What is the “right” price for an e-book? (hint: you’re asking the wrong question)

Yesterday’s news about the U.S. Department of Justice probe into the alleged pricing collusion between Apple Inc. and several large publishers has important implications for both Authors and e-book consumers.  To understand why, consider the three mainstream methods that an Author uses to sell their e-books to consumers: Traditional Publishing, Self-Publishing via an online retail store, and Self-Publishing directly from their own website.  Each of these methods provides an Author a different level of control over the pricing of their e-books.  The pricing behavior of the actors named in the DOJ investigation should be viewed in conjunction with the pricing choices that Authors have to make in the existing e-book market.  The right question isn’t “What is the right price for an e-book?” but instead “Who should have the right to set e-book prices?”

Setting aside the Author’s complex decision for selecting their e-book’s route to market, here is a summary of the key trade-offs Authors experience once their e-book is in the market:

Click on Image to Enlarge

As you can see from the table, WaveCloud approaches this from the Author’s perspective.  The reason is simple: We believe that over the next few years, more writers will become Authors, creating a buyer’s market for consumers.  In that very competitive market, Authors will naturally (if they have the direct authority), price their e-books competitively.  We predict that the prices of e-books will rise and fall in a way that makes sense to e-book consumers, erasing the current perception that e-book prices are generally too high compared to the print prices for the same books.

The complaints of e-book consumers and the investigation by the DOJ are a temporary result of the market disruption swirling around the transition from a world dominated by print books (where shelf-space in book stores created “scarcity”) to a world dominated by e-books (where scarcity is mostly gone, and traditional gatekeepers have lost most of their power).

Nirvana for Authors is to find an arrangement that gives them the most control, most profits, best relationship options with purchasers and most “discoverability” by new Readers.  How can they capture all four green boxes (above) in one service?

Stay tuned to WaveCloud…

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