How Much Should An Ebook Cost?

Abraham Lincoln's wise answer would doubtless be, "enough to reach the floor." The market seems to be adopting $9.99 as a rough standard (though that is currently a loss leader price for Amazon, at least). As the New York Times indicated the other day, mainstream publishers think the answer is, "as close to what a printed book costs as we can get away with." As Simon and Schuster chief Carolyn Reidy told the Times, ""The concept that because a book is an e-book it should automatically be priced significantly lower than a paper book is one we don't agree with…What a consumer is buying is the content, not necessarily the format."

Publisher Glenn Yeffeth, whose perspicaciousness in his business is thoroughly proven by the fact that his BenBella Books published both Choice: The Best of Reason and the paperback edition of my This is Burning Man, runs the numbers and shows that, surprise, that's some mighty self-serving reasoning by the New York publishing barons:

Let's look at an e-book:

Royalties (let's assume these are 25% of net, as S&S and many publishers pay): $3.13

Printing and Distribution: $ 0

Marginal profit is $9.37/book.

What is the cover price on an ebook that yields the same marginal profit/book [as his calculations for a typical printed book]? It turns out to be $12.35.

There is lots of room to quibble with these numbers, but the idea that an e-book should be priced the same as the hardcover is transparently ridiculous.