Not All (e)Books Are Created Equal
There's no doubt about it: The printed word is still holy. Although Amazon reports selling more Kindle e-books than traditional books, print books are still the dominating force behind publishing sales—and will continue to be so. It seems that many readers value the printed word more than the digital word. So why do so many publishers price their e-books based on the print price? Is this wise?
Print price minus x% is a common formula for pricing e-books. After all, such a pragmatic approach makes sense considering the fact that you don't have the costs of printing, storing and transporting books. But is the print price the right starting point? How high is "x"? Do e-books really deserve a lower price tag than printed books? And the looming question: What's the best e-book price for a seller to survive in a dynamic market, to cover the costs of developing content and to optimize profits?
What's Decisive: The Book's Value
Ideally, the price for a product equals the value it provides customers-in other words, the price reflects the willingness to pay. A printed book's value is determined primarily by its content, but also by factors such as the author, paper quality, font size, length; for non-fiction it's also the number and quality of graphics, etc. The costs represent only the minimum price; the margin varies according to the book (group) and competitive situation.
In reality, however, these value factors are used only rarely to systematically set the price: The length (and thereby paper and print costs) has the biggest influence on the book price. With this approach, the price might just also match the reader's willingness to pay (if the publisher is lucky). Making matters worse, publishers rarely take into consideration how a price adjustment of even $1 can negatively or positively affect volume, revenue and profits. Following the logic of value-oriented and profit-optimal pricing, using the print price as the starting point for e-book pricing makes very little sense.