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.