Tuesday, May 29, 2012

Debating the Right Price for E-Books

There’s clearly a cost associated with producing an e-book, but does anyone, other than publishers, really care?

Author Chuck Wendig makes that case on his blog, terribleminds, while Matthew Ingram said e-book costs don’t matter in GigaOm and Mike Masnick wrote that nobody cares about the “fixed costs of books, movies, whatever” in his TechDirt blog. It’s not hard to see their point, considering Amazon’s aggressive e-book pricing policies, coupled with the assumption many consumers have that publishers have cut their manufacturing and distribution costs yet are still trying to keep e-book prices near that of a printed book.

But there are real costs of publishing that can’t be brushed aside so easily, according to Ryan Chittum, deputy editor of the business section in the Columbia Journalism Review. It’s a balancing act between paying expenses and offering a price consumers are willing to pay.

“In reality, as in theory, the market for books is only so big—we only have so much time—so a 99-cent price point might move a lot of units, but not enough to justify the cost of production,” Chittum wrote. “Obviously, a $50 price point would crush sales and also bring in much less revenue overall.”

The thing is, e-book pricing really isn’t different from any other pricing strategy. Consumers always look for the best price and a good value. It’s up to the publishing industry to find a way to deliver that value and make money at the same time.

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