Lower Ebook Prices Does Not Equal More Readers

Last week saw the declaration by Amazon that the dissolution of agency pricing in the US was a “big win for customer” and that they look forward to lowering prices on more ebooks in the future. It’s slightly surreal for me to read that lower ebook prices is something anyone would ‘look forward’ to, given how much effort publishers are making (not across the board, but certainly in some places) to ensure the price of ebooks stays at a level that encourages a sense of worth for the format. Testament to Amazon’s place in the market, however, the news was not received badly.

One response I read said that the lower retail would “encourage greater sales”. Genuinely. I can’t believe people are still flogging this dead horse, acting as though it is a statistical fact that if you lower your prices uniformly across your list, sales will explode into the stratosphere.

The way I see it, lowering ebook prices may shake a fair number of fence-sitters and heavy readers from print to ebooks, thus increasing Amazon’s share of the books market, and squeezing book margins again, ultimately lowering the value of the industry (the repercussions of which will be felt everywhere – publishers, then authors, then, yes, readers). It will not expand the pool of readers to include a massive influx of current non-readers.

So if you sold books at £7 previously, and retailers start pricing them at £2, you have to sell more than three times the amount of books you did before in order to make the same amount of money (I’m not going into unit cost of print vs digital, suffice to say under agency ebooks are already priced in a way that reflects the fact there aren’t any printing costs). Except the size of your target market hasn’t increased. You have to hope ebook readers buy and read three times as many titles as they did when they bought print books. If the price is low enough, there’s probably no financial reason not to do this. But is it reasonable to expect that this will happen, given the fact the value of the market and the number of books sold are shrinking?

Price promotion is a really good tool to cut through the general noise of bookshelves. But the lower the standard prices fall, the smaller the margin of difference between a full price title and a price-promoted title. As that gap between premeditated and impulse purchase closes, booksellers everywhere are left with one less weapon in their arsenal to incentivise purchase.

And as the number of ebooks being published grows, arsenals need to be as big as they possibly can.

At this point, Amazon are in a position where they could probably set the market value of an ebook as low as they wanted and still do ok. The Kindle is pretty much synonymous with ‘ereader’ in most consumers’ vocabularies; their app allows them access to platforms they don’t own; they have alternate streams of revenue. For better or worse, they don’t live and die by the same means as the rest of the publishing industry. And I don’t disagree with discounting books at all. But I think it’s important to look past the best case scenario before you start blowing your vuvuzela in celebration of a total reduction of ebook prices everywhere forever.

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