Community Pricing for Books

The more I look at the TOC Conference program, the more I see creative sessions on social media. Right now, I’m in a session from Logos Bible Software talking about their creative pre-publication publishing model. Logos puts out electronic editions of religious and scholarly reference works, converting the works from the original.

Basically, they study their costs, and figure out how much it will cost to produce and sell a given book. They then put it out on their site, and via email to their list of 500,000 interested customers. People register their interest and put in pre-orders. Once Logos gets enough commitment from their audience, they put the project under development.

They also do what they call community pricing, where they don’t know how to set the price. Here, they expose the price curve to their users, letting users choose the price they are willing to pay. Once the price crosses the line that allows them to cover their costs, they give that “best price” to their pre-order customers (regardless of which price they actually chose when voting.) They then raise the price to the point on the curve that shows best profit for Logos, for customers who weren’t part of the original subscription. In this way, they make money on every product they produce (much like, which aggregates demand (but doesn’t set pricing) before producing a product.) To me, this is a major trend for the future of manufacturing, but that’s another topic….

Very cool. That’s a different take on community! I’d love to see us have something like this for O’Reilly. (We’re hoping to license Logos’ software, but if we can’t, we’ll be looking to build it.) There are a lot of books we hesitate to publish in today’s challenged computer book marketplace. A tool like this would help the community tell us how much we’d have to charge to publish narrowcast books.

Meanwhile, we’re hearing community crop up in other sessions later. Shortly, Ben Vershbow is doing a session on Books as Conversations, Derek Powazek on Audience as Authors, Gavin Bell of Nature on From Buyers of Books to a Community of Readers, and perhaps with a more “traditional” take on what online community might mean to publishers, Craig Miller of on Reaching the MySpace Generation.

I’m really impressed by the creativity we’re starting to see in the publishing community. Last year’s conference mainly featured web 2.0 stories to inspire publishers. This time round, we’re hearing from publishers who are doing really creative work.

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