As I discussed before, I jumped into the whole e-book thing by purchasing a Kindle. It’s been fun owning the thing, and I’ve grown used to the interface, reading along at the same pace I would with a book. It’s particularly useful when reading manuscripts—I’ve got a potential-blurb novel on it now. I’ve bought a few titles from Amazon, but mostly I’ve been filling it with Gutenberg books using the Magic Catalog of Project Gutenberg E-Books, which allows me to simply look at all their titles and click to automatically download it to my device. If you’ve got a wireless e-reader, then this is a must-have; you’ll be astounded by some of the titles they’ve got up there.

Johannes GutenbergOf course, there’s a measure of guilt involved, as I’ve been learning more about how independent bookstores get screwed along the way, and I’ve been trying to figure out how to balance things. Little luck, but at least I’m thinking about it.

Then, I happened to be looking at my titles on Amazon and noticed my Kindle versions had vanished into thin air. I sent an email to my editor at St Martin’s, and she quickly filled me in on the Amazon-MacMillan head-to-head. As we all know, it was a short-lived fight, and Amazon backed down. But to get a larger picture of the conflict I started poking around the web for thoughts. One thing I saw repeated endlessly was the conviction by book buyers that not only was Amazon in the right for pricing their e-books down to $9.99, but that $9.99 was still too much. Some people considered this amount a scandal, saying they would never buy an e-reader until the books came down to a more reasonable price, say $5.00.

I’m not the sharpest knife in the drawer—I’ll admit that—and I didn’t want to be a company tool, so I had to wonder about this. Is $9.99 too much? Is $15.00 too much? And how do we define “too much”? People point out (and I’ve pointed it out before) that an e-book costs almost nothing to produce. So isn’t any price put down pure profit?

Well, no, I’ve come to realize. First of all, the negligible cost we reference is for the transfer of a book into an e-book format. What it ignores is everything else that goes into the “making” of a book. The author’s time and labor and talent, for instance. And the writer doesn’t just get paid in royalties; he lives off of advances, which (ideally) allow a novelist to write without having to hold down extra jobs. The advances system is something no author wants to get rid of.

But a book’s not done there. Those who work in “traditional” publishing (that is, not self-publishing) know that a good editor is invaluable. He (or in my case, she) needs to get paid. So do the copyeditors who clean up those innumerable mistakes we all make.

But that’s not enough. As we all know, publishing a book does not equal sales, so marketing departments have to be put into service to make sure that buyers actually learn that a new title exists.

There’s more, of course—any large business requires an infrastructure to keep it chugging along without falling apart. Those in the mailroom need to get paid. Janitors need to get paid. So do the various specialists that raise the level of any sort of company—the designers who make the cover, for instance.

Thinking about all this leads to a bit of a mess. I doubt anyone can add up all those costs and then divide them correctly to tell you how much an individual story is worth. But there’s another way, and I asked my editor, Kelley Ragland, for some help on this.

My basic thesis, which I finally stumbled onto, is that an author (or a publishing company) shouldn’t make less money on a book because someone chooses to buy it in digital format. All the same work went into producing it. I work just as hard on a book that ends up on your screen as one that you buy on printed pages, and so does my publisher. Which leads to a very simple formula: The cost of the “real” book, MINUS the costs connected to printing and shipping that book, PLUS the cost of producing the e-book format should EQUAL the retail value of the e-book.

So I asked Kelley about hard numbers. She looked into her magic ball and came back with some estimates for my forthcoming (in May) novel, The Nearest Exit. Based on a guesstimate 50,000 printing, the costs of paper, printing, binding, and jacket per book is $1.53. To add in shipping, she suggests rounding up to $2.00.

Everything else stays the same. One could argue that the cost of warehouses for storing books could be removed, but MacMillan owns those warehouses, (they’re not printing less paper-based books), so it’s a company expense and not a book-specific cost.

You can see where I’m heading with this. List price, minus $2 = e-book price. In this case, The Nearest Exit’s list price is $26—the e-book price would be $24. Knock it down for a discounted price, like Amazon’s, which is $17.15, and you’re still at $15.15 for the e-book—which is around the price that MacMillan and other large publishers want e-books to be priced at.

Of course, I’m talking about the hardback price here, but that’s because, for a year, the hardback is the only thing available. That first year the story is new; its value is higher (again, this is how it’s always been, and, again, there’s no reason the publisher and author should make less money during this first year). However, if you base it on the paperback price (the list for a paperback of The Tourist, which will be released in 5 days, is $15), the cost of production costs you subtract would be less, and you’d still be above $9.99.

My point, if I have one, is just that before looking at these numbers I had no idea where I stood on the pricing issue. Now I know. To me, e-books should equal the cost of creating a story, with a sufficient profit for all involved. It’s why MacMillan had to play chicken with Amazon—if they didn’t, the idea that a story should only cost $9.99 would continue until all consumers believed it and would refuse to buy anything that actually represents the real price of entertainment, or culture.


COINCIDENTALLY, the NYT ran a piece the day after I wrote this, on the same subject. It’s here. Choice excerpt:

Authors have been taken aback by some of the vehemence of the reader protests.

“The sense of entitlement of the American consumer is absolutely astonishing,” said Douglas Preston, whose novel “Impact” reached as high as No. 4 on The New York Times’s hardcover fiction best-seller list earlier this month. “It’s the Wal-Mart mentality, which in my view is very unhealthy for our country. It’s this notion of not wanting to pay the real price of something.”

Amazon commenters attacked Mr. Preston after his publisher delayed the e-book version of his novel by four months to protect hardcover sales. Mr. Preston said he was not sure whether the protests were denting his sales. But, he said, “It gives me pause when I get 50 e-mails saying ‘I’m never buying one of your books ever again. I’m moving on, you greedy, greedy author.”