Trade publishers do it differently. They price their ebooks at about 80-90% of their printed books because they would really prefer to sell the printed books.
Hmm. Yes, Old Hack is right. This statement does make an assumption about the preferences of trade publishers, and that's something unprovable. It was careless wording and unwarranted.
However, I think the basic premise is true: publishers pricing an ebook must take into consideration how that choice affects the sales of the printed book. Price the ebook of a $14.99 or $24.99 printed book for $.99 and even people who prefer print are likely to ignore their preferences and buy the ebook. Especially if it's a recent blockbuster that everyone is talking about.
I'm not alone in believing that setting ebook prices too high is a risky decision. In
a Bloomberg report, Robert Thomson, the chief executive officer of News Corp., which owns Harper Collins, in a recent call with investors, said this about how pricing affects ebook sales.
“It’s a fascinating question and clearly what it shows is that purchasers make a decision based on price. They are valuing a print book versus an e-book.”
Looking at the prices of ebooks from trade publishers, it appears to me that many of them choose 80-90% as a good compromise between too low and too high. At least for new titles. For an old title it may cost more to create an ebook than to reprint it if, say, the only copy of the old book is in PDF format.
Old Hack asked for some links to how trade publishers priced their ebooks. Some of the info might be useful to self publishers, whom this forum serves, so I've included the following.
The first is from the Italian publishing house Gruppo Editorial Mauri Spagnol, which put the answer into a three-minute video. It lists 10 activities which publishers of both ebooks and printed books must do. Most of them are the same. For instance, every book must be content edited and copy edited. Every book must have a cover. And so on. Conclusion: it costs almost as much to publish an ebook as a printed book. The main difference is in the last two steps. These are turning them into their final form, and distributing them, the ebook electronically, the "pbook" physically.
However, one consideration is that most of the other activities are shared. Theoretically, once a printed book has gone through all but the last two activities, it costs relatively little to create and distribute an ebook version. A publisher COULD price the printed book high and the ebook low.
This is what self publishers often do. Why? One of the best reasons is to consider what we do as a startup. Hachette Digital’s executive director Neil De Young, who was talking about innovative ebooks such as interactive ones, said something that relates to us as well.
"A startup isn’t generally concerned about revenue for the first couple of years. They’re concerned about eyeballs."
https://scholarlykitchen.sspnet.org/2014/06/27/what-is-an-ebook-how-do-publishers-price-it/
Publishers don't public discuss specifically how they price their products. It's proprietary information, which made public would give their competitors an advantage over them. And it might open them up to prosecution. As happened in 2012, when Apple and five big publishers got into a war with Amazon about ebook pricing which went to the courts. The case was finally settled only March of last year. The clearest discussion I've come across is here.
https://www.bloomberg.com/news/arti...-big-publishers-pushed-e-books-toward-failure
Another link which might interest self publishers begins
"What if the major book publishers inadvertently shot themselves in the collective foot by raising ebook prices to protect their paper book business?" What I found most useful was how the article breaks down readers into three categories: early adopters, mainstream, and laggards.
http://www.bookbusinessmag.com/post/publishers-shot-foot-costly-ebooks/
Two other links I found interesting are below. The first discusses the drop of ebooks sales in 2016, as reported by 30+ trade publishers. Various reasons are suggested. The second shows a shift of ebook sales from the larger publishers to indie publishers between Feb. 2014 and Jan. 2016.
http://www.publishersweekly.com/pw/...article/72563-the-bad-news-about-e-books.html
http://authorearnings.com/report/february-2016-author-earnings-report/