Ebook Prices on the Rise Again?

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After hitting a new low in mid-March, ebook prices may be on the rise again after two straight weeks of gains. The average price of a best-selling ebook this week is $8.26, up from $7.84 last week and the all-time low of $7.40 from two weeks ago.

This is the first time since Feb. that ebook prices have been above $8.00. They haven’t been above $9.00 since early Dec. 2012.

Despite the recent two-week spurt in price gains, I don’t think that publishers should expect this to continue. Before I go into why, let’s look at some of the charts.

avg best-seller price 01

We’ve been tracking the movement of the average price of an ebook best-seller for titles that appears on the Digital Book World Ebook Best-Seller List — the top-25 ebooks sold in any given week*.

As you can see from the chart above, ebook prices have been on the decline since the fall of 2012. A clear pattern has developed:

avg best-seller price 02

As several higher-priced best-sellers hit the market in the summer and early fall, ebook prices rose, eventually hitting a peak of under $12.00 in Oct. Almost immediately, they began to drop. Since the holiday selling season ended, ebook prices have stabilized. Let’s overlay some significant ebook pricing events to give it all some context:

avg best-seller price 03

Some of the words on the chart might be hard to read so I’ll write it out. The first arrow is when discounting on HarperCollins ebooks began following its new contracts with Amazon and others in the aftermath of the settlement over alleged ebook price-fixing. The small arrow at the bottom is when discounting began on Hachette and Simon & Schuster ebooks — same reason as HarperCollins. The third arrow is when Macmillan started allowing limited discounting. And the bracket at the top denotes the holiday sales season.

Despite the hopes of some in the publishing industry, I don’t think the recent two week price swing will continue/become more permanent because of a few reasons:

1. Amazon Publishing, self-published authors and big publishers with back-list titles to move will continue to find success selling ebooks in the $3.00 to $7.99 range. That price range has become the most popular for ebooks that hit the top-25. It’s made up of a mix of self-published works, new books from Amazon Publishing, which has started many of its titles off in the $4.99 range, and back-list books being sold at a discount by big publishers. Regarding that last point, retailers made waves on our list by selling Scholastic’s Hunger Games Trilogy for $5.00 in March**.

2. Penguin and Macmillan, which have both settled with the government over ebook price-fixing, haven’t yet signed new contracts with retailers — or, at least, the retailers aren’t yet discounting their titles. When that happens, we’ll start to see fewer $10 and above books on the list, further depressing the price. If (more like “when”) the Random House-Penguin merger goes through, Random House titles will also be discounted. While retailers don’t have to discount titles, I believe they will; and while prices could theoretically go up depending on how the publishers adjust the list prices, I think they’ll ultimately go down.

Only time will tell. For more on this, continue to follow along with our best-seller list every week.

All data here is provided by Iobyte Solutions

* I should say here that if you take a different sample, say, the top-100 best-selling ebooks or the top-five, you will get a different graph than the one I presented below. Further, if you look at ALL ebooks, you’ll get a different graph. I take the top-25 because it’s most of the books that people are buying. If the No. 1 ebook in a given week is selling at $9.99, then that’s what a larger number of consumers are paying for their book than the No. 17 ebook selling at $5.99. Another flaw in this is not weighting each of the positions. It would be better, for instance, to know exactly how many copies of each title are sold, multiply that by the price, add up the final dollar amount for the top-25 and then divide by total number of titles sold. That would give us a better idea of what people are spending overall. For now, what I’ve done above is, I think, the among best we can do when thinking about what the average consumer is paying for an ebook today. I’m happy to hear comments, feedback, etc.!

** This line has been changed to reflect that it’s retailers — not Scholastic — that sell the Hunger Games Trilogy and set the price. 

Jeremy Greenfield

About Jeremy Greenfield

Jeremy Greenfield is the editorial director of Digital Book World. Opinions presented here are his own. Read more of his work here.

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2 thoughts on “Ebook Prices on the Rise Again?

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