Pricing

A 25 Cent Book in 1950 Would Be $2.44 Today

10 April 2014

From author Scott William Carter:

Amazon lists most of their genre fiction ebooks at $4.99, with backlist often at $3.99.  Is this the correct price?  Four years after publication, Simon and Schuster still sells the ebook edition of my first novel for $11.76, a price I think is insane, but who knows, perhaps they’re onto something.  My sharp friends Kristine Kathryn Rusch and Dean Wesley Smith generally advocate pricing a little higher than most indie authors, andthey have valid reasoning behind their approach, especially when you consider they have started a traditional publishing company, albeit one that’s smartly taking advantage of all the new technologies.  And of course there are loads of writers, like Joe Konrath, who happily price at $2.99 or $3.99 and are doing very well.  Who’s correct?

No one, at least as far as I’m concerned.  Or everyone. With ebooks, price can’t primarily be about supply and demand, because supply is infinite, but it is affected by not only what consumers are willing to pay, but also by your goals as a publisher. There is no correct price for all ebooks.

Now, that said, where do I come down? I think Amazon is probably onto something, but even they, with their mountains of proprietary data on their own customer’s buying habits, which you would think would give them an enormous advantage, currently only have five out of the top twenty books on their own Kindle bestseller list.  A twenty-five percent hit rate is pretty good, but that’s their own bestseller list on their own site for a product they created!  (And look at how prices are all over the map on that list; that alone should tell you something.) Still, I think ebooks are closer in parallel to movie rentals, and no one says that a .99 movie rental at your local Redbox is somehow devaluing the movie.  Louis CK now sells his comedy specials direct to his fans for $4.99, and he’s made millions doing so.  It’s a pretty safe bet that his fans don’t think he’s devaluing his work, but instead think they’re getting a good deal.  That’s what I think, anyway, and I’m one of them.

. . . .

When the paperback novel was released in Britain, and here in America, it was just as much a gamechanger as the ebook.  That’s why the arguments about cheap book prices devaluing literature sound so familiar.  We’re just rehashing the same argument that was had about paperbacks.  “My books are certainly worth more than a Big Mac at McDonalds!” the writer claims.  Well, that certainly may be true to that writer, but who cares?  The average price of a Big Mac in America in January 2014 was $4.64, which is pretty close to where Amazon prices their genre ebooks, and most writers would be happy to move as many ebooks as McDonalds moves Big Macs. Pocket Books priced paperbacks in the forties and early fifties at 25 cents and sold millions — a price that would be the equivalent of just under $3 today.  Boy, did some folks howl about how books priced so low couldn’t be “real books,” just as the reincarnated literati, like zombies who eat books instead of brains, say the same thing today.

What’s wrong with giving people a good deal?

Link to the rest at Scott William Carter

Content Pricing Consultant: Ebooks Should Be (Much) More Expensive

3 April 2014

From Digital Book World:

Imagine a cold winter day in New England. Now, imagine wanting a particular book. You have three options, according to Frank Luby, a pricing consultant and former journalist, speaking at the Copy Right Clearance Center’s OnCopyright 2014 conference in New York.

You could brave the cold and, presumably, snow, get in your car, drive to the nearest Barnes & Noble to hope that the store has a copy. If it doesn’t have one, perhaps a nearby location does. You can buy the book from the store and drive home.

Alternatively, you could log on to Amazon.com and purchase the book and have it delivered to your door in a matter of days.

Or, you can pick up your Kindle, Nook, iPad or other e-reading device and have the book in your hands in a matter of moments.

“Ebooks are terribly misnamed,” said Luby. “They’re not a product. They’re a reader service.”

Luby argued that the convenience that ebooks offer over their print counterparts are a great benefit that publishers and retailers should charge readers more for.

“Ebooks should be more expensive than they are, more than print books — a lot more,” said Luby, adding that ebooks are relatively cheap because publishers and retailers don’t properly explain their benefits, namely, convenience.

Link to the rest at Digital Book World

Is Kindle Countdown the new Free? Keeping books visible in 2014

30 March 2014

From author and regular TPV visitor M. Louisa Locke:

For the past year there has been a good deal of hand-wringing over the question of KDP Select free promotions. Have they de-valued fiction, do they attract negative reviews, do they even work anymore? As anyone who regularly reads my blog posts knows, I have been a strong proponent of offering ebooks free for promotional purposes, and free promotions have been very good to me in terms of increasing my reviews and keeping my books visible and selling.

However, I also believe one of the distinct advantages we have as indie authors is our ability to use our own sales data to respond innovatively to changes in the marketing environment. As a result, in the past year I followed a number of different strategies to keep the books in my Victorian San Francisco Mystery series visible, including beginning to experiment with the new promotional tool, theKindle Countdown, that has been introduced as part of KDP Select.

. . . .

Conclusions: 1) Free promotions are still very effective under certain circumstances. In fact, the BookBub-backed promotion of Maids of Misfortune in May 2013 was slightly more effective than the November 2012 promotion of this book in terms of total downloads, increased visibility, and long-term increase in sales. 2) This didn’t hold true with all books under all circumstances. For example, my free promotions without a BookBub ad had no significant effects on subsequent sales, and the first book in my series consistently did better in subsequent sales (not in total downloads) than the sequel. 3) Because BookBub is expensive, doesn’t accept every book, and now will only promote a book every six months, authors, myself included, need to continue to look at alternative methods of keeping our books visible. Which is where the Kindle Countdown becomes important.

. . . .

October 31, 2013, KDP announced its Kindle Countdown option for books enrolled in KDP Select. This confirmed my feeling that Amazon was systematically nudging indie authors away from depending on free as a promotional tool. I am not going to describe the details of the program, but I am going to report on the four Kindle Countdown promotions I have done so far and draw some conclusions about how they compare to KDP Select free promotions. Since I was experimenting, each Kindle Countdown I did went for a slightly different number of days and used different combinations of promotional ads. However, in all of them I kept the price at 99 cents throughout the promotion. The data also just represents sales in the US store, since my sales in the UK store remained minimal in all the promotions (even the one that was backed by BookBub).

. . . .

1. Based on post-promotional sales, free-book promotions are definitely superior to a Kindle Countdown 99 cent sale (at least at this point in time). Not only did the KDP Select free promotions increase the sales of the promoted book, but they also increased the sales of the other books in the series. In comparison, Kindle Countdown promotions had weaker and less consistent effects on post promotional sales of all books.

. . . .

2. Kindle Countdown promotions—like free promotions––do have a positive effect on increasing the number of reviews. But again, as one would expect, the difference in volume between the two kinds of promotions will have an impact. Nevertheless, I must note that my Kindle Countdown promotions produced a greater number of reviews than I anticipated.

. . . .

3. While Kindle Countdowns are not as effective at this point in producing sales after the promotion, at least you make some sales (and money) during the promotion. For people who have used free-book promotions and then had negligible post-promotional sales, this can make a Kindle Countdown a less risky proposition.

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

Apple, Publishers Battle New E-book Antitrust Claims

28 March 2014

From Publishers Weekly:

In two January motions, Apple and the five major publishers involved in a 2010 e-book price-fixing conspiracy asked Judge Denise Cote to dismiss a follow-up suit from an Australian e-book retailer that claimed its business was destroyed by the 2010 agency switch. But since March 14, two new plaintiffs have joined the action, raising the possibility of another legal front opening in the e-book antitrust battle—this one involving aggrieved retailers.

In DNAML vs. Apple Inc. et al, filed in September, 2013, the upstart Australian e-book retailer alleges the company was harmed “directly and as a proximate result” of the 2010 price-fixing scheme executed by Apple and the five agency publishers (Hachette, HarperCollins, Simon & Schuster, Macmillan and Penguin). Now, this month, two related cases have been accepted by Cote: one filed by Lavoho, LLC, a “successor” to the Diesel eBook Store; and another from Abbey House Media, formerly BooksonBoard.

The most recent suits offer virtually identical claims to DNAML’s 2013 suit—that the 2010 agency switch destroyed the retailers’ ability to compete on price.

. . . .

The suits contain nearly identical preambles detailing Apple’s liability finding by Judge Cote, and they press nearly identical claims: that the illegal collusion between Apple and the publishers ended the retailers’ ability to bundle, discount, promote or otherwise engage in retail price competition, thus destroying each nascent e-book business. In each complaint, the plaintiffs were said to have business models “predicated on aggressive price competition.”

. . . .

The Diesel e-bookstore (now Lovoho), was founded in 2005 by Scott Redford. It claims to have offered over three million titles and “the cornerstone” of its business model was also discounted bundling, including “proprietary software that would allow its e-bookstore to ‘shrink wrap’ up to six digital e-books and sell them as a bundle to the consumer.” Diesel also offered a rewards program. Diesel had enjoyed steady growth “every single year,” the suit claims, with “modest profits” and a “large expansion” planned for 2011.

Everything suddenly changed, however, after the agency switch in 2010. Each suit claims the plaintiffs “did not want to agree to the agency agreements,” but “had virtually no choice but to sign them” if they wanted to sell the publishers’ books.

. . . .

Just as Amazon was forced to raise prices, the suits claim, each of the plaintiffs was “forced to stop discounting its prices and cease using its already developed discount-driven promotional tools.”

Link to the rest at Publishers Weekly and thanks to Russell for the tip.

The bone-headed scheme hatched by the leaders of Big Publishing just keeps on rolling along.

PG says Amazon Derangement Syndrome is an expensive affliction.

Have we forgotten the value of a book?

27 March 2014

From TeleRead:

When we look at buying a book, it seems many are caught up in the price – thinking: ‘Can I get this cheaper online? How much is Amazon selling it? Why can’t I get this ebook free?’

The value of books has taken a dive over the last couple of years. We have become obsessed with trying to read as much as possible by spending the least amount of money.

. . . .

A good book offers about four hours of entertainment. A great book will present even more as sometimes you think about it long after you’re finished. We’re willing to pay $12 for a two-hour movie, but for some reason we have decided that a book isn’t worth nearly as much.

Link to the rest at TeleRead

Everybody talking about the value of books always wants the price to be higher.

PG’s reponse is that the value of a book is a function of supply and demand, just like the value of everything else except wives, husbands, children and good friends, each of whom is priceless.

January 2015 tax change for e-book downloads

24 March 2014

From The Bookseller:

The UK chancellor George Osborne has confirmed that e-books will be taxed from the consumer’s European member state from 1st January 2015.

A little-noticed section of last week’s budget announcement confirmed that from the start of next year, e-books and other e-services including broadcasting and telecommunications will be taxed in the European member state in which the consumer is located, as opposed to where the book is sold from. The move is set to ensure that e-books are taxed “fairly and helping to protect revenue,” the chancellor said.

The decision was originally announced in 2013’s budget and means a loophole which allows companies like Amazon, Kobo and Barnes & Noble to sell e-books to the UK from Luxembourg will be closed. In the UK, e-books attract a 20% VAT whereas Luxembourg charges a much lower 3% VAT.

Link to the rest at The Bookseller

Why Are T-Shirts More Valuable Than Ebooks?

24 March 2014

From Digital Book World:

My brothers-in-law recently started a T-shirt sales website. Grizz Riley.com sells comfy, cool T-shirts for $25. I fully support their entrepreneurial launch. But I couldn’t help thinking about it in comparison to publishers, selling ebooks for a just couple of bucks. It struck me as odd that our society values ebooks at a fraction of the price of a T-shirt.

. . . .

The price of an ebook—or any product really—settles out at whatever amount the market can bear. It’s the old law of supply and demand, right? But with that logic, ebooks would be more than five times more plentiful than T-shirts. Neither ebooks nor T-shirts are in short supply. Certainly there are plenty of both. So that doesn’t explain why T-shirts cost so much more than ebooks.

. . . .

When comparing T-shirts to ebooks, let’s not even look at the price-per-hour scale. How many hours go into the production of an ebook? The writing, the editing, the proofing, the cover design, the production…a book can take years to finish. But a T-shirt? Well, designing the graphic on the T-shirt might take a few hours, but I’d argue that at most, it takes as long as designing a book cover. So the relative value of ebooks-to-T-shirts can’t be attributed to the work involved in making them. Ebooks take much more time.

Link to the rest at Digital Book World

PG suggests that part of the cost difference is because ebooks are made from electrons and t-shirts are made from cotton or polyester or something a bit more tangible. If t-shirts could be produced and delivered electronically, their prices would go down as well.

PG is an expert on such matters because he has his own t-shirt shop.

Kobo: Ending Agency Pricing Will Kill Us

17 March 2014

From The Digital Reader:

Canada’s Competition Bureau announced a settlement last month with 4 publishers to end agency pricing, but it looks like the process isn’t going to go as smooth as one might have expected.

Kobo has filed an objection to the consent decree, and they ask that the settlement be modified so that they are not negatively impacted by the sudden and radical change to the Canadian ebook market.

As part of their filing. Kobo revealed some rather telling details about their business. They blame the end of agency in the US for the loss of their market share, and they predict that the same will happen in Canada.

. . . .

In short, Kobo is saying that when Amazon was allowed to discount ebooks in the US, Kobo was unable to compete effectively, not even by means other than price (marketing, CS, features, community). This is rather curious because other companies, including Zola Books, The Reading Room, Bilbary, Oyster, and Scribd all seem to be able to compete effectively against Amazon in the US ebook market.

. . . .

On a related note, if Kobo has only a negligible market share in the US then I have to wonder whether their partners at the ABA, and its IndieBound program, are beginning to regret betting on the losing horse.

Link to the rest at The Digital Reader

Gollancz release £1.99 e-Book series

15 March 2014

From SFcrowsnest:

UK fantasy and science fiction super-power publisher Gollancz are reducing the price of their digital e-Book editions of Gollancz debuts this year to £1.99 … for the first week of publication and on any pre-orders as well (so get in quick if you’re interested).

Stephen Hunt’s next novel – the first in his new Far-Called series – ‘In Dark Service’ is one of those being included in this scheme.

Link to the rest at SFcrowsnest and thanks to Stephen for the tip.

Plaintiffs: No ‘Do-Overs’ For Apple in E-book Case

13 March 2014

From Publishers Weekly:

Will there be a damages trial for Apple in Judge Denise Cote’s Manhattan courtroom this spring? Maybe not: In the final round of briefs before the its scheduled May trial, attorneys for the plaintiff consumer class argue that there is sufficient evidence for Cote to assess damages against Apple via summary judgment, no trial necessary. However, if the court declines to issue a summary judgment, the trial should go on as planned in New York, the plaintiffs argue in a separate brief, rejecting Apple’s call for the judge to remand the state and consumer class actions to their original jurisdictions.

“Apple wants a do-over of almost every fact and argument decided against it in the liability trial,” plaintiff attorneys state in their final reply brief, submitted last week. But a summary judgment in which the court determines a damage award is merited, the plaintiffs argue, because Apple has failed to show that “triable issues of material fact exist” that would rebut the plaintiff’s “evidence of impact and damages.” The plaintiffs have put Apple’s damages for fixing e-book prices between $697 and $840 million.

. . . .

In sum, the plaintiffs argue that summary judgment is proper because there is no genuine dispute that consumers were damaged by the price-fixing conspiracy, only by how much. “Every expert who has opined on how much the conspiracy caused the Publisher Defendants’ e-book prices to increase has landed within a few percentage points of Dr. Noll’s 18.1% damages figure, including Apple’s own experts,” the plaintiff’s argue.

As to Apple’s argument that Judge Cote is biased, based on statements made at previous hearings, the plaintiffs call the argument “cursory,” lacking “authority,” and “worth little attention.”

Link to the rest at Publishers Weekly

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