Publisher: "If You Can Afford An Ebook Device, You Can Pay More For Ebooks"

Imagine trying to buy a book from Big Generic Bookstore and watching the cashier add $5 to the sticker price. “What are you doing?!” you cry out, waving a fist menacingly at him. “You look like you can afford it,” he says back to you with a hint of entitltement. That’s basically what a publishing industry expert said in a piece he wrote last week about ebook pricing.

Michael Cader’s piece was aimed at publishers (it’s only available behind a pay wall, but you can read a summary of it here), and it laid out a strategy for how publishers should frame the ebook pricing discussion so that they can wrest control of the issue away from the dumb old media. A lot of it, in fact, is advice on how to get out of Amazon’s PR chokehold on topics like average price, consumer purchasing habits, and fair value. Cader is a publisher himself, and a smart guy who tends to be ahead of the curve in marketplace trends, so publishing types pay attention when he speaks. Among his advice to the industry is this one:

“People who can afford an ereading device can afford all proposed ebook prices.”

By that, Cader means that it’s unreasonable for a consumer to say he can’t afford to pay more for an ebook. Cader and other publishers may be justifiably upset that Amazon rolled their products up into its own marketing for the Kindle, but the truth is that there are plenty of customers who indeed bought a Kindle to save money over the long term. The idea is to invest in a special device that can serve as the physical manifestation of any book you load onto it.

On a more basic level, what consumers are willing to pay for a device and what they’re willing to pay for an ebook are two different matters and can’t be compared. But since Cader is doing so, let’s take a look at them.

Maybe a customer can pay more for a digital book, but why should he? Currently, nearly all the value of the ebook format comes from the device, not the publisher. Portability, frictionless purchasing experience, syncing across multiple registered devices–all of that is provided by the device and the retailer’s back-end.

By contrast, here’s what the publisher currently provides in an ebook edition: typos, no additional content over the print version, no cover art, perhaps no photographs or illustrations, and no custom formatting. Saddle that with DRM that deliberately interferes with the consumer’s ability to preserve or make full use of his library, and you’ve got one pretty low-value digital offering from a publisher.

You can blame some of the drawbacks on the technology–E Ink can’t handle video or color, and various formats can’t display images or special formatting. If you make that excuse, though, you’re also basically admitting that the ebook edition of a book provides less value than a print edition, and that the only benefits are conveyed by the device and not the book itself.

So you’re right, publisher; maybe I can afford to buy an ereader device. That doesn’t mean you can jack up the price on your crappy digital copy that currently offers less usefulness than a physical copy, and then hide behind the device’s potential and cry, “I want to be treated like I make expensive baubles too!” Because you don’t. You currently make poorly proofread digital files stripped of most of the qualities that make digital content awesome.

So here’s some other advice for publishers who want to win the cooperation of customers while also pricing ebooks in a way that’s fair to both sides:

Stop acting like consumers are being cheap. What consumers actually want are ebooks that are fairly priced. You’re trying to frame the other side as being irrational and greedy, but in reality consumers–despite the more histrionic posts on Amazon’s forums–are still not convinced that publishers have done anything to add value to the ebook.

Stop hiding behind your industry’s inefficiencies. You should try to improve them, not use them as a shield to protect you from criticism. The first thing that comes to mind is the waste inherent in how printed copies are sold to bookstores. In addition, acquiring, preparing for publication, and marketing books are all areas where publishers seem unable to innovate, despite the cost savings that digital distribution should convey over long periods of time.

Stop saying “trust us.” Smart consumers know that no self-respecting company is innately trustworthy, no matter how many years it’s spent trying to integrate that idea into its brand (and publishers don’t do that kind of brand management anyway ). Demonstrate. Prove your intentions through behavior. By that measure, publishers have so far only indicated that they want ebooks to be priced in the realm of hardcovers. You can look to the list prices of ebooks on Amazon for proof, or look at pre-Kindle era retailers like Fictionwise. For example, the fourth Twilight book came out in August 2008, but as of February 2010 the publisher feels the digital version should cost the same as the hardcover–an astounding $22.99. (And yes, that publisher’s owner is one of the companies arguing for more control over pricing.) It’s true that in the recent spat between Macmillan and Amazon, the publisher pointed out that it would price new releases at $15 or less–but based on past pricing patterns, there’s no reason to believe that any publisher would subsequently drop the book to a $10 or less price point after it’s been out for a while.

Stop the emotional appeals. Saying digital publishing will starve authors and kill first born sons makes it seem like you’re basing your business decisions on irrational fears, which helps no one. Just admit that you want to price your ebooks as high as the market will bear. There’s no shame in admitting that, and the sooner you do the sooner ebook consumers can demand that you step up and start providing real value in exchange for higher prices.

“Notes from a lecture by Professor Cader” [Idea Log]