Compared to what?

Compared to what?

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.

33 Replies to “Compared to what?”

  1. It is nothing new that competition comes from other sources, cinema, radio, tv and the internet have all – I suspect – affected books sales. So to mention the ipad is neither here no there. Yes you can buy an ebook over itunes, but somebody that wants to buy a book, buys a book. I doubt many people aimlessly browse the app store in idle boredom. The person that reads a book review and wants a book may well then browse for a book and pay for it. Their comparison memory may tell then that if the ebook is half the price of the hard copy that is a good deal, regardless of the cost of a game.

    It strikes be that the seller of ebooks – amazon, et al – will win whilst the independent publisher and the authors with them loses out.

  2. Traditional publishers know very little about innovative ways to get the word out. Individuals working in marketing or PR capacities only understand what they have know and have done. At individual, departmental, and organizational levels, there’s great fear of change. Authors just want to get their books read in whatever format the public wants.

    It’s this fundamental disconnect that drives authors mad–and creates enormous opportunity for projects such as this.

  3. I have completely different book purchasing habits now than I did a few years ago. If I read an interesting review, I buy an ebook to check it out. If I like and want to share it, I with purchase it in hardcover to give away or pass around. If I love it and must have it on the shelf, I purchase it in hardcover for myself.

    Once it is possible to lend/share/give away ebooks (for more than 14 days – something I can not see utilizing), my habits may change again, but for now the ebook FAR from inhibits my hardcover purchasing.

    I now have copies of excellent books in multiple formats, and I find I purchase the same books multiple times as gifts, in multiple formats.

    And none of that stops me from buying an ipad game, a movie, or a theater ticket. It simply isn’t an either/or proposition.

  4. Hardcovers make me crazy. They are prohibitively expensive and take up too much space. I’d always rather have the paperback. But the thing is, you read a review and you’re really excited to read the book but, come on, 25 bucks? Forget it! Is reading meant to be a rich person’s hobby or something? By the time the paperback comes out, most likely I’ll have moved on by then. Business model fail.

    Would love to see low cost e-editions! The instant gratification factor should not be underestimated here. You read a review and can get the book immediately before you forget. If they are low priced you could afford to take a risk on getting any book that sounds even remotely interesting. Hardcovers, paperbacks and even the more expensive e-books require you to really consider the risk. Am I actually going to read this all the way through? Can I commit to this book based on the blurbs on the back? Is this book something that I’m going to absolutely love? These are the questions you have to ask yourself before a book purchase. But if they were as cheap as apps? Oh my god, I’d get a million! You could buy it, read a little, and move on to the next one if it turns out you don’t like it. You could scan through a bunch of books until you find that one that you fall in love with. The reader would have more exposure to a wider variety of authors and genres and, similarly, authors and publishers would reach a greater audience. So what’s the hold-up? 🙂

  5. I publish really, really expensive books. I love ebooks. I prefer to publish ebooks. But I’m dealing with a tiny niche that spends tends or hundreds of thousands of dollars on teams that write large proposals. A few hundred dollars for a book that guides them through the process so they don’t have to re-invent it can easily save them a hundred times its cost. Competition with games and entertainment is not an issue here.

    I’m interested in making the books I publish available on Kindles, Ipads, and anything else my readers might be using. But even if it’s approved by the powers that be, would a $195 ebook fly? I sell them at that price and more now, but I do it directly (from my own site). When I read the publisher pages for their bookstores, they’re oriented to the mass market and high volume sales. Their pricing models reflect that. What do you advise for bringing high-value/high-price small niche documents into the Kindle world?

  6. Did publishing forget what Apple remembered?

    Different audiences want (not just need) different products.

    All kinds of industries and organizations even, and perhaps especially, long established ones need to work with that rather than upholding their status quo.

  7. I’d love to see a conversation about the value of the content between the pages versus the value of the physical page versus a digital page.

    I look at most books and think, “was that worth $30?” More often than not the answer is a resounding “yes!” Think about what you can really get for $30 in today’s world? Not much. Each book (digital or physical) offers hours of pleasure and even if all I pull out of it is one or two new “tricks,” isn’t that well worth the price? I think so.

    The conversation needs to change. Whether it’s music, movies or books to the value of having these artists produce such great work.

  8. I absolutely agree. The lending / interior design element of books are too often overlooked in comparisons in order to reduce the variables.

  9. I read fiction from the library because it’s available. In book form. Which I like. I have read books this way (including a non-fiction one) that I liked enough to buy and keep on my bookshelf. Here’s the problem with Kindle (and possibly the rest): I am an artist. I want books with pictures and color, not just black and white. As a rule, if I am buying art books, I am buying them because then I have them for inspiration in a larger format than available on the techie stuff.

  10. Different products for different readers? I don’t think that’s true. If I want to read a book I would buy it in hardcover, unless it’s available as an ebook. If it is, I buy the ebook. I buy the latter because I can get it cheaper, and faster. The ebook is in direct competition with the hardcover.

  11. The eBook experience needs to be as user-friendly as browsing in any book store. I can carry the book around and look at it…read it all in one sitting if I choose to sit and drink a latte…but, I want to put it back before I walk out the door, if I’m truly just looking.

    If the eBook has useful info, and several references to other resources/info I need…I might actually buy it and take it “out the door” with me. AND It will need to be priced “correctly”…otherwise I’m just snapping photos w my cell or jotting down the outline, the urls, etc.; that’s easy, useful and cheap.

    A great eBook will offer me info or entertainment…AND a gateway to MORE info or entertainment. It will be priced so that I don’t think twice about buying it. I will be able to highlight and cut the snippets I want and link it to other info, in this and other books, I find purposeful.

    …I’m waiting. 🙂

    [In the meantime, I’m browsing, power-reading, and taking notes & pictures.]

  12. So is it to say that books need to be incorporated into an I-tunes esque type system. One which acknowledges the challenges that exist to capture individuals eyes/ears/thoughts/time, etc.? As the future evolves are the most successful authors the ones who will develop their “tribes,” engage them at every turn available, hold lectures and speaking gigs on a regular basis to make up for the lost revenue from book sales? Can an author become as popular as a musician and then be able to sell out multiple venues in order to further embrace his audience? Time to elevate the author?

  13. Amen. It amazes me in some cases the e-book version is more expensive! Yet it cost them nothing to print – distribution is so cheap in comparison to owning $10 Million worth of printing equipment and making books!

    And still, you have to buy the reader.

    I think it will come – but it hsan’t come yet. People need to see the ‘threat’ of ebooks is not a threat, but an opportunity to succeed in two markets (electronic and paper), not one.

  14. “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.”

    Exactly! As usual, Seth understands economics: Many accessible substitutes creates price elasticity and low-cost substitutes decrease demand.

  15. I definitely agree…sell the ebooks cheaply enough that the reader feels minimal risk when purchasing (making it irrestistible). Over the past year I’ve found myself purchasing more and more ebooks because I’m only investing 2.00 to 5.00 to decide if the author’s work fits my specific preferences.

    If the book is a complete waste, I won’t feel as bothered as if I had paid 15.00 to 25.00 for it.

    If I like the ebook, I almost always go out and buy the print version of the book… as the more tangible “souvenir” that I’ll always have on hand. I might add that once I am familiar with and have been satisfied with the author’s previous work … I’m more likely to just go ahead and buy the print version.

    It’s my opinion that authors (especially unknown authors) need to consider inexpensive ebooks as a promotion tool because the wonderful juxtapose is that the author is being paid to promote … instead of paying to promote. (Think about it).

    As Kate stated … What’s the hold up?

  16. Very well said and I agree. I was recently going to publish my upcoming book when I realized that I could reach more people, more effectively outside the antiquated assumptions of conventional publishing. There is only so long that conventional publishers can continue doing “business” in a world of denial.

  17. I’ve had a sort of similar discussion with some of my friends who are, as well as myself, into reading. We never buy novels but mainly professional literature, business books etc. Overall we’ve found that majority of the books we read have some sort of problem with it that has in effect not buying the e-book. For instance we are big fans of Jeffrey Zeldmans’ work with ‘Designing with web standards’. The hard copy version (we obviously pre ordered and have in our collection as well as previous versions) costs $34.21. The Kindle edish: $35.93. For a book we already own. Furthermore the e-book will never offer the same experience the hard copy version will, it’s form, paper and color are almost a necessity.

    Where we live you are allowed by law to make a (digital) copy of everything you own, for personal use. So, I can record a cd into MP3 format for my iPod, make copies out of a book, rip a movie from DVD to my laptop etc. This leads to our opinion that we want a digital version of a book delivered when we buy the hard copy version. To us, this makes more sense because we still want to read and have the hard copy version, we’ve paid for the book and are allowed to have a copy of it. We are reluctant to switch to a digital form-factor since we feel it does not add to our experience of the book. I’m sure this is an age-old discussion, but if you have to take into account that you have to pay twice for a book, see it in a lesser form and not able to enjoy it as much as the original hard copy version, our reluctancy to perma-switch is understandable.

  18. Bull’s eye!
    The definition of Market Share as we knew it, has long been replaced by Share of Wallet. Years ago, ice cream sellers found themselves in direct competition with telephone companies: kids would rather top-up on their mobile phone credit than buying an ice cream.
    Know who your competition is, and you will know how to compete.

  19. Context is everything. If the context changes, then the pricing model must change. The old style publishers of today are like the buggy whip manufacturers of 100+ years ago, who believed that the automobile was a fad for the rich. Change or die, it’s that simple.

  20. I think I should have to buy the content once and be able to enjoy it on all media I own.
    A premium should be charged in order to add extra media and bundles offered at the first purchase.

  21. Exactly! I’ve searched some of my favorite hard covers on Amazon as ebooks and have found the price to be a bit high, and so, I have yet to pay for an e-reader, largely because I want an e-book to be substantially cheaper otherwise I’ll just buy the book. I don’t know if this makes me a dinosaur or just cheap, but why should I spend 150+ for a reader that I will most likely need to upgrade fairly often and then have to pay nearly the cost of the hard cover.

  22. I agree with Mitch. It’s the value of the content we should be judging. Especially in the business book category, one can gain the concepts from a book or e-book @$35 versus attending a seminar @$hundreds.

  23. The hard part now is going to be teaching an entire industry that they need to change their perspective on a scary, but unavoidable new trend.

    I have my fingers crossed that the ring-leaders of the publishing industry are not nearly as stubborn and close-minded as those of the music industry.

  24. I think Seth’s comment is that we needn’t think about form factors as we have in the past. It’s not an argument regarding hardcover vs. eBook, its the entire concept of a book that is changing. We see ebooks being live experiences that you buy once and that are automatically updated and added to as the world changes. You might subscribe to a serial novel or buy a business book that never goes out of date. How much do you pay for this kind of thing? Well, the payment models are going to change too….

  25. BTW,
    The iPad 2 rumors are that they are dealing with two issues that drive people to Kindle: weight and daylight readability. Fix these two things and Kindle becomes an out of date form factor. And if things move to Pads, then as book designers our options change radically.

  26. Interesting, I have been struck by the fact that both ebook and print formats have advantages for different kinds of users. Some value the tactile nature and easy lending ability of the paper while others value the easy access and portability of an e-format. Should these differential benefits not offset and make the price reflect the value of the book as a work of art?

    Somehow we seem to think of ebooks as being valuable at lower price points. Which raises the question, before ebooks did people think that the price of the books did not reflect their value? Alternatively, is success of ebook adoption driven by price in spite of consumer preferences for the paper version.

  27. Here’s another thought. For an author, trying to make ends meet, how does a pricing model for her / his work that compares to an iPhone / iPad app enable them to make a living? How many downloads would they need to make ends meet?

    What, for that matter, about the employees of the print factory that churns out thousands of the latest Harry Potter novels? Or the literary agent?

    Will the ebook pricing flexibility enable authors to do a Radiohead, and deliver direct to the reader, charging according to commitment? And does it then, like the music industry, spell the end of the printing industry which, let’s face it, is moving inexorably akin to a moth to a flame?

    Ok. Less of a thought. More a series of connected questions, many of which resonate personally.

    As for the piece itself, my latest trend is not towards to Kindle, but towards the library. Another way of recycling, and reducing waste simultaneously.

  28. Seth: I’ll buy anything new of yours… If it’s cheap I might buy 10 eCopies and give them away.