The CEO of one of the major publishers, Macmillan, had a bit of foot in mouth disease in a blog post a couple of days ago when he explained that his company was going to start charging for hardcover e-books and softcover e-books separately. The predictable storm of responses followed with folks asking such questions as “how much more expensive is hardcover e-ink over paperback e-ink?”. To be fair, the Macmillan CEO never actually said the words “hardcover e-book” together, but he got close enough, and it’s a fair criticism. You are getting exactly the same book when its an e-book – what’s up with a price difference?
Of course the real difference is how soon you get the book. They want to charge people more to read it right at release, a strategy common in many fields, not just books. I often find that software is cheaper if I wait a few months before buying it. And in fact, real hardcover books don’t cost much more to make than paperbacks – the total cost of a hardcover is just $3.25 to print, store, and ship. So even in print, the difference between hardcover and paperback is mostly charging more for early access. Macmillan’s desired e-book strategy is quite common, it’s just not usually verbalized so explicitly.
To me, the bigger question is how the floor for electronic book prices will be set. The ultimate price of electronic goods are set by what people are willing to pay (supply is essentially infinite). But the perceived value varies a lot depending on the users device. On my iPhone, most paid apps are a dollar or two, and rarely more than ten. But on my laptop, a similar app is often 10x more – I might pay $49 for a game on my laptop, but only $5 on my phone. Amazon.com set a price of $9.99 for e-books, so that’s the perceived value on the Kindle and to some extent for e-books in general. There are easy to write books where this could end up being artificially high, and likely a new distribution mechanism will come along eventually to undercut the $9.99 standard for those. On the other end, more innovative books, such as these concepts just announced from Penguin, are going to be expensive to develop – more expensive than traditional text-and-graphics books. If the perceived value of an e-book is only $9.99, and people are not willing to pay more for anything in the “book” category, will that stifle innovation?
For us at SimBiotic, that’s more than an academic question since our virtual biology labs with simulated science experiments are on the border with e-textbooks. While the e-text perceived value is much higher than regular trade books, that perceived value seems to be dropping, and it’s unclear where it will stabilize. Will teachers and students recognize the difference between a pdf’ed version of a print textbook and an e-text with much more sophisticated elements, and be ready to accept price differences between those? And if they recognize it, is the increased teaching value worth the increased price? How would we (as educators) even decide that? This tension between the need for cheaper prices (a real need for many students) and the costs of creating better learning tools still has to shake itself out.
As a closing aside, it’s kind of sad that the end is in sight for bookstores, just like record stores disappeared in the last decade. I love bookstores. I’m optimistic that reading a paper book is different enough than reading a computer screen so bookstores can hold out against the coming e-book onslaught for a while. But I guess that makes me old, pining for how things were/are rather than how they inevitably will be.