The 99-Cent Debate: How Do We Value Our Writing?

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Traditional publishers cannot even begin to price books at 99-cents, as they have far too much overhead to do so. In addition, how can a publisher sell a hardback book for $26 if the ebook version is 99 cents?

Columns, Featured, Guest Author, Guest Column, Homepage Sub  •  Dec 20, 2011

By Melissa Foster

There’s a lot of controversy circulating throughout the publishing industry about the pricing of ebooks, and it’s a significant topic that warrants discussion. Independent authors are rallying around the controversial 99-cent price point. Some authors feel the 99-cent price point devalues their hard work, while others feel that readers will not take a chance on new authors at a higher price point. To further complicate the matter, it’s not just new authors that are using the 99-cent strategy, and the issue doesn’t only affect independent authors, but publishing houses and agents as well.

Readers are scooping up ebooks for 99 cents, that alone speaks of a demand for material at that price point. After all, to some readers, an ebook is seen as nothing more than a download. Many authors spend a year or more writing their books, and 99-cents seems ridiculously low and unfair.  At the same time, an ebook for $9.99 seems equally unfair to the reader.

Let’s look at the dollars and cents of the 99-cent price point for independent authors. If an author is self-published through Amazon KDP, he or she earns 34 cents per 99-cent book sold. Not only do authors put time and energy into their writing, there are other associated costs to publishing a quality book, including cover artists ($125-3000), editors ($800-5000), marketing, etc. If you add up the average cover cost of $350, average editing job of $1400, then divide by 34 cents, the author would have to sell 5,134 books just to break even, and that’s nearly impossible without an additional amount for advertising. This would also assume that the author receives no income for actually writing the book. Most independent authors will sell less than <a href=http://amandahocking.blogspot.com/2011/03/some-things-that-need-to-be-said.html>100 copies</a> of their ebooks.

What about the author published through a small press?  For that author, that 34 cents in earnings is reduced to roughly 12 cents per book.

Traditional publishers cannot even begin to price books at 99-cents, as they have far too much overhead to do so. In addition, how can a publisher sell a hardback book for $26 if the ebook version is 99 cents?

I often hear readers say, “Look how many books they sell. [Authors] earn enough money.” An author published through a small press that sells 100,000 ebooks at 99 cents, earns an annual salary of $12,000. To earn $40,000 per year, that author would have to sell 333,333 books per year. According to the recent <a href=http://online.wsj.com/article/SB10001424052970204770404577082303350815824.html>New York Times</a> article, there are only 30 authors have sold over 100,000 copies of their books (I am proud to be included in this number, and lucky that not all of my books were priced at $.99), and only a dozen have sold over 200,000.

Why, then, do authors post their books at such a low price? Darcie Chan, bestselling author of The Mill River Recluse, states, “Since I had never published anything before and was completely unknown as a writer, I thought the 99-cent price point would be best to encourage readers to give my novel a chance.  It’s true that the royalty rate at that price point is much lower, but I saw foregoing some royalty income as a tradeoff.  I decided that the 99-cent price would be an investment in my future writing endeavors and would give me the best chance at meeting my goals of gradually building a readership and getting some feedback on my work.”

New independent authors typically have neither a following nor a publishing company behind them singing their praises.  They don’t have a readership beyond friends and family.  In most cases, independent authors also work at full-time jobs, so getting their names out to readers, so that they have enough recognition and can earn enough from the sale of their books to quit their day jobs and concentrate on their real career in writing, is their main focus and a very difficult task. Bringing books down to 99 cents throws them into the “impulse buy” category, allowing their work to get into hands of far more readers.  There are many websites that will promote bargain-priced ebooks with free exposure, so it’s no wonder that the low price point is difficult to ignore. Independent authors are simply willing to take the price hit in the hope that fans of the 99-cent books read their work and follow them to the next book, and the one after that, and the one after that.

It would appear that there are many benefits of pricing a book at 99 cents. An author might gain bestseller status, like Darcie Chan, but is this a good method for permanent pricing? That depends upon what the author hopes to gain.

According to Melissa Miller, President of Solstice Publishing, “99-cent pricing on amazon is a good promotional tool. For example if an author has a series and they aren’t selling very well they could drop book one down to 99 cents in the hopes that it will bring sells for the rest of the series. I would suggest dropping the price to 99 cents on a book for a short time. The other thing to understand is that the price is only a tool. Just because the book is 99 cents doesn’t guarantee that the book will sell. It still has to be marketed and promoted at any price. As a publisher I’ve seen books priced 99 cents sell 60K copies and I’ve seen books priced at that and sell none. It’s all about the marketing and promoting of a book no matter what the cost is.”

At what point does one have enough books sold to raise their price? Darcie Chan’s price remains at 99 cents even after selling 400,000+ copies. Many authors are afraid to raise their price, fearing their sales will plummet. Have books really become that undervalued? Does price make a difference in sales? I can only speak from experience. I sold over 60,000 copies of Chasing Amanda during the month of October at 99 cents. I changed my price to $2.99 while continuing the same marketing efforts, and my sales dropped to the 20,000 range in November. Dollars and cents? Had I self-published, I could have earned twice the income with 1/3 the volume of sales.

The difference in royalty earnings between a self-published book at 99 cents through KDP and a $2.99 book through KDP is roughly $1.66 per book. As an author, that $1.66 is significant. As a reader, that $1.66 is probably less significant. Who wouldn’t pay $2.99 for a book? Aren’t we used to paying $22 for a hardcover book? The contents of the book are the same whether in hardback, paperback, or digital format. The research, time, and hard work are identical. The only difference is the way in which the content of the book is presented. It seems that $2.99 is a steal! At $1.66 per book, authors need to sell only 24,100 books, or 2008 per month to earn $40,000 per year, not a stellar salary by any means, but enough to make writing more than just a passion. Remember, most indie authors are not selling 2000 copies of their books per month–they’re lucky to sell 50.

We should also consider the downside to the 99-cent price point. Independent authors are often trying to attract agents by selling many books. According to Jenny Bent, esteemed literary agent and owner of The Bent Agency, the 99-cent price point is not an easy sale to publishers. “As an agent, I am always interested in a successfully self-published e-book, no matter the price point.  I am finding, however, that publishers are increasingly skeptical about how success at .99c will translate into success using their very different business model.”

The Wall Street Journal (http://articles.chicagotribune.com/2011-12-15/business/chi-readers-getting-cheaper-but-rising-ebook-prices-causing-sticker-shock-20111215_1_e-book-digital-books-kindle) cites the new no-discount digital pricing model used by the big six publishers. Within this business model digital prices are set by the publishers and retailers are not able to discount those prices for the consumer. Publishers are also trying to find their way in this digital literary world. One would assume that large publishers are hoping that by setting a standard for ebook pricing, readers will continue to pay what they were used to paying for the same read—not necessarily the same product. After all, you can’t dog-ear an ereader. Maybe that standard needs to be set in order for the traditional publishing industry retain the same revenue stream. Perhaps readers will purchase their favorite author’s ebooks for $12.99 if that is their only option, or if it’s the most convenient option. How will this pricing model fare against the 99-cent price point? Will this pricing structure push readers to discover more independent, lower priced authors? Only time will give us the answer.

There are a few more issues to consider when pricing an ebook at 99 cents. There seem to be two different schools of thought when it comes to ebook readers: there are those who will only buy 99-cent books, and those who refuse to buy 99-cent books, with the latter group fearing that the cheaply priced book must be of poor quality. Then there’s the belief that pricing simply doesn’t matter, as stated by bestselling author, M.J. Rose, “”The emphasis is on the wrong thing.  Readers may buy you once for 99c but if they are disappointed they will never buy you again or even download you for free. On the other hand a reader will pay $4.99, $5.99 even up to $12 for an ebook of a writer whose work speaks to her. I’m seeing way too much conversation about what to charge for the book instead of how to write the book. My goal is to write a book so good that a reader will talk about the book and recommend it to all their friends. Quality matters more than ever.” The great quandary in this theory for the independent author is gaining the exposure it would take for those readers who have no issue paying $4.99 for an ebook, to take the leap and try an independently publishing book for that price, when the competition has set the pricing bar so low. Or is this a quandary at all? Perhaps a major marketing blitz could show a rise in sales.

Making a dent in the publishing world is a difficult process. Getting the attention of agents and readers is an even more difficult endeavor.  With over 1.5 million ebooks in the world and more being published everyday, authors have to be creative with their marketing and smart with their pricing. We’re all still learning about pricing in this digital age—the authors, agents, publishers, and even readers. The 99-cent price point will be debated for a very long time. With John Locke and Amanda Hocking selling over a million ebooks, it gives hope to other new authors. The next question is, why are bestselling authors leaving their books priced at 99-cents?  Is it lack of confidence in their products, lack of buying power in this defective economy by consumers, or simply to remain competitive in this unsure world of ebook pricing? Or perhaps, because they are smarter than the rest of us and simply want to put the world on notice that ebook buyers at every level want to read their work. What’s the next step in the pricing debate as it relates to Indie authors’ success?  Becoming a bestselling independent author with books consistently priced above 99 cents.

Melissa Foster is the award-winning author of three International bestselling novels, Megan’s Way, Chasing Amanda, and Come Back to Me. She has also been published in Indie Chicks, an anthology. Melissa is the founder of the Women’s Nest, a social and support community for women, and the WoMen’s Literary Cafe, a cross-promotional site for authors. Melissa hosts an annual Aspiring Authors contest for children, and she’s written for Calgary’s Child Magazine and Women Business Owners Magazine. Melissa is currently collaborating in the film production of Megan’s Way and is hard at work on her next novel.  www.melissafoster.com

  • Carol

    I have covered the pages of indiereader but cannot find any information about how/when/where/why decisions are made to review and list (or not review and list) titles. Does/can an author request that his/her book be reviewed? Who decides, in other words, and how?

    Or did I simply miss the information?

    • Amy Edelman

      Hi Carol,

      There are no hard and fast rules as to what we decide to review. We are open to all genres but it really depends on what we’re in the mood for at the moment.

      Yes, the first step is for an author to send their book (we accept both paper and ebooks). We’ll let you know if and when we review and post.

      Best,
      Amy

  • http://www.jacquelinegeorgewriter.com Jacqueline George

    The author’s aim is to earn as much as he or she can from their book i.e. to maximise the [price x copies sold] equation. While it is true that I will not sell any copies of an ebook priced at $20, it does not follow that reducing the price dollar at a time will bring corresponding increases in sales. Down at the bottom end, a reader who likes the look of a title will not greatly care if it is priced at 99 cents, $1.99, or even $2.99. All three are less than a cup of coffee, and a book lasts much longer.

    I can not be sure, but I think for me there is a sweet spot (where the equation above gives the best result) of $1.99 for a novella length book, and $2.99 for a proper novel. What about other author’s experience?

    • http://www.melissafoster.com Melissa Foster

      Jacqueline, I think it depends. There are ebooks priced higher that are traditionally published and do well. I have found that $2.99 works well, but I also think that it takes a while to build a following. As with any author, traditional or indie (in my opinion), when readers like your books, they probably don’t really look at price unless it’s so high that it’s hair raising.

      It all comes down to marketing. I have seen 99 cent books not sell many at all, and I’ve also seen them sell like hotcakes.

  • http://www.rayflynt.com Ray Flynt

    Thanks, Melissa for a thought provoking article. My first book was published in hard cover by a small independent press (Five Star). At that time, most publishers were paying 8% – 12% to the author. In other words, when my book sold at $25, I’d earn royalty (after advance was recouped) of about $2. When e-publishing came along I decided that I’d price my novels at $2.99 – thus earning $1.94 for each one sold. I thought it was fair (since that was a financial bargain I was used to). Like most authors, building a reliable readership is what I’m looking for. I don’t expect to give up my day job. Few authors in “traditional” publishing make a living, and I doubt that will change in the era of the e-reader.
    I found it interesting recently, however, to read an author’s blog where she noted that she started pricing her books at 99 cents and each time she raised the price, her readership increased.
    Again, thanks for your thoughts and your research.

    • http://www.melissafoster.com Melissa Foster

      Ray, I think we’ll find that what that author experienced might eventually happen more often. I might be completely wrong, but readers may eventually want higher quality, and in order to produce higher quality, hopefully more authors will pay for editors and professional covers, and then, the constant 99 cent books will become a different element all together.

  • http://new4now.blogspot.com/ Sean Naughton

    Thanks for a great article but I think the entire orientation of the debate is wrong.

    First, eBooks require a hardware device in order to be enjoyed / consumed/ purchased. A device is only useful and interesting as long as the content on it us continually refreshed. This has created an on going burden on the device owner to constantly find new things for the device. Content consumption is a daily habit that needs to be fed. Being that no one is going to be buying a novel a day at a price point of $9.99, the consumer is being conditioned to lower and lower price points. Remember albums were priced at $10. Then CDs but as soon as music left the world of Atoms and became digital package, the price point was free – 99 cents.

    Second, supply and demand. Desktop publishing and digital distribution mean that anyone can be an author. Thus creating more supply. In a cloud-based, streaming environment a purchase destination is an impulse buy. ” Do you have Catcher In The Rye?”, oh you don’t.. OK I’ll take My Weekend With Bernie 2. The destination purchase channel is not what it used to be. This is what social media marketing is all about. You can’t find content through search. You have to be given a direct path to the buy now button.

    Third, there is a case making its way into the European courts about Apple and all of the major publishing houses conspiring to price fix the cost of the eBook. This is also landing on US shores shortly. There is going to a deflation of the value of digital. There is no defending the top tier price point, unless you are providing more value to your customers. In a world of 100 million digital devices, Epub formats are not worth more than 99 cents. Books are no longer books. Stories are no longer stories. They are in fact digital experiences that are presenting on state of the art computing devices with vast amounts of storage.

    I am not saying this to depress everyone, I am saying it to inspire. Over the last year, we have developed a digital publishing platform for children’s books. We released our books at $2.99 and sold 3. We have since set the price point at 99 cents. While sales are still slow, which is a marketing issue, they have improved. There is less friction in the purchase decision.

    The key for authors to consider going forward is how to bread crumb my audience to greater and greater points of value through the various channels of my story / experience. There are amazing opportunities for innovation and I encourage everyone to dream about them!

    • http://www.rayflynt.com Ray Flynt

      Sean, You make excellent points. The flip side of the argument, from the perspective of the consumer, is the lurking question, “How much can it really be worth for 99 cents?”
      I equally agree that marketing is the key. I’ve been a fan of Michael Connelly for years, and have thought nothing about spending $25 – $30 when a new hard cover book of his comes out. A few weeks ago I found myself shocked that his publisher was charging $14.99 for THE DROP. Still, because I’m a fan, I bought it. No one would pay that kind of money to put electrons I wrote on their Kindle or Nook, but I’ve not been as well marketed as Connelly.
      Ray

  • http://hugosf.com jeffrey hannan

    I’ve gone back and forth and struggled over pricing for all 3 formats of my novel, HugoSF. I settled on 14.99 for paperback via Amazon/CreateSpace because I stand to make an ok margin when I sell through independent bookstores. The digital pricing was more difficult. I started at $8.99 then decided on $6.99 for Kindle; it seemed midway between the mass of $0.99 and full-price pub house prices for ebooks; it seemed a fair introductory price for quality work. I am probably going to sell the other epub format (Sony, iTunes, Nook, etc) at $5.99 and lower Kindle to the same. I’m convinced that we don’t know what the psychology of pricing is for ebooks yet. As an indie author all I have is my gut to go on. And my gut tells me to price something at $0.99 only if it’s a short piece or possibly a one-time promo for new work (like Gaga did for her latest album) then set its regular price at a fair price. I don’t think any of us go through what we go through in order to earn $0.12 a copy through a publisher or $0.69 self-pubbed. For a full-length work? No.

    • http://www.melissafoster.com Melissa Foster

      Jeffrey, it’s even worse – 35 cents per book self pubbed at 99 cents.
      I agree – quality over quantity

  • http://www.writing4rent.com Jane Rutherford

    To be perfectly honest I’ve never done the actual math, but after reading this article I gave it some thought. I’m pretty sure that I would price my first ebook at $0.99 for the time of pre-sale and then a month or two after that. Then I’ll raise the price to $1.99 just to see what happens. I’m an unknown writer so yeah, like the people you quoted, I would be willing to take the price hit to get my name out there.

    As a reader, I know I’m more willing to buy ebooks that are cheap and under a dollar, $2.99 seems a lot for a .pdf file when I can pay a few dollars more and get a decent paperback.

  • http://mjwrightnz.wordpress.com Matthew Wright

    Hi – very thoughtful discussion of a difficult issue in publishing, Price point is, of course, everything – even in the print industry. I’ve just spent many months negotiating a re-publishing, in print, of a book I wrote a decade ago. It sold very well back then, by any standards (especially New Zealand’s). The reprint, though, is unlikely to make any money unless it gets into a long backlist tail. And that’s solely because, for it to sell at all, it has to hit a particular price-point in the market which broadly renders it uneconomic – certainly for me as author. To the extent that I’ve been paid for writing it already, that’s not too bad. But I won’t get paid for the time put into the revisions, unless I’m lucky.

    I guess part of the issue is the depressed state of the market. But there is also the new world of the internet. There is an expectation that things will be cheap or free, and when that is combined with the ease with which anybody can publish anything the result is a dramatic drop in the acceptable price point.

    Some of the self-published stuff is, not to put too fine a point on it, unreadable. And to me that suggests that there is some hope for professional writers, to the extent that the quality of their writing will become more obvious. And maybe people will be prepared to pay for that. A lot of that will have to come from due branding and promotions. In many ways it’s a new world, and we’re all going to have to adapt. Thanks again for your post.

    Matthew Wright
    http://mjwrightnz.wordpress.com
    http://www.matthewwright.net

  • http://www.hahah.com Dollar people, listen up!

    Jane Rutherford said: “As a reader, I know I’m more willing to buy ebooks that are cheap and under a dollar, $2.99 seems a lot for a .pdf file when I can pay a few dollars more and get a decent paperback.”

    Then Jane, you’ll need to stick with paperbacks, even though something tells me you don’t really buy paperbacks at their regular price but you get them from the library or at garage sales. You’re not a shopper who spends money on books (I know this because I’m familiar with the shopping habits of people who say exactly what you just said, only they’ll usually lie at the end of their comments and say they just spent $70 on some books somewhere. Lies.) .

    No offense but why did you chime in on these comments? Why are people who spend ZERO DOLLARS on books/ebooks the most vocal? Why do you think your opinion on ebook pricing should be heard when you don’t spend anything but under a dollar? I ask this because I read so many comments like yours from people saying they only pay (or want to pay) $1 but where are the premium clients who pay $14 an up for ebooks (or $12 and up)? I want to hear their opinions on some of these issues. I’ve heard enough from the $1 crowd. It would be refreshing to hear from people who actually pay authors for their work.

    That’s right, I said it, and it’s my right (just like it’s the right of the $1 crowd to give their opinions). Excuse me Ruth but you (possibly) and people like you (I assume) value self published ebooks at under $1, and for me your opinions are worth about a penny- not even worth 2 cents. See? We each have an idea of what something is worth. If any $1 Kindle ebook buyers are upset by my words, they shouldn’t be. I put a value on what they have to say as…having minimal value. Anyway, you’re going to be ignored by me as if you don’t exist anyway. :D

  • http://www.bryanthomasschmidt.net Bryan Thomas Schmidt

    I tell you, Melissa, twice now I have explicitly told my publisher no 99 cent pricing. My book is worth more. And I don’t say it with arrogance. My book is not a self-published book. 4 editors worked on it. Two independent editors I paid before it sold at considerable cost and two at the publisher. I don’t want people lumping it in with the non-vetted crap that’s out there. While there are good books at .99, there’s also a ton of junk. My book is higher quality and we need to distinguish it. But at the same time, I’m still pretty unknown and new and people don’t know my work. They won’t pay the $9.99 or $16.99 major trade houses want for ebooks (which to me is asking a bit much even) so we’re at $3.99. We will do a one week $.99 sale to launch the new year but I feel comfortable with my position. And I think it’s dangerous to all of us in publishing who are professionals to allow our work to become devalued to the point where $.99 is the norm (if it hasn’t happened already) because that makes it really hard to make a living.

    • http://www.melissafoster.com Melissa Foster

      I have to agree with you. That was the point of the article. 99 cent as a promotional price seems a good marketing avenue, but 99 cent as a permanent price can seem desperate on many levels, and as a professional author whose work is edited and valued, we owe it to ourselves to price our work fairly.

      We have to ask ourselves this – - If traditional publishers released bestsellers at 99 cents, what would be the independent author’s next step? Permanent free pricing? Therein lies the problem. How low can one go? If we are to move to the next level of writing as a profession, can that be done at 99 cents?

  • LK Watts

    I think we need to focus less on the price issue and more on writing a high quality and edited book with a fantastic eye catching cover. Those are the things we have the most control over.

    • http://www.melissafoster.com Melissa Foster

      Here here

  • http://itsthefuturestupid.blogspot.com/ RJ Davnall

    I’m with MJ Rose and LK Watts. The single biggest motivator for people to buy books (possibly excluding supermarket/airport impulse buys) is word of mouth – someone you trust saying ‘hey, this is really good, you should try it’. That’s a motivation that takes very little account of what something costs. I’m happy to pay £8.99 for a novel on the recommendation of a friend, just as I’m happy to pay £8.99 for the next installment of a series I love (not that I’m able to very often, but that’s a different question entirely). What sells books on word of mouth is quality; the better the book, the more likely people are to recommend it to each other.

    I get quite angry about authors saying things like ‘My work is worth more than 99c!’. The value of your work, at least where writing is concerned, comes from the time you get to spend doing something you love. If you don’t love writing, why try to make a living at it? Almost any other job pays better per work-hours. The only reason to write is from passion for writing, and any money you get on the flipside is just a happy bonus. Never mind the value of the *time* a given reader spends on your book.

    What matters is writing and being read. Reduce writing to a matter of money flow and it becomes just a really badly-paying, unreliable job.

    • http://readersanonymous.blogspot.com Loren

      Agreed. Value does not equate with cash in an author’s pocket. Not a problem for me anyway as I am one of the cheapie readers who prefer quality to marketing and find loads of free classics more than enough to satisy my worthless obsessive/compulsive reading habits. I’m also a librarian and we know how meaningless libraries are to the big important pay-me-the-big-bucks-authors. Something worth reading does not have a price point.

      • http://readersanonymous.blogspot.com Loren

        “Prefers” correction to “prefer” above.
        Speaking of which, I am curious as to whether or not much editing is going on these days in print??? I am seeing more typos indicative of spell checker programs only. Costs are cut left and right for ebooks, why not keep the prices low and let the readers contribute by providing editorial feedback. Author saves money and learns from audience.

        • Amy Edelman

          A potentially good topic for an article, Loren! Thx!

  • Julie Ramson

    I’ve wrestled with the price of my e books. As an unknown author it’s always a struggle to get your books out there for people to want to read. I put my first two murder mysteries (Maggie Flaherty Murder Mystery Series) up last November and since have added two more mysteries and one stand alone novel. I’ve priced them at $2.99 each. Every book is at least 325 pages or more and I have been pleased with my first year. I’ve sold over 5300 books as of December 31.

    Would I price them at $.99? Maybe for a few days as a loss leader but overall – no. I work hard on these books and try to make each one different and interesting. I have a full time job so this is my spare time here, folks! I’m going to have to figure out more marketing methods but overall – I think they are worth more than a dollar.

    E books have given many of us a literary voice who would not otherwise have one. I appreciate that and will keep my price at $2.99. People seem willing to spend that – even on an unknown author.

    Julie Ramson

  • http://tinyurl.com/tswod Sandra

    Indie publishing/marketing is hard. I’ve recently published an e-book and it’s so difficult to find someone to give it a simple review. I’m covering social media all the time, but no bites. The Secret World of Dragons is on smashwords and amazon so far, but no one seems to want to look at the page without a review to go by.

    Also, I’ve priced it at $2.99 and I’ve only gotten 2 buys so far. Should the price be lower?

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