The Technium

99 Cent Books


I am having trouble convincing myself why digital books will not cost 99 cents within 5 years. All books, on average. Just as the price of music does not in general change on the length or quality.

99cents.jpg

Here’s a reason why they’ll be as inexpensive as music. The other day Joe Konrath, a genre writer, and avid self-publisher of ebooks, said:

Eighteen days ago, I dropped the price of my ebook, The List, from $2.99 to 99 cents on Amazon. I was selling 40 copies a day prior to that.

Currently, The List is #37 in the Top 100 Bestsellers on the Kindle. It’s selling 620 copies a day on Amazon.

Do the math:

2.99 x 40 = 119.60
.99 x 620 = 613.80

I don’t think publishers are ready for how low book prices will go. It seems insane, dangerous, life threatening, but inevitable.

I predict we’ll be there in 5 years, (before the marginal price drops to zero, but that is another story.)

UPDATE: My math is horrible; I originally had the decimal point wrong. Now fixed.

UPDATE 2: Several readers asked what the figures would be if we factored in Amazon’s cut. Readers MCM and EsmeraldaGreene offered calculations. It is a significant reduction of the difference.

Amazon pays out 35% for ebooks priced below $1.99, and 70% for ebooks that are $1.99 and up.

So the math is:

2.99 x 40 = 119.60; x .70 = $83.72


.99 x 620 = 613.80; x .35 = $214.83

Also, as others have noted, $1 is near to the royalty payment that an author will receive on, say, a paperback trade book. So in terms of sales, whether an author sells 1,000 copies themselves directly, or via a traditional publishing house, they will make the same amount of money.

I am not saying this is good news for authors. 99 cents is not. It is good news for READERS.

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Comments
  • Eric Sadoyama

    Err… 2.99 x 40 = 119.6. Not 11.96.

    • Kevin_Kelly

      Doh! My stupid. Will fix.

  • JohnFAllsopp

    And, as a twice published author, $1 a book is probably the ball park for what an author really receives in the traditional publishing. Just cutting out the many middle men.

    • Well, with a $0.99 eBook on Amazon, they will give the author $0.35 and keep the rest themselves, seem like a pretty huge middleman to me.

      • MCM

        Traditionally, the middle men would take around 90%, so this is actually an improvement.

  • I hope they actually read those $1 books and just don’t collect them like postage stamps. I often worry that the commodification of human intelligence by technology will increasingly lead to it being valued less and therefore given away for near nothing. While this is an amazing bargain for those of us who value knowledge, wisdom, and unique insights, but for those who prefer watching really stupid videos on youtube and obsessing about themselves on facebook these books might as well be postage stamps.

    Note: ‘What Technology Wants’ was an amazing book and I would have easily paid $50 for it.

  • Macke

    Maybe books will start to have donate links or variable pricing. I’d easily pay more than $1 for good books, but I might not want to the first time.

    I think average buyer price would then be a pretty neat metric that someone will make something useful out of.

    • Personally I see the arts (at least arts in the digital easily pirated/shared/copied format) returning to art’s “patronage” roots. If you want a book or piece of music made you’ll pay the creator before hand to do the work (see pledgemusic.com or kickstarter etc). Where as in the past only ridiculously wealthy people could pay artists to sit around and make art, today millions of people can kick in a few bucks, but once the art is made it will be freely available to all. People will either pay for live events (authors giving talks, musicians playing live) or throwing in pledge money to get their favorite author to write the next book or musician to record their next album. Or maybe I’m crazy.

    • asrai

      On Smashwords authors can set the book “reader sets the price” and you can pay what you think the book is worth including free. But it’s not used very often because the affliates that sell the books- Kobo, Barnes and Noble- don’t have the ability to use the same premise.

  • This is a contrary view to many authors who fear what you are describing, so I was pleasantly surprised to read your perspective on this! I agree that lowering the price will equate to higher profitability for the author – at least for those authors who ideas resonate with their readers and in turn can generate a loyal following.

    I believe what many who fear this change miss is the impact this will have. By lowering the price books will be available to a wider audience. Wide accessibility = wide markets. The book will be an easy sale to a wider number of people.

    • It’s a question of risk and investment. If you need to sell hundreds of copies of a book a day to make up for what you could earn during that day with a different job, you might not take the risk and invest that much time.

      Many authors, scratch that, many people don’t have the savings or appetite for risk to make such investments. That’s usually been where publishers come in; think of them as professional risk takers.

      Or think of them as professional risk avoiders. Much like movie studios, the problem with such an intermediary is that they want to do what’s called “managing risk”, which ends up changing stuff such that it’s deliberately similar to stuff that sold well before.

      Cynical thoughts aside, I think the $.99 price is awesome for people who would write a book anyway, regardless of the potential payoff. If $.99 means that people pay you because it looks interesting enough and is cheap enough, more power to you.

      • Interesting comment on risk and investment and your point is well taken. Your comparison reminds me of the difference between an employee and an entrepreneur. Perhaps a business model will emerge in publishing based on what you are describing – those who are intolerant of risk will stick with publishers, while those who are established authors, or more risk tolerant will strike out on their own.

        I believe that Seth Godin, a very popular marketing writer, recently transitioned from publishers to self-market his books through blogging and the Web. This seems to make sense given his large loyal following.

      • I think the risk you’re talking about here doesn’t apply in the vast majority of cases, at least for fiction: if you’re writing fiction, you’re doing it because you have to do it, not because you expect to make a living. So I agree with you that the .99 is great for people who would write a book, anyway, but disagree that the people who have managed to be published by traditional means have different risk profiles.

        • Risk profile, one term, so many meanings…

          Is publishing authors who were published by traditional means less risky than publishing authors that haven’t (for whatever reason)? I think publishers would answer that with a resounding yes.

          Does that mean there is a risk inherent in written works that the publishers base their views on? I don’t think so; I think that perception is a function of their particular view on the market.

          Are authors who go for ebooks more risk-friendly than authors who pursue more traditional publishing? Definitely yes; in the first case, there is no guaranteed return, in the second there is (unless you’ve been ripped off; one could argue that that case is in fact so common that it’s the norm).

          Does that mean they actually take a greater risk, though? If they would write their books anyway, absolutely not. Not everyone does that, though.

  • BillSeitz

    Well, volume may increase as long as you’re the low-priced producer. But once lots of people have $0.99 books out, I think the overall pie-size (in terms of units sold) gets limited by attention.

    Hmm, perhaps a future model will be a $0.99 ThinBook integrated with a paywall-controlled membership “community” site?

    • I think it is already limited by attention, for all practical purposes. If Amazon had a buffet model, ala Netflix, I might download more books to my Kindle, but I doubt I’d read more. Now if someone could only figure out how to give me more intellectual experiences per hour, _that_ would be something.

    • Lpking

      At $0.99, would it really be limited by attention? You look through your ereader or ebook reading app, you toss out or archive (on Amazon’s server, for example) the ones you haven’t gotten around to and may never get around to, something else priced at $0.99 catches your eye and you click that button…

      It’s an interesting hypothesis, either way. I’d love to hear some really knowledgeable marketers weigh in on this. It seems to me music is a good comparison product, because of the pricing. Then consider that more and more books are being turned into audiobooks, the price of those may fall as volume expands, and you toss another variable into the equation. If that happens, the comparison to music would especially apt.

      • BillSeitz

        Maybe you’re right. Esp given the number of unread *printed* books in my shelves!

        More to the point, at $1 a book is cheaper than a printed magazine, so you can buy one “just in case” you like it. And it’s OK if you start-and-drop or never-start-at-all.

        On the other hand, to the extent that this model works better for authors who sell multiple books to the same person, that unread-book overhang could be an issue: “I bought that other book by the same guy, and never finished it – so I guess there’s no point in buying this one.” (Which is different from my original point…)

  • Mike

    I would live to see the math include Amazon’s sizable take…

    • EsmeraldaGreene

      Amazon pays out 35% for ebooks priced below $1.99, and 70% for ebooks that are $1.99 and up.

      So the math is:

      2.99 x 40 = 119.60; x .70 = $83.72


      .99 x 620 = 613.80; x .35 = $214.83

      Konrath is still way ahead at the lower price.

      • Ernst_gruengast

        So the optimal price to pitch the book at for maximum return would probably be $1.99 – ie more or less exactly between these two prices.
        One might reasonably assume (I knowm logic is not cast-iron, but anyway…) that sales might be close to directly between these two figures ie 330 copies at that price.
        Return would therefore be $ 459.69.

        • MCM

          Aha, but that’s where it’s interesting. You only get 70% royalties between $2.99 and $9.99, so in fact the math works out like:

          $1.99 x 330 x .35 = $229.84

          So you do earn more than $0.99, but possibly not enough, especially if 330 copies turns out to be difficult at the higher price point.

          It’s a very interesting situation. I wonder if Amazon can or will adjust those royalty brackets as time goes on, or if they already know all this math and like the way it plays out?

          • That’s incorrect. Amazon pays .70 on $1.99 and up, not $2.99 and up.

          • MCM

            It’s possible KDP works differently where I am, but when I’m setting prices, it says the 70% royalty option is only for $2.99-$9.99, and everything else is 35%.

    • MCM

      Applying the Amazon royalties, we get…

      2.99 x 40 x .70 = 83.72

      .99 x 620 x .35 = 214.83

      (Amazon pays 70% between $2.99 and $9.99 and 35% otherwise)

  • Timaree

    They will drop to this but when all of them are around this price then the price will start rising again.

  • I think that the $1.00 ebook is going to be the rule. It’s going to wipe out the publishers, just like ITunes is wiping out the Recording Industry, since the artist can bypass them. Currently the Motion Picture Industry is still surviving due to the costs of production, but given that Star Wreck was produced for a cost of 17,000.00 Euros, I expect them to feel the heat soon too.

  • I’m a believer in Kindle. And I’m going to take your advice (ahem, what’s that, a book about fantasy baseball and teaching math to boys, now for only 99 cents!, why, yes, it’s true: http://amzn.to/f0zhkB )

    Note: Amazon has different royalty rates/rules for pricing schemes so this may not work for everyone.

    What will be interesting is to see how “social” Amazon gets. At 99 cents, then every work is ‘valued’ exactly the same. It will take social networks and recommendations to alter the value in favor of one book or author.

  • Nick Carr

    I wouldn’t rush to draw too large a conclusion from a single example. It’s not like we’ve suddenly discovered the price elasticity of demand. Apple’s app store, which also sells purely digital products, offers apps at a diversity of prices, and some highly priced ones have been among the most successful. Even when it comes to digital goods, consumers appear able to make distinctions in value and pay accordingly. It’s not impossible that the same will prove true when it comes to books.

    • Kevin_Kelly

      Yes, my single example is a hint and far from evidence. What I would like to see is a graph of the average price of ebooks (Kindle etc.) over time. I may be wrong, but it feels to me that it is dropping rapidly. My post was to suggest that I don’t see much of a counterforce, any appetite among consumers to keep it higher than 99 cents. Are they willing to pay more for a brand author? We’re not seeing it in music very much.

      • Nick Carr

        After Amazon gave in to the big publishers on the agency model a year or so ago, the price of mainstream ebooks (ie, the ones that also appear in print) went up pretty dramatically on average. There was a lot of grousing from Kindle owners immediately afterwards, but the grousing appears to have dropped off, which may indicate that people are in fact willing to pay more for a brand author. At the same time, of course, reducing the cost of publishing means that there’s been a flood of pure-play ebooks (those without print editions), and they tend to sell at a very low price. These are, for the moment, two very different trends, which wouldn’t be captured by an average-price graph. To what degree are 99-cent ebooks cannibalizing $10 ebooks and to what extent do the 99-centers represent new demand? I’m not sure, but I would guess it’s more new demand than cannibalization. That could change, of course.

        • Whenever I witness the intelligent and respectful dialog/debate between Nick Carr and Kevin Kelly, I feel similar to what it must have been like to be a Neuron inside Marshall Mcluhan’s brain.

      • briancarnell

        Chris Walters at Teleread.com has a spreadsheet tracking the cost of a bundle of books in 2004 vs. 2011…average overall decline, but some ebook costs have gone up:

        http://www.teleread.com/paul-biba/ebook-prices-in-2004-vs-2011-whats-changed/

        Anyway, I’ve noticed the same effect in buying apps vs. buying software. If I’m going to spend $60 for a videogame title, I’m going to do a lot of research on it, read a bunch of reviews, etc. If I see an app for $2.99 that looks interesting, I just buy the darn thin. As a result, I end up spending far more on apps at $2.99/apiece than I ever do on actual bigger ticket games.

        Same thing applies with books. If they’re cheaper I’ll buy a lot more, probably because of the thinking that if I buy two trade paperbacks for $10/apiece vs. say 5 ebooks at $4/apiece, the odds that I’ve actually bought at least one book that is going to make me think “I’m glad I spend *that* $20 on books” is going to be higher.

        • Lpking

          The behaviour you describe in your last paragraph is, I believe, the consumer thinking process that it’s critical to understand when pricing/selling ebooks. The author’s feelings may be hurt that he’s one of a bundle–perhaps the one that doesn’t get read to the end–but in the grand scheme of things, it’s a sale. He’s a working author, and sales are what count. Craft the cover and blurb to attract as much attention as possible, talk the thing up, and hope to be one of that 5-book package.

        • I used to work at a game store where we sold board games, among other things. A large board game like Twilight Imperium cost about $80, a typical board game like Settlers of Catan cost about $40, and a company called Cheapass Games makes dozens of different games for about $5 each, these are printed in black & white and you are expected to have your own dice and pawns. There are both excellent and awful games in each price category.
          .
          If you buy a Cheapass game for $5 and play it one time it’s cheaper entertainment than seeing a movie, and I’d say you’ve already recouped your initial investment. Settlers would have to be played 8 times, and Twilight Imperium 16 times to get the same return on investment.
          .
          As a customer, I want the most fun for the least money, so I’ll freely purchase a $5 game that looks interesting, but would never purchase Twilight Imperium for $80 without reading the rules and playing at least one full game before making the investment. As a game store employee who’s only going to see one customer per hour interested in board games, the $5 sale isn’t even paying my hourly wage, let alone keeping the shop in business. As a publisher, the fun-for-money calculation is back in my favor again if I can keep my price down, because I’m in direct competition with the makers of the other games.
          .
          How does this story about games apply to books? Two ways. First, the more expensive games didn’t cost more because they were better games, they cost more because they came with more physical stuff: plastic pieces, full color maps, custom dice, etc. As ebooks outgrow paper books in sales, the physical stuff of books will have less influence over the pricing.
          .
          Second, as physical distribution chains give way to electronic distribution, a middleman is removed from the revenue cycle. Not just any middleman, but the one most interested in the incremental price of the products. An author who makes $1 per sale doesn’t care which format you buy, and a publisher who’s paying production and shipping cost on paper books can structure to make the same profit margin off of a much cheaper ebook. The book store or chain is the entity most interested in selling a hardcover over a paperback, or a paperback over an ebook, and they’re the link we’re currently seeing removed from the chain.
          .
          My projection is that, in the short and medium term, the price of data will continue to decrease relative to the price of stuff.

    • I’m thinking it will.

      The thing with books (not just ebooks) is that prices are based partially on production cost, and partially on sales projections. Take technical literature, for example, and prices are comparatively steep because the number of potential buyers is very small. Add that technical literature is often seen as an investment, and you get higher prices.

      Similarly, many mobile apps are dirt cheap because they’re trivial and pretty much entertainment items to be consumed and discarded. Other apps are more complex, useful for business, and will have higher prices.

      I do think that we’ll see a few common price ranges emerge, similar as you can observe with mobile apps. It might well be that for novels, the common price will end up being $.99.

    • Hecktarzuli

      You should read up on the same effect in the world of Digital downloaded Games (not apps, but real games like Left4Dead or HalfLife2). The creators of Steam, the worlds largest Digital Game distribution system have noted that when they slash prices, they see not only huge sales, but huge revenue as well.

  • Josh

    One thing you have to consider here is that Joe Konrath had a large following when he was published in print, by conventional publishers. His ability to sell e-books is due in some substantial part to that following, and it’s not so clear that a debut author, no matter how good, will be able to get enough mindshare to earn a living.

    For sure, the current system is utterly broken, and electronic publishing has much going for it, but the low barrier to entry means that authors with great talent will be busking for dollars (actually, 99 cents) in an infinite sea of vanity books, and that’s not a great system either.

  • Fheald

    I don’t want to buy an electronic book. I want to buy a license to read that book, on any device I choose, at any time. This license is worth between 99c and several dollars to me, depending upon the book. It’s not usually worth the new sticker price of the dead tree edition of the book.

  • lulu_bella

    Sure, songs cost $0.99, but an entire album still costs $10, about what I was paying for it when all I had was my CD player in 2002. A book is more like an album than just one song. We can do all the speculating we want, but the industry is changing in new and exciting ways.

  • Right, it’s near the price that authors would get from a paperback trade book. BUT some of the rest of the profits from the paperback trade book goes to pay for editing, typesetting, marketing etc right? (I honestly don’t know, correct me if I’m wrong) Someone still has to pay for that stuff, and I guess it’s coming out of that one dollar

    Plus as others have noted, Amazon takes a cut, so overall the author is getting paid way, way less than before… Fun times.

    • Amazon also takes a cut on paper books. In the publishing house I helped run a few years ago, we decided not to publish on Amazon because with the numbers of books we were printing, our profit margin was low enough that we could not afford Amazon’s cut.

    • If the book is never actually printed a lot of that goes away. Amazon/B&N/Google and other e-book retailers will take their cut and pay for marketing/distribution. The people who lose are editors and agents. One of which at least adds value in theory. Maybe there will be a field of editors working on contract to authors who self publish. That would be a rather amusing power shift in the relationship, which could be good or bad.

  • ET

    You write: “I am not saying this is good news for authors. 99 cents is not. It is good news for READERS.”

    But isn’t what is good for writers also good for readers? If there are only no/bad/poor writers how does that benefit readers? Fewer writers, more copies of the same book or poorer quality books doesn’t do me as a reader any good.

  • Michael

    Horsepuckey. Your own math shows that it’s good for authors. I can tell you right now I will never pay more than ~$5-$8 for an e-book. I will never pay more than $1 for an ebook with drm. Actually I’ll probably never pay more than $0 one of those.
    Had I heard of you before this post I would have paid your previous price if your work had good reviews. At 99c I’m willing to gamble much more freely.

  • As both a digital and paper publisher, I don’t believe that the lower price model works across the board for all information. Everyone knows that you can’t buy a diamond for a dollar. When a price is too low, the buyer may rightfully assume that the information isn’t worthwhile. Technical journals, medical books, esoteric information… these high caloric items demand a higher price because of their intrinsic worth.

    • Kevin_Kelly

      That analogy is not convincing because you can buy a diamond for a dollar. There is no intrinsic worth — even for diamonds, which are common. They are dirt cheap in industry and their gem state price are artificially inflated by a cartel.

  • As a publisher (Novel Discoveries) of both paper and digital items, I don’t believe that the consumer will always accept a low price. Everyone knows that you can’t buy a real diamond for a dollar. A low price usually indicates that a product has little worth. Medical books, technical journals, esoteric information… any high caloric product mandates a reciprocal price structure or the consumer may assume that the information isn’t valid. The work-around may be in offering a ‘price-club’ structure, where active members reap the benefit of purchasing (perceived) high ticket, valuable informational items at a lower ‘club’ price.

    • Kirsten Mortensen

      We’re seeing two things happen, here. The first is that the pricing model that traditional publishers hoped to set is being challenged. Traditional publishers hoped that ebooks could be priced at just under the cost of hardcovers. But with writers’ self-pubbing and setting the book prices far lower, that model is under considerable pressure and probably won’t be able to stand up.

      The other thing we’re seeing is the establishment of a pricing floor, which seems to be 99 cents (in part because that’s what Amazon has set as the minimum price for which authors can collect a cut).

      At some point, authors with large enough followings will probably be able to raise their prices above that point — but in the end it’s a question of supply and demand — the authors who will be able to do that, without hurting volume appreciably, will be those who have name recognition.

      For the time being, though, it’s a free for all.

    • briancarnell

      I just don’t think this applies to things like media anymore. I’ve never looked at iTunes or Amazon and thought, “man, that song must be real crap if they’re only selling it for 99 cents when the CD is $17.99.”

      Similarly, people are obviously embracing the cutrate pricing of software in Android and iOS appstores.

  • davidbrake

    There seem to be some misconceptions (or substantial disagreements) about what books cost to print and distribute. According to Sam Leith who unfortunately did not provide a reference in a recent lecture (http://cli.gs/s1rBMt) the costs of printing and distribution are between 7-15% of the cost of a book. (I would love to have a proper referenced figure if anyone can provide one). Maybe publishers are inefficient in some ways but getting rid of them doesn’t seem likely to shave 50-75% from the costs of sale of books. As others have pointed out anyway, they can vary widely in the amount of work they cost to produce and in the size of the likely market for them. $1 for all ebooks seems v unlikely – and if it did happen it would be disastrous for authors and eventually the public…

    • Printing costs are *highly* dependent on the number of books you print per edition. The fixed cost here is creating a master, and the variable costs is the cost for each printed volume. The master is expensive, each volume is cheap-ish, so the more volumes you print, the cheaper your per-volume cost.

      From personal experience, I can tell you that for <5k volumes, you can expect the printing cost to be about 50% (if you try to match the sales price of comparable books, that is). Distribution is entirely separate from that.

      Sam Leith appears to be published by Bloomsbury Publishing PLC, who will most likely not even consider publishing anything they can't print some 15k-20k volumes of. I don't doubt the figures Leith gives are wrong, but I doubt they are representative of every book.

      The general consensus amongst all the other publishers I've spoken to is that 20k+ editions are rare; most publishers won't handle more than a handful of books with that size editions per year.

      Second, beyond printing (and editing), the main thing publishers do for authors is get their books on store shelves. It hardly matters whether your book is printed if it doesn't get exposure. Catalogue exposure is good, deals with book shop chains are better; either is costly. Publishers can and will charge a lot for that, though I suspect you won't see that listed on your bill.

      These factors play into the fact that there's a thriving "vanity publishing" industry – it's not so much that what's published there doesn't deserve it (some doesn't); it's that it's a much safer business models for publishers to charge the author for the cost of printing directly. Unfortunately, once they have your money, their incentive for making the book sell is gone. You need to pay them for selling the book instead.

    • MCM

      Printing costs aside (unwesen covers that nicely) there’s the issue of bookseller markup. Typically, around 50% of the cost of the book goes to the bookstore just for putting it on a shelf. This is what’s interesting about the Amazon royalty brackets: pricing outside the 70% zone might actually severely punish publishers, because their “shelf space” cut drops from 50% to 35%. If they cap their prices at $9.99, they earn MORE from digital than before. But if they drop down to $0.99, they almost certainly won’t earn enough to survive, even with zeroed-out distribution and warehousing costs.

      And how does an author’s royalty work at that scale? 10% of $0.99 or 10% of $0.35? If the former, the publishers are only making 25% profit on each sale, which I doubt they’d agree to; if the latter, authors make $0.03 per sale, so even at 620 copies sold (as above) their cut is reduced to $18.60 (from $214.83). It creates real incentive to go the indie route, assuming editing and cover artwork and file creation are non-issues.

      I really should make a systems model of this. I have a feeling this is all headed towards a very interesting balancing point with publishing houses reduced to specialty boutiques, and the rest is all $0.99 pulp.

    • ldb

      I was managing editor of a publishing company for a long time, our rule of thumb was that print costs had to be 10% at most of final retail.

  • I’m not so sure it IS good for readers. Who will write good, readable novels if they can’t get paid for them? There’s plenty of free content on the web already — vast, unmanageable realms of it — but most is dross.

    • Kirsten

      Only a tiny percentage of novelists have ever made a living selling fiction. So you might as well ask how good, readable novels got published before.

  • Hacksoncode

    Seems like the obvious experiment is to see how much you make priced at $1.99.

  • Shaun White

    Is it good news for readers if writers can’t afford to write?

  • I just bought it for my Kindle :-)

  • Nick

    The real problem at the ninety-nine cent price point is quality control.

    Put simply, most people can’t edit themselves effectively. Konrath is an exception. As a longtime professional writer, he knows the rules. Most other people don’t, unfortunately.

    The e-book revolution democratizes publishing, and that’s unquestionably a good thing.

    But the general lack of oversight on the works being published is also resulting is books with rampant spelling, grammatical and formatting errors.

    There’s still a place for editors and traditional-style publishers in this new world.

    • briancarnell

      As far as I can tell from recent books I’ve bought in the $25+ range, publishers no longer bother with editors, so I doubt anyone will notice any difference.

      • Mya Lewis

        Newpapers now hardly bother with editors as they attempt to survive in the internet age, and their readers have become used to this state of affairs over the past several years.

        So I agree with you that, over the next few years, readers who choose to consume $1 ebooks will most likely lessen their desire for a well-edited book.

    • asrai

      That’s why we have “free previews”

    • Josh

      @brian_carnell: you’re right, there are all kinds of mistakes in books from the major publishing houses, and there are some pretty mediocre books too, but I don’t think there is the wholesale drivel that you see when *everyone* can publish anything, utterly unedited or dissuaded by consistent negative feedback from the rest of the world.

      @asrai: that’s helpful if you’re considering buying an individual title, but it doesn’t help you find a good one amid the million or so on offer.

      There needs to emerge a recommendation engine to replace the very bad system that exists today, where a handful of people in New York throttle the content that is deemed suitable for publication. There could be an ecosystem complete with authors who can write, edit, revise, and proofread, as well as the illiterate gasbags, and the volume wouldn’t matter as long as there is a way for the cream to rise to the top. The cream could be defined in very narrow niches, as long as it helps you find what you like.

      I’m not entirely satisfied (yet) with the job that Amazon and Netflix do with recommendations, but I think they will do a much better job than any small number of experts, if only because the experts may not like what you do.

  • Paul Diamond

    I agree exactly, that’s why we dropped the price of our ebooks. Our non-fiction is down to $4.99. And our fiction is at 99 cents.

    Here’s a shameless plug for one of the books: A bumbling ex-criminal returns home to find that his family is more trouble than the life of crime he left. “The Moon in Deep Winter” by Lee Polevoi is now only 99 cents on Kindle. http://www.amazon.com/Moon-Deep-Winter-ebook/dp/B004O4C17I

    But to the point, the big publishers will be greedy until they realize their business model is falling apart. However, there is a lot in flux in the ebook market these days, and i expect a lot of changes before we get to a price model that works for all.

    –PD, Casagrande Press

  • The larger issue here isn’t the economics of print versus the economics of digital units, it’s that the business model of selling units of content by a small number of writers to a large number of readers is effectively over. It’s simply not the appropriate way to monetize the relationships that exist in book culture. Most prominent poets make more at a single university reading than they do from a lifetime of sales of one of their titles. Most university press authors make more money from a single month increase in their salary when they get tenure resulting from a publication of a scholarly monograph than they’ll get form the sales of the monograph. Immense value is created by book culture, the trade book supply chain be it print or digital is not a very good way for writer or intermediary to capture the value. (One need only point back to KK’s famous 1000 true fans for where the true value is to be located.)

    From a reader standpoint it is true that the dollar savings are, at least in % terms, significant. But the true cost to most readers is best denominated in time, not money. People pay $0.50-$1.50/hour, it’s peanuts. What they don’t want to waste is leisure time. But the sampling cost alone of the average book is about 30 minutes. So the challenge of publishing or of any intermediary between writer and reader is a matchmaking challenge and those who consistently demonstrate their ability to guide a given reader will be rewarded by that reader for saving their time and minimizing the number of books they abandon after 2, 3, 5 hours.

    One last observation: the price of digital content is going down because writer after writer after publisher after publisher will, over the next couple of years, seek to gain attention by lowering prices. Simply because there’s a brief period of time during which publishers are quasi-cartel-like trying to maintain a cost-plus pricing model doesn’t mean it is sustainable.

    • Kevin_Kelly

      >the true cost is best denominated in time, not money

      Absolutely correct in my opinion.

  • $8357570

    Really? Want to see how many you sell at 50 cents, or how much copies of your paperback go up once the ebook is free?

    start tracking that, you’ll see much bigger impact.

  • liz

    well you certainly got people thinking and debating … good thing.

    i feel that there’s a market for mini ebooks that look great and have clear and interesting content that would sell well at a 99 cent pricepoint.

    short + sharp + spot on content on a range of topics could attract a range of readers.

    the creation of the mini ebooks is the easiest [ish] part … it’s linking into the best distribution points online that aren’t just Amazon that will pose a challenge … and interesting adventure ahead!

  • Why do you think the marginal price of books will drop to zero?

    • Kevin_Kelly

      What that means is that the cost of making one more copy (after you have made the “original” copy), will drop to zero. It costs me nothing extra to sell the 1,000th copy of my book after I’ve already sold 999 of them.

      • Right, so the marginal cost of ebooks is already zero.

        Did you mean that, once the electronic form takes over, the marginal cost of all books will be zero?

  • Barry Kort

    Of course, the most sophisticated way to do the math is to employ the Method of Lagrange. His method will tell you the best price so as to maximize your revenues.

  • bowerbird

    kevin kelly said:
    > I am not saying this is good news for authors.
    > 99 cents is not. It is good news for READERS.

    what part of “makes more money bottom-line”
    means low prices are “bad news” for authors?
    i’m constantly bewildered that smart people
    can fail to grasp such a simple connection…

    it’s not how much you charge for your product;
    it’s how much you make at the end of the day.

    and — just to update the accounting here —
    the book in question eventually went to #17
    on the kindle bestseller list, where it moved
    _1500_copies_per_day_, which is $500/day…
    (even with the exorbitant and unfair 65% share
    which amazon claims for books under $2.99.)

    that’s clearly better than $84/day on 40 sales.

    but let us not get caught up in one example…
    most especially not that book, or that author,
    because he’s too good at gaming the system.
    (he’s now wrapping himself in a cozy blanket
    of charity to move his books up the charts.)

    the more important fact is that, over the last
    6 months, sales of kindle-books skyrocketed,
    according to authors from across the board…

    a critical mass of e-book buyers now exists…
    meaning low prices cumulate to big money…

    popular authors make unbelievable money…
    john locke, who was totally unknown a mere
    3 months ago, pulled $250,000 this quarter,
    with 6 of his 7 books in the top-20-sellers list.
    (when all of your e-books cost just 99 cents,
    people who liked one will snap-buy them all.)

    but a wide range of other authors are also
    raking in good money on a monthly basis…

    these include brand-new authors like locke,
    with no existing platform or readership base
    — and even authors who have only one book,
    like victorine lieske, whose e-book stayed on
    the top-100-sellers list for a full 3 months…
    not only did she make some very nice money,
    she also grew a good base for future books…

    but the biggest break is for mid-list authors,
    who have backlist that they can leverage and
    a readership from which to build a platform…

    since these are the very authors who’re being
    abandoned by the legacy publishing houses,
    the contrast here becomes extremely sharp…

    the e-book marketplace has now _exploded,_
    and that’s a _great_ development for writers…

    -bowerbird

    • I’m constantly bewildered that smart people don’t get how this is bad for authors, for one simple reason: the massive amounts of sales that make 99cents/book a profitable price for authors will not happen to all authors.

      What’s worse, what’s good for the minority for whom it will work, will make the chances of the majority to get a slice of the pie even worse. Most digital stores automatically promote highly downloaded/bought content, which – as the article points out – you can game by dropping the price point for the content.

      Crucially that trick only works when you already have a critical mass of exposure. In terms of statistical distribution, that means the head content gets to rake in even more money, whereas the long tail gets longer and flatter.

      Brutally put, you can only think this is good for authors if you flatter yourself into thinking that you’ll be one of the privileged few. Maybe you are, good for you. For the economy of budding authors as a whole, no, it’s not.

      • bowerbird

        my reply seems to have been censored…

        -bowerbird

        • Kevin_Kelly

          What were you saying?

          • bowerbird

            in a nutshell…

            although unwesen’s
            argument sounds
            as if it could be
            plausible, the data
            that i have collected
            does not support it.

            indeed, my data
            outright refutes it.

            ***

            so, was my comment
            censored, or did it just
            fall through a crack?
            if it was just a glitch,
            or you don’t know what
            happened, please say so.

            -bowerbird

          • Kevin_Kelly

            I don’t know what happened.

          • bowerbird

            kevin_kelly said:
            > I don’t know
            > what happened.

            ok, things happen.

            i’m glad it wasn’t
            intentionally removed.

            thanks for clearing
            that up with me…

            -bowerbird

  • wodkehawkinson

    We have listed our first Kindle book, a short story collection, for 99 cents as a way to introduce readers to our writing in advance of the release of our first novel. 

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