Pricing

Beyond $0.99: New tips on ebook price promotions

10 February 2015

From Gigaom:

The days when a single Kindle Daily Deal could catapult an unknown book up the New York Times bestseller list are probably behind us now. And big publishers are experimenting more and more with price promotions, so that a super-low price on a self-published ebook isn’t enough to help it stand apart. So as more and more and more ebooks are published, how have the mechanics of price promotions changed?

. . . .

It’s all about the shopping cart

The “cart” is an obvious feature of online shopping — but hasn’t always been a huge part of shopping for ebooks. If you’re reading on an e-reader, for example, you might be buying books one at a time. But Kobo learned the value of the cart at the end of the last year, when it added the ability for customers to buy several books simultaneously. In December the company ran a 3-for-2 ebook promotion for the first time, with great success.

“It was a price promotion, but it was really interesting because of what people were buying,” Nathan Maharaj, head of bookselling at Kobo, told me. “People were loading up on full-price ebooks, then often taking one that was already promotionally priced and dropping that in their basket, and that was the one they got free” — for example, buying a $14.99 ebook, a $15.99 ebook and a $2.99 ebook, with the $2.99 free. It wasn’t a “fight over how low can you go. This was completely different.” The promotion seemed to appeal to a different kind of customer — those who “haven’t been playing the cheap game very much.”

. . . .

Nonfiction is hard, but keep trying

Ebook price promotions are largely geared toward readers of fiction. “We’ve had some miserable luck with nonfiction” price promotions, Maharaj said. “My hunch is the nonfiction reader is differently oriented toward their reading material. Price is less interesting to them than, ‘Is this information I need now? Is this how I rule the dinner party? Do I need to master these concepts?’ … There’s a shift in emphasis in how the customer values it, but that’s a wild guess.”

At the same time, ebook price promotions are also less common for nonfiction. “If that’s your preferred area, it’s not a really good investment of your time to pay attention to things like daily deals and price promotions [because] the good stuff tends not to come up too frequently,” Maharaj noted.

Link to the rest at Gigaom and thanks to Dave for the tip.

Is this why Kindle Unlimited affects sales?

5 February 2015

From author and TPV regular Diana Kimpton:

Several months after the introduction of Kindle Unlimited, several indie authors have blogged about the way their sales have dropped while they were in the system and have picked up again after they left.

I’ve noticed the same. In fact, while it’s been in Kindle Unlimited, the ebook of There Must Be Horses has often sold slower than the print edition – a situation that is not usually the case.

It’s easy to assume that the drop in sales was due to readers borrowing the book instead of buying it. If that were true, I’d expect the number of borrows to be roughly equivalent to the drop in ebook sales, but it’s not. It’s much lower.

. . . .

It was only the other day that I noticed something significant about books in the KU library: they are listed on search results with a price of zero for Kindle Unlimited. The real price does show below it, but you naturally read the zero first and may not even notice the other number.

Amazon is probably hoping that this will lure people into joining Kindle Unlimited. However, it could also be having several less desirable effects.

  1. People who see the zero and think the book is free will be disappointed when they find it isn’t. As a result, they may neither join the library nor buy the book.
  2. The real price automatically looks expensive when compared with the zero offer.
  3. The zero may put off potential readers who equate free with poor quality.

. . . .

[T]he current way of listing prices for books in Kindle Unlimited my be restricting the effectiveness of our pricing strategies because the real price is less obvious.

Link to the rest at Horses and Dragons

Here’s a link to Diana Kimpton’s books

Pivot Post Update

4 February 2015

From author and TPV regular M. Louisa Locke:

Recognizing that the Kindle Unlimited subscription service on Amazon was undermining the effectiveness of the Kindle Countdown 99 cent promotions for my books, I decided to:

  • take my 3 full-length novels in my Victorian San Francisco Mystery series (Maids of Misfortune, Uneasy Spirits, Bloody Lessons) and my short story collection (Victorian San Francisco Stories) out of KDP Select
  • upload these 4 books into other bookstores
  • make the first book in my series, Maids of Misfortune, perma-free
  • advertise Maids of Misfortune as free through a BookBub promotion.

By the middle of January I accomplished all of these goals.

  • I uploaded my 4 books to Apple, Nook, Kobo, Page Foundry, and Scribd through Draft2Digital (a simple process of uploading a word document), used the epub that D2D nicely gives you to upload to GooglePlay, and stripped my word document down to upload it to Smashwords to distribute to several library affiliates and Oyster.
  • Within 3 days of Maids of Misfortune showing up free in other bookstores, Amazon price matched, and it was now free everywhere.
  • January 11, 2015 I had a BookBub promotion of Maids of Misfortune.

Reported Outcome:

There has been a dramatic improvement in my sales and therefore my income.

. . . .

As you can see, even before the BookBub promotion in mid-January, making Maids of Misfortune free had begun to give the other books a boost on and off of Amazon, but the BookBub promotion was what really made a difference in my sales.

Two weeks after that promotion, Maids of Misfortune was still listed in the top 100 Free books on Kindle, ranked #5 on the Nook’s Free list, and #27 in Free mysteries on Apple. In addition, there have been a nice increase in positive reviews for this book on Nook, Apple, and Amazon.

During these two post-promotion weeks, the increase in sales of the other books in the series demonstrates that people who downloaded Maids for free are going on to buy the next books.

For example, on Amazon the average number of copies sold of Uneasy Spirits (Book 2) went from 1.5 a day in November, to 2 a day in January before the BookBub promotion, to 13 a day in the two weeks since the promotion. The average number of sales of Bloody Lessons (Book 3) has gone from 2.2 a day in November, to 2.8 a day in January before the promotion, to 11 a day in the post promotion period.

. . . .

Will it work for everyone? Probably not. The whole perma-free strategy works best with series. And one of the reasons I hadn’t tried this approach before is that with only 3 books in the series, the long-term loss of sales of one of those books seemed too risky—particularly when short-term discount promotions were working for me. The eminent publication of a fourth book in the series made the shift less risky.

While I was achieving some success in downloads and sales before the BookBub promotion, the effect was limited. So I know that one of the reasons for my success was getting the Bookbub promotion. I am always good about filling out their post promotion surveys––not just so that they have the data to judge when I next apply––but also because I hope this will make them more likely to accept other authors with similar books following similar marketing strategies.

Link to the rest at M. Louisa Locke and thanks to Liana for the tip.

Here’s a link to M. Louisa Locke’s books

‘Who Decided Our Worth?’ Do Free Books Give Away Authors’ Value?

2 February 2015

From Thought Catalog:

For those following the industry! the industry! in its digital melodrama, tossing books to the crowd free is not new.

But the question of whether today’s plethora of free offers may devalue books and/or authors in readers’ minds is not going away as easily as some folks wish it would.

. . . .

[Author Roz Morris] writes:

I’ll admit that I worry we give away our work too easily. If we create a culture where a book costs less than a sheet of gift-wrap and a greetings card, there’s something badly wrong. An ebook may not have material form, but it does give you more time and experience than something you glance at and throw away. And tellingly, the people who get cross with me for speaking out are the ones who say they refuse to spend more than a couple of dollars on a book, or berate me for not putting my books into Kindle Unlimited.

. . . .

The “free” debate is a worthy one, in part because it points to a confusion about what the digital dynamic represents. And this frequently is lost in the self-publishing world — where seldom is heard an unemotional word.

(1) What “digital” is about is distribution. It makes it possible to move content of several kinds around much more easily and less expensively than before. It makes it possible for you to publish a book yourself — also to make a film, record an album, devise a video game.

(2) What “digital” is not about is art — or even entertainment. While digital means you can publish a book, it doesn’t mean you can write your way out of a Starbucks bag. You may be awful. And you can publish. You may be radiant. And you can publish. Digital, like justice, is blind. It distributes the good and the bad, not just in books but in any medium to which it’s applied.

(3) And what digital does not promise is an audience. This is where “free” comes in. While the going complaint is that traditional publishing doesn’t deliver the marketing support it once did, a book with a “house” at least enters the world “in the system,” meaning the standard supply chain. It will be listed in that publisher’s catalog, which in turn is something that retail buyers and/or librarians look at routinely to find inventory. In happy cases, there may be much more, from sales-department efforts and mainstream media attention to publicity campaigns and advertising.

. . . .

[Author] Kathryn Magendie who probably makes the most ringing statement of the heaviest side of the question: “Who decided our worth?” She writes:

Who decided our worth?

What other professions do we ask, or demand, the proprietors to give away their work for free or so cheaply they cannot make a living on it?

I was a reader before I was a novelist, and over the years I have spent many dollars purchasing books (before e-readers for many years) that I did not like all that much or that I was disappointed in. But, that’s just how it works. I never questioned it.

All that said, I like that ebooks are less expensive – I like that we can try out authors or that readers can try out my work with less “risk” — but there has to be a reasonable expectation of “monetary worth” here, right? For all the sacrifice and stress and worry and work?

Link to the rest at Thought Catalog and thanks to Dave for the tip.

The Rise of the Paperback Novel

24 January 2015

From Kirkus:

I’m going to . . . take a look at the bigger picture that helped to shape the science fiction genre by looking at one of the biggest innovations to change publishing: the introduction of the mass market paperback novel.

Up to around the late 1940s, just about all of science fiction could be found on the magazine racks. Magazines, such as Argosy, Weird Tales, Amazing Stories, Astounding Science Fiction, and countless others graced newsstands with their brightly colored, provocative covers. There were some exceptions: Edgar Rice Burroughs had financed the print runs of collected editions of his novels, but this was a rare exception. Science fiction novels really didn’t exist.

Neither did the bookstore, at least in terms of how they are structured today. Prior to the 1950s, books were sold through independent bookstores, which sold books in limited numbers, according to John B. Thompson in his book Merchants of Culture: The Publishing Business in the Twenty-First Century, “the bookstores tended to cater to an educated and cultivated clientele—the so-called ‘carriage trade.’ ” These stores were frequently located only in major cities, and largely focused on books as upscale commodities for a consumer base which could afford such luxuries. Science Fiction pulps weren’t sold through bookstores, nor were other genres like Westerns, Mysteries and Romances. The magazines carried with them a certain stigma, to the point where people were afraid to be seen with them.

. . . .

In 1935, a new innovation in publishing began to change everything: the Penguin paperback book. English publisher Allen Lane found himself waiting on a train platform, where he found little to read beyond magazines and poor-quality reprinted novels. He believed that there would be a market for a line of high quality paperback novels and nonfiction, sold in places where books weren’t typically sold. Once he returned home, he and his partners began to plan out a new imprint to publish paperbacks. They hit the streets, looking to sell their product to the unconventional locations, eventually landing a contract with Woolworth’s, a major department store.

. . . .

What set Lane’s Penguin books apart was different from the style of cover: It was the price and distribution that ultimately allowed his books to sell in vast numbers. The line grew immensely, allowing Penguin Books to become even more successful, and the low cost of the paperbacks required Lane to print in huge volumes—hundreds of thousands of copies. As World War II began to restrict paper supplies in England, Penguin was granted larger paper rations and managed to survive as its competitors floundered, unable to meet demand or compete.

. . . .

The paperback novel concept didn’t remain within the U.K.: In 1939, it came to the United States when publisher Robert De Graff founded Pocket Books in partnership with hardcover publisher Simon & Schuster. He took out a full page ad in the New York Times on June 19, 1939, proclaiming that his new line of books would “Transform New York’s reading habits.” Like Lane, de Graff bypassed traditional bookstores and went to magazine distributors who already had the network and infrastructure in place to put books in drug stores, newsstands, grocery stores and numerous other locations. De Graff’s paperbacks were cheap. Compared to hardcovers, which sold at $2.75 ($46.72 in 2014 dollars), a Pocket Book would sold for merely a quarter ($4.25 in today’s dollars, well under the current price for a mass market paperback).

. . . .

De Graff’s secret to success came not in the content which was available, but for his ruthless cost-cutting. He sought out reprint rights from hardcover novels, which publishers gave him for next to nothing, believing that this venture would have little impact on their own hardcover lines, all the while he planned massive print runs to bring the cost of each copy down to an unimaginably low price.

. . . .

The major publisher’s perception that their products were only valued by the wealthy was a self-fulfilling idea: The masses didn’t buy hardcover books, while the wealthy did. However, hardcovers were expensive and out of reach for most Americans, especially at the end of the Great Depression, and thus only available to those with money. Pulp magazines, a refuge for science-fiction stories, which were bought in larger quantities by the poor and middle classes in America, were largely thought to be of lesser quality, in terms of the physical book, but also that of the content. Now, with an outlet for cheap books, the American public came out in droves to purchase them.

Link to the rest at Kirkus

Don’t Blame Readers If Books Are Being “Devalued”

24 January 2015

From BookRiot:

If you hang out on the bookternet at all, you have no doubt seen one or more pearl-clutching declarations that books are losing their value–especially ebooks, which you can get for as little as NINETY-NINE CENTS (omg)–which is putting literature in great peril. After all, if writers can’t make a living off of writing, how, HOW will we carry forth with our grand literary traditions? Usually, these declarations are followed by impassioned pleas to support your favorite writers by paying “fair value” for their hard work and sacrifice.

. . . .

I want writers to make money. I really do. I love reading. There are a few hiccups to the “customers need to realize that books are worth more” angle, though. Such as, that’s not how economics works, at all.

Reading is a buyer’s market, y’all.

According to Merriam-Webster.com, a buyer’s market is “a market in which goods are plentiful, buyers have a wide range of choice, and prices tend to be low”. Basically, what happens in a buyer’s market is that the supply exceeds demand, buyers have a bounty of options and sellers have to compete for the buyer’s attention. Sound at all familiar?

In a buyer’s market, the seller has little advantage that would allow them to dictate prices. If one seller decided to raise prices, customers would just go to their competition. In the book world, a reader can’t throw a stone without seeing a publisher or author vying for attention; books are literally being given away for free to try to gain an audience.

. . . .

If books are becoming “devalued,” it’s not because readers have magically lost respect for the written word; it’s because we can choose from thousands upon thousands of books and obtain them while we lounge on the couch in our pjs. Rarity breeds value, and books ain’t that rare. If only ten titles came out a year, people would pay a whole lot more to get one.

There are exceptions. For big-name authors like King, Rowling, or Gaiman, the demand for their books transcends price differential–to an extent.

. . . .

As a reader and a customer, I’m tired of being scolded for what the market is naturally doing.

Link to the rest at BookRiot

E-book prices stable following VAT hike

5 January 2015

From The Bookseller:

E-book prices have remained stable five days after a new law came into effect charging an extra 20% VAT on e-books from 1st January.

A survey of e-books by The Bookseller shows e-booksellers and publishers appear to have cushioned the impact of the VAT price rise on e-books at least for now, five days into the new rule.

As of 1st January, a European Union law, dating back to 2008 came into effect, charging customers VAT on digital “services” according to the country in which the consumer is located, as opposed to the country they are sold from. The new rule means companies such as Amazon, Apple, Nook and Kobo, whose European headquarters are based in Luxembourg, now have to apply a 20% VAT levy on e-books sold to customers in the UK, when they had previously paid only the 3% Luxembourg fee.

A survey of 168 e-books taken across-genres and from frontlist, mid-list and backlist and ranging from large to independent publishers (including those on agency), Amazon-published and self-published authors has found little change in prices from 23rd December to 2nd January and from 2nd to 5th January. The price stability suggests retailers, perhaps in conjunction with publishers, have worked together to cushion the extra tax costs.

. . . .

The pattern was the same across other retailer websites.

Link to the rest at The Bookseller

Publishing Sales Execs Consider the Future of Book Pricing

27 December 2014

From Publishing Perspectives:

Around the world the picture changes from country to country with regard to book pricing, with some countries that might appear very free market – such as Japan and South Korea – opting for versions of retail price maintenance (RPM), and others that one might think are more controlled – like Switzerland – operating a free market. Europe is a mass of contradictions, with Norway having RPM, but Sweden not, and Hungary in discussions to bring in the German model.

The situation is fluid too; the information here is based on an International Publishers Association report earlier this year, but it seems that the question of pricing is frequently under review, from country to country. In Poland for example, which currently has no RPM, the Polish Chamber of Books has just drafted a bill that is set to introduce fixed prices for new book releases for 18 months after publication. Mexico, which brought in limited fixed prices in 2008, is concerned over the lack of enforcement.

. . . .

“In Germany, the online retailers take advantage of the fact that they can discount English language titles, but not German ones. So for example, the English language editions of Ken Follett are much cheaper than the German edition. As a result, we are seeing worrying signs of bricks and mortar retailers reducing space for English language books because they know it’s difficult to compete with the online giants.”

Former Random House International Director Simon Littlewood notes that in Japan books are prized as a physical object above any other. “Japan has a net book agreement. The role played by books in Japanese culture is very important. Books are printed on lovely paper, they are delicate objects and the public demands that the publishing values are very high. It’s part of Japanese culture – the design, the quality of paper. They wouldn’t produce anything as shoddy as a mass market paperback.”

. . . .

Mike Abbott, European Sales Director for Europe at PRH, who lives in France, is a keen observer of his adopted home too. “Books are seen as a cultural rather than a commercial product,” he says. “I think there’s a greater respect for authors and reading than there is in Anglo Saxon countries. The state intervenes in cultural matters – there’s an attitude that this is what the state is there for, to protect and support culture. Liberté, egalité, fraternité – the freedom of choice in where you buy books, an equality of price and a brotherhood of shops if you like. I think there’s a gap between the Anglo-Saxon world and continental Europe – the latter is more unified in its cultural attitudes.”

Link to the rest at Publishing Perspectives

Amazon hints at e-book price hike on Jan 1st

17 December 2014

From The Bookseller:

Amazon has warned that e-book prices will rise come January following a change in VAT law in an email to self-published authors. On 1st January Amazon will “make a one-time adjustment to convert VAT-exclusive list prices provided to us to VAT-inclusive list prices” resulting in a rise in the list price of thousands of e-books.

From 2015, VAT will be charged at the rate where the customer resides, rather than where the servers are based, meaning e-books bought by UK readers will be charged a rate of 20%, as opposed to the 3% levied by Luxembourg, where Amazon is based. The Kindle Direct Publishing team has contacted authors published on its KDP platform explaining that when the new law comes in on 1st January, Amazon will make a one-off adjustment to the prices of e-books already published, increasing, for example, a £5.00 list price of a book to £6.00 to account for the 20% VAT rate.

The one-off price-change example implies e-book prices will rise when the law comes into effect in January. In the run-up to the change, there continues to be speculation about how retailers and publishers will handle the change, with some tax experts warning that price hikes were inevitable.

. . . .

Amazon has also explained that e-book royalties would be calculated on the list price of a book minus VAT. And following the new law, minimum and maximum list prices for the 35% and 70% royalty plans on KDP will change to also include VAT. However, the retailer assured   authors that titles scheduled to run in the Kindle Countdown Deal in the UK marketplace during or after 1st January would still be eligible to finish that promotion, even if the list price does not fit the new requirements of being priced between £1.99 and £15.99, including the VAT.

. . . .

Other retailers have been less clear about what will happen to prices. A Kobo spokesperson said:  “We will continue to work closely with our publisher partners, both agency and wholesale, to bring our customers the best possible offering.” Nook did not want to make a comment about what would happen to prices.

Authors have expressed concern that the move would either impact their royalties, or, if prices rise, sales. Mark Edwards, author of several books including Because She Loves me (Thomas & Mercer), currently at Number 2 in the Kindle Chart, said he was concerned about the new VAT law’s impact. He said: “My concern as an author is that the amount of royalties we earn is going to decrease unless the price of e-books go up. But if that happens, sales might decrease. My feeling is that prices won’t go up, so authors will lose out on royalties.” He added: “Nobody wants e-book prices to rise because this could harm sales and discourage readers. It’s hard enough to make a living as an author and it’s going to be even harder now that more of the money readers spend on e-books will go to the government and less to the people who write, publish and sell them.”

. . . .

At the time, Richard Asquith, vice-president of global tax at online accounting service Avalara, said he expected retailers to adopt the “Ryanair-style” model of adding VAT at the till. He said: “Companies are getting much better at protecting their margins. If they don’t increase prices on 1st January they will do it soon [after]. Otherwise it’s a huge dent in their business model. It’s inevitable that it will come.”

Link to the rest at The Bookseller

Jeff Bezos’ Lemonade Stand

15 December 2014

From the New York Times’ Bits blog:

Philip K. Dick’s “The Man in the High Castle” is about what the title character calls the “terribly, terribly disruptive” nature of reality, so it is awesome that the terribly, terribly disruptive Amazon has now filmed this classic science fiction tale. The pilot will appear early next year from Amazon Studios. Any member of the Amazon Prime perks club can watch it free.

Nothing in life is truly free, of course, even from Internet companies that proclaim their generosity. As Amazon loads the benefits on top of Prime — including costly original programming like “High Castle,” older movies, a streaming music service and an e-book lending library — the conventional wisdom is that these customers will return the favor by ordering much more from Amazon. Come for the movie, stay for the vacuum cleaner, diapers and marmalade.

But there is another, more hidden group paying for “High Castle”: people who buy physical books on Amazon. The retailer’s expansion of Prime benefits, as well as its myriad other projects, appears to be fueled in part by fattened margins on all sorts of books beyond the top best sellers.

Say, for instance, “High Castle” is terrific and you wanted to read something else by Mr. Dick. There are quite a few novels to choose from and Amazon has them all. But the deals are often less than compelling.

“Dr. Bloodmoney,” “Confessions of a Crap Artist,” “In Milton Lumky Territory,” “The Penultimate Truth,” “Time Out of Joint,” “A Scanner Darkly” and 15 other Dick novels were all discounted 10 to 17 percent late last week.

. . . .

 These are not the sort of bargains that made Amazon into the biggest bookseller in the world. In 2001, the retailer announced with much fanfare that it would discount by 30 percent books selling for $20 or more.

. . . .

 Sales boomed. “It’s Adam Smith economics that volume will go up when prices go down,” Amazon’s chief executive, Jeff Bezos [said].

. . . .

Although Amazon does not reveal its pricing strategy, that blanket 30 percent discount seems a thing of the past. Customers today also pay sales tax in much of the United States, which equates to a price increase of as much as 9 percent.

Mr. Bezos is apparently now using a different measuring stick than Adam Smith economics. Books are helping pay for the company’s expansion, he suggested in an interview this month.

. . . .

 “It’s like we built this lemonade stand 20 years ago,” he said. “It’s become very profitable over time, but we also decided to use our skills to open a hamburger stand and a hot-dog stand and so on.”

. . . .

 If Amazon seems to have changed its business practices, its message is still the same. It talks the way it did a decade ago, when it was still relentlessly driving down prices. In the confrontation with the publisher Hachette over e-books last summer, the retailer made the crowd-pleasing point that it was on the side of readers against the fat-cat publishers that wanted to line their pockets.

Link to the rest at New York Times and thanks to Jan for the tip.

PG didn’t check Amazon’s prices for all the books mentioned in this article, but, for those he did, the author was citing hardcopy prices, not ebooks.

PG speculates that ebooks are much more profitable than hardcopy books for Amazon. Since most indy authors make a large portion of their money from ebook sales, this sounds like a win-win.

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