With four of the five major publishers going back to agency, ebook prices are bound to remain high and will continue to incite arguments between readers, publishers, and authors as to the best price for an ebook.
This is a debate which will never end, but in the interests of moving it forward I would like to address one argument I hear, namely that traditional publishers have to price their ebooks higher because they have more overhead.
For example, author Jody Hedlund posted this argument on her blog yesterday:
Traditionally published books have more people involved in the publication process, thus need to generate more revenue in order to pay everyone who had a hand in the book: two or more editors, office staff, the cover design team, the cover model, photographer, the marketing staff, publicist, sales representatives, and more. And let's not forget, the author also has to be paid! No, Ebooks may not require the same "print" costs that a hard copy or paperback may incur, but as you can see, the costs of traditional publication go beyond the price tag of paper and ink.
While this might have some weight on the publisher side of the debate, it is viewed with contempt from the reader side - and with good reason.
It asks the reader to offer our charitable support to multi-national, billion dollar a year publishing conglomerates (Hedlund has books with HarperCollins and Penguin Random House). We're asked to make up for a publisher's poor business decisions, including the decisions to:
- buy and maintain Manhattan offices,
- hire too many people, and
- grow beyond any reasonable scale.
When you put it that way, the conclusion is obvious. Readers have no moral or financial obligation to support a publisher's bad decisions or flawed business model.
Publishers don't have to be based in Manhattan, they don't have to hire huge staffs, and they don't have to operate inefficiently.
The fact of the matter is, folks, books simply don't cost that much to produce. Much of what is spent at the major publishers goes to overhead costs, including Hachette's open floor plan office and the Big Five's candlelit dinners at expensive Manhattan restaurants, to name a couple examples.
Strip away the inefficiencies and you'll discover that the actual cost of producing a book is a lot lower than you might think. And it's not just indie authors saying that; there are publishing startups saying the same thing.
Last week at BEA 2015 I sat down with Enrique Parrilla, the CEO of Pentian, and discussed that startup's crowd-funded business model. Pentian invites readers to back a book, and once it is funded Pentian publishes the book both as an ebook and as a print book (also, sometimes, an audiobook).
Pentian's ebooks are priced between $5 and $9 in the Kindle Store. Of that $9, 10% goes to Pentian, 40% goes to the author, and 50% goes to backers.
Here's the fun part: Pentian's production costs are usually in the range of $3,000 to $10,000 per book (an audiobook costs around $6,000).
Yes, Pentian, which lacks the overhead of the legacy publishers, can publish a book for under $10,000 and still pay authors a better royalty than just about any major publisher.
Could someone tell me again why I should pay for the bloat and inefficiencies of a major publisher?
I don't get it.
image by Philip Taylor PT