Ebook Pricing for a Foreign Market — Eurozona and Eastern Europe
It is always exciting to read and write about faraway lands and cultures. But our ebook pricing tour has finally reached my home market: Europe. Is there more to the Eurozone than just — Euro? What and who decides ebook prices?
As many of our readers are indeed from Europe, we would be really interested to know what works for you, what strategies have you used?
What influences pricing in Europe?
One of the biggest challenge publishers of mainland Europe face is the case of high VAT. Unlike American and British ebooks, books bought all over Europe are subject to high (even as much as 27%!) VAT. This results in higher ebook prices in general: in order for the publishers to get anything back after VAT and distribution costs have been deducted the prices can’t be kept at 1 euro. (VAT is calculated based on the buyer’s country.)
Another factor in setting the ebook prices is fixed book price agreements. These agreements are held up by many countries in the Western world and are aimed to enable bibliodiversity. The publishers argue that stores can only stock niche books, if they can still get a margin on bestsellers. It comes in many forms, but they all go back to the same idea: publishers set the prices and stores are only able to marginally discount them (around 5%). Variants of the law are only valid for home published books or only for a certain period after publishing.
The opposers of FBP agreements argue that this is only a weapon in publishers’ hand to artificially keep book prices high and is against the buyers’ needs. The supporters see FBP as the only way to enable bookstores to store quality books that are only interesting for a specific audience. Although stocking is not an issue when it comes to ebooks, FBP is also in use when defining ebook prices, resulting in generally higher prices than in the UK or US.
Some European countries with FBP are: Germany, Austria, Denmark, Spain, France, Greece.
Germany and France
Germany is the biggest book market of Europe, closely followed by France. The market is slowly growing: both Germans and French people love to read. Due to the FBP agreements, both countries have a strong chain of smaller retailers independent from Amazon.
However, the ebook market is still tiny: according to a recent survey (pdf) by FEP, ebooks all around Europe have only a 6% of market share. This is no different for the big markets either. (But hey, it doesn’t account for self-publishers! That’s just simply nobody knows.) Based on this great article, the French market is pretty much open to translations and the competition might be smaller.
Popular stores and price tiers in Germany and France based on our data
According to current PublishDrive sales data, Amazon is down to 50–60% with the rest going to Scribd, Google Play, iBooks and Kobo. The biggest category is fiction in both countries, accounting for around 64% of the sales.
Books priced at 2.99 GBP are usually priced up to 3.99 or even 4.99 EUR and sell well both in Germany and in France accounting for the second best working price tier. Books priced under 0.99 EUR account for 19% of total sales from these two countries.
While you can’t change your prices set in Euros depending on the country your books will be sold (not even for independent retailers, as Amazon will match the price) and it will be priced evenly, you can change it for countries outside the Eurozone.
The following countries from Eastern Europe are members of the EU but not of the Eurozone: Bulgaria, Croatia, Czech Republic, Hungary, Poland, and Romania. While Amazon is available from these countries (and offers free shipping to countries like Hungary), it is not the biggest force at the market. No wonder: from an Easter European perspective, book prices set in Euros could be way out of people’s comfort zone.
Ebooks on the local language are mostly bought from local stores. For buying foreign language books, many people turn to Google Books that is already pre-installed on Android phones and tablets — and shows prices in the local currency, making it easier for people to decide what to buy. Subscription services like Scribd and Bookmate are also hugely popular.
If we only look at the English language books, the best category is fiction, accounting for 34% of total sales in the area.
When it comes to pricing, free does not work: the best tier is under 1 EUR but not free or between 2–3 EUR. Interestingly, ebooks on the local languages are priced substantially higher, between 7–9 EUR.
Of course, if you are setting the price individually, you’ll need to use the local currency instead Euro.
As PublishDrive is based in Hungary, most of our customers still come from the European region: it was very interesting to finally conduct research based on our own data. This kind of detailed and easy to digest information on best working genres, stores and price tiers is available for everyone selling through PublishDrive.
And since we are talking about Germany anyway: see you at the Frankfurt Bookfair?
Originally published at publishdrive.com on September 29, 2017.