E-Readers, Tablets and Bears, Oh My

Attractive smiling student using tablet and holding book in library

The latest data from the Pew Research Center’s Internet Project released this Fall and confirmed in solid data what we all know to be true…that e-Book readers and tablets are becoming more prevalent in American society.

In a scientific survey conducted five times since May, 2010, the Pew Research Center concluded as of September 2013 that 24% of Americans age 16 and older have a dedicated e-Book reader (Kindle, Nook, Kobo, etc.) and 35% have a tablet computer (like an iPad, etc.).  Furthermore, 43% of those 16+ have one or the other, so a number of people have both.

Compared to the last survey taken in November 2012, this one reveals a 26% increase in ownership of e-Book readers and a 40% increase in ownership of tablets in the last ten months.

So who owns these things anyway?

Slightly more female than male.  E-Book readers are owned slightly more by people in the 30-49 age group, but the data shows pretty broad use by all ages.  The tablets are strongest with the 16-49 age range, with fully 46% of 16-17 year olds owning one, but 18% of persons age 65+ own a tablet.

Predicting the future is always difficult, but as young people today age, they will continue to use technology more than their predecessors.  The most interesting aspect of these surveys is how quickly people age 50+ have adopted these new technologies.  People in that group picked up the technology “habit” later in life than those who grew up with it and it has significant use among older Americans.

Of course, children at the youngest ages are being exposed to technology every day in schools with the assumption that it will even more prevalent and important than it is now.

What will happen to printed books?

In general, digital books are less expensive than printed versions. As digital sales grow and physical sales shrink, the cost of printing the physical editions will increase.  Two factors contribute to this…lower press runs and increases in paper costs will drive printing costs higher which will need to be compensated for by increasing the retail price of the physical books.

Those higher prices will have a further dampening effect on purchasing, making eBooks and their lower prices even more attractive.  So, there is potential for a digital “tipping point” sometime in the next few years, caused not as much by the love of digital content, but by the expanding price difference between print and eBooks.

An even more interesting trend will accelerate the decline of print books…excessively low prices of eBooks. Readers will consider a book “worth” $0.99 and so the printed edition heretofore priced reasonably at $12.99 will be viewed as overpriced.

Authors should be concerned about a trend that lowers the expectations of consumers to a vanishing point.  Selling your eBooks at $2.99 or less might give you the short- term satisfaction of higher unit sales, but as far as I can tell, your bills still need to paid in dollars, not units!  Training consumers that books cost $0.99 will irreparably damage the entire publishing industry.  In other words, what you write is not worth much.  Marketing guru Seth Godin refers to this as a “race to the bottom”…a race that no one wins.

Thoughts?

21 Responses to E-Readers, Tablets and Bears, Oh My

  1. Jackie Layton November 19, 2013 at 5:00 am #

    I own a Kindle but find myself buying more print books. I like to hold a real book in my hand when I read. I like to put it on my shelf when I finish. I even like to put a print book in my to-be-read pile and anticipate reading it.

    I have two sons ages 32 and 20 and neither one is interested in an e-reader. I’ve offered to buy one for each son as a gift at different times and they both said they weren’t interested. Both guys are very frugal and both enjoy reading. I think they also just like print books better.

    I see many good points about e-readers, but I hope print books never leave us.

    Thanks for sharing.

  2. Pegg Thomas November 19, 2013 at 5:24 am #

    “Training consumers that books cost $0.99 will irreparably damage the entire publishing industry.”

    This has been my concern. I’ve never understood how undervaluing a product benefits those who produce said product in the long term. If I undervalued my farm products, I wouldn’t be producing them very long.

    • Robin Patchen November 19, 2013 at 7:47 am #

      So true, Pegg. The publishing industry has trained people to be patient, because everything will eventually be marked down from its $12.99 price to $2.99 or even $.99–even if just for a limited time. So why buy the book the instant it comes out? It is foolish and, in the long run, damaging to publishers and writers.

      But I’m ashamed to admit, as a voracious reader, I love those low prices. And I purchase more books than I ever did before, because it’s easy to justify when they’re so cheap. So I spend more money on books, but because there are so many in the marketplace, the publishers and authors are making less. It’s a strange phenomenon, isn’t it?

      • Virginia November 24, 2013 at 7:25 am #

        Am I wrong, Robin, or is your book .99 right now? Why do this if it’s damaging to publishers and writers??

  3. Ane Mulligan November 19, 2013 at 7:20 am #

    And unfortunately, most authors are using the $.99 sale on Amazon as a tool to drive up their numbers. It really gives one pause. Personally, I value books, but I’m a writer. I wonder what the younger readers think, the 16-25 range. Those are the ons who will change what their peers think.

    Besides, does the $.99 e-book truly make you a best-seller? I don’t think it does.

    • Jackie Layton November 19, 2013 at 8:12 am #

      I wonder if anybody has done a study on the $.99 books for sale. Do the highest paid authors do this? I don’t think so, but I’ve not studied it that closely.

      One day will readers quit buying the .99 novels because they are not as high quality as the best seller novels at higher prices?

      I understand the thought of selling some stories at lower prices to build an audience, but are these our best stories? And once an author sells this cheap, will his/her followers not be willing to pay higher prices?

      I don’t know the answers, but I hope this trend doesn’t last long.

    • Virginia November 24, 2013 at 7:31 am #

      Sure feels like bestselling to me when I’m in the top ten of the genre for 10 months at a time. If I priced the book at 2.99 and it was invisible and sold a hundred copies a year, that would do nobody any good. To sell 10,000+ copies in five months PER BOOK at .99 sure feels like I’m making money. I sold 500 copies of Pride, Prejudice, and Cheese Grits yesterday. I’m a writer. And it definitely feels like it was a best-seller.
      Funny how easily we want to discount others’ successes. I admire those who can sell 9.99 books at the same rate I sell my .99 book. But I don’t think they’re fleecing the readers or short-changing them on a product, just because their book is priced much higher. I wish I could do the same. But I’ll stick with my best selling books, at whatever price the readers want them. I listen to the readers first.

  4. Debra L. Butterfield November 19, 2013 at 7:34 am #

    I have Kindle for PC, a nice plus, but I didn’t know it was there until after I bought my laptop.

    “Training consumers that books cost $0.99 will irreparably damage the entire publishing industry.” It’s hard enough for writers to make a living without adding issues like this. While I do enjoy the e-book technology, print books don’t strain my eyes the way e-readers do. I dread the thought of print books becoming extinct.

  5. Robin Patchen November 19, 2013 at 7:51 am #

    I love books. I love how they look, how they feel in my hands, how they smell. But when I have a choice between reading on my Kindle and reading a print book, I’ll choose the Kindle every single time.

    I still purchase print books, especially for nonfiction titles I know I’ll want to flip through again and again. And my favorite novelists’ books line my shelves. But most of those books are also “stacked” in my Kindle, where they never fall off the shelves because I’ve piled them too high, and I never have to dust them.

  6. Mike Manto November 20, 2013 at 2:27 am #

    While I agree that training consumers that books are worth “less”, the flip side is that people are much more willing to take a chance on a new or unknown author at a price point of 2.99 – 3.99. I think the e-book trend is very good for new authors – as long as they write quality stuff of course. And from what I’ve seen, established authors can still command the higher price point on e-readers. People will pay more to read the authors they know and love. And, even at 2.99, with the typical royalty structure in place for indie publishing, the author still earns more than paper publishing at 12.99.

    • Virginia November 24, 2013 at 7:34 am #

      Exactly. And my newer books have done very well at 2.99, a price point I couldn’t use when I first started in January. I built a readership, and now the newer books can be priced a little higher. I will never be pricing a 100 page book at 2.99 because I just don’t think it’s worth it and isn’t at all fair to the reader. they should at least get more than a taste of the story. (Unless it’s a Stephen King story, then he probably could do that and people would be happy to pay 2.99 for a hundred pages. Bu he’s a master. Not many novella writers out there are King-level authors.)

  7. Donna Geesey November 20, 2013 at 10:48 am #

    Totally agree, Dan. I’m not a published author, but I hope to be someday. I’ve been concerned about free or very low priced e-books ever since I first saw them pop up. The $0.99 price probably started with the music industry, but if you consider that a CD is $13.00-14.00 with 10-15 songs on the CD, the per song price comes out to $0.99. The concept does not transfer well to books and still allow authors to make a viable living. Thank you for speaking to this.

  8. Brandilyn Collins November 21, 2013 at 12:06 pm #

    “Selling your eBooks at $2.99 or less might give you the short- term satisfaction of higher unit sales, but as far as I can tell, your bills still need to paid in dollars, not units!” — Dan B.

    True, but what if that lower price point sells so many more books that the publisher and author end up making more money?

    I could give example after example of this in my own novels. But let’s look at my latest Seatbelt Suspense® release, DARK JUSTICE. I strongly urged the publisher to bring out the ebook at a hefty sale price, something they’d not done before. They released it at $3.99. It was only supposed to be at that price for a short time, but the publisher kept it there for 4-5 weeks, presumably because the price point was working. Then it was moved to $4.99, which slowed sales a bit. After about a total of 7-8 weeks after release, the publisher moved it up to $9.99—double the price. And of course at that price sales are slowing considerably.

    At the $2.99 ebook price, Dark Justice was selling really well. I think at its best ranking it was around 400 for the Kindle (which ain’t bad out of 1 million+ books). For a long time it stayed in the teens rankings and was very high in all three of its categories. (The high category rankings are important because it puts the ebook front and center for browsing readers.) Today, selling at $9.99, it’s around 12,500 in rankings and number 55 through 75 in its three categories—too far back for category browsers to see without a lot of scrolling. So what does this mean for profit? A ranking of 1500 means an estimated 65 books sold a day (there’s quite a bit of variable in this). A ranking of 12,500 means an estimated 8 books sold a day. So let’s do the math. $3.99 x .70 (the publisher’s share) = $2.80/unit. My cut is 25% of that, or .70 cents/unit. At 65 books a day, that’s $181 for the publisher and $45 for me. Now: $9.99 x .70 = $7. My cut = $1.75/unit. Sounds so much better, doesn’t it? But at 8 books a day, that’s $56 for the publisher and $14 for me. So which price point pays more bills? Not only are we selling less books, but we’re getting DARK JUSTICE into the hands of less readers—which means less word of mouth potential.

    Here’s the crucial point, which can be seen from earlier comments. As authors we can say, “Oh, our books are being devalued” by low ebook prices. But as ebook readers we say, “I love the low prices!” You have to listen to that second comment. Readers buy more ebooks when they cost less. A product—any product—is only worth what a consumer will pay for it. Call it devaluing if you want. But in the end, if it means more sales for me and more revenue, I say bring it on. Even if end revenue was exactly the same, e.g., double the price (and therefore profit) per unit, resulting in half the sales, I’d still opt for the lower price/profit and double the sales. Because again, you’re getting the book into the hands of more readers.

    ~ Brandilyn

    • Brandilyn Collins November 21, 2013 at 12:46 pm #

      Note: In my fast typing of my above comment, the daily profit numbers for the publisher are a little off because I neglected to subtract the author’s cut. In the end, no matter. The bottom line is the same: when lower prices result in the sales of more units, everyone wins.

    • Virginia November 24, 2013 at 7:35 am #

      Thanks for weighing in Brandi. I sort of feel like these posts are to drive traffic. What if we all stopped commenting on this tired old thread of ‘free and cheap books will end quality books as we know it’? :D

  9. Randy Ingermanson November 21, 2013 at 8:49 pm #

    The fear that we are in a “race to the bottom” is simply incorrect, because quality writing tends to stabilize prices. The better the writing, the higher price it commands.

    A lot of indie authors are doing extremely well at a price point of $2.99. In fact, they’re doing better per e-book unit than they would with a traditional publisher at a price point of $9.99.

    To see how this works, compare two authors, one whose book is priced at $9.99 by a traditional publisher, and an indie author who prices her book at $2.99.

    In either case, Amazon pays 70% royalties.

    The indie author pockets all the royalties. The traditionally published author sees 75% of the royalties go to the publisher and 15% of the rest to her agent. Here’s how the numbers break out:

    Traditionally published author with book at $9.99:
    Total royalties paid out are $6.99
    Publisher gets $5.24
    Agent gets $0.26
    Author gets $1.49

    Indie author with book at $2.99
    Total royalties paid out are $2.09
    Publisher gets $0.00
    Agent gets $0.00
    Author gets $2.09

    It should be clear that the indie author DOES BETTER than she would have with a traditional publisher, assuming that the same number of units are sold.

    However, a book priced at $2.99 generally sells more units than a book sold at $9.99. Many more units.

    So the indie author earns more per unit AND sells more units than the traditionally published author. (Here we are talking about sales on e-books, and we are assuming that in either case, most of the actual marketing is done by the author. The trend for several years has been that e-book market share is increasing and author marketing responsibilities are increasing.)

    As Brandilyn pointed out, the price per unit is not the relevant number. The number that matters to authors is total revenue to the author.

    Low prices don’t harm indie authors. Low prices may harm agents and publishers and traditionally published authors, but they don’t harm indie authors.

    It’s worth noting that every book has a “sweet spot” in pricing that maximizes revenue. For some authors, this is $0.99, because they lack the reputation to get a high price. But many indie authors find their sweet spot price is $2.99 or $3.99 or in some cases even higher.

    There is a fear that the market will be swamped with crappy novels and nobody will be able to find the good stuff. This has turned out to be mistaken. The crappy novels get bought by the author’s mother and sisters and nobody else. The good novels get found, because word of mouth still works and always will. People talk about the good stuff. And they don’t talk about the bad stuff.

    It’s a great time to be an author. A fantastic time. I personally believe that there has never been a better time to be an author.

    • KC Frantzen and May the K9 Spy November 23, 2013 at 8:26 am #

      Thanks Randy.
      Do the math! Yep.
      Back to the tried-and-true basics.

      I’ve been listening to others out in front of the indie phenom, who say it is around books 6-7 when things take off for them. May and I just finished #3, so we need to get back to writing!

      • Virginia November 24, 2013 at 7:38 am #

        Yay, more May books for us!

    • Virginia November 24, 2013 at 7:37 am #

      “There is a fear that the market will be swamped with crappy novels and nobody will be able to find the good stuff. This has turned out to be mistaken. The crappy novels get bought by the author’s mother and sisters and nobody else. The good novels get found, because word of mouth still works and always will. People talk about the good stuff. And they don’t talk about the bad stuff.”

      So, so true. I’m sure there are good books out there that don’t get read, but what I hear is a lot of whining by authors who can’t get people to buy their books at a high price. They claim it’s the fault of other authors, Amazon, a bad cover, a changing industry, etc. Fact is, usually it’s just not a very good book. But it’s always easier to blame someone else, sadly.

  10. Virginia November 24, 2013 at 7:22 am #

    I’m glad I read to the end of the comments. I hit that last paragraph and wanted to stab myself in the eye. This is an old concept proven untrue many, many times in the last year. recently literary agent Janet Kobobel Grant blogged about how free doesn’t sell books. There was a lively discussion in the comments, with a lot of self-publishers weighing in, and a lot of other authors claiming that free books devalued their content. But then she attended a meeting with one of her client’s publishers and changed her mind .

    She wrote,

    “I had a recent conversation with individuals in a publisher’s marketing division that has given me whiplash. They generously shared charts, graphs, and details about how their free digital marketing functions, and the statistics are downright impressive. This department has worked the analytics masterfully. I found myself wishing other publishers devoted the same attention to what works and why. So you may consider this is my official recognition that, when it comes to this publisher, I was flat-out wrong. And happy to be so.”

    I found this very interesting. Self-publishers use free book runs to sell books. People who can’t see the sales for themselves don’t believe it’s helpful. In fact, other authors feel it is lowering the value for their own books. Traditional publishing houses (which are in the business of selling books) try the practice and find, when done right, it works, and works really well. Agents are confused about why their client’s books are being given away and object. Publishing houses put in the time to explain the marketing behind it. Meanwhile, self publishers are… giving away free books in order to sell books.

    I think this sort of blog post might be written just to drive traffic to the site, because the ones in the known will try to step in and clarify the reality of the situation. I’m sure the blog writer understand well enough that .99 books are not hurting anybody and will not cause the entire book industry to fail.
    But I took the bait anyway and commented, so he must know something, at least, about blogging.

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