This is a follow-up to Ali’s Ebooks: Overpriced or Underrated. I’ve been meaning to write this for a while and her post catalyzed that intention into action.
Many people make blanket comparisons between the price and value of books to ebooks. Usually, ebooks lose in the comparison because books are longer, cheaper, and written by recognized experts, whereas ebooks are shorter, more expensive, and written by people who may not be recognized experts. However, I’ve learned that it’s best to think of the two mediums of content as being in entirely different economic structures. Ali touched on the economic structure that ebooks belong to, so I’d like to cover the economic structure of physical books.
What we often don’t think about when it comes to books is that there’s a whole marketing and publishing engine behind them. This engine is designed to a) make the cost of creating books as cheap as possible, b) ensure that books are sold in very high volume, and c) maximize profit for the publisher. You’ll note that the author’s interests don’t factor highly into this equation, as the typical publishing process put most of the power in the relationship in the publisher’s hands.
That said, many authors have careers that support their writing or their books are strategic chips in career-building. For instance, academic authors have their writing subsidized by taxpayers or donors in the case of private schools. Authors who write in their free time have jobs that put food on the table. And business writers often have business ventures that are funding the development of the book, either directly in the case where they’re giving workshops that they know will turn into books or indirectly via to the experience their getting from the field.
Most authors will tell you that you don’t write books to make money – it’s just not lucrative enough when you think about the time, energy, and attention involved. I know this because I’ve now talked to a lot of book authors about my own potential books and have worked with many authors as clients or friends. The truth of it is that many authors make their money by speaking. Ironic, no?
My point here is that books can be priced the way they are because they are the product of a massive production engine designed to maximize profit for the publisher, not the author. If authors depended on the books to make a living, we’d see an entirely different price structure and economy. (There are outliers to this, of course.)
So, when you buy a physical book, it’s best to realize that you are directly supporting the publisher and only indirectly supporting the author. As a contrast, many ebook publishers do depend on the revenue from their products to put food on the table, and the pricing of said products need to reflect that. Having created low-cost products myself, I can tell you that I’d be working a dayjob if they were the only thing generating business revenue.
Comparing books to ebooks is a comparison between apples and oranges. Having the same value and price expectations between the two over-simplifies the entirely different economic structures that support the creation of the two different types of products.
Now, just because they are from different economic structures doesn’t justify laissez-faire pricing on information products. Pricing an ebook at $397 banking on the fact that a few people will be desperate or motivated enough to buy it isn’t something I believe in or am advocating here. All I’m saying is that railing against a $47 or $97 ebook by comparing it to a $24.95 book overlooks the submerged iceberg of context while focusing on the very small tip.
Heya Charlie,
Your analysis is all well and good, but I have a question – if ebooks are priced considerably higher than your typical book, what incentive is there to purchase the ebook over the regular, physical book? Granted, odds are the books are totally different and offer different types of value, but your average consumer is less likely to trust an online blogger guy who put out an ebook compared to the professor or business owner who puts a physical book on the shelf.
When there is a physical book with the same timely, actionable, and relevant information, there’s not an incentive. However, looking at publishing cycles – which can be a year+ long – it’s often the case that topical books are out of date by the time they hit the shelf.
Another incentive, though, is interaction from the creator. You generally can’t just write an author and ask about their book, but it’s an accepted norm amongst ebook publishers.
You’re right, though, that it all boils down to trust. Your average consumer doesn’t trust the online blogger guy, but they trust the professor with a PhD and the ubiquitousness of the book. It’s irrational but still a market dynamic.
I completely agree. When someone self-publishes to produce an ebook, they have to do everything themselves — layout and formatting, art creation, marketing — or pay someone else to do it from their own pocket. Plus, they have to write the thing. Ebooks have opened the door for aspiring writers. It used to be nearly impossible to get your work into the hands of the audience without knowing an industry “insider”. Now, it’s still a lot of work but anyone can do it. Yes, that creates some credibility concerns since literally anyone with a computer can write a book and call themselves an author. But I’ve seen some horrifyingly bad, poorly researched books by PhDs as well. Just because someone has a specific type of education doesn’t make them more “right”. And just because jo-shmoe blogger doesn’t have a degree doesn’t make him less “right.” You always have to use your critical thinking skills when evaluating what information to accept into your life. I think ebooks are an incredible and exciting resource to take advantage of. I’ve bought dozens and have found that all have been well worth the price.
Whew. Sorry for the ridiculously looooong comment 🙂
I know it’s not rational but when I’ve run across ebook offers that have exactly the info I’m needing right that moment, I’ve gladly paid twice what I feel comfortable paying for a physical book. So much of the info in paper books is outdated by the time it’s printed. As with so much else in life, timing is everything. When I buy ebooks from trusted sources I’ve rarely been disappointed.
For many years, I earned a six figure living as an author. It’s still very possible to do so.
But what is cool, which we are at the forefront of, is authors are claiming the means of production. This is a huge, messy, transition. Nobody knows what is going to happen – not even Seth Godin 🙂 – but those of us who can think and write may actually find it easier to make a living then we did in the past. I celebrate that freedom.
We have to educate people about digital products and make them more useful and interesting than simple e-books. Video, audio, interaction: it’s got to include lots of ways to learn.
Welcome to the NW!
Charlie, I sell my own e-books, and I also have trade paperbacks sold by a traditional publisher, including one that’s sold somewhere in the 40,000-copy range.
I think e-books are best suited for timely or specialized knowledge. For example, I bought an e-book on how to use WordPress, in part because it has a lot of information, and in part because the authors promised free updates of the book every time there is a major update to WordPress. (Still waiting for the 3.0 version.)
I also like to read physical books and still buy them. I also print out important e-books and put them in binders.
I’ve just recently started to buy e-books, but I’ve been largely buying Kindle e-books which are the equivalent of the printed versions. I understand the argument and justification for pricing the e-books higher, however I think you’ll struggle with a perception of digital products as lacking the legitimacy to justify the increase in pricing and the perception that the lack of production costs should dictate lower pricing. Thusly, I think your volume will be poor, and the revenue potential would be higher with a lower priced product.
The best thing anybody could do to resolve this would be to create two channels for the same product, and sell the exact same product in those channels for wildly different prices (say $10 and $50) and write about the results. A/B testing FTW! Of course, it would need to be a product and brand (i.e., person, or pseudonym) for which repeat business is not expected, as channel conflict will certainly draw the ire of the consumer, and the lack of an established brand may cause the results of the study to be suspect given the lack of demand for a throwaway brand’s product. Would be interesting none-the-less though.
Price is such an individual and personal thing that depends on one’s unique economics (their views and current financial situation). Speaking for myself, I look at the product (book, ebook or whatever)carefully and ask myself “Is the info in that book, worth it TO ME considering what the the author/publisher is asking me to pay?”. If the answer is yes, I buy it. If no, I pass.
I think of a book like “the 4 hour work week” which completely changed the trajectory of my life. I probably paid about $20 for that book. It was probably worth thousands… to me anyway.
So where does that leave the person that is in charge of setting the price for their own product? Confused, I’m sure, but the only way is to price their book or ebook at a price that they fully believe in (for whatever reasons they can come up with).
Tricky stuff, I just read back what I wrote and I have no idea what I am trying to say 😉
~Mike