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It’s not unusual for a book publisher to look at Kindle books and get nervous about the pricing. After all, if it’s the same words, available just as soon as the hardcover, why should it cost half as much (or less?)
Eighty years ago, if you wanted to read a book, your choice was a hardcover. The price was the price. All hardcovers, all new books in a category, cost just about the same.
Decades later, paperbacks gave you an alternative, but the thing was, you had to wait a year for the book to come out in paperback. Bargain seeking readers could read older books, but within each format, there was parity.
The ebook presents a conundrum. They are cheaper than a hardcover for the same content. The real puzzle, though, has nothing to do with hardcovers, and this is what publishers are missing:
The competition for a Kindle book isn’t the hardcover. The competition is a game on the iPad or a movie from Netflix or a song playing on your Sonos. Pricing is about substitutions, and if we want books to avoid becoming a tiny niche, we need to price accordingly. There are more substitutes, and they are cheaper than ever before.
An ebook might be faster to get and easier to carry around, but it doesn’t offer the prestige or interior decorating benefits of a hardcover. We don’t devalue the book when we price it lower as an ebook, because we’re actually not selling the souvenir/lendable element we sell with the hardcover. They’re different products for different readers.
The market is clearly willing to buy ebooks, and now our job is to price them in a way that makes them an irresistible habit.
Seth Godin is an author and the founder of the Domino Project.