Forbes: Let the Ebook Price Wars Begin: Three Ebook Pricing Predictions
Snippet:
“Here are some predictions:
1. Amazon will not be the lowest priced retailer for every ebook out there. One of Amazon’s policies seems to be to offer consumers the lowest prices anywhere on anything it sells. One interesting part of the settlement is that it stipulates that retailers cannot lose money on business from any one publisher, meaning that if Amazon discounts certain Hachette books below cost, it may not be able to discount others because it has to make a profit. Different booksellers will use their discount pools differently, meaning that sometimes, Amazon will not be the cheapest option.
2. For some ebooks, discounts will not result in enough increase in unit sales to justify the discount. Let’s engage in a thought experiment. If you discount an ebook 20%, say from $10 to $8, you need to see a 25% rise in unit sales to generate the same revenue. For instance, if you sell 100 copies at $10 each, that’s $1,000 dollars. At $8 each, you would have to sell 125 copies to reach $1,000. This analysis of HarperCollins ebooks that have been discounted since Sept. suggests that the discounts may not result in commensurate rise in sales.
3. High-priced ebooks will still dominate best-seller lists. For certain books, titles by James Patterson or John Grisham, for instance, consumers seem to be willing to pay whatever price they have to to get the book they want: they’re not choosing between a $12.99 legal thriller and a $3.99 legal thriller — they’re choosing between Grisham and Grisham-alternative. Authors like Grisham and Patterson have enough of a following that readers will buy their books at whatever price the retailers will set. While the retailers seem to be discounting some of those books now, I think they will soon learn that readers will pay what they need to pay to read them and prices will steadily go up and settle at $12.99 to $14.99 for most popular best-sellers. Perhaps the retailers are banking on consumers doing comparison shopping and seeing they can save $0.50 or a few dollars on an ebook title. I would argue that the closed ecosystems of Kindle, Nook, iBooks, etc. will discourage that. Most ebook buyers will just go on their preferred device and download their next book without even looking at competitors’ prices.”
Stephen
4 Responses
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Continuing the Discussion
I do wonder if the new ebook ecosystem will create best-seller authors in the future. Editors had to pick authors and titles that became the profitable “home runs” that made publishing less known authors possible … can this continue in a “flatter” social media world?
Bob Watson Wellll . . . 50 Shades started out as an ebook and went on to a traditional publisher. I think it’s a way of getting noticed and then entering the bigger marketing and distribution engine.
Agreed, for now. Traditionally (one might say) the big publishers “validated” authors simply by taking them on. I do wonder if this will continue to be the case. In some sense, it may be that this is the only reason for their future existence.
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