What's an e-book really worth?

Oh, if only Johannes Gutenberg could read the Amazon message boards, he would probably be…horrified. Readers turning against authors, publishers, and each other; readers lamenting $10 price tags because new books just aren’t worth that much; readers admitting that they read more from a screen than they ever would on paper. The value of the printed word that Gutenberg invented, some 500 years ago, just isn’t what it used to be.

Until the iPad came along, that is, and breathed new life into a wilting publishing industry. The device’s iBook store follows an agency model approach to selling electronic copies, meaning publishers can set their own prices (from $12.99 to $14.99) and keep 70 percent of the profits. Naturally, five of the country’s six biggest publishers—Hachette, HarperCollins, Macmillan, the Penguin Group, and Simon & Schuster—cut deals with Apple to be part of its new e-book marketplace even before the iPad launched. These newly empowered publishers also began rethinking their deal with Amazon.com, which has dominated the e-book market since the Kindle’s 2007 debut. Despite competition from Barnes & Noble and Sony, the company still enjoys 90 percent of the e-book market, thanks to a $9.99-per-book mantra that helped lure millions of customers to the Kindle store (and also pissed off publishers, who had to settle for a much-slashed “cover” price until the iPad’s promise of pricing autonomy went public).

So the publishers took their post-iPad bargaining chip—their revalued content—straight to Amazon and demanded more per e-book for the Kindle. First it was Macmillan, who won their case when Amazon agreed to raise consumer prices; and then it was HarperCollins and then Hachette Book Group. All of them argued for higher price points that, as Hachette CEO David Young said, “reflect the value of our authors’ works.” In other words, something that the Amazon.com bargain-basement prices do not.

Another wrinkle in the saga, according to last Thurday’s New York Times, is that Apple may have added its own discounting terms into their contracts to keep its competitive edge. Which begs the question at the heart of this pricing melee between publishers and Amazon (and now, frustrated readers and authors): What is an e-book really worth, when you can’t share it or store it on a (physical) shelf once you’ve finished it? Does a higher price tag validate an author’s craft, or just make it more inaccessible to the audience?

If you just looked at the Kindle store, and examined which titles are flying off the virtual shelves, books would seem to be one of the company’s least valuable commodities: 15 of Amazon’s top 25 e-book bestsellers are free, and eight more cost less than $9.99. There’s no doubt these deep discounts also help sell the Kindle itself—the lower the book prices, the more useful the device is, so more people buy the e-reader and the company can compensate for the lower per-book price. It’s great for the devoted reader—many commenters on the company’s Macmillan deal discussion thread say they read way more on a Kindle than they ever did before.

What do you think, Shelf Lifers? Do you think that e-books devalue the published word or promote authors and reading itself? Would you pay $14.99 for an e-book?

Comments (40 total) Add your comment
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  • JLC

    It seems to me that all “books,” whether electronic or paper, have certain fixed costs: the author, the editor, promotion, etc. After that, the price should be determined by the form in which the book is sold. Electronic books, for example, do not need typesetting, printing, binding, transportation, storage and sales costs. An ebook reader shouldn’t be charged for those costs.
    When CDs first came out, the record companies charged a premium over tapes and LPs, because it cost more to make a CD. Soon, the cost to make a CD dropped like a stone, but the record companies kept the prices artificially high. Now the record business is in shambles. The publishers could learn something there (but probably won’t).

    • Toni

      i totally agree with you! Plus I would never buy a hardcover book, always waited for the cheaper paperback

      • Allison M

        Regarding people who always buy the paperbacks: This is why some publishers are thinking about delaying accessibility to ebooks until some time has passed after the book is first released. This way they can (rightfully) charge a premium for new merchandise by giving you the option to buy it now in the store, or later online. (Think about it – you do this all the time with paperback books and last season’s clothes on clearance. Yet people still think this is unfair.)

        Author Scott Westerfeld wrote a great blog entry about it:

        http://scottwesterfeld.com/blog/2010/02/zinc-blinked/

        Additionally, re: JLC above, I completely agree that ereader customers shouldn’t be charged printing/etc costs. However, this cost is so small (when performed on a huge book distribution scale) that it does not account for the huge price discrepancy we see today.

        Lastly, Amazon is losing crazy money by selling books for so little, and would probably raise the prices sometime anyway.

  • Joel

    I absolutely love my kindle and I am one of those who reads way more now than I ever did.

    To be honest though, I think that it has more to do with convenience than price. Most of the books I have read are older and would have been under $10.00 if I had bought them in paperback anyway.

    The fact that anytime I want a book, or I’m not happy with the book I’m reading, I can have a new one at the press of a button. That’s the beauty of the Kindle to me.

    • Book Reviewer

      I totally agree. I hesitated to buy the kindle because I do love to hold books, the library and bookstores and thought I would miss them, but I am actually reading a lot more. Price is part of it but the convenience is the best! So publishers are getting more money from me because I am reading/buying more. I would rarely spend $25.00 on a book – usually wait for the paperback version. BTW – the best feature of the Kindle is that you can sample a book before you buy it – saves money and time.

  • vg

    Yes, I would pay more, probably in the $14.99 or trade paperback range but I am willing to bet I am in the minority. I actually bought my Kindle for the opportunity to sample a book before I buy it. Frankly it’s gotten me to try new authors I might not necessarily have read. Also I feel good about saving a tree or two. The funny thing is when I used to “loan” my books out to friends and coworkers, no one ever bothered to return them anyway.

  • Jason

    I dont pay 14.99 for a real book so I certainly wont pay for an electronic one. I always wait for paperback and usually the used paperback at a used book store.

    • DW

      Keep buying used books so the authors you enjoy never get paid. Awesome!

      • Matt

        For any given product, if I cannot: 1) Hold it in my hand. 2) Lend, sell, donate, or otherwise dispose of it in any manner and for any compensation I choose. 3) Throw it at ninjas, then I do not truly own it and therefore will not pay any more than a few dollars for it. I’ll pay a “full” price to BUY things, which comes with a complete sent of usage rights. Digital distribution for anything is more like renting and I’m simply not going to pay much for that.

      • Matt

        That was supposed to go into the main thread.

      • Allison M

        True on one hand, but in the long run, used books still support bookstores, which support the publishing industry, which supports authors.

  • Fran

    I don’t own any e-reader device and nor do I ever plan too. Sitting on the subway all I can see is people around me pulling out books- and the entire time on it, saw one person with an e-reader. I think, and I’m one of them, that people still enjoy reading an actual book. There is something about it. Also my eyes hurt enough from the constant glare of a computer screen- I want to give them a break!!!

    • Gail

      Fran-the point of the Kindle (or any e-reader) is that you’re not reading a “computer screen”. It uses e-ink technology. It looks like you’re reading a paper book, but with more convenience. They are lighter and easier than a traditional book. Check one out to see.

    • Al

      There’s a difference between an e-reader and a computer screen. E-readers create a text on the screen and it stays there until you turn the page, like an etch-a-sketch, so there is less strain on the eyes than a computer screen. The iPad will not have this and will be a flickering screen.

    • The Dude

      Supposedly the Kindle has something called “e-paper” or “e-ink” where the screen doesn’t cause the eye strain that a computer screen does. I don’t have a kindle so I can’t say for sure but that’s what I’ve heard.

    • Jackie

      I take four different subway cars for my commute to and from work, and see at least two other people with an e-reader every day. The screen is much easier on the eyes than a computer screen, and I love the ability to change the text size. As someone who commutes and carries a heavy bag every day, the Kindle is beyond convenient.

      I read way more now than I ever did before the Kindle. I don’t have a lot of time to go to a book store or library, so a book delivered in seconds is amazing. The free samples are especially handy. As someone who likes to highlight and make notes when I read, there is nothing easier than an e-reader. And, I may be alone in this, but when I read a really great book on my Kindle, I like to buy a physical copy to keep, to lend out, etc.

      I don’t think an e-book is worth quite as much as a physical book – you are saving paper, after all, and you can’t save it on a shelf or lend it out to friends. I can’t see myself paying more than $9.99 for an e-book, regardless of the device.

  • jets

    it almost sort of reminds me of the music industries panic over file sharing… except that most authors are paid a lot less than musicians.

    check out my novels? :D THX! http://tinyurl.com/ygh3vux http://cameronglenn.wordpress.com/

  • Ed

    Am I the only one who finds e-readers to be a bit harsh on the eye? After spending a good part of my day behind a computer, I like holding a book in my hands on the train ride home (and while at cafes, or on my couch, etc). Though some e-readers are better than others, my eyes seem to tire out more quickly using them. They don’t tire so easily when I am reading from the actual book.

  • Stephen

    Um…to be quite honest, I think that the fixed costs in books don’t mirror up to the $9.99. While this is a bargain, you have to consider the fact that unlike a normal book (one that I might have been charged $9.99 for) I can’t lend this one to a friend when I finish it. I also can’t sell it back to a bookstore or trade it in for another book. I never really bought books, always went to the library, but am willing to pay a little for the convinience that comes with a Kindle. Publishers need to be careful, the electronic format of books is getting people ot read more – they can’t overdo it and become greedy or else they will get back to where they were. (I’m actually quite shocked that they don’t harp on libraries for not charging a monthly membership fee, I mean, what about the ‘value’ of a writer’s work there?) Just sayin.

    • The Dude

      I thought Amazon allowed you to “share” your e-books with friends and/or had a way for you to “sell back” the titles that you were done with. I could be wrong, but it might be worth looking into.

      • Toni

        with the nook..you can share books with another nook owner

    • vikki

      Libraries are some of the largest purchasers of physical books. I like the agency model for e-books. It seems to make sense. The prices steadily drop over the life cycle of the book. You pay more for a new release just like you would if you bought the hardcover book. Eventually, the book will be the same cost as a paperback.

  • RustyT

    I read a lot more on my Kindle than I did with printed books. Before, I just waited until most books I wanted to read would eventually came out in paperback (or I could find them in a used bookstore). Now I can read them quickly. If some books are suddenly $15, I’ll simply choose not to purchase them (or wait until the price goes down awhile after release, as I imagine they’ll do) but instead seek out other e-books. And for the people who speculate about the difficulty of reading on a Kindle — try it, you’ll realize it’s a whole different animal from a computer screen; there’s no backlight, and it’s actually a lot easier to deal with on the go (at the gym, in the airport, etc.) than a physical book. It doesn’t flip closed on you, it’s easier to turn pages, etc. I now dread having to deal with printed backs when a book I want to read is not on the Kindle.

  • KT

    I don’t pay $14.99 for real books; why would I pay that for an electronice one that’s so much more limited than the ink-and-paper? Especially when both my husband and I would have to pay it, since you can’t lend books around. And even if you could lend them, the formats are all proprietary, so his Sony can’t read my Kindle book. It’s ridiculous. If the publishing industry wants to charge those kinds of prices, they should insist on some standardization among devices and rules, like Apple’s and the Nook’s, that allow for book sharing.

  • Cole9219

    I either buy PBs (rarely), get hardcovers for X-mas, or *gasp* order it from the library.

  • ks

    Love my kindle, I do read more and have found new authors. Some of my fav authers do not publish on the kindle or the nook. I will pay 14.99 on a book if it is on of my favs plus my husband wants to read “books” and does not want to use my kindle, even when offered.
    Living in Alaska, the kindle is a great option-long waits in the airports, shipping costs and all.

  • Scoop

    I would love to not have to pay 100s of dollars for each of my textbooks. I’m curious to see how the sale of e-textbooks is handled. I can’t picture myself feeling comfortable spending 200 bucks on a 1 Megabyte text file. Plus, I’m used to being able to resell my textbooks after I’ve used them, so I can recover most of my expenses. I can’t see how I will be able to resell an e-textbook.
    I suspect that all e-books are going to be traded for free on the internet – yes, I know they already are – in the same way music and movies are. Publishers need to keep the prices of e-books reasonable, or many people will opt for free (but illegal) copies.

  • Dan

    What do I think, Daniella? I think the folks commenting here are commentators, not “commenters.”

  • Leila

    If they are going to charge the same amount for an e-book as they do for a paper book I would like proof that the overhead costs are actually the same, which I highly doubt they are. The author actually only makes a small percentage of the book sales, so what is the rest of the high cost for? No way am I paying $14.99 for an e-book. Maybe we should just all rediscover classic novels which can mostly be found free online…

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