August 14th, 2012

What’s an e-Book Worth to You?

Over on The Digital Reader, Adin and Hoffelder have both weighed in on e-book prices recently.

Adin has this weird theory that things which appeal to more senses are worth more to the consumer and that’s why people don’t want to pay for e-books. Also, he seems to believe that the content of the book drives its value/price, which is absurd on the face of it (hardcover, freebie classics, etc.). He did avoid the idea that things are worth some amount more than the cost to make it (an idea sliding around in the background of the flippant Brent Weeks’ tweet Nate refers to in his discussion of e-book pricing debates).

There are a variety of perspectives on what e-books should cost. Back in the late 1990s, when the Rocket Reader first came out, the Authors’ Guild looked at the implications of that form of content delivery and concluded that all the money freed up from wood pulp and so forth should go to the Authors’. The publishers have had similar ideas, only with the notion they ought to get the excess. When Amazon launched the kindle, Bezos’ did so with the idea that e-books should cost under $10. At the time, people like me were putting together spreadsheets comparing their book buying habit in paper to their book buying habit in e-form, and trying to justify spending hundreds of dollars on an electronic device. The cheaper the e-books, the easier it was to justify, but there were other tricks to make it work. I wasn’t the only person to switch hard over to new books in e-form/older books used.

When the readers got cheaper, and indie bookstores and others weighed in on e-books, my already reduced visits to bookstores essentially disappeared. I agreed that showrooming wasn’t right and I didn’t do it; if I wanted a book I found out about in a bookstore, I bought it there, so I had been careful to only look at non-fiction with a broad appeal that I could donate to the library in Mayberry, NH (not its real name) with some expectation of it joining the collection. Now, I only go to bookstores to buy children’s books and I make sure I don’t even glance at the tables, in case I might discover something I really want.

While I did the spreadsheet and re-adopted a used book habit (on Amazon, natch -- nice to see Midtown Scholar, one of my favorite sources, mentioned in the recent NYT article about Larry McMurtry’s Big, Big Sale), I didn’t need to. I can afford to pay new hardcover prices for whatever I want to buy, and even before the Agency Model, I was paying more than $9.99 for some of the fiction I wanted on the kindle (Jayne Ann Krentz novels stick out in my memory). It was really more that this was a game of frugality that I had gotten into the habit of playing earlier in my life, and which I had not gotten unstuck from.

Publishers know that at least some of their customers could divert money ($4 coffee, buying new cars less often, or buying less nice cars, or walking more, or eating rice and beans or whatever) from other spending to books. When they talk about pricing expectations, and Not Teaching People To Expect Free/Cheap, that’s more or less what they are talking about. Unfortunately, they ignore the supply/demand curve at their peril. Companies which focus on high margin, expensive product lines, and allow other companies to supply cheaper-but-good-enough products often discover too late that the cheaper-but-good-enough has in fact become cheaper-and-better. The current strategy appears to be, “We’ll just buy bestsellers”, whether bestsellers in e-books or other countries. We’ll see how that turns out.

Bree has a few thoughts on why people are not willing to pay very much for ebooks:

“I see a lot of authors upset over the “devaluation” of books and sometimes I want to ask them what they expect. Ebooks are locked up in DRM that makes them difficult to read on various devices and easy to lose access to. They can’t be resold. They can’t be easily (legally) lent. Sometimes the production value is even astonishingly low, as if ebooks are the afterthought.”

Nate noted:

“Hachette is getting almost nothing from the $4 paper books; they’ve probably been remaindered. But those $8 ebooks are earning Hachette better than $5 a sale. What’s more, since the ebooks cannot be resold each is effectively a final sale. … Amazon makes $3 from each sale. That’s more than Amazon would make off of the $8 ebook. … By propping up the paper book market, Hachette is both leaving money on the table and putting more money into the coffers of Amazon.”

Publishers think, well, the people who need e-books to be cheap in order to buy them are people who are otherwise going to be buying used books or getting grocery bags of romance novels from their better off friends and relatives. We’ve never made any money off of these people so why worry now? But in the past, used books -- like used anything before everyone was willing to buy stuff online -- were labor intensive, highly localized and anything but liquid. Amazon changed all that, so while the _publishers_ are still not making anything off of used books, Amazon is.

The kindle, honestly, kind of sucks. It always has. It has no color. Graphical elements like tables and graphs display poorly. You have to keep them charged. Rearranging your collection is not nearly as satisfying an activity as p-books. While you can search a kindle, it’s a lot tougher to just flip to the right spot and move forward or back to find the passage you remember. It has always been a cheaper-but-good-enough solution, where quite a lot of the good enough involved things like, I never have to find space for another bookcase again, and, my suitcase is so much lighter. As the screen has improved, and the content available for it become broader, it has moved into the realm of cheaper-and-pretty-good. Most of what is stopping it from being cheaper-and-as-good involves all the limitations placed on e-books (lending, re-selling, inheriting). I wish that more people could have focused on how to make the e-book experience good enough to make me want to pay more money for e-books. My game of frugality is a game: I _want_ to give more to people who do good work, to make sure they’re still around for me to buy from in the future. I pay probably 15% more than I have to on my groceries, because I like the store that is close to where I live, has lots of competent, cheerful employees and carries a mix of brands I like and adequate substitutes. I could go cheaper, but I won’t, and I don’t put in the extra effort to Get the Very Best that would require me to visit three (or more) stores instead of one. Amazon mostly shares this approach: don't try to be the cheapest; just make it Not Worth While to price hunt, by supplying a consistent good customer experience. I wish I believed the same is true of traditional publishers, but I just don't.