The dollar store: what price is the right price?

Mike Shatzkin published an interesting blog post on April 25th about the pricing of ebooks and how it differs between self published books and those published by an established publishing house. In it, he brings up an interesting point; self-publishers can set their book prices at any level they want. As an independent, they have fewer overheads and can therefore get away with lower prices.  Add to that that these books are now being printed digitally, and the cost of paper, printing and binding need not be accounted for, the price can be even lower. How do traditional publishing houses compete?

Shatzkin uses the case of self-publishing author John Locke who sells his books on Amazon for $0.99 as an example. He makes a compelling and highly accurate point when he says that Locke doesn’t have to justify his books to match his prices, it is the publishing houses that have to justify their prices and convince people that their books are ten times better than Locke’s, and are therefore worth the $9.99 price (for example). Locke’s books are extremely popular and are considered to be quality products. Can that be said for the majority of self-plublished ebooks? Are they as good as or comparable to those published by a traditional publishing house? Does it matter if people are buying them? Shatzkin then also makes the counter point that the publishing house need only sell 1/10th of the amount of books to reach the same amount of revenue as Locke, which is a true enough statement. I would argue that the high prices (those higher than $9.99) make publishing houses look greedy. They need to recoup their costs somewhere, but 10+ dollars for an electronic file you can’t even hold in your hand seems a bit much.

The aspect that interests me the most about the article is impulse buying, especially from a low-income perspective. If you have a credit card, and most people of age do, it has become incredibly simple to purchase almost any and everything online. A click here, a click there, fill out a form or create an account (and then no more forms, just a username and password) and you’ll be seeing an amount on your credit statement next month. With a lower price range, it increases the propensity for impulse buying. I would be far more likely to purchase something for one dollar than for ten. One dollar, or even three, won’t likely hurt your pocket book. Ten might not either, but you’d think about that purchase longer. When I walk into a dollar store, I usually walk out with more things than I intended because the price is so right. Clicking on that $0.99 book is rather harmless. Unless you are like Sophie Kinsella’s Becky Bloomwood, you probably wouldn’t click with the same abandon on higher priced books from traditional publishing houses.

As an experiment, I went to click on Mr. Locke’s book to purchase but found myself hesitating. Even though Shatzkin claims Locke’s stories are enjoyable, I wondered if something so low in price was going to be cheap and not worth the money. I was having difficulty letting go of that dollar. Have we been trained to think that things that are more expensive are worth more, are of better quality? This penny pincher thinks so. So maybe traditional publishing houses won’t have it so bad after all.

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There is writing on the wall? Let me get my glasses…

The written world is changing. It has changed consistently through the years, but with the recent digitization of the publishing industry and print world, there’s a new word that keeps popping up that’s going to have an effect on traditional publishing houses: “paperless.” Sure, the market for printed works, hard copies, hasn’t died yet, and it may not ever, but some people, like David Carnoy, seem to believe it’s coming. The price of self-published ebooks is what he believes will kill the industry, and he has a point. Traditional publishers can’t keep up with self-published ebook prices, that is a plain and simple fact. Now, they have even further competition from Amazon who is offering other publishing related services along with distribution of their books. Their royalty system encourages affordable prices, and no matter the price chosen, an author will still get a higher royalty rate self-publishing an ebook through Amazon’s Kindle platform than through a traditional publisher. They also allow for fluidity of pricing, allowing authors to manipulate the system to stay on “bestselling” lists longer. And with lower prices come lower expectations, so that edit you’d get at a traditional publishing house? Maybe it’s no longer necessary. Maybe.

So where does this actually leave traditional publishing houses? Not in a good spot, apparently. With authors seeking out their own editors and designers and publishing their ebooks through platforms like Amazon’s Powered by Amazon or Barnes & Noble’s PubIt, traditional houses seem less necessary for ebooks. Then there’s Amazon’s Encore program that notices popular self-published books and gives them an extra marketing boost. Unless an author really desires to have their book in print, or doesn’t have the time seek out their own editors/designers, why go to a traditional publisher? If there’s a larger push for “paperless” operations due to environmental concerns, and writers can publish ebooks without a publishing house, what will happen to them? They still have an argument of offering the highest quality, but that may not last long if publishers continue to get their editorial work done out of house; authors can start or continue to employ freelance editors just as readily as publishing houses provided they have the necessary funds. Now necessary services like marketing are also being offered by outside sources. Taking all of this into account, Carnoy believes that traditional publishing houses are aging, antiquated, outdated, and nearing being replaced. Can they see the writing on the wall? How long can traditional publishing houses sustain operations with competition from self-publishers and outside organizations? How long will they be able to, in effect, defy gravity?