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.

David vs. Goliath: is the best of both worlds possible?

Mike Shatzkin’s unusually long article about Barry Eisler’s decision to turn down a $500,000 contract in order to self publish and his ensuing conversation with Joe Konrath about that decision and the direction publishing houses are trending offers some insightful comments on the publishing industry’s future. It’s a little long to get into the full details, but there were a couple of aspects that really stood out. The one that interested me the most was what Shatzkin explains as the reason why an author would choose to self-publish; of an author’s choice to self publish, Shatzkin writes, “This is not about ego or vanity; it is not about hating the publishing establishment. It is a coldly calculated decision […] that says, in effect, “it would not be smart to take a half-a-million bucks considering what I’d have to give away to get it.”” Shatzkin claims it is not about hating the publishing establishment, but in a way, when you use terms like “what I’d have to give away to get it” (in reference to turning down a large sum to publish through a publisher as opposed to self-publishing), doesn’t that connote some kind of negativity towards a publishing house? Is what you’d have to give away worth $500,000? That hardly seems possible. One could (and would) make the argument that giving away/selling the integrity of your work should be priceless, something that would be akin to selling your soul, but then that suggests that signing a contract with a publishing house will in fact corrupt the integrity of your work (which is most certainly not always the case) and IS akin to selling your soul, which sounds a little bit like hating the publishing establishment if you ask this blogger.

Another interesting aspect of this article was the attempt to include print books in the dialogue. Print books are arguably harder to self-publish and market, as the costs are much higher than just creating a digital file. Then there is the question of where do you sell it out in the real world (as opposed to the virtual)? Shatzkin suggests that booksellers and publishers concern themselves with trying to acquire, in terms of self-published ebooks, print rights instead of grouping them together with print and digital and accepting nothing less. It would be smart of a bookseller or publisher to try to get and market a successful self-published ebook in a print version. There is still a market out there (with a ticking clock, Shatzkin seems to think) for print books. Self-publishing a print book can be very expensive, and expecting it to have the same dividends as one published by a publishing house is unrealistic. They have access to marketing teams (usually, especially the case of larger multinationals) that self-publishers simply don’t. They have connections to retailers. They probably get deals on printing, as their print runs can be larger. It is much cheaper for self-publishers to create a digital file and sell their books that way, but print books still sell and it is another possible revenue stream. Deals with retailers or publishing houses for print rights could be a smart idea. I have known a few people who have self published their own print books, none to much success; they could have saved themselves a lot of money if they had just done so digitally. Maybe then the publishing houses would have come calling.