Sunday, October 19, 2014

Shields Up!

A quick stroll through the ranks of Amazon will reveal a bizarre dichotomy.  Look first at the ebook titles from authors you know well - Harry Turtledove, James Patterson, Stephen King, and so forth.  Then head over to the ranks of indie writers like Amanda Hocking, Hugh Howey, and JA Konrath.  Anything stand out?

Yup - the prices.

This dichotomy exists from traditionally published mid-list writers to those who might be considered mid-list(or lower) in the indie ranks.  Traditionally published writers' ebooks are consistently higher, with most topping at least $11, while indie writers tend to keep ebooks in the $5 range.  I originally thought this could be explained by the way that traditionally published writers are still having to cover fixed expenses - like editors, secretaries, warehouse, etc - that indie writers don't, and I'm sure that still accounts for some of the discrepancy.  However, I've always been big on "follow the money," and this circumstance should be no exception.

It struck me out of the blue that a big part of the reason for this is that traditional publishing is still anchored to its paper book sales.  They're so anchored, in fact, that they have to artificially inflate ebook prices in order to not lose customers to the digital marketplace.  The thinking is that people will still want the books, but many(most) will opt for traditional books if prices between the two mediums are comparable.  Even I prefer paper books if given the choice, so it's people like me they're after.

Yes, I feel like an idiot that it took me so long to realize what should've been obvious from the start.  That revelation also leads me towards feeling that traditional publishers are making a HUGE mistake if they think they've found a winning strategy.

First, no matter what fantasy we want to live in, most readers are casual ones.  They can read or not and be just fine with that decision.  In fact, it's precisely because they're casual fans that they can move on from reading altogether if finding what they want becomes too bothersome.  Few find an ebook price they don't like and move to find a bookstore - getting harder and harder to find anyway - to pick up their tome.

Second, by artificially inflating prices, they're discouraging those who might otherwise be intrigued.  If prices were, say, around $6, someone otherwise inclined might take a risk on a new novel.  However, certain price points will cause people to walk away(there's a reason why prices end in .99 rather than just going up to the next round number).  However, in the mind of a traditional publisher, since their sales are anchored to print, they have no choice but to keep ebook prices so high that it won't make a dent in their margins.  Instead of seeing potential new customers, they see an interchangeable person who will buy regardless of price.

On the plus side, this artificial pricing model has helped the indie ebook boom.  People are much more willing to take a chance on someone whose prices are so much lower.  Were JK Rowling and Joe Smithy the same price, JK Rowling wins every time.  However, with Rowling at $12 and Smithy at $4, the analysis changes, and Smithy becomes much more appealing.

I guess this means we should actually thank traditional publishers.  By doing what they're doing, they've helped create the very competition now causing them so many headaches.  Well done!

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