What Are E-Books Worth?

Since most books don't even earn out their advances (or in the case of self-published books their expenses), the focus shouldn't be on what it costs to produce an e-book but rather on the monetary value we as a culture place on the experience of a good read. For my own part, I think it's invaluable.
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For the past few months, our distributor (Ingram) has been encouraging She Writes Press to price our e-books above $9.99. Because we are distributed by Ingram, we will not be penalized by Amazon for pricing above this price point, and publishers experimenting with higher e-book prices are reporting that sales aren't dropping when they're publishing e-books at $12.99, or $14.99, or even at $16.99 for a $16.99 paperback. Interesting.

At She Writes Press we're going to start experimenting with higher price points for e-books this spring. Pricing your e-book at exactly what your print book is priced at is called "parity pricing," and it's something that gets bandied about a lot by bigger publishers. I've stated before that Amazon is, in effect, price fixing by "incentivizing" its KDP authors to price their e-books between $2.99 and $9.99. They do this by giving authors 70% earnings if they stay within these parameters versus 30% if they price below $2.99 or above $9.99. This is a pretty effective way to keep the vast majority of e-books right within that sweet spot. This is the kind of pricing control they want to have with the big houses too, and we all know what happened when Amazon tried to exert this control over Hachette this year.

The very public "war" (now resolved) between Hachette and Amazon was, in part, about this question of who gets to control pricing--the retailer or the publisher. It was also about discounts, and Hachette's push for better terms. Hachette--and many publishers--do not want to price their books at $9.99 or less, and a look at a couple of Hachette's front list titles, like Joshua Ferris's To Rise Again at a Decent Hour and Robin Roberts's Everybody's Got Something, show the Kindle edition priced (as of the day of this post) at $12.99 and $11.04 respectively. Interestingly, Roberts's book is only out on hardcover, so your savings on the Kindle edition are a whopping 59%, whereas on Ferris's paperback book you save only 19%. Here you can see how Amazon's system of discounting is very appealing to consumers. Some readers might take a look at that 59% off number for Roberts's book and be compelled to buy--after all, it's hard to resist a good deal.

But what are the larger consequences for deep discounts on e-books, or Amazon's incentivized pricing system? Many argue that there is no downside. I see this argument being made most ardently by those who, as I've written elsewhere, have drunk the Amazon Kool-Aid. These are mostly genre authors who are making a killing on Amazon. They champion Amazon because it's opened doors where big publishing has shut them out. These authors are Amazon's loyal crusaders because Amazon has legitimized their work and given them control, and because it pays them handsomely. All good for those authors. But what works for genre fiction does not work for other genres. I have not seen this model successfully replicated for the sweet spot She Writes Press authors are in: literary fiction, commercial women's fiction, and prescriptive nonfiction.

It's taken me a while to come around to the idea that raising e-book prices might be a good thing for our authors, and for authors in general. Like a lot of people, I look around and see that the vast majority of e-books are priced at $9.99 or lower. I've heard people say that authors would be shooting themselves in the foot to price higher. I've priced my own e-books below $9.99, and when my first book came out in 2012, I underpriced the paperback because I wanted it to be "affordable." I also tried out a free giveaway through Kindle Select (before we signed with Ingram). Was it satisfying to know that hundreds of people downloaded my book for free? Honestly, not really. Making zero dollars on an experiment I threw money at and spent a bit of time to figure out didn't feel good at all. And there was a lot of hype, and promise that I would see an uptick in my sales after my free weekend was over, but if there was an uptick in sales, it was negligible. Plus, as a consumer who's downloaded books for free during promotions, I can speak to my own attitude toward those books. Yeah, I downloaded them for free. And they're still sitting in the Kindle cloud, unread. Maybe I'll get to them someday, but it's clear that our culture of free books does nothing but make us value books less.

Like a lot of people, I'm hot and cold on Amazon. It's amazing that they've given authors a platform to publish and sell their work on. They deserve to be recognized, even applauded, for making publishing accessible, and something anyone can do. Without Amazon, there would be no She Writes Press. There would be no hybrid publishing. The part of me that values voices of all sorts being heard loves Amazon for the democratization of publishing--something I believe in with all my heart. The dark underbelly of this free-for-all, however, is that there's no discernment. Masterpieces are the same price as works that authors have churned out in one month with zero regard for editorial control.

This all ties into my point about e-book pricing, which is this: Consumers will pay for the books they want to read. I'm just one person, and I'm not going to single-handedly make Amazon change their terms (God, how I wish I could), but I do believe we all need to be careful about our own contribution to a cultural belief system that e-books are, by the very nature of being digital, not worth very much. When I read, I'm transported to another realm by an author's voice, description, storytelling, and craft. This is what I'm paying for--not for the paper the book is printed on or the publishing costs. And since most books don't even earn out their advances (or in the case of self-published books their expenses), the focus shouldn't be on what it costs to produce an e-book but rather on the monetary value we as a culture place on the experience of a good read. For my own part, I think it's invaluable.

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