An American Editor

January 29, 2010

The eBook Wars: The Price Battle (II) — Starbucks 1, Publishers 0

On January 23, 2010 The New York Times had a front-page article titled, “On Kindle’s List, the Best Sellers Don’t Necessarily Need to Sell.” The article went on to discuss the phenomenon with which most savvy ebookers are familiar: many of the “bestsellers” on any ebook bestseller list are free titles. More important to publishers is that many of those bestsellers are always-free public domain books, not paid-for ebooks being given away temporarily as promotions.

The article went on to discuss publisher approaches to freebies, how freebies are promotional, and other good reasons why giving away an ebook is good and/or bad. (Sadly, the article neglects to mention some of the best sources for free ebooks such as MobileRead and Feedbooks. Free ebooks at these two sources are well-formatted and generally well-edited by a caring community.)

Let me say upfront that I like free ebooks–afterall, who doesn’t like free. Free ebooks have introduced me to authors whose work I never would have read otherwise. But let me also say that with rare exception, I have not proceeded to buy other books of the new authors I have liked. (I do, however, buy a lot of ebooks and hardcovers — more than 100 of each type in 2009.)

Free ebooks are a two-edged sword for publishers and authors. On the positive side, it introduces readers to authors they might not otherwise have read. In my case, it introduced me to David Weber, author of the Honor Harrington Series, and now I buy all of his books in hardcover. On the other hand, it also introduced me to Fiona McIntosh, author of the Quickening Series. I liked her writing but have not bought either of her newest two books (books 1 and 2 of her Valisar Trilogy) because the publisher set the ebook prices higher than the paperback prices.

So, problem #1 is that many publishers still have no clue about what differentiates an ebooker from a print copy buyer. In the case of David Weber, Tor/Baen gave away older Weber ebooks and reasonably priced new ebooks, thereby gaining a new reader, whereas for Fiona McIntosh HarperCollins/Eos gave away the ebook then threw away the reader with excessive pricing.

Problem #2 is that publishers are creating reader pricing expectations. Readers expect that sometime down the road an author’s newer books will become freebies too, so why buy now, especially at exorbitant pricing. Once the impulse buy is lost, readers tend to forget the author and move on. Yes, the Times article quoted some success stories, but remember this: It is still very early in the ebook revolution (ebooks account for only 5% of the current book market) and what happens today doesn’t indicate what will happen tomorrow. Let me repeat: The ebook bestseller lists are stacked with freebies, not paid-for ebooks.

Let’s consider consumer thinking for a moment. Many people rush to their Starbucks and plop down $4 for a coffee. Within minutes the coffee and the $4 have disappeared, neither to ever be seen nor savored again. This is the Starbucks law: Make the product a one-time consumable and require new payment for the next one-time consumable.

Contrast consumers’ willingness to buy the coffee with their willingness to pay for ebooks. An ebook, unlike the coffee, can be savored over many hours and can be resavored 2 years later. Read that $5 ebook 5 times, and each reading has cost $1; try drinking that same cup of coffee twice let alone 5 times — it simply can’t be done. The coffee is $4 for a one-time thrill whereas an ebook is multiple thrills that cost less each time. This is the anti-Starbucks law: Make the product consumable multiple times  with each consumption costing less. Yet, consumers balk at paying for an ebook and publishers feed the freebie frenzy.

Clearly, publishers aren’t making their case about value very well. Isn’t there something amiss when Starbucks can convince someone to part with $4 for a one-time, short-lived thrill but publishers can’t convince anyone that their product has greater value because it is a long-lived thrill. Perhaps the time has come for publishers to demote the bean counters and promote those who give value to their product. There is no financial future in free books for any publisher or author.



  1. I was with you right up to the very last sentence. I think you’re entirely wrong to say “There is no financial future in free books for any…author.” This is probably true for well-known and much-loved authors, but for those millions of authors trying to make a life in writing, free ebooks can offer exposure that they wouldn’t otherwise receive.

    Free ebooks are essentially the online equivalent of browsing the “new release” shelves and end caps in your local brick-and-mortar library. I would never have discovered some of my favorite authors if I hadn’t first borrowed a free copy of one novel from the library. Case in point: A friend encouraged me to read Neal Stephenson’s Snow Crash. I borrowed it from the library and was hooked, later buying all three books in hardcover from his Baroque Trilogy.

    As for free eBook sources, I just wanted to bring up Project Gutenberg. Granted, they only publish public domain stuff, but I think the future will thank them for the literature they’ve digitized.


    Comment by 4ndyman — January 29, 2010 @ 3:08 pm | Reply

  2. As much as I can understand right now, I think you’re right!


    Comment by Hungover Guy — January 29, 2010 @ 8:39 pm | Reply

  3. […] and production services to publishers and authors. This is reprinted, with permission, from his An American Editor blog. PB Digg us. Slashdot us. Facebook us. Twitter us. Share the […]


    Pingback by The eBook Wars: The Price Battle (II) — Starbucks 1, Publishers 0 | TeleRead: Bring the E-Books Home — February 1, 2010 @ 3:58 pm | Reply

  4. Great article. And the pros and cons will continue to tip back and forth like kindergardeners on a seesaw.

    The challenge with a lot of free ebooks is they are worth the price – nothing.

    But let an author put out quality content and, as Seth Godin says, people will then pay for the “souvenir”. I read his “Spreading the Idea Virus” as a free download and have checkout out several of his books from the library. But when it came time to “have and to hold” a hardcopy I bought “All Marketers are Liars”. And I didn’t wait for the new addition with the new title and cover – I wanted the old one because I agreed with it (you’d have to be a reader of Seth’s blog to follow this thread). So he got $25 from me.

    And the Ideavirus, after being downloaded free over 1 million times and still available for free online, became another Godin bestseller.

    There’s something to be said for “owning a copy” of a good book. After all, libraries didn’t put bookstores out of business. In the past two years I have checked out more than 100 books from my local library AND I spend at least six hours a week in a Barnes & Noble.

    All right! I Confess!! As an author looking for his audience, FREE IS SCARY. But money can’t buy the feedback from a fan who read and benefited from what you wrote!



    Comment by toastedmaster — March 2, 2010 @ 3:13 pm | Reply

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