eBook Pricing - Where's the Money Going?
Which leads to a big-ass question: Why is this not the case with other publishers?
Go look at some recent releases by traditional publishers. For example, I'll use Snow Queen's Shadow, which I bought both the paper and electronic versions of. (Why? Because Jim's that good of an author and I really enjoy his work, that's why.) Look at both Amazon and Barnes & Noble. The print and electronic editions cost exactly the same price, even though they do not cost the same to make.
I see three possibilities (please, suggest more if I'm missing something):
1. The print books are being sold at a price where the publisher loses money. Without a complete plan to move digital, I don't see where this would be a smart or sustainable move. Doesn't mean it's impossible, but it's damn unlikely.
2. The print books are being sold at a sustainable price, and the publishers are raking money in hand-over-fist on the digital copies. I can kind of understand this - maybe. Because there are fewer players involved (you don't have shipping, printing, etc), the creative folk's pay should go up as well.
Why? Because the money spent for storage, printing, and delivery is now unallocated.
(My percentages for this graph are totally fictional and should be used as illustrative purposes only.)
The short of it is that royalties should always be the same or higher for digital books if they are sold at the same cost.
To the best of my understanding, this isn't the case (if anything, I hear of traditional publishers trying to lower royalties on digital sales). So where the hell is the money going?
3. Print books are being propped up by keeping eBook prices higher. Digital publishing costs less and can, at the same time, get more money to content creators. But digital publishing seriously disrupts the existant business model - for good or ill. (Think about all the jobs that are no longer needed.) I suspect that left to their own devices, novel length eBooks would be distributed in a normal curve around the $5 price point. I further suspect that more people would read digitally if they saw price savings over print books. Regardless of the motivation, I believe that keeping eBook prices the same as print book prices slows the adoption of digital readers.
So what does that mean for me as a small publisher?
1. Yog's Law comes first. Money flows toward the author.
2. Print books will cost more than digital books. Pricing will be so that authors will get (approximately) the same per-unit-sale profit. That is, I price a specific markup over cost, not to meet a specific price point.
3. Financial transparency. As a publisher, I should have to justify my percentage of the profits. Period. And if it's not clear, the authors have every right to get the hell out of town.