What Making an E-Book Costs, Publisher Responds
Last week, we published an article that got a lot of passionate feedback from both book-lovers and publishers: Consumers Upset and Confused Over E-Book Pricing.
There were hundreds of Tweets, nearly 100 comments and pingbacks on DBW.com and I personally fielded dozens of emails on the article.
There was one email that really stuck out to me and I think it’s worth sharing.
One of the issues I have with reporting out this topic is that the costs of making an e-book vary widely between books and publishers. For some e-books and publishers, the costs can be very low. For others, quite high.
This email was from Trish Heidebrecht, executive director of The Kerygma Program, a Pittsburgh, Pa.-based firm that provides bible-study materials, including books and e-books.
I began to read your article about consumers being confused and upset about e book pricing with some hope. “Finally!” I thought. “Someone will tell the publisher’s side of the story”. But no. Your article ended just as it should have begun. Yes! Costs of development of an e book are identical to the print version. Yes! The usual costs of “inventory and distribution” are not the same as for print, but they are real, AND substantial. And it doesn’t have to do with salaries of extra staff dedicated to this conversion process as you suggest. We are a small publisher, and our printing company (print and virtual) charges us for storage and/or bandwidth, and for the handling involved in the distribution of even the virtual books. Someone still has to process the order and payment for every piece sold. When we add up the cost of production, plus the conversion fee, plus the virtual storage/bandwidth, plus handling of orders… our costs are almost the same as our print version. In the end, we simply cannot afford to deeply discount an e pub version of our books to the level the consumer expects. The simple- but entirely wrong- conviction on the part of the consumer that e books cost “nothing” to produce or sell is extremely damaging to the publishing world. Two thirds of your article was spent reinforcing that widespread belief. I am greatly disappointed that you did not take the opportunity to fully explain the math behind the pricing of e books when you have the consumer’s attention.
The message here, to me at least, is that these costs are different from publisher to publisher. A digital executive at a very large publishing house wrote to me, “why didn’t you mention the 30% cut that the bookseller takes?” (This publishing exec was obviously at a publisher that operates under the agency pricing model.)
Consumers, however, may not be aware of this.
After writing me the above email, Heidebrecht and I had a back-and-forth, during which she revealed to me the following:
In a poll, 50% of Kerygma’s readers said they would welcome electronic versions of their books instead of the print version. Only 5% said they would buy the EPUB version for the same or close to the same price as the print version.
“What’s holding us back,” she wrote in an email, “is the disparity between the actual cost to offer EPUB versions of our titles and the lower price expected by the customer for non-print books.”
Heidebrecht worries that with e-books, she won’t sell any more books but she will be selling many of them (the e-books, in particular) at a lower margin.
Typewriter photo via Shutterstock