The argument over the right price point for ebooks still rages on, though many readers and writers can agree that ebooks should cost less than their print counterparts.
How much less? That’s the big question. Publishers argue if you set the price too low then it will give readers an expectation of that low price and they’ll refuse to pay a penny more.
That argument fails, at least on historic grounds. When paperback books were introduced around the 1930s-ish, people moaned they would be the death of the hardcover because of the cheap prices. Hardcovers are still around and flying off the shelves.
But is a 99 cent price for ebooks to low? According to this Huffington Post article, there are more than a few who think 99 cents is insultingly low price for an ebook:
“At issue is the phenomenon of ‘anchoring,’” agrees William Poundstone, bestselling author of 11 books including Priceless: The Myth of Fair Value (and How to Take Advantage of It).” When people don’t know what a fundamentally new product should cost, they are strongly influenced by the first price they encounter… A reasonable person might ask, what does it cost to produce and market an eBook? But that’s like asking what does it cost to produce and market a movie. The answer can be zero (YouTube) or $500 million (Avatar). The biggest unknown of all is what the consumer will pay.”
I don’t think this explanation of the dangers of low ebook prices gives consumers enough credit. When a new technology is emerging, especially one like ebooks, people understand how complex of an issue pricing can be.
On the other hand, an ebook priced at 99 cents can give an emerging author a big advantage:
Because authors control the price of the e-books they publish, some experiment with price points, lowering the price to 99 cents when sales are slow in an attempt to gain visibility and momentum, and — if they’re lucky — kick the book into Amazon’s “Top 100″ Kindle list. Then after the desired result has been achieved, they raise the book’s price again.
I agree with this assessment. Because ebooks are breaking down the doors of self-publishing, there is going to be a need to experiment with prices – especially for newer, untested authors. Buying an ebook for 99 cents from an unknown, first-time author isn’t as big of a risk as paying $9.99, for example.
Personally, I have purchased several ebooks on Smashwords for 99 cents and ended up buying more books from those authors at higher prices. If I like an author, I have no problems paying a fair price for their work.