Thursday, December 15, 2011

E-Books Sticker Shock

The Wall Street Journal today had an article about ebook sticker shock and how ebooks have now risen to the point where they're as expensive as paperbooks or even hardcovers, because while paperbooks are still sold via the old model (wholesale price to retailers who can discount the books and even use them as loss leaders to drive traffic), ebooks (as sold by the big six) are sold under the agency model, where the retailer is not allowed to set prices.

There's a general denial in the industry that this increase in prices is driving down ebook sales, even as ebook adoption increase. Think the two aren't compatible? Then you don't understand piracy, or library use. For instance, when The Snowball first came out at $9.99 on Amazon, I bought it and read it right away. My reviews on this blog drove further purchases. The Snowball is now $16. Can you imagine a 3 year old car selling for more than it did 3 years ago? Probably not, especially since a used copy of the same book has the same information and can be had for much less. Now that Steve Jobs and Thinking Fast and Slow are $15 and $13 respectively, I opted to check them out from the library instead. The unscrupulous would just download them.

The publishers would argue that ebooks are more portable, easier to carry and easier to store. But there's one huge thing wrong with them: with license terms as they are today, ebooks are impossible to resale, difficult to lend to your friends, and of course, the added cost makes no sense.

Furthermore, most books sold are not non-fiction (as the three are above). For non-fiction, most books are not fungible, not even mine. When someone on Quora asked Why are my books so expensive, my reply caused a flood of sales. Fiction, however, is more easily fungible. The next best-sellers will probably be independent phenomena, not traditional publisher-driven ones. The regular publishers are going to lose their stand as gatekeepers if they insist on pricing ebooks for the 19th century. Like the music publishers, they will become gradually more and more irrelevant.

The lesson for you if you're a fiction author? You have a window of opportunity right now where traditional publishers have provided an incredible price umbrella. Take that opportunity and ride it for as hard as you can.
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