The Ebook Pricing Sweet Spot

Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.

As we’ve discussed over the past several months, pricing for ebooks has been in flux over the past year due to a number of factors but has seemed to stabilize since the end of 2012.

In the past four months, however, a new paradigm has emerged: The new price accepted by consumers for an ebook seems to be in the $4.00 to $8.00 range. Here are some thoughts to support this idea:

— Over the past several months and especially over the past two weeks, very few ebooks priced $8.00 to $9.99 have hit the DBW Ebook Best-Seller List. The literal translation of this observation is that readers aren’t buying many books at that price point. It could suggest that there are few popular titles being priced in that range.

— The average price for a best-selling ebook seems to have stabilized around $8.00 (see chart below):

ebook best-seller avg price 2

— Out of the six titles on this week’s DBW Ebook Best-Seller list priced above $10, two of them are published by Hachette and Macmillan and the other four are published by Penguin and Random House. All six titles priced $10 and above on the list last week were published by Penguin and Random House. Now that retailers have control over pricing, they’re listening to readers who don’t want to pay more than $10 for the best-selling ebooks they want to buy. When the retailers gain control over pricing for Penguin and Random House, we will likely see fewer ebooks at that price point on the list.

— Self-published authors and small publishers are realizing the value at pricing their titles at $2.99 at the lowest. The $0.99 self-published title at the top of the list this week is more the exception than the rule these days. Nearly half of the titles in the top-25 this week  (12) are priced $3 to $8 and only 4 are priced below $3.

When you consider these trends, what do you get? A pricing sweet spot for publishers and readers: About $4 to $8.

And that means, when publishers are considering where they want their books to be when it comes to pricing, our chart should look like this:

ebook best-seller avg price 3

What does this mean for publishers, interested in maintaining a certain price for ebooks for the sake of the long-term viability of their businesses — especially their print businesses?

What does it mean for authors who depend on garnering a percentage of each sale for their paycheck?

What does it mean for retailers, that are in constant competition to attract and retain customers, with price being a big consideration?

Time will tell.

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.!

7 thoughts on “The Ebook Pricing Sweet Spot

  1. Jim Brown

    Ebooks have been around for over 15 years now, not just the past two or three, and those of us who have been e-publishing long before the likes of Penguin et al got involved have known that particular selling price range for all that time. Of course no-one listened to us, or even asked us, and ‘real’ publishers had to go trying to re-invent the wheel. E.P.I.C. (Electonically Pubished Internet Coalition) http://www.epicorg.com is an organisation for e-publishing industry members which was founded in the 1990’s, and runs the longest-established global, annual ebook awards program. All the new entrants into the industry had to do was get in touch with EPIC. They could have saved themselves a whole lot of trouble!

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  2. S. Pike

    Actually, the REAL e-book publishers, the ones who actually pioneered the industry (EC, Amber Quill Press, Loose ID, Samhain, Etc. Etc.) while NY was still denying the e-book’s existence, have known this price sweet spot for more than 10 years! It’s only the NY pubs, the ones who barreled into the industry a few years ago and acted like they owned the place, even though they hadn’t a bloody clue, who screwed up the entire system that was working just fine without them. They’re the ones who mucked up the entire pricing structure, and are only now, after their experimentation that screwed up the industry, have come to the conclusion that their prices are too high. Greed and idiocy do not mix! You would have thought they’d have done the research before jumping head-first into a pond they knew nothing about, yet oddly claimed expert status.

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  4. Pingback: DWD on the pricing of ebooks.

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