08:10 – I thought this would happen, but not this quickly. There are now so many free books being released for Kindle that I don’t have time even to scan the titles. Some days, Amazon releases literally hundreds of new free titles.
As a result, my standards for downloading a free ebook have tightened significantly. It used to be that “this looks like it might be interesting” was sufficient. Now, I pass up books like that by the score, not even bothering to visit their Amazon pages to get more details. In the last couple months, I think I’ve actually paid for only two ebooks, one a $3.99 title that Barbara wanted and another a $2.99 Joe Konrath title that was actually on sale that day for $0.99.
Most authors seem to loathe and fear the proliferation of free ebooks, seeing it as a “race to the bottom”. Even two or three months ago, an author could get noticed with a $0.99 or free title, but that’s no longer true. When thousands of ebooks are cheap or free, just being cheap or free doesn’t buy any exposure.
But I still think low ebook prices are a good thing for authors, at least those who have backlists and are realistic about pricing. I have books from literally scores of new-to-me authors queued up for my Kindle. If I read one of those and like it, I’m going to want more from that author. If I visit Amazon and find that author has a dozen other titles in that series available, all priced in the $0.99 to $2.99 range and without DRM, I’m going to buy all of them in one go. I’ll probably give a copy of the first title to one or several of my Kindle-owning friends who have reading tastes similar to my own, which will probably generate a bunch of additional sales for that author.
But if that author has made the mistake of overpricing his or her other titles, or of putting DRM on them, that chain is broken. If the other titles are priced much above $2.99 or have DRM, I’ll simply abandon that author and move on. It’s not like I don’t have many others to choose from.
Authors need to understand the economic concept of residual value. Print books have residual value. I can sell them back to a used bookstore or trade them two-for-one. I can donate them to the library. That’s why I keep saying that the natural value of an ebook is half the price of a used paperback. When you “buy” an ebook, all you’re paying for is the right to read the story. Even $2.99 is a pretty high price for that. I’ll pay that much because that’s the minimum price upon which Amazon pays the author the 70% royalty instead of 35%. But most readers don’t know that and wouldn’t care if they did. What they do know is how much a used paperback costs, and they will be resistant to paying much more than half the price of a used paperback for an ebook. Particularly when there are so many free ebooks available.
10:45 – I just shipped what I suspect will be the final chemistry kit that’ll arrive in time to go under the tree. I suppose it’s possible for one shipped tomorrow or even Friday to arrive in time for Christmas if it’s shipped to an address near us, but I sure wouldn’t bet on one shipped tomorrow, let alone Friday. The USPS is just as covered up right now as UPS and FedEx. I’m expecting them to take one more day on average than normal. The one I just shipped went to one of the Maryland suburbs of DC, and I told the buyer to expect it Friday.
What’s your preferred way of finding all of the new free and low-cost releases on Amazon? The best I’ve been able to find is the “top 100 free” list. Is there a new releases list?
– Rob
“Even $2.99 is a pretty high price for that. I’ll pay that much because that’s the minimum price upon which Amazon pays the author the 70% royalty instead of 35%.”
Bob, please help me out here with a clarification:
Is it 70% for $2.99 and up with 35% for $2.98 and down, or
35% for $3.00 and up with 70% for $2.99 and down?
Yes, I love the Konrath books having read then from your recommendation.
Stu
Amazon pays the publisher (or author, for self-pubbed works) 70% of list price on any ebook that’s priced between $2.99 and $9.99. For books from $0.01 to $2.98 and those $10.00 or more, Amazon pays only a 35% royalty.
Which is why it’s so insane that many traditional publishers price their works over $10. I’ve actually seen trad-published books listed at $10.00, which earns a $3.50 royalty. If they’d cut the price by one cent, they’d have gotten a $7.00 royalty. In order to get the same royalty they would priced at $9.99, they have to price at $20.00.
Trad publishers are so desperate to keep print books selling, particularly hardbacks, that they’re willing to price ebooks at $10 and higher even though they’re leaving loads of money on the table.
And authors get screwed. For self-publishers in the $2.99 to $9.99 range, authors get 70% of the list price, or $7 for every $10 in sales. If they’re published by a traditional publisher who prices in that range, the author gets 25% of net, which means 25% of 70%, or 17.5% or $1.75 for every $10 in sales. Of course, that author also has to pay his agent’s 15% cut, so the author ends up with 14.875% of list price, or $1.49 for every $10 in sales. Of course, many trad published ebooks are priced more than $9.99, which cuts those numbers in half. On those sales, the author ends up with about $0.74 for every $10 in sales.
The best one I’ve found is Kindle Review, listed in the sidebar. He posts new lists of free Kindle books almost daily and sometimes more than once a day. A month or so, he talked about discontinuing his free book posts, mainly because he dislikes free books and thinks they’re harmful to authors. His readers convinced him to reconsider, and he compromised by posting only a subset of free books, those with high average reader reviews, that are full-length (as opposed to short stories or novellas), and so on. I still can’t keep up with it all.
RBT wrote:
“Amazon pays the publisher (or author, for self-pubbed works) 70% of list price on any ebook that’s priced between $2.99 and $9.99. For books from $0.01 to $2.98 and those $10.00 or more, Amazon pays only a 35% royalty.”
So, I assume Amazon have thought this pricing strategy out and are doing what they think is best for them. They don’t want prices too low, or they’ll make a lot of not much, nor too high, or they’ll make not much of a lot. Do you think their pricing strategy is a good one?
I think it has more to do with transaction costs than anything else. Amazon would love to be able to offer 70% royalties on $0.99 ebooks, but at that level the amount they have to pay the credit-card companies becomes a big chunk of their net.
It’s kind of like how PayPal charges for processing the transaction when we sell a kit. It’s a flat $0.30 per transaction plus 2.9% of the amount. So, if we sell a kit for $160, PayPal keeps $4.94 and credits me with the balance of $155.06. I’m sure Amazon gets the lowest per-transaction rate available, but that’s still going to be a pretty big chunk of a $0.99 sale. In fact, after all their costs, I suspect Amazon just barely breaks even on a $0.99 ebook sale, if in fact they don’t actually lose money.
I also check this daily, usually shows $0.99 books:
http://amazon.com/kindledailydeal
In a different area of the world: any thoughts on the “blue bra woman” in Egypt? Will this finally cause women in that area of the world to stand up for their rights? Initial reactions seem at least hopeful, with thousands of women actively protesting…
I saw the video days ago but lost track of any news; is there really a swelling of protest over that now? How about here in the U.S.; oh wait: lost my head there for sec; here the focus is on the corporate glass ceiling, women getting paid less than men, and abortion-on-demand-no-apology and gay rights. Over there it’s on trying not to be stomped to death, tortured to death, and then shot.
Or are our pepper spray, beatings, fire hoses and prolonged arrest procedures a precursor?