The Diminishing Return on eBooks

In BISG’s most recent Consumer Attitudes Toward eBook Reading survey, the organization found that ebook consumers say they are buying more books overall, but that their total dollars spent on books is decreasing.

No surprise.

With ebooks often offered at a much, much cheaper rate than their corresponding print books, consumers can buy more books and spend less money.

This does not bode well for the publishing industry. The advent of e-readers is not increasing the number of book consumers in our country, rather that number continues to decline. It does not take a mathematician to figure out that fewer readers spending less money on books means less revenue for the publishing industry.

I recently heard on a news broadcast that some of the major publishers were going to start testing to see what the market would hold in terms of ebook pricing. I think that was a fancy way of saying that many publishers are going to try to charge more for ebooks as a way to compensate for the diminishing income that the sale of ebooks (compared to print books) brings in.

What does this finding mean for you, a small or self-publisher?

I suggest that it means that you should be careful how you price your ebooks. Price them too low, and as digital book sales increase, your revenues will stay low. Price them too high, and few will purchase, also causing you to lose revenues over the long haul as digital books sales take up a larger and larger percentage of book sales overall.

Finding the right pricing for ebooks is important. Pricing them less than their print counterpart, but not so low that you lose revenue, is the key.

Be prudent and you may not experience those diminishing returns that the major publishers are concerned about.