How Much Should an Ebook Cost?

The book industry seems to be moving towards a standardized price for electronic books.

This past weekend saw the release of the iPad, the “magical” device that comes with the promise of being a game changer for the book industry. At almost the same time, we also started to see the emergence of a further-reaching adoption of the agency model.

The ebook agency model is one in which the publisher determines the price for the ebook. They get 70 per cent of that price and the retailer gets 30 per cent. It’s similar to the model used in the print book world, except, within the agency model, retailers are not allowed to discount or offer coupons to reduce the price.

What does this mean?

Well, for one, it means that the standard $9.99 pricing for ebooks that has been emerging might increase by a few dollars. This will lead to less comparison shopping, at least with respect to price. Book buyers, who are currently used to scouring the web for the best price, will find the same price everywhere under the agency model. This levels the playing field for retailers and means that the predatory pricing tactics that some retailers like Amazon have used, where they pay the publisher $15 for an ebook and sell it for $9.99 (losing $5 for each book they sell in order to gain market dominance), go away.

What makes more sense to this book-lover would be a sliding ebook pricing strategy that mimics the pricing of the different print versions of a book. If the hardcover has just been released and sells for $30, a decent ebook price would be $14.99 (half the price of the hardcover). Then, in a year’s time, once the trade paperback version is released, the ebook price could drop accordingly: $16.99 for the paperback, $7.99 for the ebook version. If a mass market version is released, the ebook version would be cheaper still: $9.99 for the mass market copy, under $5 for the ebook version . This would reflect a decent trade-off between owning a physical copy and a more portable, less tangible ebook version.

But that’s just one way this could play out.

Publishers will set prices, consumers will respond by either buying or not buying, stats will come in, publishers will adjust, and the market will stabilize.

One of the best things about agency model pricing is that, with every ebook retailer now on the same ground, the focus shifts to customer service, selection, browse, searchability, and, more importantly, the actual ebook reading experience. Branding, customer experience, and continuing to improve the customer’s ability to “use” the ebook whenever and wherever they choose will become more important than ever.

Kobo just announced one of the best-priced ebook reading devices yet. The Kobo eReader uses e-ink technology (the reading experience is similar to paper, requiring ambient light and resulting in less eye strain than with a traditional back-lit computer display) and is priced at $149. Added to the dozens of dedicated ebook readers already out there, this is evidence that there is a focus on improving the ebook experience, not to mention a more attractive and affordable price point for consumers.

I currently own three ebook readers – Sony’s PRS-505, the enTourage eDGe, and an iPhone. Though I love the e-ink reading experience on my PRS-505 and the ability to annotate and make notes in the margins of ebooks on my eDGe, the one I read on most is the iPhone. Why? My iPhone is always on me, which means there’s always a book within reach. I have half a dozen book reading applications installed, including the Kindle and Kobobooks apps. I favour the Kobo application, partly because it allows me to bookmark and read the same ebook on my iPhone, on the web, and on a desktop-based reading application.

But my overall reading is still divided between print copies and electronic book versions.

So what also makes sense would be to have the option of bundling. Meaning, when I walk into a bookstore, I can choose between buying just the hard copy of the book or buying a slightly higher priced bundle that includes the hard copy and the ebook version. That way, I can keep the hardcover on my nightstand and carry the ebook version around with me on whatever device is most convenient for instant and quick reading anywhere.

I’d likely read more books that way. And reading more books usually results in buying more books. And buying more books results in more cash in the pockets of retailers, publishers, and authors.