This review was posted for Son of the Black Sword.
(Name removed because he probably meant well, and this isn’t personal)
I read and absolutely loved, Correia’s monster hunter books. Own each and every one of them. I was so looking forward to reading this one after I saw the blurbs for it. However, I cannot bring myself to allow the publishing company that Correia has his contract with, to take advantage of me. Like many of the ‘main stream’ authors, or rather, those that aren’t taking advantage of self publishing, the cost of the book is inane. The Ebook. Which costs the publishing company NOTHING to create in comparison to hardback, and paperback books. Costs more than the Paperback. That alone, will prevent me from purchasing this book, until the price is fixed to something reasonable.
I know writers aren’t supposed to respond to reviews, but I’m not responding to this as a writer, I’m responding to it as a retired accountant.
I am the author in question. Your review doesn’t hurt anything except my overall average. You aren’t sticking it to the man. You aren’t harming the corporate fat cats. If you think the book sucks, give it one star. That’s awesome. That’s what the stars are for. But you don’t use one star to bitch about the price of eBooks. That just makes you look stupid. We shouldn’t still be having this conversation with anybody who isn’t a Bernie Sanders supporter.
Now, Accountant Hat on. This is pretty basic stuff. This is how basic costing works, not just for books, but quite literally everything. But today, we’ll talk about books, because your ridiculous review has pissed me off. I’m going to dumb this down and keep it simple as possible.
I produce a product, which I sell to a publisher. Under that contract I am given an advance against royalties (money up front), and then I get royalties based upon a percentage of the sales price. This is good. This is how authors GET PAID.
Now, over on the publisher side they have a bunch of costs associated with the production of my product. Some of these costs apply to both ebooks and print. However, contrary to what most people think printing isn’t the big deal, as much as all the other stuff.
There are four levels of costing. Each one will represent a percentage of the cost of the product.
General and Administrative: These are the costs associated with having a company. Regardless of whether the product makes it out the door or not, you are paying the rent and keeping the lights on.
Overhead: Cost related to doing whatever it is your company actually does.
Direct: Costs related to actually making whatever it is you make.
Now, I’ve never been an accountant in the publishing industry so I’m not sure what the rules are for which costs go into which bucket. (My accounting experience was for manufacturing high end electronics, then guns, and finally keeping the wings from falling off of A-10s, and this varies from industry to industry)
Now, the thing that is different between eBooks and physical books is that Direct part. (Which having seen how books are printed, trust me, you are drastically overestimating) and you’re leaving out all that other stuff like having a company, and paying a bunch of people to make art and sell it.
And direct cost is more than “paper” and “ink”. On my publisher’s books, I am a Direct Cost.
Oh, but wait, we forgot the last percentage, and that’s profit. That’s the awesome part everybody wants to maximize. I like when my publisher makes a profit, because that means they get to stay in business, which means I get to continue making lots and lots of money.
So when a producer sets the price of an item, they look at what all those numbers above are, and then they try to cover all of them, and have some left over to make a profit so it is worth doing it again.
Some products are more profitable than others. When you go to a fast food restaurant, the margin on the burgers is slim. If they sold nothing but burgers they’d be in trouble. However, the margin on soda is amazing. That soda you spent a couple bucks on? The most expensive thing involved was probably the cup. When I was selling guns, guns were cut throat, high competition, and on most brands I’d only make 10-15% on the sale of a gun. But then I’d made 40%-50% on accessories. That was how I kept the lights on.
Ebooks are like that. Publishing is an industry with crappy margins. Don’t believe me? Ask Borders. Yes, ebooks have a lower direct cost, but that is all still going into the same company bucket. Some lines are more profitable than others. Duh. It isn’t about “fairness”. Business has nothing to do with fairness. Business is about staying in business.
That’s the basics of how costing works.
But wait, there’s more!
Now we get into Econ 101! (I love Econ).
So now that you know how much you have to make in order to keep the lights on, you want to maximize your profit. You want to sell it for as much as possible, but not for too much because that will turn some people off and you’ll sell fewer units, so you want to get that sweet spot where the supply and demand curves meet.
Some people are willing to pay more, others are willing to pay less. Go super cheap, make less per unit, and sell more, and at the other end you go super expensive, make more per unit, but sell less. Which is why the Nissan Versa and Aston Martin DB9 can both exist.
Beyond that I’m not going to explain how supply and demand work. That’s the first few hours of an Econ class. Or go read Thomas Sowell. You’ll thank me later.
Books aren’t cars, but they’re basically interchangeable entertainment products. Some authors’ brands can get away with a higher cost because they’ve established that they’re a Honda, and some new guy is going for moped prices because his quality isn’t established and the only way he can hope to attract customers is by low price. The super cheap customer isn’t going to buy the Ferrari, and Ferrari is just fine with that. But when cheap guy posts a one star review for the Ferrari, we’re all going to laugh at him. For the record, I’m not a Ferrari. I’m more of a Ford Expedition.
Since there isn’t some super easy way to tell you what the perfect sweet spot is, publishers guess. Some guess too high, and others guess too low. Who guesses just right? Well, we don’t know, because it isn’t like you go around showing your competitors your P&L (that’s a Profit and Loss statement for you Bernie fans, for those guys, think of it as magic voodoo).
Oooooh, but there’s even more!
What? Pricing eBooks is even more complex? Unpossible!
Yes, because now lawyers get involved!
Did you know that Amazon is actually a business too? And that it exists to make money? And that it also wants to maximize its profit? Crazy. Bernie should do something about that.
Publishing houses don’t work off the same contract as lone self-published authors. In fact, for a publishing house to set up an ebook distribution deal with Amazon there is a lot of wrangling, and Amazon gets a say in how those books are priced. This involves lawyers (see that line about Overhead, they probably go in that bucket).
And that isn’t even getting into the fact that in said contract, there are all sorts of little special things, like Amazon promotions (where they can put things on sale or discount them or bundle them with audiobooks) and publishers need to set their regular price to take those things into account.
Now, if you’ve got a publishing house that sells ebooks in other places (like on their own page in monthly Webscription discount bundles that have been around since the internet was invented) then that complicates matters, and Amazon is going to have you set minimum price guidelines and maximum discount rates. It all gets very complicated, and is also why for the first few years of my career the most common FAQ on my blog was “Why can’t I get your book on my Kindle?”
Once my publisher got that contract hammered out, and Amazon was happy with the minimum prices they agreed to, I was super happy, because now on my personal P&L I was making a whole lot more money by having my eBooks in the biggest marketplace. Yay.
Now, you may have noticed that my publisher (who trust me, isn’t evil, she’s actually pretty cool) drops the prices of the ebook the longer it has been out. Part of this is that contract thing, and another part is that demand curve thing, but either way, it gets cheaper as it goes.
So yeah, in this case the ebook is around paperback costs. HOW BARBARIC! Oh, except wait… There is no paperback yet. The book is only out in hardcover. Which means back on that demand curve (remember, profit good) the potential customers aren’t choosing between an $8.99 paperback and a $7.99 ebook. They’re choosing between a $25 hard back and a $7.99 ebook.
In our case when the paperback comes out, my publisher drops the price because the market conditions have changed (which is why the Monster Hunter Nemesis ebook is $6.99 and Monster Hunter International is free). Sometimes my eBooks show up for less because Amazon is having a sale, and I don’t even know about it until one of my fans tags me on Facebook about the sale.
You really want to get offended? My Super Evil Publisher also sells eARCs (Electronic Advanced Reader Copies) on their own page three months before the book comes out, for close to hard cover prices! GASP! These are the early, probably not fully proofed, versions that would normally go out to reviewers. But going back to that demand curve thing, some brands are in such demand that there is a market of people who will spend $15(!) to get an eBook, because they are in that much of a hurry to find out what happens next, and are willing to pay a premium to get it first (I actually earned out my advance for Monster Hunter Nemesis off of eARC sales alone).
Now if you’re self-publishing and trying to decide how to price your book, it is simpler. You don’t have a bunch of lawyers involved, and you don’t have all that G&A and Overhead. Lots of self-published folks go 99 cents, others do the $2.99 to maximize the royalty percentage. Same principle. You’ve got your market and your demand curve, and you’re going to price accordingly. You need to figure out the price that maximizes your return. Whatever you set it at, somebody is going to come along and say it is wrong. ONE STAR!
This all boils down to a question of entertainment dollar value to the customer. If you want it now, and you really like this particular brand, you’ll realize that you spent more than that on your burger combo at lunch today and buy the book. If that isn’t worth your entertainment dollar value, then you won’t purchase.
In pricing, nobody is “taking advantage of you” unless you are stuck in a monopolistic situation. Ruth’s Chris costs more than Sizzler, but Ruth’s Chris isn’t taking advantage of you, they are pricing according to their brand and their product to maximize their position in the marketplace. If they price too high, then they will not make a profit, and will have to adjust or lose market share. Which is kind of funny, because in this tortured analogy, I’m actually priced more like Sizzler, and you just gave a one star review to Sizzler, because I’m not priced like McDonalds.
Accountant Hat off, Writer Hat on… Back to this kind of one star review, it is utterly pointless. You aren’t educating anybody. The only person you’re harming is the author. Because nobody in the world is going to say your review was helpful, nobody is ever going to read it. So all you did was lower the overall average stars, which primarily damages the author’s standing. A review that says “I’m too cheap to buy this ONE STAR!” is the same as “It sounds like this baby killer likes guns ONE STAR!” or “I bet he listens to Fox News ONE STAR!”
“What a rip off! It turns out Moby Dick is about whales! Whales are fat and stupid and so is Herman Melville! ONE STAR!”
Ignorant reviewers… You aren’t helping.
Frankly, it is kind of insulting. Me? I’m fine being insulted. I consider it blog fodder. A. I get called the worst things in the world daily, so I’ve got rhino hide. B. I’ve sold a ton of books so I know you’re full of crap. But put yourself in the shoes of some new author at a publishing house and think about how they feel when you post reviews like that. It’s like you’re telling them that the eight hours* of entertainment they provided was worth less than the price of a hamburger.
And I’m not even talking a very good hamburger.
The value of a book isn’t the paper. The value is the entertainment you get from the book. If you get books because you like having shelves and shelves of books (nothing wrong with that by the way, you should see my office) great, but why the hell did you buy an eReader anyway? Authors love being told that the entertainment they provide isn’t worth a buck an hour, usually from people who have no problem drinking a $6 Coke and eating $4 nachos while watching a 90 minute movie that cost $8 to get into.
Stars are to rate the product, not to announce to the world you don’t understand how capitalism works. If you’re too cheap to buy it, just don’t buy it! If you read it and it is good, give it stars! If you read it, and you thought it was bad, give it less stars. It’s that simple.
*Oh, and shut up, speed readers. That’s right. I said eight hours. Deal with it. Nobody cares that you read 6,000 WPM like some sort of freaky robot person. Most people read for fun at 200 WPM and most books are 100k words. I swear, I’ve never in my life mentioned that it takes hours to read a novel without some self-righteous speed reader chiming in the comments about how brilliant they are and how they read a novel every fifteen minutes. Goody for you. Those of us who’ve known the touch of a woman don’t care you read fast.