Ebook prices in 2004 vs 2011: what’s changed?

by Chris Walters On Monday I wrote in a post that I think prices for ebooks have gone down since 2004. Over on Teleread, a couple of readers called bullshit on that statement and argued that actually prices have been creeping up thanks to greedy publishers.

Okay, it’s true I was basing my statement on my own experiences starting around 2006, when I began to take a strong interest in ebooks and found, to my shock, that lots of publishers were pegging digital editions to the hardcover price. Now in 2011 there are thousands of $10 new releases on the big ebook stores, and I can’t open Google Reader without seeing another story about an author making money off of $3-or-less ebooks.

So I concluded that prices in general have gone down. But after seeing the Teleread comments, I thought it might be fun to find an actual price list from 2004 and compare it to today’s prices.

This simple spreadsheet comparing ebook prices in 2004 and 2011 combines a 2004 bestseller list created by the Open eBook Forum, and current prices for those same titles on the Amazon Kindle Store as of March 8th, 2011.

First, I want to point out that I’m fully aware my crude spreadsheet doesn’t provide a big picture overview; I’m not trying to prove the Teleread commenters wrong, in other words. This comparison merely shows how a specific ebook collection has changed in price over the past seven years.

The simple conclusion is that if you were to buy all the books on that list in Kindle format today, you’d pay about $67 less than in 2004. That savings is somewhat misleading, however, because of the relationship between price and release dates.

If you look at just the 26 titles which are still for sale today, only the 11 most expensive ones dropped in price. This subgroup includes two dictionaries, a bible, and 8 new releases in fiction, and in all they account for a drop of $93.

Unfortunately, since the 2011 savings is about $67, it’s clear that the remaining 13 titles crept up in price over the years. A slightly more accurate observation, then, is that the overall cost only dropped because there are no new releases on the list.

But there’s a bright spot in this subgroup, too. The average price of those 8 fiction new releases in 2004 was $17.21, which is a little higher than the $12-15 range of most Big Six new releases on the Kindle Store today. (I left the dictionaries and bible out of this calculation, but if you add them in, the 2004 average price jumps up by 50 cents.)

Is this good news?

So is this worth cheering? On the minus side, the majority of titles on the list went up in price; but on the plus side, at least they remain pegged to mass market paperback prices, which also rose during this period. These ebook editions haven’t gotten any cheaper relative to paperback, but they haven’t crept higher relative to paperback either, which I think counts as a mild win-by-default for consumers. *

Although I didn’t count them in my comparison above, I also found that two of the books on the list are available for free in 2011. The ebook freebie, whether as a marketing strategy or because of volunteer efforts in the public domain, is much more common today than in 2004. I’m not sure how to place a dollar value on this category, but I think it has a real effect on total annual cost for many ebook consumers, and counts as another improvement from 2004.

But the most positive change, I think, is that the average price of a mainstream fiction new release has gone down — perhaps not from Amazon’s unilateral (and subsequently unsustainable) pricing strategy in 2008, but certainly from where we were in 2004 when publishers called all the shots. I consider this a clear win, and I think it probably wouldn’t have happened if Amazon hadn’t come along.

As everyone who follows the industry knows, Amazon tried to force a $10 ceiling on new releases back when it first introduced the Kindle, and although big publishers successfully fought back last year and raised the ceiling to the $12-15 range, that’s still far below today’s average hardcover price. Amazon pushed for a very low price point, publishers pushed back, and the result in 2011 is somewhere between the two extremes.

The future looks cheap

Big publishers will probably want to keep pushing for higher prices in the coming years, or at least keep raising ebook prices to match mass market prices, but there’s a new twist now that might undermine that strategy: indie publishing.

The last couple of years have been all about Amazon, but 2011 is shaping up to be all about indie publishers and authors — and they’re even worse than Amazon when it comes to discount pricing. They’re aggressively pushing prices in the other direction, and getting lots of favorable media coverage in the process, which I suspect will speed the normalization of the $0.99-2.99 price range in consumers’ minds.

In another year or so — depending on whether the current discount authors are exceptions — $9.99 may be considered a premium price point, and $14.99 an impossible sell. (It already is to people like me who tend to shop for ebooks a lot.)

Whether you think that’s the right direction prices should move probably depends on whether or not you earn your living from publishing. Consumers, however, have reason to cheer.

* To keep this focused on publisher prices, I’m not including retailer discounts in my comparisons. Although you can frequently find a print edition at a lower discounted price than a Kindle edition because of agency pricing, technically the two editions often have the same list price.

(Image: Hanan Cohen)

reposted from Booksprung

1 Comment on Ebook prices in 2004 vs 2011: what’s changed?

  1. If you’re going to look at specific titles, won’t prices– print as well as digital– ALWAYS go down over time? To get a valid comparison, you would need to take the price of, say, the top 10 bestsellers the first month they were available in 2004 and then look at the top ten best sellers for the same month in 2011.

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