Things are bubbling along very nicely in San Jose, but I was taken aback this morning to realize that being program chair does not mean you can magically attend simultaneous sessions. Dreadful disappointment. On the other hand, I have reams of notes from the juicy presentations I did catch, and I’ll be able to share some cool ideas over the next few days. Meantime, here’s a report on one of the breakout sessions this morning that excited a lot of people.
Bob Pritchett, President and CEO of Logos Bible Software, a publisher of electronic reference and scholarly material, gave a fascinating presentation on two unusual pricing models he uses.
The first is pre-publication subscriptions. When Logos is trying to decide whether to do a book that’s on the bubble profitability-wise, they post a page about it and let their customers help decide. If enough people commit to buying the book, Logos will publish it (they build a profit margin into the equation). If a reader signs up early, s/he gets the book at a lower price than those who sign up later. Even more interesting, readers do a lot of marketing, because they have a direct interest in a book’s gaining enough sign-ups. Bob said the system has saved the company from a few potentially bad decisions, and it has rewarded them with a bunch of surprises.
The second model is community pricing. Bob described this system as a sort of a reverse
auction in which readers tell them how much they’ll pay for a book, with a minimum price based on the number of people at that price Logos would need to publish the book. The more people sign up, the less Logos charges. Again, readers do a lot of marketing for them. For this model, Bob included a couple of graphs with price-demand curves that showed exactly the price at which he would make the most money. Astonishing. (“Wouldn’t you love to have this data?” he asked. Um, yes!)
He pointed out that Logos gets this info in exchange for giving the initial users the best deal. And in both models, readers learn a lot about the business behind publishing while they build ties with the company.
It was an inspiring presentation, and I’d love to hear from other publishers who are using similar models or who’ve been inspired by Logos to try something similar.