How much should an ebook cost?
From Seth Godin:
This is the wrong question.
The right question is: How much will an ebook cost?
Because the answer isn’t up to one author or one publisher or even a price-fixing cartel. It’s up to the market, which is a far more complicated entity. There are no shoulds in the market, just reality.
On one hand, the marginal cost of delivering a single ebook is close to zero. It might cost Amazon and B&N a dime to transmit it, but it certainly costs the publisher nothing.
. . . .
In a market where the marginal cost is close to zero, prices tend to race to zero as well. Except…
Except when there are no substitutes. If you want Elvis Costello to call you on the phone and wish you a happy birthday, he can charge you whatever he wants, because even though it costs him very little, you have no alternatives. If you want Elvis, well, there’s only one. Take it or leave it.
So our analysis begins with the notion that there will be at least two price points for ebooks. One will be super cheap, perhaps a dollar, for ebooks where there are substitutes. Genre fiction, diet books, manuals, instruction guides, travel books–if you can’t tell them apart before you read them, then of course you should buy the cheaper one, all other things being equal (and those other things might include reviews, reputation, etc.)
But what about books where there is no obvious substitute. A Neil Gaiman book, or a Tiger Mother, or even that one Ellery Queen book you haven’t read?
Here, we need to take a moment and think about the nature of a substitute. Of course, there is no substitute for Neil. On the other hand, at $100 a book, most of us would make do and move on to our second choice. So there is a substitute, just not a perfect one or an easy one.
. . . .
For books that aren’t hot, that aren’t new or fresh or filled with buzz, it’s hard for me to see how profit and volume can be maximized at a price like that. All the data I’ve seen and produced in experiments shows me that trial and purchase and conversion goes up significantly at less than $10.
. . . .
Which leads to my guess/proposal for creating buzz, particularly for unknown authors with great books. That category (call them UAGB) is the most interesting in all of publishing, because it’s about buzz and breaking open a new idea/author.
I would start those books at ZERO and raise the price a penny for every ten purchases until I got to $15 and then hold it there for three months.
If the book really is great, the first 1000 readers (who are easy to find, because they love to read and love a bargain and have to hurry before the price exceeds a dollar) either start raving about the book or they don’t. If they do, then the next few thousand readers are going to stampede along. Still a bargain, but moving fast.
Link to the rest at The Domino Project
Interesting take on things. I’m not sure I’d be willing to try out this formula on my next release, though! And I think that $15 a copy is going to be considered highway robbery unless your name ends in King, Patterson, or Meyer.
The problem with Seth’s analysis is that he’s guessing just as much as the big publishers and the indies are about what the true sweet spot for pricing.
Using Seth’s example, there was a time in the ’80′s when N.G. wasn’t Neil ‘F***ing’ Gaiman, but Neil Gaiman, a British journalist taking a stab at re-creating a D.C. Comics property. The Vertigo line at the time was priced higher than most mainstream comics. It was a good two years before Sandman really took off, thanks to word of mouth.
Would Gaiman have the same level of success if he started writing fiction now? Pricing has come down, and the speed of dissemination is greater than twenty-five years ago. But there are so many other factors than pricing and access.
Not even the ‘experts’ know what the exact trigger for each book is. Every editor and agent a friend submitted to told her that romantic comedy is dead. She self-published and is doing quite well. As in making a living well.
What makes her sales different than anyone else? Damned if we know. And we’ve spent many hours analyzing what she’s done versus what other indies have done to try and figure out the magic button. Neither of us has come up with an answer.
Maybe Joe Konrath is right. Maybe it does come down to luck.
I’m going with luck – because mine was changed by going with Kindle Select. I ran “Let’s Do Lunch” free for 5 days, 7.5k books went out in those 5 days.
After that – the book fell off the US charts, but has stayed #5 on the UK Romantic Suspense for the last 5 days.
In this case, “Luck” is the result of 18 months of marketing and 5 days of taking a chance.
Even if I wanted, I could not try it out. We have fixed prices for books (and ebooks) here in Germany. So whatever I come up with as a price for my ebook, I better keep it for at least 18 months if I do not want to get into serious (and potentially expensive) trouble.
So I have an iBook out for 1,99EUR and a fairy tale on Amazon for 2,99EUR. And this is how it will have to stay for the next 18 long months.
“Of course, there is no substitute for Neil.”
Don’t be too sure.
I’m just one guy in the world. But I’ll tell you what, a little less than a year ago, shortly after I began reading writing blogs in my quest to learn how this business works (because I began writing my first novel over Christmas last year), I “heard” a bunch of people mentioning this guy Neil Gaiman on their blogs and podcasts.
My first thought: “Who the f@%k is Neil Gaiman?” Because I had never heard of him before. Ever. I did a lot of reading over the years (I’ll grant you it was more fantasy than science fiction, but still…) and I had never encountered him. Maybe that means I was not as well read as I would have liked to think. But I actually think that’s reality. Writers know who Neil Gaiman is because he’s a big writer. Joe and Jane Schmuckitelli out there probably don’t know him from Adam.
So don’t be too quick to say there is no substitute for Neil. Or for Joe, or Barry, or Dean, or Brandon, or whomever. Most writers (even the bigger ones) are FAR less well known than people in the writing world think they are. That’s not to say that writers are a dime a dozen and all books should be free. Far from it. But we can do with a little perspective on this.
Of course, I could just be an uncultured, unlettered Philistine. In which case, disregard and please accept my apologies.
$4.99
You don’t create buzz by under pricing. You create buzz by persistently creating great products.
Zingerman’s didn’t start out selling pastrami sandwiches for a penny. (Though to this day they do give free samples of just about anything in the store.) They always charged a full price.
ebooks are not commodities. NO intellectual property is a commodity.
Oh, and genre books are generally not interchangeable — however, when they are produced to actually be interchangeable (i.e. ghost-written book-factory pulps): they do not build a reputation for the author that there are no substitutes, because the whole point of them is that there ARE substitutes.
Just from my own experience, I think Seth is trying to simplify the ‘new’ publishing business – unless distill is a better word?
In order to get a ‘lucky break’ the writer has a tremendous amount of behind the scenes work to do. There is no formula “X amount of effort leads to XY amount of success in Z number of days.”
There are too many variables.
The only one the writer can control is the amount of effort they put into their work. They can’t control the amount of time it takes to do that effort. Or the time it will take for that effort to pay off.
Lassal isn’t in the position to attempt what I just did on impulse without months of effort. Camille likely doesn’t need to do it – her books are already more popular than mine and have been for a very long time. Someone else would find it a complete waste of time and effort.
Then there are genre variables. How difficult it is to find readers. How you turn readers into fans…more work and more twists and turns until it makes a maze look easy.