Paperback or e-book: which costs more?

Paperback or e-book: which costs more?

I recently wrote about how the AAP (Association of American Publishers) was reporting lower e-book sales, and how I thought that didn’t indicate that people were reading fewer e-books overall:

E-book sales are dropping…off the radar

One of my readers, Wildsubnet, commented that tradpubs (traditional publishers) charging more for Kindle books than for paperbacks might be having an impact.

That’s an analysis I haven’t done in a while, so I thought it was worth a look.🙂

What I did was look at the bestselling paperbacks at Amazon.com, although that really sorts now by “Featured” (that’s likely to get more tradpubs)

Featured paperback books at Amazon.com (at AmazonSmile: benefit a non-profit of your choice by shopping*)

Before I do, though, let me address the situation a bit more.

From very early on, people would bring up (in the Amazon Kindle forums, for example), this idea that e-books should cost less than p-books (paperbooks). They often based it on the idea that it didn’t cost a publisher anything to put out an e-book, and that the natural materials cost was less.

The first one was based on a couple of ideas that didn’t tend to be true. One was that the publisher already had the e-book rights if they had the p-book rights, which was very often not the case. Another was that all it took was scanning the book if they didn’t already have a digital copy…in reality, the formatting is considerable. It also leaves out royalties for the author for the e-book.

The second one assumes that the list price of a book is set primarily to cover the cost of production…specifically, the cost of the “parts”. That’s actually quite a small part of the cost…there are legal costs, marketing, editing, proofreading, cover artist, lay-out, and so on.

When I would go to check, there were usually a few reasons why an e-book might be more than the p-book:

  • It was a case of Amazon discounting the p-book more…the publisher had set the price of the e-book lower, but Amazon had discounted the p-book more deeply
  • The comparison was to a p-book which had not yet been released…it was on pre-order
  • The p-book was used or remaindered

I can eliminate the second two when I look. I’ll also try to pick just from the Big 5 US trade publishers…although smaller publishers could also be included in the AAP survey.

Okay, here are the top ten that fit those parameters:

Rank Paper List Paperback Kindle Diff Comp to List
1  $      16.00  $         9.89  $  11.99  $ (2.10)  $           (4.01)
2  $      16.00  $         9.52  $  11.99  $ (2.47)  $           (4.01)
5  $      15.99  $         9.39  $    8.04  $   1.35  $           (7.95)
6  $      20.00  $       12.00  $  12.99  $ (0.99)  $           (7.01)
7  $      15.99  $       10.53  $  13.99  $ (3.46)  $           (2.00)
8  $        9.95  $         5.81  $    9.95  $ (4.14)  $                  –
9  $      14.99  $         8.99  $    7.99  $   1.00  $           (7.00)
10  $      16.00  $         9.60  $  11.99  $ (2.39)  $           (4.01)
12  $      16.00  $         9.40  $    9.99  $ (0.59)  $           (6.01)
13  $      16.99  $       10.19  $  11.99  $ (1.80)  $           (5.00)

“Diff” compares the Kindle price to the paperback price…a negative number (in parentheses) means that the Kindle book costs more…which is the case in 8 out of 10 here. There are negative savings. In the last column, a bigger number means more  savings with the Kindle  book compared to the print list  price. Every Kindle book is lower than the print list price.

Is this the same situation it was in the past? Is it because Amazon can freely discount p-books, but not e-books?

Generally, Amazon’s agreements with the biggest publishers are, reportedly, a modified version of the Agency Model. What that means is that Amazon has a limited ability to discount the books.

It still shows that the e-book price is “set by the publisher”, at least when I checked. We no longer see a digital price list.

My guess is that the publishers are setting the price of the e-books relatively high, but not higher than the list price for paper.

Wildsubnet’s comment got me thinking about something else.

I would not buy a p-book instead of an e-book, for me to read, if  it was just a few dollars different. It is simply so much easier for me to read an e-book…I’d skip the book, in most cases.

That’s me, though…let me ask you:

If you don’t see an answer there that works for you, feel free to let me and my readers know what you think by commenting on this post.

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* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. :) Shop ’til you help! :) By the way, it’s been interesting lately to see Amazon remind me to “start at AmazonSmile” if I check a link on the original Amazon site. I do buy from AmazonSmile, but I have a lot of stored links I use to check for things.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

14 Responses to “Paperback or e-book: which costs more?”

  1. Lady Galaxy Says:

    I don’t buy paperbacks any more because the print is just too small for me to read. I wish publishers understood that when they high price the Kindle versions of books they are hurting those of us with visual difficulties. And yes, I do have reading glasses, but I also have an autoimmune problem that affects the ability of the muscles in my eyes to focus and track.

    • Bufo Calvin Says:

      Thank for writing, Lady!

      I’m with you on the type size in paperbacks. When I do take one out of my library, I need my reading glasses. With my non-prescription readers, I can’t look around the room through them…I have to peer over the top or under the bottom. When I read on my Kindle EBR (e-book reader) or tablet, I can immediately see the rest of the room even at a distance. For example, that means I can easily read and watch TV at the same time, which is now not easy with p-books.

      I think what the publishers miss about people with print challenges is that they think that the fact that there are accessible versions of books available to those who can certify a print disability, they don’t need to be concerned about those folks with uncertified disabilities or challenges which do not rise to the level of a disability. They’ve ticked the box, when it is actually much more of a continuum than that.

  2. Edward Boyhan Says:

    There are two things wrong with your beginning analysis. For at least the last 15 years every traditional publisher processes all their books in an internal digital format related to PDF. Many publishers no longer accept input on paper at all. All typesetting is done electronically direct to “digital plates” — there is no longer any manual typesetting involved. There is NO scanning necessary for a traditional publisher to create an eBook. At worst all they have to do is run a computer program to convert the internal digital format to the desired eBook format (typically epub,, AZW,kf8, mobi, etc) depending upon how/where the eBook is to be distributed.

    Very few traditional publishers would ever agree to a contract with an author (certainly not a new, or average selling one) that didn’t include the eBook rights. The only place where a tradpub might have to negotiate eBook rights is for older backlist titles where the original contract was executed before eBooks were a “thing”.

    Your point about Amazon being able to discount paper, but not eBooks is well-taken.

    At the margin the additional cost to a traditional publisher to distribute an eBook version is miniscule. Those marketing and editorial costs you refer to have to be regarded as sunk costs because they would incur them anyway in order to distribute the print versions. IMO there are NO additional marketing, editorial, or administrative costs to providing an eBook version to the marketplace.

    One thing that has changed in our digital world: it used to be that publishers would release a hard cover version of a title, and the paperback version wouldn’t come out until a year later. I’m not sure if that hard vs paper lag still exists, but one thing is: eBooks are released simultaneously with the hard cover version. I wonder if that gives any insight as to just how important eBooks are to the traditional publishers — no matter what the AAP might say about declining eBook sales.

    I don’t recall from your earlier post whether the AAP was talking about $ declines or unit declines in eBook sales?

    • Bufo Calvin Says:

      Thanks for writing, Edward!

      I think I may need to clarify a couple of things here

      The initial analysis is not mine, but me reporting what other people thought. Second, and perhaps just as significantly, you may be leaving out the fourth dimension.🙂 The arguments then were much more about digitizing already existing books…James Bond, Janet Dailey, that sort of thing. In those cases, there weren’t digital files already, and e-book rights had not been negotiated generally. As you may recall, e-books were less than 1% of the market prior to the release of the Kindle (announced in November 2007).

      Much of what you describe now is current state. What I was describing was not only from “From very early on…” but was specifically early on in effectively a different world. When I use past tense in those first paragraphs, I’m talking about back then. In my current analysis, I was deliberately addressing those older rationales and eliminating the first two.

      Were books ever scanned back in the old days as a way to digitize them? I am sure the did: some of the errors seemed clearly due to OCR (Optical Character Recognition) errors.

      Similarly, those marketing costs happened when you were taking an existing book (let’s call them “legacy books”). Imagine that you are a publisher, like Open Road, and you negotiate for the e-book rights to a backlist title (which they’ve done). The marketing for that book, 25 years earlier or more, did not help them reach people who were likely new to e-reading.

      Sorry, I accidentally hit reply towards the end of that paragraph…I’ll have to look if I have more to write in reply.

      Update: okay, I looked again.🙂 Yes, your points about current state are generally good, just not what I was addressing…and I must not have made that clear.

      I wouldn’t have done ALL CAPS on your “NO” costs…but I generally wouldn’t use them. Old media tends to sell p-books (paperbooks)…new media tends to sell e-books, I believe. Let me give you one example: publishers are designing covers so the can be appreciated in a thumbnail…that’s changed their development costs. Reaching out to social media influencers is different than mainstream reviewers. When I get e-mails from Amazon, I’m sure they are different from People Magazine folks get…while that might not be a large cost, it might “decapitalize” your NO.🙂

      • Edward Boyhan Says:

        It’s easy to misunderstand your intent about “old” books when all your examples are about current best selling books. I think the concern of most with the price differential is with current books not backlist titles.

        I still think a lot of the pricing rationale has a lot to do with covering fixed costs, which these days are not so much about physical production and distribution, but with editorial and other things that aren’t as important in the indie world.

        Hextant did have a good point that beyond covering costs is the whole notion of “value” pricing (I’m embarrassed that I overlooked that — as when I worked for Microsoft that was a big part of their business model and pricing regimes). Clearly if customers perceive enhanced “value” in an eBook over a pBook, then they’d be more willing to pay a higher price. Businesses (especially technology ones) really like the whole notion of “value” pricing because it allows them to easily increase their margins — to generate profits beyond what traditional supply & demand economics might dictate.

        Sorry about the caps, but publishing industry processes, costs, and pricing is something I feel passionate about. (:grin).

      • Bufo Calvin Says:

        Thanks for writing, Edward!

        Yep, that was my fault…I didn’t make it clear that I was giving historical context because I wanted to see if what people believed had been true back then was true now. I hadn’t done the comparison in some time…so that’s an example of when it was clearer in my head what my intent was than how it appeared on the page.

        One of the “value” factors often cited for p-books over e-books is the ability to resell them, donate them, or gift them. For people who do that regularly (I don’t), it makes a difference…as you know, that’s one of the reasons textbooks cost so much in paper: publishers assume they are resold several times.

        For me, there is a lot more value in e-books, but there is also the factor of price/value perception. My concept is that e-books cost less than p-books for me…not necessarily that they should, but that they have. If they had been the same prices for the past roughly nine years, that would be different…and I would still think e-books were more valuable to me.

  3. Lady Galaxy Says:

    One of the Kindle books I bought in May for $11.99 is a Daily Deal for $3.99 today. I bought it after ERIQ notified me of a price drop to my set point. The irony is, I haven’t read it yet. I should’ve waited!

    • Bufo Calvin Says:

      Thanks for writing, Lady!

      Well, if it was worth $11.99 to you then, it hasn’t diminished in value.🙂 There are so many options for books now…I would say that taking into account whether you want to read it now or not in a purchase decision makes sense, unless it is on a really significant sale equal to other books you can buy for the same price.

  4. Sean Says:

    To add to what Edward said, there is one other point that doesn’t get mentioned when comparing cost between these formats, which is returns. Publishers allow some and maybe most brick and mortar locations to return unsold print books. So there is more cost to the production side then just print, store and deliver. This would then add to the cost of all print books.

    There production cost might not be much, the returns associated with print might not be much but it does add a cost that should not be there for ebooks.

    • Bufo Calvin Says:

      Thanks for writing, Sean!

      I’m a former brick-and-mortar bookstore manager, and I have mentioned returns before, but didn’t do it this time.🙂 However, it may not be quite the liability you might imagine for the publisher.

      Generally, at least when I was a manager, you didn’t cash back…you got credit for future purchases from that publisher. So, if you bought twenty copies of the new Stephen King, and only sold sixteen, you could return four. Let’s say you paid $10 each for them to the publisher: you might then have $40 credit for future purchases…which are likely to include non-brand name authors (at least, in general interest bookstores). So, allowing returns is a type of marketing.

      Also, the returned copies of hardbacks can generate income for the publisher in two ways: one is by donating them (which is a write-off); the other, probably less common one, is remaindering them…selling them back to bookstores at a discount (and the stores sell them for a much lower price than the original list price), often with a “magic marker” stripe across the page edges, or a corner cut off the book. That allows for some small amount of recovery.

      The return system does make it a wildly different economic system…e-tailers (or direct from publishers) don’t pay for the books until they sell the book (I’m using “sell the book” loosely). With p-books, they buy the copies of the books…and those books might sit in the store for a year before they sell (I’ve had it go longer, but that’s a bad thing, due to the cost of rent for the space under that book, for one thing).

      E-books should be cheaper for publishers than p-books…but not massively cheaper.

  5. hsextant Says:

    I am too ignorant of the publishing world to offer any sort of intelligent opinion, but from purely a distribution model, the fact that e-books are released at the same time as hardbacks and we assume that the publishers are interested in making money, then I would have to say yes one could expect the e-book to be more expensive than a paperback, with the pricing rationale being that you didn’t have to wait.

    For me the Kindle offers too many advantages to fool around with paper copies. One of the main being, that I like to keep my books and frankly my house is about to collapse into a black hole with all the damned books that I have. I don’t know where most of them are. If I can find my Kindle, I can find my books, and can find certain passages within them.

    I currently keep an eye on prices and replace my dead tree books that I have already read with Kindle versions.

    Lady Galaxy: I did the same thing. I heard an interview on NPR with Anna Quindlen about Miller’s Valley last March. I bought the Kindle version for full price and today on the daily deal it is $3.99. I like you have not read the book yet.

    • Bufo Calvin Says:

      Thanks for writing, hsextant!

      I understand about the number of books in your home. We have something like 10,000 p-books on shelves…and we have friends who have said they would never help us move again because of all the books.🙂 I haven’t gotten rid of any…I have bought multiple copies of the same book so I had some to give away, but that’s different. I am, though, actually considering donating some…that’s a hard point to reach for me, but I might give some to Loren Coleman’s International Cryptozoology Museum, if Loren wants them.

  6. Wildsubnet Says:

    Great idea for a poll, but I would guess your audience would skew towards all kindle all the time. For me, I wait unless a title is something I “must have” now. Generally that works since e-books tend to be cheaper than hardcovers when they are released. What I won’t do is buy an e-book that is significantly higher than the paperback if it is out. I’ll wait for the sale or price drop.

    And independents are killing it. I’ve bought more “independently” published books than traditional published books in the last year. I don’t care who publishes it, I just care what the reviews say.

    • Bufo Calvin Says:

      Thanks for writing, Wildsubnet!

      I’ll say first that I never suggest that my readers are typical of the population at large.🙂 I think more of them tend to be “serious readers”…we can call that as low as even a book a month. They also are more likely to have read some e-books, and on my turn for guessing, I would expect them to be more likely to be Kindle users than average (given the name of the blog).😉

      However, I also would guess that many of them read p-books some times…perhaps the majority. I may need to poll that again at some point, I can’t rely on the old numbers.

      Indies have certainly had great gains. I’m curious, though: when you say “the reviews”, are you talking about the reviews on the Amazon product pages from the customers? That’s is still certainly a disparity…much harder for indies to get reviewed in mainstream, old media sources.

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