Why are e-book so expensive?
I resisted e-reading for several years – right up until my baby decided books made the best teethers. Until then, I had surrounded myself in print books. My living room was lined with bookshelves, and many of those shelves had books stacked two or three rows deep. Sure, the movers complained every time they came to box up my life (my career moves me every couple years), but until faced with the prospect of baby-proofing my books, I never really SAW how many of them I had. And there were HUNDREDS.
I have always loved reading. As a child, my mom quickly figured out she had to come up with more inventive disciplinary actions than sending me to my room, because I was quite happy to sit and read for hours (she ended up sentencing me to pulling weeds, the severity of the infraction directly correlating to the number of bags I had to fill – to this day, I despise yard work). I have books I’ve read regularly since I was a child (who doesn’t love Little Women?). Books I re-read on a regular basis. Books I know I’ll want to read again, either for pleasure or reference. Books I may not read again but just have to keep around me because I am so in awe of/enthralled with something about them. Books I’m simply holding on to until I encounter the right person I’m supposed to pass them on to.
So I took the plunge and bought an e-reader. And while I was binge-downloading the free versions of my old favorites (
Pride and Prejudice, anyone?), I stumbled across the world of self-publishing and 99-cent e-books on Amazon – a veritable treasure trove of what I affectionately call brain candy; light-hearted, quick reads that entertain without brain strain. The literati out there may disagree (
see http://publishingperspectives.com/2011/06/selling-ebooks-99-cents-destroys-minds/), but I think there’s a place for that kind of material. It’s like a bubble bath, or milk chocolate. Sure, a shower gets you cleaner and dark chocolate (
also delicious) is healthier, but sometimes you just want to indulge, and that’s okay. It’s more than okay – after a full day of work, then a few hours of toddler-wrangling, sometimes I’m left with an hour to myself before it’s time to go to bed and start it all over again. One hour to spend on me – and sometimes brain candy is just what the doctor ordered.
But eventually I started looking at more “mainstream” books again, and boy, was I surprised. Why on earth do e-books cost the same as (
and sometimes more than!) the print versions? After all, the books started out as an electronic file, and the publishers are raking in the savings in printing and shipping costs, right? I ranted and raved for a bit, because that’s what I do (
like many others – check out this article on readers writing negative book reviews due to e-book pricing: http://reviews.cnet.com/8301-18438_7-20051201-82.html); then I started to dig around a bit. Lo and behold, some of it actually makes sense, and the rest is the big publishing companies manipulating pricing – not the retailers or the authors. So here’s what I found; I’ll leave it up to you to decide whether this stems from greed or fear.
First, publishers dispute that e-books actually cost much less to produce. Take this article, for example (
http://michaelhyatt.com/why-do-ebooks-cost-so-much.html), in which a publisher says printing and distributing only account for 12% of the book’s price – the rest comes from the search for new books, royalties to the authors, the editorial process of turning a manuscript into a readable book, design, cataloging, sales, marketing, publicity, merchandising, and all the other administrative costs that come with any business. Plus, it costs extra money to format e-books to fit multiple e-readers, and to do a thorough quality check on each format (
although I have yet to read a single e-book that didn’t contain several formatting errors, which irks me to no end).
Second, there are two primary ways the publishers sell books to the retailers – traditional wholesaling and the agency model. Most of us are used to traditional wholesaling, in which the publisher gets a set percentage (often 50%) of the retail price (think of the retail price as the MSRP on a car – it’s on the sticker, but not necessarily what you pay at the register). The seller then can sell the book at that retail price, or offer additional discounts that may cut into their profit margin on that book but result in more sales overall. Either way, the publisher still gets their 50% of the original retail price. With the agency model, however, publishers don’t just set the retail price, they set the actual sale price – sellers aren’t allowed to lower those prices. Publishers get a set percentage (the going rate seems to be 70%, higher than for print books) and the seller gets the rest, but they no longer have the option of offering discounts to motivate their customers to buy more. Yup, you read that right – the publisher makes more money per e-book with the agency model.
So let’s use a typical mass-market paperback priced at $7.99 (and when did that happen, anyway? I remember when they were $4.99…I’m starting to feel old). The print version, which is still sold using the wholesale model, nets the publisher 50% of that $7.99. The retailer can choose to sell the book at $7.99 and get the other 50%, or offer an additional discount to spur larger sales overall. The e-book version, however, is priced using the agency model, which means the publisher nets 70% of that $7.99 and the retailer can’t offer any additional discounts. So the publisher makes more, the retailer makes less, and the customer pays more for a version of the book that actually cost less to produce.
This is why you so frequently see e-books priced higher than the print book (hardcover or paperback) – because the retailer can choose to offer discounts on the print version, but can’t do the same for the electronic version. You’re paying more for a book you can’t share, re-sell or donate – you can’t leave an e-book in the airport or USO as a nice surprise for the next stranded traveler. Not to mention the risk of your e-book disappearing entirely if your chosen vendor goes out of business.
In the end, I came to the conclusion that publishers are afraid of Amazon, and afraid of e-books wiping out the print book – if that happens, then retailers are no longer dependant upon the big publishers as distributors, and more and more authors will operate independently, possibly eliminating the need for the big publishers altogether. I understand the logic behind that fear. It makes sense. I still don’t like paying more for something that costs less. What do you think?
- Brandy