SmartMoney Blogs

Real-Time Advice
Our real-time advice on how market shifts and news impact you and your money

E-Book Authors May Set Price of Prose

As the government battles against Apple (AAPL) and other publishers over the cost of e-books, experts say more writers will choose to cut out the bickering middlemen and sell their digital works directly to readers.

Getty Images

Amazon.com (AMZN) plans to slash e-book prices following the Justice Department’s settlement with three of the five publishers accused of price collusion. Apple and two other publishers say they will fight the antitrust allegations in court.

The settlement may lower prices in the short-term, but publishing experts say that rather than allow Amazon to discount their work, some more authors will take J.K. Rowling’s approach and set up their own e-bookstores. The Harry Potter author recently launched her own website (Pottermore) to sell her books online. She is charging $7.99 for the early books in the series and $9.99 for the rest — significantly less than hardcover prices, but more expensive than the paperbacks. Bob Young, CEO of self-publishing platform Lulu.com, says writers won’t give their books away for less than the market price. “The more government restrictions there are on e-book prices, the more authors will do what J.K. Rowling has done,” he says.

By selling their own books online, authors can charge whatever price they choose — lower prices for older books and lesser known authors, but higher prices for their latest bestsellers, says Mark Coker, founder of Smashwords.com, one of the world’s largest distributors of self-published e-books. “Any author — popular or not — should have the freedom to set their own prices,” he says. “The laws of supply and demand will judge if the price is acceptable or not.”

When authors self-publish, Coker says they typically earn 60%-80% of the list price as their royalty. “More authors are looking for ways to sell their own e-books,” says Joshua Tallent, the founder and CEO of eBook Architects..

Going it alone won’t work for all authors, experts point out. Some aren’t comfortable selling their books without “digital rights management” – a system where the publisher aims to protect the author from online piracy. And Tallent says many authors lack the resources to build a website that has a good digital sales system. “Pottermore is definitely a better website than most authors would be able to create on limited budgets,” he says. Rowling also has the clout required to make special deals with the makers of e-book devices, he says. The ability to set prices is more precarious for “mid-list” authors, says e-book consultant Alina Adams. “Demanding e-rights could well be a deal-breaker in those cases,” she says. “Authors will really have to think about whether they are ready to give up the advance, the distribution to bookstores and libraries, and the credibility that comes with a major publisher.”

But Young says websites like his are making it easier, and partnering with Amazon’s Kindle or Barnes and Noble’s Nook could be regarded as a credible alternative to having a traditional publisher. “Technology is moving at an incredibly fast rate,” he says. “Who knows what the e-book marketplace will look like five years from now?”


We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (4 of 4)

View all Comments »
    • Selling DJ drew CDs 11-16-00 disc 1 n 2 good condition

    • Dear Bill, I agree that the money should go to authors. Unfortunately, there are many self-published authors who produce low-quality writing. Publishers do a have a role – books from publishers are vetted and edited. They are often higher quality. You can definitely find self-published authors who are excellent, but more often self-published books have not received the benefit of editing and are sometime unreadable. You get what you pay for. And if we don’t pay, a little bit, for quality, we will be subject to a morass of mediocre writing.

    • Why all the spam?

    • I read Ebooks every day, 2 or 3 books a week. Yes that over 100 a year. If I paid $8.00 a book that would be over $800 a year. . I can not pay paperbook prices. I get most of my books through lending libraries. I am a senior citizen and cannot afford the FIXED prices set by Apple and the publishers. Amazon, Barnes and their ilk are stealing from us every day. I am glad to pay a fair price for a book, but i want it to go the the author and not the greedy big bucks publisher.

About Real-Time Advice

  • How breaking news — in the markets, Washington, and around the world — affects you and your money. Have a question about how current events may change your financial future? Email us at ask@smartmoney.com.