Explaining the Recent Spike in Ebook Best-Seller Prices
The average price of a best-selling ebook spiked this week up to $8.92 after spending most of 2013 hovering in the $7.00 to $8.00 range. In fact, it’s the highest observed average for the list in all of 2013. Last week, for instance the average price of a best-selling ebook was $6.95, which was fairly consistent with what we’ve seen the past month.
The question is, why did the average price spike this week? Here are the reasons:
— Sylvia Day hit the list in a big way this week after the release of her latest Crossfire book, Entwined With You. The book pre-sold a million copies and is currently the best-selling ebook in the country. Two other Crossfire books crept back up onto the list as a result, all priced at $9.99.
— Of the nine new titles to hit the list this week, only two were priced below $10.
— There is only one self-published work on the list and it’s priced at $3.99.
Synthesizing these three concrete causes, one clear explanation emerges: The book business is a capricious one. The average price of a top-25 ebook best-seller is determined entirely by what books are selling and in what quantity. When there are a series of higher-priced releases from big publishers that sell well, the average price of a best-seller goes up. When there are self-published works, back-list titles and other relatively low-priced books that hit the list, the average price sinks.
When considering this analysis, you should think about it as an indication of the prices a plurality of people are paying for their ebooks. And, concurrently, the prices many people are observing when they look at best-seller lists, which many people do to determine what to read. This week, because of some new releases, the average price is a bit more than it was last week.
What you think happens from this point, following this spike, depends on your point of view about the long-term prospects for the industry. If you think that the rise of self-published authors to the best-seller list was a temporary state of affairs and established publishers will once again dominate the list going forward, then expect $9.00 or even more to be the norm. If you think that self-published authors will continue to see success, then this is just a blip.
Some Scenarios to Consider
1. Prices stabilize at around $9.00 because publishers figure out how to sell more ebooks at higher price points.
2. Prices stabilize at around $9.00 because publishers figure out how to find and acquire self-published hits before they make the top-25 and are successful at turning them into $9.99, traditionally published hits.
3. Prices resume their decline and hover between $6.00 and $7.00 because the long-term trend favors the rise of self-published authors and relatively inexpensive back-list ebooks.
4. Prices resume their decline and hover between $6.00 and $7.00 because retailers will continue to fight price wars over ebooks. Factor in to this scenario what happens to the average price of some titles when Random House and Penguin go off the agency model and Amazon and other retailers begin discounting their books to $9.99 and lower.