Thursday 31 October 2019

The bizarre economics of book pricing.

The pricing of books can be an emotive subject.

There are a number of things that always seem to crop up whenever it's discussed online:

1) Someone who is genuinely poor will come along to decry anyone comparing the price of a book to that of a cup of coffee in Starbucks. They'll remind you that price of both books and coffee-chain coffee can genuinely constitute a big chunk of any disposable income they have - and that the concept of "disposable" income is in fact alien to them.

This is a fair point and hard for that rare beast - the financially comfortable author - to argue with.

A sub-thread will then develop about libraries and how some people live a gazillion miles from the nearest one.

Another sub-thread will develop about whether books and coffee are luxuries, and whether books occupy some niche that coffee doesn't which makes them something that people should expect to have - as the library system seems to imply. We don't, after all, have a public coffee system.

2) Someone - usually many someones - will tell us that somehow putting the book into an electronic file rather than on paper sucks out the value to such a degree that helping yourself to it for free isn't stealing. And even those who don't advocate piracy may maintain that an e-book should be substantially cheaper than one printed on paper.

A sub-thread will develop where authors attempt to educate the world in general (against its will) about the fact that the paper constitutes a small fraction of the price-per-unit and is in fact often smaller than the chunk some governments (the UK for sure) take in tax off e-books but exempt paper books from.

The author will explain that the bulk of the cost of a book is the labour of those involved with its production and that this must be recouped across the number of copies expected to be sold. A calculation that leads to the pricing of both ebooks and paper books across the lifespan of a novel.

Let's put those genuine issues to one side for now and focus on the median book buyer, an individual who can easily afford the occasional Starbucks coffee and the occasional new book.

What's a fair price for a book?

Often the price on offer depends on whether you want the thing NOW or if you're prepared to wait. If you wanted to see Endgame when it came out you'd be faced with a trip to the cinema and a sizeable hole in your pocket. If you wait 3 or 5 years you'll be able to see it as part of your Netflix (or alternative) package or pick the DVD out of a bargain bin outside a thrift store.

With many of my books you'll have to buy the hardback if you want to read it in the first year or buy the e-book at a higher price than you'll have to pay 12 months later.

This is just how the publisher structures its sales. It's not unique to book sales. is currently listing my book for 2020, The Girl and the Stars, at $22.99 for the hardcover and $13.99 for the ebook.

Every year I will get a random outraged email or two complaining that THE KINDLE COSTS MORE THAN THE PAPERBACK!!!!  The fact is, though, that the paperback is listed a year in advance but you can't have it delivered to you until the year is out - and by that time the kindle will have come down to a similar price.

I hope you like my work enough and are sufficiently financially comfortable to treat yourselves on launch day.

However, if either or both of those things are sadly untrue ... then patience will reward you with more economic opportunities to acquire the book in due course.

In fact, if you wait long enough, the ebook will undoubtedly be offered in a promotion for $0.99.

This is a remarkable reduction of ~93% in price.

I assume that publishers have established through trial and error that this is a worthwhile strategy, and that many readers won't stint their enjoyment for months or years to save the money. Many of those readers will blow $10 or more on far shorter lived pleasures than a good book, a pizza they later regret perhaps, or a bottle of wine, who knows?

Book pricing is an odd beast. Some might say that $0.99 for a book is a race to the bottom that gives readers an unreasonable view of the value of the labour and skill involved. Others may point to libraries and second-hand stores and note that we've had access to free or very cheap books for decades - many of them classics loved by generations.

Others might point at Picassos that have sold for tens of millions and say that the fact we can buy a decent print of them for tens of dollars doesn't collapse the market.

Supply and demand are tidal forces that create many strange whirlpools.

My self-published short story Bound retails for $2.99. How do I expect anyone to buy a copy when they can buy whole books for $0.99 or indeed get books for free legitimately both on Amazon and in libraries?

I priced it at $2.99 because that is the cheapest price where Amazon gives the author 70% of the sale price. At any price below $2.99 the author gets 35% of the sale. Which is still far more than they would get if it was traditionally published. So remember - when you buy a book at 99 cents, the author gets 35 cents and Amazon take 65 cents (note: the author gets significantly less than those 35 cents if it's traditionally published - typically 25% of what the publisher gets after Amazon dip their beak).

And yes, I priced it at $2.99 because I thought that a fair number of people would consider that sum in terms of a cup of chain-coffee and just want to treat themselves to another dip into a world that they had enjoyed.

Some (many?) may point in outrage at the story and say $2.99 for a 16,000 word story is some kind of robbery. I have no answer to that other than to suggest they don't buy it, and also to note that many people allow themselves to be "robbed" on a regular basis when treating themselves to all manner of things they want when they want them.

The other answer is that a short story takes a lot longer to write than a similarly sized chunk of a book. And I expect to sell far fewer copies as the market for short fiction is very limited. As such, if it is to be in any way economic for me to take time out from writing books to write a short story, it has to be priced in this way.

You might suggest (correctly) that if I halved the price and sold four times the number of copies I would make the same income. However, my intuition is that the price doesn't act as barrier of that magnitude to the readership as a whole. I don't think if I halved the price of Bound that sales would increase the necessary four-fold. And does anyone suggest that if I keep halving the price then sales will continue to double ad infinitum?

I'll stand by my opening statement: book pricing is an emotive subject. And I'll add that it's emotive at all levels, from external commentary to the act of purchase itself. Logic takes a backseat most of the time and all I (or more often, the publisher) can do is go with our gut and guess.

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  1. The world is full of entitled deluded people. Keep writing your awesome stories and I will continue to be grateful for them whatever the cost per word. and if I one day cannot afford them then I’m pretty sure I’ve got larger problems than begrudging you and your support team their rewards for the successful path you’ve forged as an author.

  2. I always like to look at books as an unnecessary entertainment expense and compare it to similar expenses. If I'm willing to pay $15 to see a movie for 2.5hrs of entertainment, that sets the benchmark for my cost / hr. When I was younger and not particularly well off, I found myself frequenting the movies less often (almost never) and purchasing more paper back books most times used. I still frequent used books stores and used books sellers if I'm willing to wait for the story but, as you pointed out Mark, I'm also willing to pay the price to have it NOW in the format that I prefer.

    Another wrench to throw in, if an author self- publishes or retains higher margins through their personal store v.s. retailers, I'm typically willing to wait the extra week or two to support that method of distribution.

  3. I submitted a comment a few moments ago, but it didn't seem to go through. If this is a duplicate I apologize.
    I burned through your three main trilogies over the last two weeks. I wouldn't have been able to if ebooks weren't as accessible and affordable as they are. I also wouldn't have started Prince of Thorns if I hadn't acquired it free of cost--in this case the library, but it could have easily been a second hand store. Im not willing to invest $10 in a new book if I think I may not enjoy it, though spoiled that may sound. Libraries, second hand book stores,and promotional ebook prices must surely increase overall sales of recently published books by the same author. I wouldn't have spent upwards of $100 on this reading spree without them.

    Thank you for writing books with characters you can love (and love reluctantly), plots you can't put down, and magic that puts goosebumps on my neck.

    1. This is exactly why many self-published authors offer a small portion of books at a lower price. It allows people to "test" their stories without the reader incurring a huge cost; in other words, it breaks down a barrier to entry. There's no shame in waiting for a book to go on sale to buy it, or in picking up used books or checking books out from the library. Those are all legitimate ways to discover and try new authors. (I say this as a self-published author.)

  4. I read an article by a professor of Ethics who argued that illegally downloading an e-book is ethically fine IF you have paid for the audiobook or hard-cover; his argument hinges on the fact that you have paid for the story, for the words, and for all the production-related costs associated with the book. Thoughts?

    1. I question his/her ethics.

      If you don't have a thing, and you want a thing, and it is for sale, buy it or do without.

    2. Most fantasy books come in trilogies or more. If I download the first book from piratebay or a similar site and then buy the rest of the books from an online bookstore isn’t that a win for the author?

      If I then continue to buy books by that author wasn’t my initial ‘free’ download incredibly beneficial for the author? What am I missing?

    3. You're missing the bit where you are stealing. Stealing things is wrong.

  5. Books and audiobooks are easily one of the cheapest forms of entertainment around. Paying 10-20 dollars for an (audio)book that gives you 10-20 hours of entertainment? It's a steal!

    What kind of entertainment only costs a dollar per hour?

  6. Where I live a hard-back will list at around 45$ ,and a paperback is around 20$.
    When I discovered my first kindle I found most books at between 10-20$ at amazon rather than my local book store. Anything between those two numbers I pay with pleasure. I like to see 500+pages if I reach the high end and expect 500- if on the low end. Just going from my local prices to having any new book being cheaper than old paperbacks is great. If the e-books climb towards 30-50$ Each I think I would not enjoy reading that much. With around 100 books a year that would put me down for more than a substantial amount of coffee :)

  7. Speaking as an author, I think that you're buying the words not the paper. The fact it saves money for the publisher and allows the author to (theoretically) have a larger cut is a good thing. If you can pay for a show on Amazon Prime for 2.99, you can pay for one here.

    And if you can't, well, it's worth that cup off coffee.

    1. That's why i'm more willing to patreon books, or buy self published.

      I do not understand the price of ebooks. I'm dying to read holy sister and i've bought every single Mark Lawrence's books so far, but i'll wait for a "normal" price.

      Speaking as a consumer, i used to buy books. Paper, cover, the full thing with words in it and the ability to lend them, read them again, put them in a nice library.
      Now that i'm buying mostly ebooks, i got no paper, no beautiful hard cover and my library, and i may not be able to read them again if amazon decides to revoke my rights on it.

      It's worth less. I fully understand that i get the same words, so the author part definitely should be the same. But as a consumer, i don't have the same product at the end.

  8. For me I always want to have the hardback. And I have a question. Red Sister is sold out in HC, why the publisher do not print more copies so fans could buy it?

    1. The main reason is that there is a minimum number required to make a new printing economically viable (low thousands) and the publisher doubt that they will be able to sell that many hardbacks.

      A subsidiary reason may well be that this approach encourages readers to buy hardbacks when they are available and not sit on their hands.