Tuesday, December 21, 2010

About eBook Prices - Part 3

So the first two models of ebook pricing were inwardly focused. One group prices ebooks high partly to prevent cannibalization of their lucrative hardback market. Another group prices low partly because they don't feel that an ebook has intrinsic cost. In other words, they are choosing their price based on what a book is worth to them as a producer.

Which is perfectly valid. In some sense, that's what yesterday's post was all about - because ebooks are not a commodity, you can set the price based on your needs, and then find the right customer. And I'm not saying that these two groups aren't thinking of the consumer - of course they are. Sometimes obsessively. But it feels to me like the reasons given for these prices - high or low - are focused on defense, as if the customer is some outside thing that has to be dealt with.

And that's where I feel the reasoning behind the third and fourth groups is a little different. They are more focused on what the consumer expects. They aren't trying to affect or manipulate customer behavior with pricing. They are just looking to see what the consumer is paying in their genre, and placing themselves in that ballpark. That is, they are letting the customer be, and adjusting to suit.

There is a lot of wiggle room in this pricing model, but when I look at the two groups I'm about to talk about, I notice that their prices tend to fall right into the price range Amazon prefers: $2.99 to $9.99. That is no coincidence. Amazon did its research on price. This range also happens to be where mass market paperbacks and used books fall.

Which is how I am going to label the two remaining philosophies.

3.) eBooks are the New Mass Market Paperback, or Magazine.

Hardbacks are generally perceived as having some intrinsic value - that is, they are valuable not only for the words they contain but as a physical object. Mass market paperbacks and magazines and digests, on the other hand, are considered to be a cheap vessel that holds the precious story.

So psychologically speaking, the price of a paperback or magazine is what the story itself is worth on its own. This is what the audience expects - although, since they know that there is some cost to produce and distribute a paper book, they may expect an ebook to be a touch lower. So a $7.99 paperback might be priced at 6.99 or 5.99.

This is actually where a lot of the big publishers are at right now. And it's well accepted by the audience, it appears.

4.) eBooks are the New Used Books.

Not everybody buys new books, though. As a matter of fact, I daresay every paper copy that doesn't get land-filled probably has several readers. The used book market is huge. Same with book swapping and libraries. Many who buy books new, only buy them with the idea of trading or selling them. And this audience doesn't consider the price of a new paperback to be the price of a story. It's the price of a vessel that can be recycled.

This audience sees the price of a good read at something closer to $2-5. A little higher for prized items and rarities, and they can certainly get books for cheaper, but that requires a hunt. But they do enjoy that hunt.

There are two reasons why I think this is the model to watch.

One is because this is a HUGE audience. They are high volume readers and they do experiment with interesting titles. They don't just stick to what Walmart sticks under their noses. This audience is coming, and they do want your 99 cent magnum opus. (But they're willing to pay more for a treasure. And they're willing to hunt for a treasure.)

The other reason is because I think market forces do have some effect. Not a full impact, but I do think that the cost of the old system - printing and distribution - did push up prices beyond their natural level. With ebooks, the upward pressure will be gone (or less) and so the prices will settle a bit. How much? I have no idea, but some.

Now, regarding the 99 cent short story:

I started this series partly because Dean Wesley Smith commented that he didn't understand my resistance to the 99 cent short story. To understand that, you had to know how I feel about all the rest.

I understand that there is an established audience among early Kindle adopters who like short fiction and are used to paying up to $1.99 for a story. I know very well that neither Amazon nor Smashwords allows a price lower than .99, so you can't price a story at a more reasonable .29 or .49, as Fictionwise has.

I understand that a good short story writer can make pretty good money off the niche audience for the 99 cent short story market. Just as Penguin can make money off a 14.99 e-novel.

But to me, and I think the majority audience out there, a buck is a heck of a lot to pay for something you normally get 20 for 6.99 in a paperback or a magazine.

Now, here's the thing: Dean pointed out that people don't like to be forced to buy a whole album when they could buy individual song tracks. But, IMHO, 99 cents might be fine for a one track out of 15 on a $12 CD. But it's too much for a single story out of an anthology.

As long as the vendors insist on 99 cents, we need to compensate by bundling a couple of stories together. Not a lot of stories. Figure the base price for a 60k novel, depending on which philosophy of pricing you go by, and divide it up from there. To me 99 cents needs at least 10,000 words, maybe less if it's an author I already know and like.

That's just imho, but I'm in the "eBooks Are The New Used Books" group.

In the meantime, my cough has let up to the point where I might be able to get some writing done. I may be posting a progress report later tonight. Certainly tomorrow.

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Anonymous said...

Of course, that's assuming you can get a CD for twelve bucks. Mine start at seventeen and usually, due to tax, I block out about TWENTY bucks for 10 to 11 tracks. (Of course, my taste runs CCM and that might make a difference.)

But if you're spending twenty dollars for a full CD (I happen to like my jackets with legible lyrics - who taught these singers how to enunciate?) or one dollar a song when you don't want the rest, suddenly one dollar for a short story doesn't seem that bad.

Especially if the whole anthology is available. I like my anthologies to be a discount, and I certainly don't mind paying $0.99 for about 5,000 words or sometimes even less (if I like the author).

But that's my view as a reader.

The Daring Novelist said...

My point there is that they're apples an oranges. For most people, a song simply doesn't equate to a short story. They might pay more or they might pay less.

The vast majority of albums have fewer songs and a higher price than the average paperback anthology - so it really doesn't make a good real world equivalent.

The question is who is your audience and what will they pay? Sometimes a high paying audience is worth going after, at the expense of the general population. But very often it isn't.

Right now, in ebooks, I think it is, because the first adopters tend to be less price sensitive. However, for stories with mainstream appeal, it may soon be worth much more to price for the general audience, because the price sensitive crowd is beginning to enter the field. But they won't be interested in all books equally, and it may be worth it for many short fiction writers to stick with the minority audience.

We're all guinea pigs right now. However it shakes out, it will be interesting.