What's the most profitable price for an ebook?




I had an interesting (if that's the right word) experience yesterday while looking for a niche academic work. Because it's niche I expect the price to be high, and have happily paid high prices for good books in that niche, but in this case the ebook price was higher than the already high hardback price. That's the point at which I think the publishers are just taking the pith, so in turn I choose to take my money - all of it - elsewhere. When I need access to that book I'll just grab it from the library. Well done, publisher; your author gets nothing! I hope you're both happy.


This survey must be skewed towards current bestsellers only. No one pays $9-10 for an ebook that they can find in a dollar store in hardback.
And no one will buy an ebook for a price higher than its hardback or paperback price unless it's a dire book emergency. All things being equal, a physical book won't suddenly decide to leave your device because a publisher changed it's mind about how much you really OWN it.


I have no problem paying more for an ebook than a physical copy simply because the electronic copy is more valuable to me.

All of the books I've purchased have had their DRM removed, so none of them will suddenly leave my device either. There are extra benefits as well -- I can access my entire collection from my phone if need be, I can read in the dark, I can look up the meaning of words in seconds, my collection can't be destroyed by fire, if i can't remember who a character is, I can search with the characters name and refresh my memory in seconds, etc...

All of these features mean I'm not that bothered to pay more for an electronic copy than a paper copy.


@Professor59, I'm the author of the analysis mentioned here. Just to point out, it's not a survey asking what people would pay, it's an analysis of what they did pay.

People may not pay $9-10 for an ebook they can find cheaper elsewhere in physical form; but they are paying $9-10 for ebooks. (In the USA, at least)


The study is a good look at eBooks on their own, but many readers think of a book as content rather than either paper or digital embodiment. This blog post looks at if and how publisher (and author) revenue can be increased by offering print + eBook bundles. While this one looks at the social equity that publishers (and authors) can build by offering eBooks for free to readers who buy the print edition.


"a rational business wants to maximize its profits, not the amount that each customer spends"

So you're saying Apple is irrational?


While the raw data is interesting, I'm afraid comparing dollars and pounds is a bit like comparing apples and oranges. At present, £1 is worth about $1.63. So saying that, in the UK, ebooks don't sell well above £5 is only meaningful to me (as an American) if £5 = $5, and of course vice versa. Unsurprisingly, £5 comes out to about $8.15 which is pretty close to the price point ($9 - $10) at which US publishers earn the most revenue. After following the link, I see the graphs have been "normalized" which, in my humble opinion, only muddles things further. I think what would be really interesting would be to see both charts expressed in one currency (pounds, dollars, rupies, whatever) and then measured as a percentage of mean household GDP. It would be more insightful to be able to say "Households in country A are willing to spend X percent of their annual income on ebooks, where as in country B they will only spend Y percent."

Also, Purchasing Power Parity.


There are a few things to keep in mind. First, the "right" pricing and the average "right" pricing are two different things. I would drop $50 to read a new Neal Stephenson book without batting an eyelash, but I'll balk at paying $10 for an ebook from a total unknown with only a few reviews. I would be a lot more interested if it tried to break out various optimal selling prices. Does a new author have a different optimal price than an established one? Does it vary by genera? Are UK folks buying more short stories?

The average optimal price for everything is about as interesting as reporting that the average human has one boob, on ball, half a penis, lives on average near the center of the earth, which is located on average inside the sun, which is located on average inside of the super massive black hole in the center of the galaxy. Anyone who works with numbers for a living knows that the average is something you glance at for a sanity check before you start doing the real work.


What's the confusion here? This is simply where the supply curve and the demand curve meet, and since the supply curve goes flat as soon as the number of copies sold reaches the revenue break-even point, it's all about demand. This ironically is one of the few times when the supply curve is almost backwards; development costs for an e-book are basically fixed.

Some books-as-products will never have a very high public demand but will be essential to those that actually need them, and will command a high price even with low demand, and arguably that low demand will raise the price to pay for the production of the text.

It's expected that many books will see an increase in demand as the price drops, but only a portion of that curve will be a sweet spot, and predicting or measuring it may not help a whole lot. It'd be like trying to quantify the Laffer Curve, it's really not possible without experimentation, and even that experimentation may only be good for a short amount of time or on that single volume.

I feel that e-books are too expensive. I buy a paper copy and I'll have it forever and I can insure it against loss, and it'll always work as there's no medium or machine involved that has to be able to interpret it. E-books are useful from a search perspective, but for leisurely reading they come with baggage that makes me think they should sell for about a quarter of what a dead-tree edition sells for at any given time.


It seems like Luzme basically requires you to know what you want to read when you go to their website. If people are generally looking for the cheapest version at the moment, then you probably see a lot of people purchasing books at the typical price point (and we see a small peak at the $9-10 range). Luzme probably misses a lot of the people who just wander the cheap deals.

I wonder about the details of those books at the lower end. Are they generally popular books that briefly dropped in price? Do the people who buy those books tend to have large wishlists and lots of patience when it comes to waiting for price to drop?


hmmmm i think 1GBP equals 1,63$


You're right, that's a typo. Off to fix it I go.


Hi @fireshadow, if you read my original article , you'll see that I think my users at Luzme fall broadly into 2 categories:

  1. The avid readers, who have a long, long watchlist and buy several books a week; usually happy to buy whichever happens to be on offer today; and
  2. The specific reader, who knows exactly which book they want, and just want to know when and where it's available; they're usually very insensitive to the price, they just want the book.

I've been surprised just how long some people's watchlists are; I think the current largest on Luzme is approx 4.5k books. With a watchlist that long, there's always going to be a book on a price deal to buy!

So I think, in answer to your question about the books at the lower end, they are a mixture. There's definitely many normally-higher-priced books that get bought at the low price; I can see this from the response when I send out a price alert email. But there are also some, often from the self-published authors, who are on permanently low price.


As a rule of thumb I never buy an e-book that is higher or equally priced than it´s pocket edition.

And if there could not be pocket editions of that particular work (roleplaying manuals for example) I would not pay more than a second hand store would offer me for the same, physical, book.


If you think they are not maximizing profits, their market cap and earnings report have something to say to you.


Exactly. A lot of people seem to be in the mindset that an ebook is some sort of lesser alternative to a physical book that one would only purchase as a cost-savings measure in the same sense that one would buy a paperback over a hardback, but in general the opposite is the case. And it's not because ebook users hate printed books -- I own over 1000 myself. But I live in an apartment and use mass transit frequently. So ebooks are just more practical.


Faulty logic.

Apple's prices are high, because they do not go for the low price, low margin market at all (Well, nearly at all) and because enough buyers are are willing to pay a premium for convenience and design. And yes, even quality.


I think they TRIED to maximize ebook profits through collusion in forcing a price increase marketwide. Had they raised prices all on their own, that would have minimized profits. Hence the antitrust action.

Apple wanted to increase the amount each customer spends and link that to increased profits by illegal collusion with book publishers. That was the only point.


But that doesn't apply to ebooks, so it isn't faulty logic. Unless you can show me some way in which an ebook from Apple is higher quality than one from Amazon.