Nathan Bransford has an interesting blog post up today about Hocking, Konrath and what they mean for publishing. Nathan’s wicked smart, but he’s making the same mistake most people with experience in print make. He’s overlooking that supply and demand thinking doesn’t apply to a product where the supply is infinite.
Paper books are priced based on scarcity. You know how much they will cost to produce, you know how many of them you will produce, and you can decide how much you want to make per copy to turn a decent profit overall. You only have so many, so you would obviously prefer to make as much money per copy as you can.
Ebooks, on the other hand, are a post-scarcity good. There are as many ebooks as you can sell, and as it turns out, there’s plenty of room at the bottom. There is no such thing as an ebook print run. Without a constraint on how many copies you can sell, you don’t have to make as much per copy. Price the book low enough, down to “impulse buy” level, and you’ll pick up hordes of readers who never would have considered buying the hardcover. This is why one-to-one cost comparisons between paper and ebooks don’t work. An ebook priced at 1/20 the price of a hardcover will sell way over 20 times as many copies. Maybe not right away, but while a hardcover has maybe three months on the shelves, ebooks sell forever.
This is the lesson Hocking and Konrath really have to teach the publishing industry, if they’re willing to listen. Post-scarcity digital goods require completely different thinking, completely different economics, than physical goods. The longer print publishers take to figure this out, the more money they’ll lose.