Two days ago The Wall Street Journal highlighted the growing popularity of self-publishing which is turning the charts on end. New names are being made, and many of these authors are selling books for as little as 99 cents. One thriller writer, John Locke, has seven successful books selling at under a dollar. Despite paying about $1,000 to have a book published digitally, he earned no less than $126,000 from Amazon in March alone. Downloads of his books have gone from 1,300 in November to 75,000 in January and 369,000 in March.
The WSJ goes on to say that the issue of pricing has been to the fore since the Kindle e-reader was introduced in 2007. The demand for the device “exploded”, driven by the popularity of $9.99 digital best-sellers which were available on the same day as hardcover editions. The publishers didn’t like this:
Initially publishers sold their e-books at wholesale prices to Amazon, which then offered the e-book at the discounted price. The country’s six largest publishers, increasingly concerned that e-book discounting would erode their traditional business, subsequently embraced the so-called agency model in which they set the retail prices of their e-books. On Wednesday, many of the Kindle best-sellers offered by these major firms cost between $11.99 and $14.99.
Amazon says its studies have shown that digital titles sold by publishers using agency pricing aren’t showing the same rate of unit growth as books that Amazon can discount. “The publishers showing the fastest growth are the ones where we set the prices,” says Russell Grandinetti, Amazon’s vice president for Kindle content.
Blog Kindle believes that ebook buyers are encouraging publishers to keep prices high simply by continuing to buy their overpriced books.¹ In an article this morning they suggest that buyers should make an effort to buy cheaper books whenever possible. There is a lot of choice out there, from a wide range of sources, such as Manybooks and the Baen Free Library, but they acknowledge that there isn’t much in the way of current bestsellers.
Meanwhile, if you browse the bestsellers lists in the Kindle Store you will find that popular titles are seldom cheaper than the physical choice. In many cases, real books can be had from Amazon at a range of cheaper prices, yet there is only ever one Kindle price. You will also note that the hardback/paperback marketing model, which allows premium pricing in the first few months of a book’s life, is faithfully and illogically reproduced in the digital world for the publishers’ benefit.
Major publishers still have their heads in the sand. There is absolutely no doubt that they are using ebook sales to subsidise physical books. As long as they continue with this attitude there will be a gradual haemorrhage of talent to the self-publishing world. In a free market, ebooks would be a fraction of the cost of real books and that is what will eventually happen. Publishers will appeal to traditionalists and bemoan the demise of “real” books, but they will be no more successful in this than were the music publishers in defending CDs.
At the moment it is difficult for major authors to ditch their publishers and turn to self-publishing. But as ebook market continues to grow, as it inevitably will, the day of reckoning for the publishers will come. I think that day is nearer than any of them can possibly imagine.
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¹ Yesterday I mentioned a book, The Eye Collector, which I bought from the UK Kindle Store. This is a case in point to illustrate publisher greed. In the Kindle Store it sells for £13.25 while Amazon sell the hardback from as little as £11.40. You can even get a CD audio book, which involves a lot more production cost than an ebook, for only £9.87.