Historical and Contemporary Romance Author

Do Low-Cost eBooks Hurt or Help Authors?

After watching the stunning uptick in the Kindle rankings for low-cost romances on Wednesday (see yesterday’s post for the details), I’ve been giving even more thought than usual to digital book pricing. There have been a plethora of posts from various industry professionals bemoaning the rise of the 99-cent novel and its supposedly harmful effect on authors’ (and, by extension, publisher’s) bottom lines. I’ve already said that I don’t believe that the price of digital full-length front-list novels will actually settle as low as 99 cents, although it could easily settle as low as $4 or even $3. However, if the prices DID settle at 99 cents for all ebooks, independent of length, what would that mean for authors and publishers?

I think before we can even think about this, we have to throw out the fact that Amazon and most of the other retailers currently “punish” you for pricing a book under $2.99 by taking a significantly greater percentage of the cover price for themselves. If ebook pricing were to settle lower than $2.99, I have a strong suspicion that the retailers would ultimately find themselves forced to increase the percentage they pay to the author/publisher, although probably not to the levels they’re currently offering on the $2.99-$9.99 titles. That said, we can’t RELY on the royalty split for those $2.99-$9.99 books remaining as generous as it currently is. The reality is that Amazon and B&N (the two major players right now) can change those percentages at will, and if they do, are authors really going to walk away in droves? I doubt it.

So, let’s not think right now about royalty splits and just talk about the potential effect of low-cost ebooks on total book sales, and talk instead about what we know about the buying habits of readers who own ereaders. And what we know about them is this–they buy WAY more books on a monthly basis than the average print book reader. I’ve read many stories about people who were indifferent/irregular readers in print, got a Kindle or Nook, and then went on reading (and associated book-buying) tears. As more and more people get their first ereading device (be it an exclusive ereader or something like an iPad or other tablet), it’s reasonable to predict that more and more will read and buy more books than they did in the past.

But there is a limiting factor on the total number of books any individual can buy, and that’s disposable income. Most people DON’T have an unlimited amount of money to spend on ebooks (or on anything else, for that matter). This means that pricing matters way more to digital book buyers than it does to print book buyers. They want to buy more books than they did in the past, but they still have roughly the same amount of money to spend on those book as they did when they were reading print. This means that if they have $30 per month to spend on books, they can buy MANY MORE at 99 cents (or even $2.99) than they can at $5.99 or $7.99 or $9.99.

Thus, it stands to reason that, while lower average prices for ebooks means less income per copy for the author/publisher, lower average prices increase the total number of units sold–not just of any individual book, but of ALL books. The more books I can afford to buy, the more books I probably will buy. And that goes for pretty much everyone.

So there is a possibility that this is a “rising tide lifts all boats” scenario. I’m not suggesting that every book that is priced at 99 cents will sell enough copies to make decent money for an author or publisher. That isn’t even happening today, when the total number of 99 cent books is clearly less than it will be a year from now (or even a month from now). What I am suggesting is that keeping the price of ebooks artificially high actually depresses sales for all books to the extent that everyone in the chain suffers.

Do I want to sell my novels for 99 cents? No. Truthfully, I don’t even want to sell a meaty novella (meaning 25k+) for less than $2.99. But if that’s what the market demands, it might not be as bad for authors and publishers as all the hand-wringing prognosticators are positing. Especially if readers who own ereaders go from spending $10 a month on books to $50 a month on books. And I’ve heard plenty of stories where just that has happened.

I wrote a post a long time ago called “It’s All about the Pie.” I think this is about pie, too. It’s not about slicing up the pie differently, but about making the pie bigger. And I really believe low-cost ebooks have the potential to do just that.


  • Dhympna June 25, 2011 at 1:46 pm

    For me, as a reader with a limited budget, 2.99$ is the sweet spot for novellas and novels. If a book is priced higher, I may wishlist it to watch the price but it may just linger on that list as I move on to other books. Anything above 6$ gets put on a different wishlist–I may buy it if I get a gift certificate but again, I wait and watch.

    I like the .99$ price for book one of a series but not for stand alone books. If I see an author always pricing their novels at .99$ then I have to wonder what is wrong with the book. I view series differently because of the money I may spend on the series should I like book 1.

  • Sofia Harper June 25, 2011 at 4:31 pm

    I’ll say what most people say, .99 cents is good for limited time offers. $2.99 sounds about right for a novella.

    I do believe the lower prices hurt the authors. I just think they are conditioning readers to believe that’s the standard price for a novella. I’ve also seen around that keeping a book at .99 cent for a long period of time actually hurts the author. The price though serves a purpose–opens you up to new readers. But I don’t think it’s how an author can make a living.

  • Anthea Lawson June 25, 2011 at 11:49 pm

    I think you’e right with the ‘enlarging the pie’ idea. I also feel completely comfortable charging .99 cents for my short story, but if I put a full novel up for sale, I’m pretty sure I’d start it at .99 for a month, then move it up to 2.99 after that.

    Thanks for the slew of interesting recent posts!


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