The mere thought is at once repulsive and terrifying: books as commodities. After all, a book is the original divine creation of its author, right?
We typically think of commodities as undifferentiated products such as corn or wheat. To a consumer looking for flavor and nutrition, one kernel of corn is the same as another. Though higher-quality corn can command premium prices, the price ceiling is ultimately determined by what the market is willing to pay for a given product.
In this respect, books are similar to any other commodity. Books are delivery vehicles for reading pleasure. Although each book is unique, the primary reason readers purchase books—reading pleasure—can be measured and commoditized.
If we divide the hours of reading pleasure one book offers by its price, we can create a simple metric: cost per hour of reading pleasure. This metric allows one book’s pleasure-delivery potential to be compared to another’s.
Readers are unlikely to consciously intellectualize their cost per hour of reading pleasure. Yet this metric guides consumer behavior much as gravity guides water to flow downhill. In a marketplace of interchangeable options for pleasure, consumers will gravitate toward the best-quality option with the lowest price, whether that quality is measured by brand, average review, or word of mouth.
How low can prices go? With agricultural commodities, the price floor is ultimately determined by the cost of production. If farmers can’t turn profits at the given market rate for their products, they stop producing those products. When farmers stop growing, supply decreases. This then causes prices to stabilize or increase to the point where new growers are incentivized to enter the market.
For decades now, most writers—even traditionally published writers—have maintained day jobs to make ends meet. This means authors are personally subsidizing the publishing industry by continuing to write books that don’t pay the bills.
Would we expect farmers to work for free? Certainly not. Yet many writers will continue writing even if there’s no money in it. Though one writer may write for the joy of writing and another to afford groceries, both require readers. And price is often the determining factor for finding readers.
Imagine two five-star e-books of equal length in the same genre by authors of equal brand stature. If one is priced at $4.99 and the other at $9.99, most readers will gravitate toward the lower-priced option. This is how indie e-book authors have captured such sizable market share over the past 10 years: by offering high-quality books at low prices. But now indies are learning the limits of low prices.
In my example above, imagine that a third book of equivalent quality and desirability is thrown into the mix, except that it can be read for what feels like free. And then imagine a single retailer controls nearly 80% of the e-book market and actively encourages its customers to read for free rather than purchase copies.
Imagine no more. This is what’s happening with Kindle Unlimited, Amazon’s e-book subscription service. Kindle Unlimited users can read more than one million books for free as part of their monthly subscriptions. The service is almost entirely powered by indie authors who’ve made their books exclusive to Amazon by enrolling in KDP Select.
Kindle Unlimited causes significant devaluation on two fronts:
1. Amazon is training the world’s largest community of readers to expect five-star reading experiences for what feels like free. This makes readers reluctant to pay for books, which harms sales.
2. Because Kindle Unlimited decouples book price from author compensation, it means that Amazon has stripped authors of pricing power and can pay them less.
Here’s how indie authors can prevent commoditization of their valuable intellectual property:
1. Produce premium products. Quality and craft matter. Elevate the true and perceived qualities of a book through professional editing, beta readers, and professional cover design. The greater the quality, the higher the price the book can command.
2. Don’t underprice: readers will pay for quality. The e-book sweet spots for quality bestselling full-length indie fiction are typically $3.99 and $4.99, and $7.99 to $9.99 are good prices for quality nonfiction.
3. Avoid exclusivity. When indie authors make their books exclusive anywhere—even for a short time—it undermines their ability to build readership at other stores. Exclusivity makes the author vulnerable to exploitation when a single retailer controls the author’s access to readers. True independent authors publish, price, and promote with complete freedom.
Mark Coker is founder of Smashwords and host of the Smart Author podcast.