Basically, if pricing the ebook higher than the print book is
seen as an effort to protect a book or its writer from some sort of
psychological devaluation, the favored books are high priced, literary fiction
or thrillers written by older established authors and published by the big
publishing houses.
-----------------------------------------------------------------------------------------
Many observers have noted a shift in book pricing on Amazon, in the recent past. This seems to have occurred largely in the big publishers’ books, since they won the right to return to “agency” pricing earlier this year. Basically, this means that the publishers set the book price, and the retailer (Amazon) takes a standard cut of that.
Briefly summarizing:
·
In nearly half of all cases (45%), the ebook
version was priced higher than the print book version in late 2015.
·
This was more pronounced for the 2014 Amazon Top
100 books, relative to the 2013 Amazon Top 100 books. So, recency seemed to have some effect on
this.
·
Books that were highly ranked (in the first
quartile) during the year that they were first published are much more likely
to have their ebook priced higher than the print version by late 2015.
·
Current ranking didn’t seem to have nearly as
significant an effect, in this regard.
·
There was some evidence that male writers were
more likely to have the ebook version of their titles priced higher than the
print version. However, this varied by
the month in which prices were recorded, so the evidence is not strong.
·
More highly educated writers tended to have the
ebook priced higher than the print book, more than did the writers without
known university degrees.
·
This was also true of writers with more
traditional subjects of study, such as English, History and Journalism.
·
Older writers were much more likely to have
their ebooks priced higher than their print versions.
·
This tendency to price ebooks higher than print
books was very much a traditional publisher characteristic, especially the big
five publishing houses. Indies rarely
did this.
·
Books that were highly priced during their
initial publishing year were also much more likely to have their ebook priced
higher than their print book.
·
In terms of genre, the Literary Fiction books
were very likely to have their ebook version priced higher than their print
book versions. This was also true for
the Thriller category and Science Fiction, though to a lesser extent. The opposite was true in Romance, where the
ebook version was far more likely to be the inexpensive version of a title.
-----------------------------------------------------------------------------------------
Many observers have noted a shift in book pricing on Amazon, in the recent past. This seems to have occurred largely in the big publishers’ books, since they won the right to return to “agency” pricing earlier this year. Basically, this means that the publishers set the book price, and the retailer (Amazon) takes a standard cut of that.
Prior to the return of agency, Amazon was price setting,
giving up some of their share of the book price in the form of lower prices to
the consumer, in order to increase unit sales.
The share paid to the publisher stayed the same. They felt that lower prices would create the
circumstances for greater book sales overall, more than making up for the lower
prices; the result would be more money for everybody involved. Publishers didn’t care for that idea; they
thought it was eroding the price point at which consumers will willing to buy
books, which they considered ultimately harmful to the traditional publishing
industry, especially the print book side of the market.
Traditional publishers have long standing relationships with
print book chain stores (basically a lock on distribution through that market),
so they didn’t want that sector to be ultimately displaced by Amazon and other
on-line retailers. On-line retailers are
fairly agnostic as to publisher type, Indie, small publisher, or large
publishing house, so the bigger traditional publishers would be giving up an
advantage if most book sales pivoted to on-line retailers.
So, if big publishers are “protecting” the value proposition
of print books, and the perceived quality of the traditionally published book,
via higher prices, we might well expect them to set ebook prices quite high,
relative to print book prices. Indeed,
they might well set the price of their ebooks considerably higher than their
lowest priced paper option (usually trade paperback or mass market paperback). They would hope that such pricing will
maintain higher psychological price point in the minds of consumers and protect
their long-time specialty, the paper book, from the inroads of the easier to
produce ebook. We might expect them to
“hold the line” on particular types of books more than others - say, books by
well known authors or books of high perceived quality (i.e. literary fiction).
Generally speaking, publishers have been putting the price
of ebooks up since reclaiming the agency pricing model. Sales of ebooks have fallen, but publishers
feel that is worth it, to obtain higher profit margins on each book sold. Since we don’t have access to their detailed
financial data we are in no position to know whether or not that is true.
But we can do an analysis of current book prices, in a
selection of books for sale on Amazon to see just how prevalent the practice of
setting ebook prices higher than print book prices is, and whether it is
focussed in particular types of books. I
am using my dataset of the “Amazon Top 100” of 2013 and 2014 to do such a
comparison. These are the 100 books that
Amazon declared to be their readers’ favourite new books of 2013 and 2014,
based primarily on sales. I have
maintained this dataset for general research purposes and augmented it with other
publicly available data, such as the gender, age, and educational level of the
writers of these books.
The prices were recorded separately on October 10, 2015 and
November 10, 2015. Most of the following
graphs use the November data, though the October data is also noted in the
text.
Naturally, we can’t necessarily assume that the findings
based on this subset of books is transferable to the entire set of books on
Amazon. But it is a fairly broad selection of popular
books (many genres, a wide diversity of writers, many original price points,
many publishers, etc), so it should provide some pretty good evidence of what
is going on in the industry, in terms of pricing strategies.
One final point – there is no golden rule for what the
proper price of a book is. Economists
would say, it is whatever consumers are willing to pay. However, they would also say that it should
eventually equilibrate at the costs of production plus some reasonable profit
margin. By this reasoning, since the
costs of production of an ebook are less than a print book (no paper, printing,
or shipping costs), ebooks ought to be less expensive than print books. If they aren’t, the producers must be using
strategies to prevent that result from occurring.
1 – Overall Comparison of Ebook vs Pbook Price, in late 2015
As the graph shows, the ebook version of titles in the
Amazon Top 100 lists for 2013 and 2014 were priced as high, or higher than, the
print book version, nearly half the time, during the survey date of November
10, 2015. This was also true on the
survey date of October 10, 2015 (not shown), so it appears that pricing
decisions do not change radically from month to month. By the way, if you happen to be reading this
in black and white, the bar to the left (blue, in colour) corresponds to Ebook
price greater than or equal to Print Book price. The bar on the right (red, in colour)
corresponds to Ebook price less than Print Book price. That will be true for the other graphs as
well.
Note that in some cases there was only an ebook version of
the book; those were excluded from the analyses. There were 17 such books in all, out of the
200 books in the study.
2 – Ebook vs Print Book Prices, by Year of Publishing
Book published in 2013 were more likely to have their ebook
version priced lower than their print book version, than books published in
2014. This result was also true, when
examining prices in October 2015 rather than November 2015.
This might be a result of publishers more willing to ease
off on protecting the print version value proposition, as the book gets less
current, and presumably less valuable, given that sales of most titles tend to
decline with time.
3 – Ebook vs Print Book Prices, by Rank Quartile in Year that they were Published
By quartile, we refer to the ranks 1 to 25 as quartile 1,
ranks 26-50 as quartile 2, ranks 51-75 as quartile 3 and ranks 76 to 100 as quartile
4. Since this data includes both the
2013 and 2014 Amazon Top 100, each of those quartiles will each include about 50
books (e.g. quartile 1 will include ranks 1 to 25 from both years, totalling 50
books), less those books excluded from the analysis as they only had an ebook
version published. In the graph, the
quartiles run from left to right for each subject grouping.
Books that were ranked highly in their first year (i.e. the
“Amazon Top 100” year) were far more likely to have their ebook priced higher
than their print version, in November 2015.
Apparently, publishers were more likely to emphasize the print version
of the book, if it did very well in its original run. For books that did less well (in the other
three quartiles), the ebook tended to be priced lower than the print version.
4 – Ebook vs Print Book Prices, by Rank in November and October 2015
Interestingly, the current rank of a book had much less
effect on its ebook vs print book price, than the rank in the original
publishing year. There is only a slight
tendency for books with lower current (November 2015) rankings to have their
ebook priced higher than their print book.
The October 2015 data did show a greater tendency in this regard,
though.
5 – Ebook vs Print Book Prices, by Gender of Writer
In November of 2015, pricing of ebooks vs print books was
almost identical for books written by males and females. However, this was a case where the October
data showed a different trend, where books written by males were more likely to
have the ebook priced higher than the print version. So, there is no clear trend in the gender
analysis.
6 – Ebook vs Print Book Price by Education Level of Writer
As the graph below shows, books written by writers known to
have university degrees tend to be more likely to have the ebook version priced
higher than the print book version. The
converse was true for books written by writers without degrees, where the ebook
tended to be cheaper than the print version of the book. Using October 2015 prices (not shown), the
trends were similar, and in fact a bit more pronounced.
7 – Ebook vs Print Book Price by Educational Subject of Writer
The differences here tended to be fairly slight. There is, perhaps, limited evidence that
books written by writers with more traditional backgrounds have their ebooks
priced higher than their print versions more often than writers from less
traditional writers. The October based
data (not shown) is broadly similar.
8 – Ebook vs Print Book Price by Age of Writer
Age of writer appears to be significantly related to the
likelihood of the ebook version costing more than the print book version. Older writers are more likely to have the
ebook set at a higher price than the print book version; the converse is true
for younger writers. The effect appears
to be quite strong. Similar results
obtain for the October 2015 prices.
9 – Ebook vs Print Book Price by Publisher Type
This graph is arguably the one that most directly supports
our thesis, that traditional publishers are attempting to protect their value
proposition by pricing their ebook versions higher than their print book
versions. The big five publishing houses
show this tendency, very clearly.
Smaller publishers practice this pricing strategy to a more limited
extent, and independently published (or self-published) books almost never
display this strategy. Using October
2015 pricing figures showed an almost identical trend.
10– Ebook vs Print Book Price by Price Range in the Publishing Year
Books that were high priced in their initial publishing year
are much more likely to have their ebook priced higher than their print book
version, than is the case for books that were moderately or low priced. Using the October pricing data, the trend was
similar, though more pronounced.
11– Ebook vs Print Book Price by Genre
Books in the Literary Fiction genre were very likely to have
their ebook version priced higher than their print version. This also tended to happen with Thrillers and
Science Fiction/Fantasy, but at a less pronounced level. The converse was true in the Romance and
Other categories, where the ebooks tended to be cheaper than the print book
versions. Using the October price data,
the trends were similar.
Summary
Briefly summarizing:
·
In nearly half of all cases (45%), the ebook
version was priced higher than the print book version in late 2015.
·
This was more pronounced for the 2014 Amazon Top
100 books, relative to the 2013 Amazon Top 100 books. So, recency seemed to have some effect on
this.
·
Books that were highly ranked (in the first
quartile) during the year that they were first published are much more likely
to have their ebook priced higher than the print version.
·
Current ranking didn’t seem to have nearly as
significant an effect, in this regard.
·
There was some evidence that male writers were
more likely to have the ebook version of their titles priced higher than the
print version. However, this varied by
the month in which prices were recorded, so the evidence is not strong.
·
More highly educated writers tended to have the
ebook priced higher than the print book, more than did the writers without
known university degrees.
·
This was also true of writers with more
traditional subjects of study, such as English, History and Journalism.
·
Older writers were much more likely to have
their ebooks priced higher than their print versions.
·
This tendency to price ebooks higher than print
books was very much a traditional publisher characteristic, especially the big
five publishing houses. Indies rarely
did this.
·
Books that were highly priced during their
initial publishing year were also much more likely to have their ebook priced
higher than their print book.
·
In terms of genre, the Literary Fiction books
were very likely to have their ebook version priced higher than their print
book versions. This was also true for
the Thriller category and Science Fiction, though to a lesser extent. The opposite was true in Romance, where the
ebook version was far more likely to be the inexpensive version of a title.
Basically, if pricing the ebook higher than the print book is
seen as an effort to protect a book or its writer from some sort of
psychological devaluation, the favoured books are high priced, literary fiction
or thrillers written by older established authors and published by the big
publishing houses.
--------------------------------------------------------------------------------------------------------------
And after all that hard work, here's a nice Science Fiction book by Helena Puumala, for only $3.99 (free if you are on Amazon Kindle Unlimited):
Kati of Terra Book 1: Escape from the Drowned Planet
Amazon U.S. http://www.amazon.com/gp/product/B00811WVXO
Amazon U.K. http://www.amazon.co.uk/gp/product/B00811WVXO
Amazon Canada: http://www.amazon.ca/gp/product/B00811WVXO
Amazon Australia: http://www.amazon.com.au/gp/product/B00811WVXO
Amazon Germany: http://www.amazon.de/gp/product/B00811WVXO
Amazon Japan: http://www.amazon.co.jp/dp/B00811WVXO
Or, you can try a short story by the writer of this blog, for 99 cents.
The Magnetic Anomaly
Amazon U.S.: http://www.amazon.com/gp/product/B0176H22B4
Amazon U.K. http://www.amazon.co.uk/gp/product/B0176H22B4
Amazon Can: http://www.amazon.ca/gp/product/B0176H22B4
Amazon Australia: http://www.amazon.com.au/gp/product/B0176H22B4
Amazon Germany: http://www.amazon.de/gp/product/B0176H22B4
Amazon Japan: http://www.amazon.co.jp/gp/product/B0176H22B4
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