2007 and the $9.99 Best Seller E-Book
When the Kindle was first released (back on November 19, 2007), it retailed for $399 and Amazon was setting the price for e-book versions of its best sellers at $9.99. If we were to take $29.99 as the typical price for a non-fiction, new release best seller in 2007, then the math in favor of buying an e-reader went something like this.
Assuming you bought a Kindle and purchased e-books from amazon.com, the difference between the cost of purchasing an e-book versus a physical book could be said to be approximately $20 ($29.99 minus $9.99). At a savings of $20 per title, after buying 20 e-books (instead of physical copies), the $400 cost of the Kindle would be recouped. From then on, you'd be saving money at the rate of $20 every time you bought a book.
Using those economics, it's easy to see why many people, especially heavy readers, were excited about the growing potential of e-readers. Not only could they cart a library around with them, but they could save a ton of money while doing so.
The Price Gap Between Books and E-Books Narrows
Things have changed considerable since 2007. Amazon (and other e-book retailers) lost a battle with major publishers over that $9.99 new release price, and now publishers set their own rates for e-books; and that price is usually higher than $9.99. Offsetting the higher price for e-books, the price of e-readers has dropped substantially and you can now buy a Kindle for $139. So how does the math work out today?
To calculate this, I took the first 10 titles on the New York Times Bestsellers non-fiction list, checked the price for both e-book and traditional print versions on amazon.com, and averaged them. For e-books, the average price was $12.17, compared to $17.80 for the average selling price of a paper version. The difference is $5.63, which is significantly lower than it was using the averages from 2007. However, the e-reader price is also substantially lower than in 2007. At $139, you'd need to buy 25 non-fiction best sellers in order to recoup your hardware investment, after which you are saving yourself over $5 each time you buy a book. While not as compelling a case as a few years ago, the math means buying an e-reader is still a pretty good investment for a heavy reader.
What About Fiction?
What doesn't factor into these equations? For one thing, I'm using averages, so the mileage will vary for everyone. I looked at best seller lists and not all of us buy best sellers exclusively. I also used the non-fiction lists. The price of trade paperbacks tends to have a narrower price difference between e-book and traditional book versions, so it may take considerably longer for your e-reader to pay for itself. For example, using Amazon's pricing on the New York Times Bestseller list for fiction titles, the first ten average out to $13.59 for e-book versions versus $15.31 for printed copies, a difference of under two bucks a book. The payback period is much longer if these are the titles you usually buy.
Garage Sales versus Free Classics
At this point in time (since most e-books can't be resold), e-reader owners miss out on things like garage sales, rummage sales and library sales; places where a box of paperbacks could be picked up for ten bucks. On the other hand, e-book retailers like amazon.com offer a huge number of free, classic titles and they often offer heavily discounted titles from new authors to to draw readers into a series. The difference is, those used books could be former best sellers and you're not likely to find many such titles on the $1 e-book list.
Upgrading Your E-Reader Hardware
Finally, there is upgrading to factor in. Many people who bought an e-reader three or four years ago still use their device. However, as is the case with any electronics, every subsequent iteration brings new features and improvements, so some people end up buying new hardware. Whether they sell their old e-reader or pass it along to someone else, that does change the equation. If you upgrade before you've bought enough e-books to recoup the cost of your original e-reader, then you're in the hole and not saving money by going electronic.
But no matter how the math works in your case, you still have the satisfaction of books on demand in your pocket.