The Casual Vacancy: How Low Can EBook Prices Go?

Oct 18, 2012

Last month I wrote about some of the immediate effects of the DOJ ebook settlement, including the reduction of prices on many HarperCollins e-books within a few days of the court's acceptance of the settlement. This month Hachette -- a former settlement holdout -- released JK Rowling's first adult book The Casual Vacancy. However, a look at the Amazon Kindle page shows a note that reads, "This price was set by the publisher." When initially released it was listed at $17.99 (and had quite a few formatting errors.). It's been lowered to $14.99 this week, but it's still more than half the list price for the hardcover. Amazon is selling the hardcover below list, at $20.90 but the Kindle edition is still substantially less.

It's not cheap, nor is it going to be no matter what happens with the lawsuit,  but compared to a few years ago -- when some companies were pricing ebooks released with the hardcover at the same price -- it's a steal. It's priced on par with a first edition paperback release. As someone who, for many years, would wait for the paperback edition to come out before buying, it's nice to have the option of buying a new book when it's actually still new.

But there seem to be a lot of people complaining about how expensive The Casual Vacancy ebook is. Almost as many as those complaining that there are adult situations and cursing (and not the Harry Potter kind of curses).

Do people really expect all ebooks to be priced at a loss, not just to the retailers who choose to do so as a loss leader, but also to the authors and publishers? Many people seem to think that ebooks are much less expensive than paper books to create. Yes, there's no paper, printing, binding, or delivery costs for an ebook. But there are other costs that go into making a book. Marketing, editing, software, copyediting, proofreading, art, cover design, interior design, overhead, and, and you know, paying the author. Saying, oh, why are these ebooks $.99 and yet those are $15 is comparing apples and oranges. Costs are inherently higher for a large, professional publisher's front list releases than they are for backlist titles or self-published authors who might do it all themselves.

For a (hopefully) best-selling front-list release, the expectation is that most of the overall sales will take place in the initial release of the hardcover. Additionally, the author's royalty rate is generally higher for the hardcover edition. If you release the hardcover and the ebook of the same title at the same time, and price the ebook much, much lower than the hardcover, not only is the author making less money per ebook you can also potentially cannibalize the hardcover sales and make less money overall. (And by money I don't mean profit. The Casual Vacancy probably isn't going to earn out for a very long time.)

Average movie ticket prices in the US hit $8 this summer, and in New York City and other major metropolitan areas the average is quite a bit higher. (In some cases, as with 3-D showings, it's almost $20.) A decent seat on Broadway is well over $100. Is $15 really too much to ask for a 400-page, brand new ebook by a best-selling and beloved author?