In a comment at this blog Harald Johnson, a successful self publisher, says “Because there is no actual reason for trad pubs [traditional publishers] to inflate their ebook prices to absurd levels (like $14.95)—except for greed, I automatically steer away from purchasing those ebooks.” No reason except for greed? If that were true publishers’ margins would be a lot better than they are — if we really were that greedy we’d have to stand indicted of being incompetent about getting there. Of course lots of commentators stand ready to do just that.

Let’s not get into a debate about whether books cost a lot compared to product X, Y, or Z. We all know what books cost, and when it comes to ebooks we all think we know that reproduction costs are to all intents and purposes zero. So books cost too much, don’t they?

The basic problem in this discussion is that there’s really no such general thing as “ebook prices” or the price of a book. Perhaps a couple of million books were published in the USA in 2018; 1.6 million of them self-published, and about 300,000 from traditional publishers. (These numbers are curiously hard to confirm, but ballpark, ballpark!) Each of these two million books is unique, and its price is its price, not the price of any class of books: maybe many of them share a lot of qualities with one another, but the differences are what stand out. They all have different content, some of which may be tortuously complex. Some are intended to advance academic research, some aim to educate, some to entertain, some to make money, some list facts, some try to inspire, and some are written with an eye toward posterity. They all took different levels of skill and lengths of time to write. Many of them required years of education before their authors could even think of putting pen to paper. For instance why would Leucocyte Typing VII cost $1,050, Glassworking in England from the 14th to the 20th Century $120, An Introduction to Anglo-Saxon England $62.99, and Anglo-Saxon Attitudes $18.95? After all Harald Johnson’s Neander: A Time Travel Adventure costs just $3.99. Why are these virtuous indie authors able to price their books under $10, while traditional, greedy, publishers price their ebooks much higher, at a discount off the paperback edition?

Leucocyte Typing VII is, as Amazon tells us, “the standard reference source for all those working with antibodies recognising marker molecules on white blood cells — immunologists, cell and molecular biologists, haematologists and pathologists working on white cell differentiation.” The problem is that there just aren’t too many of these folks, and the book has 1,054 closely-filled pages of complex material. If you need it, as maybe a hundred others may, then it’s cheap at the price. (Well, maybe good value would be closer.) Glassworking in England is a fairly specialized work, with a potential audience of say 1,000. It no doubt has lots of tables and some technical setting, and the full academic apparatus. Take the total cost of making the book, divide it by 1,000 and you end up forced into a high retail price. This is less of a problem than it might seem, because the audience for these sorts of book expects to have to pay this sort of money. They’d prefer the books to cost less, but they understand why they don’t. The Introduction of Anglo-Saxon England is an undergraduate textbook. No idea how many Anglo-Saxon studies and medieval history students there are each year, but you can look it up, and you’d be printing for a couple of years, so you might end up doing something like 3,000 copies. Same mathematics, and you end up pricing north of $50. The beauty of established textbooks, and this one’s in its third edition, is that students do tend to buy them. This required sale is not true of novels such as Angus Wilson’s Anglo-Saxon Attitudes. Here the book is pretty straightforward, no tables, notes, fancy typesetting, so even though you might be printing a similar quantity to the textbook, your math will take you to around $20. There are price-level expectations among fiction buyers, so you may have to fudge your numbers a bit to get to a “good” price.

Of these books, apart from the born-digital Neander, only one is available as an ebook. Anglo-Saxon Attitudes may be had as a Kindle book for $10.99. Neander costs $3.99, and some Anglo-Saxon bodice-ripper is no doubt available for $1.99 or less. Now, nobody can deny that the cost of selling an ebook of each of these titles is exactly the same: a tiny bit of electricity and time: virtually nothing. But the cost of getting to the point where you could offer it as an ebook — the cost of creating each of these books — is wildly different. And these costs have all got to be recovered from sales. A couple of seconds’ thought will tell you that offering Leucocyte Typing VII as an ebook at $9.99 might make a few of the 100 potential customers happy, but wouldn’t increase the sale by a single copy, nor come anywhere near recovering the costs of creation.

However, I think the complaints about ebook pricing are mainly directed at trade books of which Anglo-Saxon Attitudes is my only example (though it’s a reissue of a 1956 publication). But book publishing of any type is a business. The aim is to make money. Making money off books is a satisfyingly “clean” way of making money, but it’s still making money. Because of the “cleanness” I dare say profit margins are a bit less than they might be, but without profits the business ceases to exist. You can make a million dollars by selling one item priced at $1,000,000, or by selling 1,000,000 items at $1 each. For most commodity items you will sell more and make more money if you set a lower price — Leucocyte Typing VII is an obvious exception — indeed all books are actually exceptions to this rule, at least until you take out the “and make more money” bit. Books look less and less like a commodity the further away you get from online genre fiction. How many copies of Barack Obama’s A Promised Land would have been sold if Crown had priced it at $3.99, like Neander? By December sales had passed 3 million. Their retail price is $45, and $17.99 for the Kindle edition, though of course lots of the hardback sales by Amazon have been heavily discounted and some are in audio or ebook format, but we can still guess that in very approximate terms they’ve taken in about $60 – $65,000,000. To have grossed $65 million at $3.99 retail, they might have had to sell around 30 million copies. Does anyone think there’s any way to have expected to sell a copy of this book to every tenth person in the country? So is $45, or $17.99 for the Kindle, just greed?

Remember that the publisher is essentially the author’s agent in publishing the book. An author’s remuneration is tied to the publisher’s — whether or not you believe royalty rates should be higher, they are still directly tied to sales revenue. So the publisher has a responsibility to aim to maximize sales revenue. Underpricing the product isn’t the obvious route to this end. A self publisher can make a silent mental deal with the author — left brain to right brain — without any risk of consequences worse than self-recrimination. A publisher “defrauding” the author by cheapening the book too much faces a different set of issues.

It’s dead easy to say “books are too expensive” but that’s not a statement that has any analytical force. This or that book may be describable as too expensive, and in different contexts too expensive may mean $10, or $75, or $200, or $1,000. But to call, say, OUP greedy because they priced Leucocyte Typing VII at $1,050 is obviously just a waste of breath. Should it have been $750 do you think? What would be the right price for an ebook version? You need the facts to know — well knowing isn’t even possible — you need the facts just to run the argument.

Publishers live in the real world. They know that cheaper is nicer. It’s the rare book which doesn’t end up priced as low as you can get away with. Publishers have no obligation to favor one format over another: the ebook price is just the price of another format — it’s all about market segmentation.

See also Cost of a book.