Why Ebook Best-Seller Prices Will Continue to Decrease

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

In the past six five weeks, ebook best-seller prices have stabilized to between $7.00 and $8.00 but I don’t think this mini-trend will last the year. As soon as the holiday selling season starts, I see ebook best-seller prices decreasing to levels perhaps unseen in the year I’ve been tracking the price many consumers pay for ebooks*.

First, let’s look at the trend:

avg price of ebook best seller aug to aug

As you can see, while ebook prices have fluctuated greatly throughout the year, often responding to news events and changes in the ebook retail marketplace, they have settled in the past month or so to a level that basically makes sense. When I say “makes sense,” I mean given what we’ve seen over the past year: Titles from some publishers going from the $11.99 to $15.99 price range to points lower; the rise of self-published authors whose titles generally are priced relatively lower than other ebooks; and the publishers and retailers starting to understand price as a promotional weapon that can be very effective when paired with other promotions (like advertising, a movie coming out or social media marketing).

Here’s why I think prices are set to go lower still by the end of the year:

1. Holidays. As the ebook retailer wars continue — and I believe they will — this holiday season will be important for grabbing market share and establishing as a go-to, low-cost retailer. Starting in late November and going through early January, I wager we’ll see some unheard-of low prices on new best-selling titles.

2. More discounting for Penguin Random House titles. Penguin Random House is now on new contracts with retailers allowing discounting. Assuming the contracts have the same stipulations with regards to the Department of Justice as other big publisher contracts, it means that there is a discount pool that has a full year to be explored and exhausted. If you look at the PRH best-sellers from this week, many aren’t discounted at all. Come the holidays, I think you’ll see a lot of them at lower price points.

3. The rise of self-publishing. In the first quarter, we tracked 22 self-published titles to hit our best-seller list in 13 weeks. In the second quarter, that number jumped to 44. As more self-published titles, which are often priced lower than other ebooks, hit the list, the average price of a best-selling ebook will decrease.

Overall, I predict we’ll see the average price get within 10% of $6.00, if not lower.

All data here 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.!

More on Ebook Pricing

The Ebook Pricing State of Play: Insights and Analysis (video)

4 thoughts on “Why Ebook Best-Seller Prices Will Continue to Decrease

  1. William Ockham

    There is one simple thing you could do to improve this analysis. Chart the median price of the top 25 ebooks. For every week, sort the top 25 list by price from high to low. The price of book #13 is the median price. When there is a real, overall price decline over time, the median and the mean (average) would both be trending downwards.

    There are lots of other stuff you could do, but that one thing would be simple and effective.

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