Hardcover, E-Book Pricing… and Irritated Readers

Over the past several months, I’ve had blog comments, emails, and questions at appearances about why my publisher insists on demanding a higher price for an ebook than a hardcover. The simple answer is that my publisher doesn’t, no matter what it may seem to readers, but… obviously some explanation is in order.

So… I’ll give some examples, but please note that the prices I’m giving are those in force as I’m writing this… and they could change.

My last two published books are currently Scholar and Lady-Protector.  The book immediately published before Lady-Protector was Empress of Eternity.  At present, the hardcover of Scholar on Amazon or Barnes and Noble costs more than the Kindle or Nook version.

The hardcover version of Lady-Protector sells for $.32 less on Amazon than does the Kindle, although the Kindle price will drop on March 27th, when the paperback is released.  The hardcover price of Lady-Protector at Barnes & Noble remains above the Nook price.

The hardcover version of Empress of Eternity currently sells on Amazon at something like $6.67, less than the Kindle version, as an irate reader noted.  Amazon purchased that book from Tor for around $12.00 and has chosen to sell it at the discounted price, in all probability, in order to unload it, because the hardcover was published roughly 16 months ago, and very few hardcovers of any book sell that long after publication. Barnes and Noble has kept the hardcover price at the original level.

The reason for these disparate prices is that hardcover books are sold at wholesale to Amazon and other retailers or distributors, usually at slightly more than 50% of the cover price, and retailers and/or distributors can sell them at any price they wish.  The prices on electronic books, on the other hand, are set by the publishers, as a result of the nasty fight between all the publishers and Amazon several years ago, when Amazon insisted on selling all ebooks at a loss, subsidized by its profits in other areas, thus attempting to fix prices at a lower level and gain control of the market.

Some readers have claimed that ebooks should be far cheaper than either hardcovers or paperbacks because the ebook does not require paper, ink, printing, and physical distribution.  That’s true, but an ebook does require all the other costs of production, and at present, the “difference in cost” between ebooks and hardcovers, on average, it runs from about $2.50 to $4.00 per hardcover, depending on the number of pages and the print run, which is roughly the price differential between the price Amazon or B&N initially charges for a hardcover and the initial Kindle/Nook price.

The bottom line is that, at present, subject to an on-going legal battle and a Department of Justice proceeding, the publishers have control over the retail ebook price, but not over the retail hardcover price, and Amazon has a practice of playing games with hardcover prices as part of their on-going fight with traditional publishing… and letting readers place the blame for the “high” ebook price on the publishers, which, in fact, is half-true.  The publishers do set those prices, but selective use of low hardcover prices is totally under the control of the retailer.  Macmillan, the parent company of Tor, has a policy of dropping the ebook price to match the paperback price on the day the paperback is released.  Amazon is usually reliable in doing so… but not always, but, again, failure to drop the ebook price is not necessarily the fault of the publisher and has to be assessed, unhappily, on a case by case basis.

As an author, fortunately or unfortunately, I have no control over any of the retail prices charged for my books that are published by Tor. Nor does any author whose books are issued by a major publisher.


23 thoughts on “Hardcover, E-Book Pricing… and Irritated Readers”

  1. Carl says:

    E-books aren’t published by Tor, they’re published by Amazon. What you call publishing isn’t what publishing is supposed to be.

    “an ebook does require all the other costs of production” – No, an ebook doesn’t have any costs at all, except your labour. Free software will spell-check and grammar check for you, and you have readers that would pay you to let them beta-test or edit your books. You already have a website where you could publish them. Ebooks don’t even have covers. And since you write in a long series, you don’t need to advertise your new books, people will just Google them.

    OK, maybe you need Paypal or something like that, but that’s all.

    1. Mayhem says:

      Carl, you’re wrong on so many levels here it is painful.

      One blogger I know has recently self-published his first book. He has a very good proofed electronic copy of the work. He *must* submit it as a word doc due to Amazon & Smashwords requirements. Both treat word layout features differently. Both introduce different bugs in the read in process, so for example errors crop up in the text for Kindle for PC that don’t show up on a real Kindle.
      It took him almost a month of work to get the book into a state that all his various electronic publishers would (a) accept and (b) not fuck up. And that was a month after the dead tree version was already finalised, so not part of the regular editing process.
      There is a very good reason almost every major writer works with a particular publisher and that is that they have a very good support team abstracting away much of the editing, proofing, and working through the printing minefield. That isn’t cheap.

  2. Carl says:

    Oops, I forgot a cost of ebooks… policing against piracy. That probably costs money for lawyers.

  3. No… Tor creates the electronic format that Amazon and Barnes and Noble re-format. As for electronic spell-checkers and grammar checkers… they’re not good enough for a professional product. In fact, some spell-checkers and grammar checkers on the market actually make manuscripts worse, as I’ve discussed previously. As for my labor, if I had to do all the little things required to turn a manuscript into a professional e-book, it would likely cut the number of books I publish in half, if not more. It takes TIME and effort to recruit reliable beta readers and more time to go over what they do. I’ve been a professional editor in a technical field, and it’s not as easy as you make it out to be.

    In all areas, over-simplification is often the mark of the zealot, not the professional.

    As for relying on e-books… the market isn’t there yet. Almost every book I’ve written is available as an e-book… and of books released in the last five years,the book with the highest percentage of e-book sales only has about 15% of total sales in electronic formats.

    1. Mayhem says:

      It is interesting to see how the ebook market is moving for genre works – some popular authors are getting up to 50% of their sales through electronic formats, others barely 5-10%.

      I suspect a lot of it comes down to the type of work in question, and the nature of the fans.

      Your work, and that of others like say Guy Gavriel Kay, tends to require a lot of reading effort – the books might flow well and read fast, but there is quite a lot of depth and alot that a cursory read won’t pick up.

      By contrast, many of the Baen authors for example tend to write fast paced tales without a huge amount of layers, so they are easier to pick up and go. There has also been heavy cross-promotion of ebooks by Baen which would come into play.
      Others, like Cory Doctorow or Charles Stross write for a fairly technically literate fanbase, so have a wider existing market for electronic editions.

  4. Carl says:

    By the way, I’m not suggesting your books are overpriced. I actually think they are underpriced if you compare them to other forms of entertainment.

  5. R. Hamilton says:

    It seems that the publishers have an incentive to price e-books such that they won’t be too competitive with printed books, notwithstanding that the variable production costs (per unit cost not counting the portion of those costs that are fixed regardless of volume) for an e-book are near zero.

    Granted that people neglect fixed costs, and also forget that investors like a nice return on their investment. But I think manty people feel that it’s getting close to the point where an author should be able to contract out for editors, publicity, and even overall management, at fixed rates rather than a large percentage, leaving more royalties for the author, lower prices for the consumer, and the parasitic publishers dead and buried. (That might well NOT result in lower prices for low-volume works, but it might give them more of a chance…something between actually getting published, and vanity publishing.) I’m sure there are some problems with that idea, not the least of which is that some of those involved will _still_ want the larger of billable hours or a percentage. And of course a good editor is certainly not a parasite. But surely some of the rest of the chain _other_ than author and editor just begs to be replaced with something much cheaper.

    I agree that Amazon wants to take advantage of that perception, and to gain as much control as possible over book (and other) media distribution. I know a couple of people that used to work at the Random House (subsidiary of Bertelsmann now, I think) warehouse for the US (and other countries?) in rural Maryland…and their impression is that they’re lucky they retired before the company goes belly-up; apparently the warehouse is well below capacity in both inventory and shipping volume, perhaps even beyond what the economy alone would account for.

    At least Apple has their fingers deep enough into digital music distribution that Amazon won’t be controlling that market anytime soon. Not that Apple, or anyone else, having such obvious ambitions on controlling such a large portion of the overall market for salable information is a good thing.

    Regulate and subsidize incompetence…or deregulate and risk monopoly? Not good either way…

    1. The problem is that as e-books become a larger fraction of books being sold, they can’t be treated as a marginal cost of production because they’re already not “marginal,” in that they’re replacing hardcovers and paperbacks, yet the perception remains that they have a marginal cost of production.

  6. Brad says:

    Even if people were really aware of all the back-end costs involved with publishing an ebook, they aren’t going to care. When they get an intangible electronic file instead of a tangible physical book, they will assume it’s cheaper to produce. A file is more of a “throw away” item than a physical book, easier to delete or lose, so it’s worth less to people. Publishers like to think that most people are willing to pay $10 for something that it took an author hours upon hours to create, no matter what format, but sadly this is not true.

  7. Mike G. says:

    I don’t think it makes sense to blame you as the author for the failings of your publisher (or Amazon).

    But that doesn’t mean we shouldn’t tell you about them – for example, have you ever downloaded the ebook of _The Soprano Sorceress_ from Amazon? It looks like it was generated *directly* from a scanned copy of the books, as a bunch of badly fuzzed and dirty bitmaps.

    I’d think you’d want to know when your publisher is messing up converting your backlist to electronic form that badly…

    Note that tSS is the only one I’ve noticed this about – _The Magic of Recluce_ is fine, for example. But if someone starts with tSS, they’re not likely to buy any of your other ebooks (or anything else from Tor, for that matter…)

  8. Thank you for letting me know about The Soprano Sorceress. I’ve asked Tor to look into it.

    1. Mike G. says:

      Thanks for letting Tor know!

  9. Wine Guy says:

    I rather thought that things were more complex than Carl thought – nice to see suspicions confirmed. It’s like drug makers and medications: people only see the price per pill, not the $200 million spent on development.

    E-books are a godsend for me: I only wish that was an easier way to turn all the books I already own into e-format without breaking my bank.

    Don’t get me wrong, I love real books, but when I own >600 and buy 2-4/month, space gets to be an issue.

  10. Chad says:

    My two cents. I love a good book. That said, I was tired of my paperbacks falling apart and tired of storing hard covers so after waiting a few years for E Book readers to mature, I switched. I will not go back. What is new to me however is the new authors that I have been exposed to. These are the self publishing types that now have a market via free or extremely cheap pricing. I am finding that I will easily take a chance and sample a work if it is free or a dollar and I have found a few gems which I will follow and even buy full price if they start charging full rates. I am inspired.

    One more bit about myself… I spend probably 3-5 hours a week trying to search for books and authors I would like. Having the lower price point makes it much more likely I will try a new author or risk buying a new work.

    What I would imagine we will see are mom and pop editor services springing up to cater to the self publishers.

  11. Chris says:

    Mr Modesitt – at the risk of going slightly off-topic, have you any idea when (or if) the currently “missing” eBooks from the Recluse series will become available? It’s very irritating to read a series such as Recluse, and suddenly find that eBooks of volumes at seemingly arbitrary points in the series cannot be bought. Eg, I have “Magi’i of Cyador” as an eBook, but I’m unable to buy an eBook of its immediate sequel, “Scion of Cyador”.

    Do you have any plans to release these missing volumes as eBooks in the foreseeable future?

    1. Unfortunately, I don’t have control over ebook releases. In the U.S., that is handled by my publisher [Tor], and in the U.K., the agreements between Tor/Macmillan and Orbit determine the releases. I’ve been led to believe that it won’t be long before all the Recluce books are available in the U.K., but the release of the “missing” books is now up to Orbit.

  12. Spencer Wallace says:

    can you please advise why Kobo have taken all your e-books down. I am working my way through the recluse series and they have all driopped off other than the ones I purchased.

    1. At the moment, I didn’t even know this had occurred, and I’ll look into it.

  13. josh says:

    I would be more than happy to pay full hardcover price for an e-book. my problem is the delay in release, I live a considerable distance from any major brick and mortar store and online order still takes days for delivery. The logical conclusion would be simultaneous release of both printed and digital media at identical price and let the reader choose the format he/she prefers.

  14. So far, at least, the initial ebook versions of my novels come out at the same time as my hardcovers, and they’re usually priced a few dollars below the Amazon or B&N discounted prices for the hardcover. Likewise, when the paperback version comes out, the ebook price drops to that of the paperback. Sometimes there’s a day or so delay, but not usually.

  15. Mike says:

    Here we are two years on from this blog and UK readers still can’t get two of the books in e-book format. The books in question are the SCION OF CYADOR and the SPELLSONG WAR. I am in Canada on a holiday for a month and can see both books available to US readers through Amazon.com, Google Books, Nook etc but as soon as you enter a UK credit card and billing address – boom they are not available. It is time to take a lorken staff to your digital publishers (Orbit?) and get these books released outside of the US.
    I have collected all of the books in paperback and am now trying to complete an e-book library prior to sailing around the world.

    Yours Aye, very irritated reader and fan

    1. The problem lies with Orbit. Tor/Macmillan has been working for over two years trying to unscramble the mess, which arose some ten plus years ago, when Orbit decided they didn’t want to publish any more of my books, but also didn’t want to revert the rights back to Tor until they absolutely had to.

      1. Mike says:

        Thank you for your response. Orbit are denying readers enjoyment of a good read and you of your rewards. I am quite happy to pay a good price for a book that the author has obviously enjoyed crafting and I will enjoy reading. Plese keep the pressure up on orbit

        Yours Aye

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