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On Book And Content Pricing

Out Of Date Warning

Languages change. Perspectives are different. Ideas move on. This article was published on April 4, 2012 which is more than two years ago. It may be out of date. You should verify that technical information in this article is still current before relying upon it for your own purposes.

Yesterday, an (understandably) frustrated gentlemen tweeted a link saying the fact that my book’s print and ebook editions were priced the same, was “greed.” While this was a bit hyperbolic to be sure (and the price being identical was in fact a mistake that has now been corrected), it sparked a discussion about book pricing and content value that gave me pause to reconsider all I had previously thought about buying a print versus an ebook.

It’s not uncommon to see ebooks priced lower, and in many cases significantly lower than their print counterparts. It makes logical sense on first pass: the cost of printing, storing and distributing physical media is higher than the cost to send an ebook to a purchaser via email. Marco Tabini points out that “when you buy a can of beans at the supermarket, it’s the beans you really want, not the can, which is simply a convenient medium for the manufacturer to sell you their goods.”

The problem is, publishers have essentially shot themselves in the foot. By offering steep discounts on ebooks, they’ve essentially convinced the public that it is the can, not the contents, that people are purchasing. It doesn’t cost 50% more to create a physical book, but publishers act like it does when they discount their ebooks 50%. If we establish a price floor for the content at 50% below the list price, that’s an impossible position to recover from. Some have tried to fix their mistake; they’re being investigated by the Department of Justice for price fixing.

For those of us who produce content and sell it (that would be anyone who has written a book, given a talk or hosted a class), it’s easy to think that we should price our content to sell. But this is a mistake: ancedotal evidence suggests otherwise. Pricing content incorrectly leaves money on the table: it makes it really hard to earn more on the content you’re presently selling, and makes it difficult to price another product higher in the future.

We need to stop buying the can, and start buying the contents. When we evaluate a pricing strategy, or a purchasing decision, we need to look at more than the medium the product is being packaged in. We need to look good and hard at the value of the content, the value it will bring to our lives and the value it holds for the person who produced it. Chances are good that for most products, it would be a steal at twice the price.

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Cal Evans (@calevans) wrote at 4/4/2012 9:22 am:

Hi Brandon!

I took a different tack with my second book, “Avoiding a Goat Rodeo”. I never intended for that to be a physical book, my intention was to simply produce an ebook. However, so many people clamored for a physical book that I went to lulu.com and produced one. (great system) The price of the ebook was $9.95 on Amazon and I priced the PDF the same. The physical book did cost me almost exactly 50% more ($5.35 per copy) so I sell the printed copy for $15.00. Again though, like Marco posted, the “beans” (content) is still $10 and I think that is a fair price for the value it provides. I simply pass on the price of the “can” (the physical book) to those that want it. (Of course, I throw in an autograph for free on all of the physical books.) :)

Great post!

=C=

Christof (@cdamian) wrote at 4/4/2012 9:54 am:

I agree that there is not a big reason for the ebook to be cheaper than the printed book.

But I think the ebook should never be more expensive than the cheapest available print version. On Amazon you find a lot of books where the ebook is a little bit cheaper than the hard-cover, but a lot more expensive than the paperback.

If we are buying the beans in a paper-bag they shouldn’t be more expensive than the cheapest can.

The worst thing for me about ebooks are regional restrictions though, there are a lot of books that are not available for my Kindle in Spain. This is the same mistake that was made with the DVD region code.

Jake Smith (@jakefolio) wrote at 4/4/2012 9:57 am:

I agree that the “discounted” ebook prices can easily devalue a persons work, but all of the physical costs associated with a dead tree version still heavily outweigh ebook. Storage, bookshelf space and shipping are all costs that don’t translate to the ebook.

Deciding the value of a book by the author is more than bias, but also a book’s value isn’t always initially realized either. The value of a book/content is different for every person, so there is no single measurement to decide the value. More so, the author needs to decide the audience it wishes to capture, and whether the profits or wide readership is more important.

Hopefully I haven’t lead you to believe I think there is a simple answer to a complex situation. I merely want to state there is a strategy to the pricing that isn’t always directly correlated to the value of the content, but the large picture strategy the author wishes to accomplish.

Anthony Wright (@wrightmanthony) wrote at 4/4/2012 10:22 am:

While I can agree that the value of the content of an ebook needs to be examined when determining what is a justifiable price, you do have to remember that the cost to manufacture is indeed baked into the price of a physical book. Yes, I might be buying the beans for the beans and not the can, but the manufacturer still adds the cost of producing and shipping the can to the price I have to pay for the beans. Whether I like it or not, I *AM* buying the beans *AND* the can.

Also, there is a matter of worth to the consumer. For one thing, if I have to choose between a $30 ebook and a $30 physical book, I’ll generally buy the physical book, one reason being that once I’m done, I can sell it to recoup some of the cost, or at the very least, donate it for a tax deduction.

Anthony Wright (@wrightmanthony) wrote at 4/4/2012 10:31 am:

@Cal Evans:
I like your model.

Have you ever considered selling the physical book bundled with the electronic copy for a slight markup (say, in your eamples, $20 for the ebook/physical book combo)? I myself and a few people I know have really wanted to see such a thing (in the same vein as DVD & Digital bundles on the market for video). I was just wondering what someone’s take who actually sells content in this fashion would be. Do you think that there would be a market for such a thing, or do you feel that the so many people want one or the other that it’s not worth the effort? Would it be worth it to you as the content creator knocking the $5 (or however much) off the price of the content if such demand existed.

Just curious. Thanks!

Lawrence H. wrote at 4/4/2012 11:22 am:

Let’s not forget that the can is a physical object that has a literal production cost. There is no wrong in passing production costs on to the consumer. So start with the cost of the content and then add on the cost of the can, but don’t say the can should be free since it isn’t content. (If the can is free, I want a solid-gold can, please. Is it still free?)

I’ve been exposed to the publishing industry through personal experience enough to know that the pay-for-content-not-package argument is BS. It’s the same BS as telling customers they need to pay a convenience fee for a service that costs a company less to provide than their regular one. They charge the money because they can get away with it. Too much pricing today is based on what can be charged over what should be charged, perceived value over actual value. It is all BS used to mask basic human greed.

Brandon Savage (@brandonsavage) wrote at 4/4/2012 11:38 am:

If you think that my argument is that the physical manifestation of the book has no cost, then you have misunderstood my argument.

My argument is not to reduce the cost of printed books to the price of ebooks. My argument is to raise the price of e-books to the cost of printed books, less the actual costs of printing. We have devalued our content by offering a significantly cheaper option.

PHP Architect prices the print version of my book $4 higher, to reflect the cost of publishing and shipping a physical title. But the majority of what a buyer is paying for is content – this is why the price difference is minimal. In Cal’s case, the physical book cost him about $6 to print, which amounted to 50% more, but for most books priced higher than Cal’s book the physical cost is less and certainly not 50%.

In other words, as content producers we should consider what our content is worth. Then we should figure out the costs per distribution medium and tack those costs onto the content price. The can may have an added cost to the overall product, but replace the can with a bag and the contents still cost the same, even if the material used to contain them is different.

Scott Mattocks (@scottmattocks) wrote at 4/4/2012 11:49 am:

For me, having a physical book is not an added value. Digital copies are more valuable to me. If you are going to force me to lug around a heavy stack of paper, I want a discount on that copy. I don’t care how much extra it costs the publisher to produce, I don’t want the burden and lack of usability that comes with a physical product. I want pure content that I can consume on my own terms. The fact that physical copies are priced higher than the more convenient digital copy has always struct me as odd.

cephyn (@cephyn) wrote at 4/4/2012 12:10 pm:

Hardcovers cost more than trade paperbacks, which cost more than regular paperbacks. Why? Is it the production cost? If so, then the ebook should NEVER cost more than the lowest quality physical copy. And yet, I just bought a new kindle last night and there were quite a few books I looked at where the ebook was more expensive than the paperback. As a consumer, how am I not being screwed here?