Friday, September 2

The Race to the Bottom: Are low ebook prices hurting writers?

Are low ebook prices hurting writers? As I understand it, the argument for this is something like the following:
Low ebook prices are creating a race-to-the-bottom, each author charging lower ebook prices than the next, trying to attract readers. Soon it will get to the point that readers will refuse to pay anything for books and writers will have to put their books up for free in order to get read. The result: no one will be able to make a living as a writer.
I read what I have just written and can't help but feel that the argument, on the face of it, doesn't seem plausible.

Here, such as it is, is my argument that low ebook prices -- even free! -- won't prevent writers from earning a living wage.

What do writers want? Writers, whether of the traditionally or independently published varieties, care about writing and being able to make enough money through writing that they don't have to do anything else.

All things being equal, how much money an author makes depends on, first, how fast they write and, second, on how big their audience is.

Now, consider these points:
1. The cheaper books are, the more books people will buy. If I have budgeted $50.00 a month for my book purchases, buying cheap ebooks means I can buy more books.

2. The cheaper books are, the more people will buy them. Folks who don't normally buy books, preferring, for example, to get them out of the library, will buy cheaply priced ebooks just for the convenience.

3. The more people who buy books, the greater the chance writers will get their books into the hands of someone who is part of their audience. That is, someone who will enjoy the book and look forward to other books by the same author.

4. People from your audience, people who love your books and want you to keep writing because they want to keep reading, will pay a decent price for your books.

That is my argument, such as it is. I think that the key to success for writers is to get their books into the hands of readers who would love them. Once that is done, those readers will pay money for the books and they will recommend the author to their friends, etc. But the key is to make that initial match between writer and reader. Giving ebooks away cheaply, or even for free, helps a writer find his or her audience.

I would be interested in hearing from anyone on either side of this issue. :)

I wrote this post after reading Joe Konrath's excellent blog post: The Race to the Bottom. I highly recommend it!


  1. Hi Karen! I'm really enjoying reading your posts. One awesome thing about Twitter is that it provides such a great way to disseminate information. I am learning so much!

    At some point, I came across this post that is about book pricing. There are some interesting thoughts here. One of them that I considered when pricing my e-book was the whole issue of perceived quality. When I priced my book I looked at it through my own lens as a buyer. Whenever I see anything that is markedly less than the going rate, I question the quality of the item. I didn't want people to think that my book wasn't just as good as all the other traditionally published books in my genre. There were other factors that went into my decision, but more than anything, the quality issue is what prompted me to price it at $6.99.

    I've decided that when I'm ready to publish the sequel, I'll lower the price on my first book. Of course, I might change my mind and lower it sooner. We'll see.

    Did you know that Amazon takes a drastically larger chunk of your proceeds when you're priced lower than $2.99? At least, that's what I've heard. (I haven't ACTUALLY dug through Amazon's site to verify this though.) I wonder why they set it up that way.

  2. Thanks for the link Katherine! And I agree, Twitter is great ... as my friend would say, it's the bee's knees. I have no idea what that means, but it makes me laugh!

    The pricing of ebooks is indeed a contentious issue and a multitude of strategies are available to an author. I suspect that what works fine for one author might not work as well for another. If anyone finds something that works for them, then I think they should definitely stick with it.

    About Amazon pricing, if a book is priced between $0.99 and $2.98, or if it is priced above $9.99, they will take 65% of the sale price. If the book is priced between $2.99 and $9.99 then Amazon will only take $30%.

    Thanks for the comment! I appreciate you sharing your experience.

  3. I would argue that many people don't necessarily budget for their book purchases. I suspect that most people buy ad-hoc, as and when they see something they like. Obviously, price is a factor, but beyond that time becomes the important thing. I haven't filled my iPhone with free books simply because I don't want to invest the time in many of them, free or not. The free books I HAVE got are ones that I'm pretty sure I'll invest the time in.

    For me, and I suspect for a lot of other book buyers, below a certain price point - around £4/£5 (I'm in the UK) - I don't really care how much cheaper something is. I'm not going to buy it just based on how affordable it is, I'm going to make my decision based on whether I'm happy to put the time into it. A higher price point than that might put me off, but a lower price point isn't likely to increase my interest. The same doesn't necessarily apply to music or film, which require less of an investment of my free time.

    I hope that made sense!

  4. That makes sense, Mark. Over the past few days I've noticed a few independently published books priced over -- sometimes well over -- four dollars, books that are doing quite well. You explanation fits. Thanks for the comment, you've given me a lot to think about.

  5. "I fell in love with all things paranormal after watching Buffy the Vampire Slayer"--Karen

    Me, too, Karen but I really, really got into ANGEL! And his son, CONNOR. CORDELIA et al. Ha ha! I really miss those shows! Sigh. Anyway, I'd better get back on topic befor I get reported.

    I've started writing shorter works to go along with the 99 cent price point, personally. Call it lazy but I just don't want to write a full novel so I can wait 3 months to get my 35 cents per copy. It would be different if I were actually making the full 99. That's a buck per copy & that can add up fast. But 35 cents? It's just not worth the time to me at this point.

    Also I'll say I used to design makeup and had my own brand a few years back. I sold cheaply on Amazon and (Ebay).On the latter of the 2 I had customers leave good reviews, contact me by email if there was a problem and give me a chance to correct it. We had GREAT communication! But on Amazon I noticed customers never left any reviews, never contacted me at all, and 1 woman bought a product and went into a total rage. Then she ran to the review page to give me the 1 star review- the 1st review my products had on Amazon.

    Amazon customers are of a different ilk than on some other sites. Very demanding, very rude, and very cheap. And the ebook crowd is exremely cheap.They want all ebooks to be free or they'll have that 1 star review ready for you. The 99 cent, free, or cheap price points draw moochers and hoarders from everything that I've seen. One guy left a comment I remember reading under Amanda Hocking's "Switched" book- a good book.
    He told people it wasn't worth the 99 cents & for people to go buy a 99 cent app instead. A lot of these 'customers' don't think writing is worth money, they think anyone can do it. There's always been that preconceived notion that writers shouldn't be paid for their work in general. Ebook land just pushes that mentality forward, I think.

    And as far as giving out FREE ebooks. Well, I don't know. I mean, we talk about how the publishing industry is going the way of the record company, but I think we writers may very well end up like musicians. Most can't GIVE their music away for free because so many of them are already & folks are bombarded. A few weeks ago, I would've agreed with you but today, I don't know. Online is dangerous because it's a place where everyone expects the FREE. And those are the 'customers' who complain & rant the most IMHO.

  6. "Me, too, Karen but I really, really got into ANGEL! And his son, CONNOR. CORDELIA et al. Ha ha! I really miss those shows! Sigh. Anyway, I'd better get back on topic befor I get reported."

    Don't stop! I'm watching the series again from beginning. I think the first three seasons were my favorites.

    About pricing, I agree that 0.35 per book isn't much, especially when one isn't selling hundreds of books a month. My strategy was to keep my prices low so more folks would buy UNTIL DEATH and copies would, hopefully, find their way into the hands of my target audience. I guess that's what I'm trying to say. For me, at this stage of my career, I'm concentrating on finding my audience.

    I've been incredibly lucky. Since publishing Until Death, I've connected with fantastic people -- like yourself! -- who have given me all sorts of encouragement. It's true that I haven't earned much money yet, but I'm just starting out and, so far, it has been both educational and exhilarating.

    Thanks for your comment! By the way, I love your website.

  7. Hi Karen!

    I've just checked back here and it was so nice of you to respond! In looking at my comment, I should've written it under a fake name or anonymously. Ha ha! I guess I was sipping on venom about this 99 cent stuff^^

    I had to sit back and really, really THINK about my goals & strategies with my ebooks. I had to write those goals down under points A & B (in case strategy A didn't work out), then C & D (but hopefully I won't have to fall back on those). Ha ha.

    Since my "awakening" (my new strategy), the 99 cent price point doesn't bother me in the least anymore. I'll just leave it at that^_~

    As for ANGEL IVESTIGATIONS, INC., oh, I envy you for watching the whole thing again! A part of me felt wrong for finding CONNOR attractive:( What we really missed was his finally "becoming" a VAMPIRE! Or maybe it was just me who somehow missed that! Did CONNOR ever morph into a vamp, bare fangs, any of that? If he did, tell me what episode it was so I can go get it! Hee hee!

    It's great we liked the same shows. What else in the genre did you watch? I don't mean to pry into your business (or redirect the comments towards paranormal activity), but I'm just curious.

    P.S. Thank you for the compliment about my blog page, where it's so empty you can hear crickets rubbing their legs together. Ha!

  8. PPS!
    One more thing, you know.... You remind me of Wallis Simpson. You seem to have the same eyes and other similarities. I mean that as a compliment.

  9. Hi Alshia, it's great to hear from you again. It's funny, since I made that comment I've warmed up to the idea that $2.99 is a good price point for indie books. Still, since UNTIL DEATH is the first book in my series (the second, IN DEATH) will be out in Feb 2012 * cross fingers *) I think I'll keep it at .99 cents.

    What do I watch, hmmm, well I've been enjoying Vampire Diaries. It's something of a guilty pleasure, but the series is well plotted. I like the pace and the actors know their craft. This season I'm trying out The Secret Circle. I don't know what I think of it yet.

    What about you?

  10. Oh, and thank you for the compliment about Wallis Simpson! She was a strong woman yet she strikes an enigmatic figure.

  11. Hi Karen!

    It's always a pleasure to talk to you. You know what I've noticed about the topic of 99 cents (and I don't mean just in ebooks)? I've noticed that this price point has saturated other areas of entertainment content as well: music with the 99 cent iTunes, and Android Market with mobile games.

    The reason I say "mobile games & iTunes" is because I've been reading a high volume of comments comming from those artists that mirror this conversation that you and I are having. Concerns raised have included:

    Is 99 cents sustainable?

    This is a race to the bottom!

    Customers are starting to 'expect' all content to rest at 99 cents

    New artists/game developers feel pressured to ask for 99 cents even though the product may be well worth more than that.

    They also voiced concerns about the high volume of downloads/sales needed to at least 'recoup' their investment in their product at the 99 cent price point (let alone turn a profit).

    It's weird, too, that most consumers who chimed in to respond sounded eerily like cheap ebook consumers. They said stuff like: "If you charge less, more people will buy your stuff", and ""the less you charge, the more you'll sell".

    But for me, there is no proof of that. It's all just talk and speculation. It's like there's an assumption that if you charge 99 cents for your ebook/game/song, 5 million people will rush to to download/buy, and I just don't think that's "reality", especially with so much content being offered at that price now. 99 cent mobile game consumers also kept bringing up ANGRY BIRDS over and over again to "prove" that game developers can earn millions by charging 99 cents. Just like with us and ebooks, how people bring up Amanda Hocking repeatedly to prove that 99 is the road to millions of dollars.

    Idk. I also did some research and one blogger showed stats indicating that back in 2008 tpre-Amanda Hocking, mind you), only 5% of ebooks were at the $1 price point. Today 48% of ebooks are $1. That's basically half, indicating the obvious "race to the bottom" people have fear. At this rate, maybe 75% will be $1 two years from now.

    The same study also said that big 6 publishers were starting to offer their books(not all but enough) at 99 cents. Uh-oh. And the same for mobile game developers for iPhones charging 99 cents for their creations. They said Big game creators like Take Two Interactive (Grand Theft Auto franchise) were starting to price high quality-graphic games for mobiles at 99 cents. Uh-oh.

    Grand Theft Auto doesn't need the $ from selling 99 cent games, for example; it's the "exposure" they're after, and their prensence can sting independent game developers who are counting on 99 cents to turn a profit.
    What about Big 6 publishers, Karen?

    All they need to do is convince some writers to scribble some supplemental materials for the sole purpose of charging 99 cents. They could beat SP authors at their own game and it could sting, Karen.

    Imagine if Stephenie Meyer, Cassandra Claire, Alyson Noel, and other top paranormal creators were asked by their publishers to put some small 99 cent series together for sale and left them up there.

    But...enough talk. I'm writing an ebook here in your comments section. Why do I keep doing this? I'll leave you alone now.

    P.S. Feel free to comment on my page if you want. Ha ha! It needs to be dressed up with at least ONE Comment for the month of October!

    On Vampire Diaries: YES! I LOVE the show but haven't had time to watch it in a long time! The storyline was wicked and the characters were so great! You never know who will be killed in the series and that is really something. My favs were Lexi (R.I.P), Anna & Pearl (R.I.P.), and Harper, a vampire slave who I think was killed after being re-awakened (R.I.P.).

    P.S. PLEASE forgive me for these LONG comments! I will stop because this is crazy!

  12. Hi Alshia, it's always nice to hear from you!

    You make many good points. I think that authors these days are pricing there books with a number of things in mind. Yea, we want to make money, but we also want our books to find their target audience. The trick is to find the price that helps the author reach their goal. I think that sometimes that price will be $0.99 and sometimes it will be more. It depends.


Because of the number of bots leaving spam I had to prevent anonymous posting. My apologies. I do appreciate each and every comment.