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Potter magic: Lower e-book prices?

Prices on J.K. Rowling's new Harry Potter website may draw younger readers to the technology, which could lead to cheaper e-books elsewhere.

By MSN Money Partner Mar 28, 2012 12:49PM

This post comes from Quentin Fottrell at partner siteSmartMoney.


J.K. Rowling cut out the muggles and middlemen and began selling digital versions of her Harry Potter books directly to readers March 27. By going it alone -- without the big publishers or e-book stores, she may also be inadvertently casting a price-lowering spell on other e-books, experts say.


Credit: ©Scholastic. Book cover of Harry Potter And The Order Of The Phoenix

Rowling's new website is Pottermore. When the site is fully operational, those who venture to Barnes & Noble and Amazon will be directed to Rowling's page to purchase the books, helping her avoid paying massive royalties to publishers.


And even though she has already sold 450 million paper editions in 70 languages, Rowling appears to still have some extra marketing magic tricks up her sleeve. "I will be sharing additional information I've been hoarding for years about the world of Harry Potter," she says in a video broadcast on the site.


Rowling doesn't need to offer bargain basement prices online, but at $7.99 for the early books in the series and $9.99 for the rest, she is charging less than other publishers might have, experts say. Analysts say Rowling's effort will help drive younger readers to e-books and spur imitation among bestselling authors and relative unknowns.


"J.K. Rowling is going to open up a lot of eyes," says Mark Coker, the founder of Smashwords, one of the world's largest distributor of self-published e-books. "It will bring about a sea change of books by big-name authors at lower prices." (Post continues below.)

E-books theoretically cost less because they are cheaper to produce and distribute. However, prices often remain high -- a fact that prompted a Justice Department investigation into alleged price collusion among publishers. And though Rowling is charging substantially less than hardcover prices, her digital e-books are more expensive than the paperbacks.


Not everyone is prepared to buy them at that price. Chicago-based crime writer Joe Konrath, who has sold more than 800,000 e-books at below $5, says his son can't afford $57.54 for the Harry Potter e-book collection. "Instead, he'll borrow the paper books from the library, or buy them used," he says.

Selling discounted e-books has made millionaires of some authors. Minnesota writer Amanda Hocking found success for her paranormal/romance e-books for young adults, selling hundreds of thousands for 99 cents to $2.99 apiece. Last year, she signed with MacMilllan to publish her trilogy: "Switched," "Torn" and "Ascent," one of which was optioned for a movie. Writing on her blog, Hocking says new versions will have fewer editing errors: "They've been polished up and smoothed out." But at three times the price.


Others authors worry that pricing a book too low can make it seem bargain-basement. Mike Essex, an online manager for Koozai, a digital marketing agency based in London, spent an hour a day for a month writing a how-to book, "Free Stuff Everyday." He has sold around 1,000 copies at $3.68 each. He had less luck at 99 cents. "People assume the content isn't very good because it's priced so low," he says. "Nobody wants to buy something without any reviews." He personally asked websites to review it, too.


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