Yesterday morning in my Twitter feed, I ran across this piece by self-published author Catherine Howard. In it, she asks the hypothetical question “do ebooks sell simply because they’re cheap?” I say hypothetical because low price is certainly a factor but not the only one.
Price point is something I, as a self published author, have considered quite a bit. I have reached the same conclusion Howard has. My books are cheap enough that people can be enticed to give them a shot for the cost of a cup of coffee. If they don’t like it, they don’t really lose anything. If my price was $12 or $15 and the buyer thinks the book sucks, they’re far more likely to feel ripped off. My thinking on this is keep the cost low enough to encourage exploratory reading by buyers with as little downside to them as possible.
Plus, my expenses in producing a book are basically limited to my time and little else. Howard makes a good point that traditional publishers cost structure, even for inexpensive to produce ebooks, are infinitely higher. They’re not simply making a profit on the book in a vacuum, they’re supporting an entire corporate infrastructure. Where $2.99 works great for me, and Howard as well, apparently, a large traditional publisher with many mouths to feed has to set a price point much higher, sometimes five times higher.
This echoes some of my recent sentiments on the state of large publishers. What we’ve seen across the spectrum of information and entertainment, be it books, news, music and even movies and television shows, is a democratization of opportunity. Large prohibitive production expenses in the past have effectively limited competition to a relative few players, creating a manufactured scarcity that drove higher prices. Add to that the controls over distribution and marketing, largely supported by previously high costs for both, and you can see the forces pushing higher consumer pricing.
All these costs, that were once significant barriers for entry, are no longer any such thing. Howard mentions easily covering her expenses for copy editing, proof reading and cover design in her piece. But for someone like me, with a background as an editor and publisher with production and design skills, I don’t even have those modest costs. Therefore, I can produce and sell an ebook for $2.99 very comfortably and profitably. A traditional publisher, however, cannot. They need much higher prices to support their infrastructures.
This is a very real problem for them as it’s a trend that isn’t going to turn. If anything, as print book sales decline in the coming years, as they no doubt will, traditional publishers are in serious jeopardy of suffocating under their own weight. The need for publishers to adapt is paramount. They simply must alter their business models in such a way as to bring down prices, not drive them higher.
I watched first hand as the print news and periodical business failed to adapt to the changing reality, and that segment of the industry is in virtual ruins, having lost at least half of their once ample business in less than half a decade. The music industry followed much the same course, sticking their fingers in their ears and yelling “Nah, Nah, Nah” as their cost-heavy infrastructures quickly became an anchor around their neck.
Instead of adapting, the music industry tried the litigation route, trying to stifle technological innovation as well as threatening and suing their own customers. The news business tried to slap the same content in the paper online thinking they could simply sell ads against it just like they’ve always done to great success in print. Neither tack worked as both businesses have suffered massive financial losses as well as a steep drop in relevance.
The book publishing industry is only now entering the period of its disruption. The ebook boom has barely even gotten off the ground. Publishers would be wise to heed the lessons taught by the music and news business. Don’t be fooled by the fact that you’re legacy business still sports large libraries of maketable material and controls the vast majority of the most popular writers. That is little more than carryover from your dominant positions of yesterday.
Competition has and will continue to explode. You’ve almost completely lost control of your once dominant distribution channels. The created scarcity you benefitted so much from simply doesn’t exist any longer. The cost structure for the new leaner, more efficient competitors you’ll face transforms your vast infrastructure from a strength to a weakness. And, as more and more writers see the potential upside of publishing themselves, you’ll undoubtedly lose ground on your stable of popular writers.
Adapt and do it now. Certainly, there is still money to be made in your traditional ways at this moment, but unless you want to find yourself in five years sitting back nearly helpless and behind the curve while your business continues to dwindle, changes must be made. Of course, if publishers fail to do so, they’ll have lots of company. Music companies, news companies, and soon, film companies who are following in the failed footsteps of their music brethren, will be there with you to share stories about the good old days.