Meri Paterson

The ideas business and other interests

The value of an author’s work

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By Thomas Hawk on Flickr

By Thomas Hawk on Flickr

When book prices are being discussed in the media, it is often with concern over falling prices and with the view that discounts are bad and only a high price means the author is getting fair compensation for their work. The lower the price the less their work is being valued, we’re led to believe.

While this can feel right on an intuitive level, I think the logic is skewed. Surely the price of a book is determined by more factors than just whether or not society appreciates authors – surely that’s the case with all products on sale. Other price considerations nearly always include the seller covering their own costs and making a margin, taxes and what prices competitors are setting.

I can also think of three other reasons why a high price does not equal appreciation:

1. When price goes down, demand goes up

When the price of anything is lower, more people will buy it, and people will buy more of it. This is especially true of discounts where something is only on offer for a limited time, but a static, low price will have the same effect. The threshold to buy is lower, the consumer doesn’t have to save up for it or think of the product as a rare treat, and it can even seem like good financial sense to buy more than once since you’re getting a great deal.

Just imagine if books were incredibly expensive luxury items (like they once were). Few people could buy them and few would read them. Would that mean the authors’ work was incredibly valuable? I think most authors would agree with me and say they would rather as many people as possible bought their books. The money is important, but the point of publishing a book is to get as many people as possible to read it.

This is why I actually think Amazon is the best thing that could have happened to the book business. Books are cheap to buy, and that’s great. When I lived in Finland, where books are stupidly expensive, I bought books from Amazon because it was a better deal even with postage factored in. I bought significantly more books than I ever could have if Finnish bookshops were my only option.

If I could, I would poll the Finnish authors and the English-language authors whose books I have bought over the last ten years (or not, as the case may be) and ask which group is feeling more valued. I can’t – but I can guess the answer!

2. Authors get paid before the book is bought, so retail prices mostly don’t affect their pay

This is what the book sales chain looks like with £ signs to signify where money changes hands, ie, where a price is paid:

Author <- £ publisher <- £ bookseller <- £ customer

It is first and foremost the publisher who pays for the author’s work, not the consumer, so it doesn’t make a whole lot of sense to say the retail price drives the monetary appreciation of their work. Traditionally, authors get either a flat fee (a one-off payment usually paid at delivery of the manuscript) or a royalty advance – a wildly variable figure which is big enough, the publisher hopes, to make the author take their offer over some other house’s, but small enough to leave the publisher a profit as well after all the copies have been sold.

Authors who are on royalties do get some money from every copy of the book sold as well, but that’s only once they’ve earned out their advance. Most authors never  earn out their advances – the figure I’ve heard is 60%. That’s why I say retails prices mostly don’t affect how much money an author makes on a book. Most authors never make it to the point where they can start receiving royalties.

When publishers say they’re concerned that discounts bring down the value of an author’s work, I’m not sure what they mean. Discounts eat into the bookseller’s margin, nor the authors’ share, even if on royalties – except if their contract with the publisher stipulates that the royalty is a percentage of whatever price was paid, not the RRP. But that’s easy enough for the publisher to fix if they’re so worried.

3. A low price doesn’t equal low quality in books

One worry is that a low price will create a perception that the product on sale is not any good. This argument assumes that the price of a book acts as a kind of quality barometer and so consumers will take one look at the price and be able tell whether the book is good or bad. Also, if books are consistently cheap, general opinion of them will tank as well, much like that of anything made in China.

I think consumers would find it very hard to make value judgements on books based on price, though. Everyone has plenty of experiences where they have bought an expensive book only to find out they didn’t enjoy it, or a cheapo one that they ended up loving. Quality in books is very subjective and doesn’t usually have anything to do with the packaging, but the words inside.

When people say the prices of books should be kept artificially high in order to fabricate an impression that they’re a valuable product, it seems to me that they don’t really believe in the power of books to enlighten and entertain on their own. I don’t think books need a crutch. Readers already know books are fantastic, and people new to reading are more likely to pick up a new experience if the price is right.

What do you think?

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  1. Pingback: In publishing? Get comfortable talking about money.Meri Pentik.

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