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Saturday, September 18, 2010

The Rising Cost of eBooks: Don't Get Him Started

In my post dated 9-9-2010, I requested that book bloggers stop asking me for free books, but instead, contact their local public libraries and ask them to acquire Ashes to Water and post a review online. In return, I offered to send them my first book, Rules of the Lake as a thank-you gift. I got a comment by a book blogger named Zohar. He said he would contact his library (which immediately put him on my good guy list), then added this:

"Also, just FYI, us book bloggers aren't 'cheap', it's just that some of us (ahhmm) read 2-3 books a week. Even at eBook prices, which are on the rise (don't get me started), we're spending a small fortune anyway."

The parenthetical "don't get me started" intrigued me. (BTW, I never accused anyone of being cheap; that was a defensive reflex, I'm thinkin). Whenever someone says "don't get me started," it usually means they're DYING for someone to get them started, and I was happy to oblige. I asked if he had a blog post on the rising cost of eBooks. With his permission, I'm sharing his response here, which he identifies as "preliminary thoughts":

Hi, Ms. Ziegler,

Thank you for your kind words.

I don't have a "don't get me started" blog post on the rising cost of eBooks because when I posted something to that effect on Barnes & Noble's Facebook page I was shocked to receive many negative responses from...readers!!!

For a moment I thought I was living in an alternate universe where money grows on trees, but then I remembered that the "sheeple" in the USA, especially those in the mid-twenties and under, are so used to being gauged by banks, utility companies, credit card companies, etc. that the thought of someone selling a good product for a fair price doesn't even cross their minds. They all missed my point, which was that the publishers are trying to see what is the highest they can charge before people stop buying - so let's cut the head off that experiment immediately.

Of course, several days after they were all complaining again, because the new hot novel of the week was priced at an astounding $15, which is now the norm for hot new novels on the B&N eBook store.  That is too bad, because the publishers are aliening their best customers. After all, why pay $15 for an eBook when I can wait a week, or a month, and get the hard cover for much less?

I have been in the IT field for 15 years (I'm a programmer) and I have seen this trend of greedy executives trying to squeeze more and more out of their customers by 1) either selling a product customers don't want to buy (music industry) or 2) ignoring technology until it's too late & letting quality suffer in the name of profit (newspapers).  I can see the book publishing industry is trying to stay away from number one, but are getting caught in the trap of number 2.

Much as the music companies are finding that the good old days of making $10-$15 profit per CD are gone, and newspapers are finding that the Internet has let people keep more of their money in their pockets instead of handing it over for an inferior product (ex: items wanted ads vs. Craigslist), the publishing industry doesn't know how to handle this new technology, and new demands by their customers - they are trying to find out a comfortable median instead of the unthinkable - providing a good product for a fair price and the hell with next quarter's numbers.

Hmmm....I think I'm off to a good start on a "don't get me started" blog post, what do you think?
Any insight?


I'll pass Zohar's question along to you guys. Is he on track? Is there anything eBook consumers can do to discourage this trend?


  1. Interesting take. Much appreciated, Zohar.

    I've also noticed the rising increase in costs for eBooks. And, yes, it's alarming.

    But I suspect the reason we haven't seen any real reader backlash yet is because the math still favors consumers ... although the gap is closing.

    New hardbacks and bestsellers were typically selling for $9.99 as eBooks when I got my Nook nearly a year ago. More and more of those eBooks cost $12 to $15 now. That's a 50 percent increase in some instances.

    And yet $15 for an eBook is still a bargain, because that's still cheaper than the hardback by at least $5 to $7 even after you've factored in your Barnes and Noble in-store and membership discounts and tack on taxes.

    The squeeze is on, though.

    The big booksellers ... Barnes & Noble and Amazon, for example ... have been pushed by publishers into increasing eBook prices (especially for their new books and bestsellers) because eBooks are cutting fairly heavily into their hardback sales.

    In fact, Amazon said earlier this year that eBooks outstripped U.S. sales of hardbacks on its website in July for the first time ever, claiming it sold 143 eBooks for every 100 hardbacks that month.

    Amazon said in that same press release that the "pace" was quickly accelerating, noting that in the four most recent weeks it was selling 180 eBooks for every 100 hardbacks.

    That's why publishers are pushing back, why they're insisting on higher prices for eBooks. Profits. The bottom line.

    At some point, of course, the price gap between eBooks and hardbacks will narrow enough that readers will start wondering whether it makes sense to buy eReaders or eBooks.

    (And that, by the way, is why I think eReaders will eventually give way to something closer to the iPad, which gives us more bang for our buck by giving us both the Internet and eBooks in one device.)

    Even with the closing gap, though, I'm glad I bought an eReader.

    As I wrote elsewhere, there's something exciting about getting in on the ground floor of new technology ... like beepers to flip phones ... like flip phones to smart phones ... like desktops to laptops ... like, sooner than we think probably, laptops to iPads.

    You can't fight new technology. It's here or it's coming. And it'll run you over and leave you behind if you're not paying attention. Might as well find a way to enjoy it. I mean, really, isn't that what life's about? Having fun while we're here?

    As long as it still makes sense moneywise.


  2. Hi galleycat,

    I think the publishers are totally missing the boat here. There are tons of money to be made in eBook format - it's just NOT from selling books and certainly the profit margin is going to shrink.

    If they are going to want to keep that profit margin they will be shooting themselves in the foot and falling into the same trap that the music industry fell into (not wanting the sell the products that the consumers want to buy).

    Unlike you, I don't see the eReaders failing - I see the business changing. Granted it could take a very long time but forcing consumers to buy the products you want to sell to them is a losing battle (and an idiotic one at that).

    I think that in the future, most eReaders will look like the iPad and the eBook will no longer be an electronic version of a book, but the "e" will stand for "enhanced". Imagine a book with video, links, ads, puzzles, etc.


  3. "I think that in the future, most eReaders will look like the iPad and the eBook will no longer be an electronic version of a book, but the "e" will stand for "enhanced". Imagine a book with video, links, ads, puzzles, etc."


    Hi, Zohar

    We're pretty much on the same page here.

    Wasn't suggesting eReaders will fail as much as I was suggesting they'll morph into something bigger and better.

    Take your vision of an 'enhanced' eReader and throw it into the same iPad-like tablet with desktop programs (Photoshop, etc.), the Internet, e-mail, texting, cameras, games and lots of other cool stuff that hasn't even been invented yet.

    I believe that's where we're headed. And I'll be first in line to buy it.

    If I'm reading a book on my eReader in a park and I want to take a break to surf the Internet, for example, I don't want to have to power up a separate device to get there. I'd prefer to just minimize the book to the bottom of the screen and start surfing.

    Convenience sells.

    Nice blog, by the way.


  4. As someone who is new to eBook reading (only had a device for a week) and doesn't live in the US/UK (therefore find it almost impossible to find legal content for said device) I probably can't comment sensibly on this topic (book prices here in Australia are so stupidly over-the-top that Americans literally explode when they realise the cost) (this is true, my American relatives recently visited and all of them exploded one horrid day in a local bookstore).

    I'm honestly not sure that "e" is the future - enhanced sounds OK for some things but I don't reall need enhancement all the time. I quite like being told a good story with good characters in the same way I have always been told it, I don't really need video and pictures and anything else - I like reading words.

    But I do get annoyed when anyone says I should be comparing an eBook with a physical book in terms of pricing because an eBook is not the same thing at all - I only own a license of it not an a copy of it which is mine to do with as I please. I can't loan it to friends or swap it on bookmooch or sell it on eBay to fund future purchases of more books. Heck in the case of some eBooks I can't even read it beyond the life of the device for which it was purchased. In that repsect alone, not to mention the fact that production and distribution costs are much lower, eBooks should be considerably cheaper.

    But then we get back to Zohar's excellent point about nasty publishing companies and their gouging practices and the fact they'll continue to do it while they can get away with it and we're stupid enough to let them.

  5. galleycat thanks for the kind words.

    Bernadette I agree, the comparison between the price of eBooks and paper books is totally invalid. I've read many reasons industry professionals give for the high cost of eBooks and the majority were all ridiculous. It was like they were inventing an answer on the spot, the problem was that the answer could be torn apart by some googling and critical thinking.


  6. As a IT person as well, I will never be convinced that the production and the storage of a e-book is as costly as the printing, shipping and stocking of a physical book. That being said, I have no problems with the publisher waiting a month or so after the hardcover comes out before releasing an ebook (or even waiting to release the ebook until they release the paperback). If the book is something I want that badly that "I must have it now" then I am willing to purchase the physical copy. I think the happy medium for the publishers and consumers would be that if the publishers want us to buy the hardcover books, then they should also throw in a FREE copy of the ebook with that purchase.
    I also think that the publishers are missing an important aspect of the e-reader. People are prone to impulse purchases. When they finish book 3 in a series, how likely is it that they will instantly connect through their e-reader and purchase the ebook, versus driving to the nearest brick and mortar book store and buying the physical book? With the ease of buying an ebook (you don't even have to get up off the couch)people are more likely to buy a book on impulse. Over time, I believe that people are more likely to spend more on ebook than on physical books (I know my bank account will attest to that stat).

  7. as one on social security and pretty much house bound, my book buying is pretty much restricted to the net... and my pocketbook.

    i finally gave up and used money gifts to get a kindle. i love it. so much easier to cart around to doctor appointments. (dumb dora managed to 'give in' 1 week before the new version's release.) would i trade it in for an why? cost! i have a lovely mac for multitasking. my kindle meets my desire for portability and space conservation. i think there are other folk like me...ones who have to monitor their spending carefully. (o, i also love the ability to make the print size easier on my eyes.)

    do i still get hard betcha! do i keep them...i try not to (hard though). what do i do with them? pass them on to someone who will enjoy them as much as i (currently, my 91 year old mum...who addicted me to books). I love hard back books better than paper backs as they last longer...but i probably have more softer covers because of $.

    i am saddened i cannot share my ebooks with my mom and others. but that's one of the reasons for my blog...i can share my thoughts about a book and they can decide if they want it it too...and besides, if i have only one copy, i can only share it with one person.

    if you really want to talk $, have you checked out the cost of audibles? i got hooked on books because i was read to...the spoken words from my parents who read to me...and they were good narrators! so naturally, i craved more, hence books. now i find myself craving both! i mean really, who wants to do the mundane (dishes, knitting, driving, cleaning the bathroom) in silence? and while i read with my internal narrator, i don't do well with some accents or foreign word, so it's nice to hear them from others...but the cost! wow! so, not unlike my early post college days, i joined to audio club when i use my monthly credits carefully.

    what am i trying to say? i don't know...the above is just stream of thoughts from your words.

    i thank god for people like our hostess who can take me away from bad news filled air waves, who can distract me from physical pain, who take me to another place and time (even when they distract me so much i have to stay up all night!) what would we do without you!

  8. I think the prices of ebooks will fall as more people take them on. I've noticed older books of bestselling authors are hitting the $3-$5 range.


  9. @Anonymous - I’m an IT person as well and I laugh every time I hear the excuse of “storage” and “conversion” costs. What a bunch of BS, sure there are costs but they are miniscule (I’d be surprised if it’s a penny a book).

    By the way, B&N do give out every once in a while the first book of a series for free. I think that publishers are missing all the great data and ad opportunities in eBooks as well as the impulse purchase ($4 is the price for me for an impulse purchase).

    @HODGEPODGESPV – my mom recently bought a nook (she’s not as old your mom – G-d bless her, but she is a diabetic and has vision issues so the font size on the eReader comes in real handy). I don’t know about the Kindle, but you can hook up 3 nooks to the same account. I simply hooked up her device to my account and she can download all the books I have.

    I wonder when a Netflix type service for eBooks would start – pay a monthly fee and read as much as you can or some sort of this type of business.


  10. Thanks, all, for this lively and informative discussion. I'm pleased you came here to have it! Best wishes to you and your books, e or otherwise. Best, Irene

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