ENTRIES TAGGED "pricing"
The future is bright for ebook prices and formats
But first we have to break a bad habit and embrace HTML5
I typically get a sympathetic look when I tell people I work in the book publishing industry. They see what’s happened with newspapers, they realize many of their local bookstores have disappeared, and most of them have heard about the self-publishing revolution. The standard question I’m asked is, “wow, isn’t this a terrible time to be a book publisher?” My answer: “We’re in the midst of a reinvention of the industry, and I can’t think of a better time to be a book publisher!”
Sure, there’s plenty of volatility in our business but we have an opportunity to not only witness change, but embrace it, as well.
With that in mind, there are the first two of four key areas that make me so enthusiastic about the future of this business: pricing and formats.
Pricing
You might be wondering why pricing tops my list, particularly since we seem to be in the midst of a race to zero pricing. First, Amazon set the customer’s expectations at $9.99, and now some of the most popular ebooks are free or close to free. Amazon routinely sells ebooks at a loss so that they can offer customers the lowest price, and the agency model isn’t turning out to be the silver bullet for falling prices many hoped it would be.
Despite this, I firmly believe publishers are to blame for low ebook prices, not Amazon (or anyone else). After all, we publishers are satisfied with quick-and-dirty print-to-ebook conversions, where the digital edition doesn’t even have all the benefits of the print one. Ever try loaning an ebook to someone? How about reselling it? Of course customers are going to assume the price should be lower in digital format!
We need to break the bad habit of doing nothing more than quick-and-dirty p-to-e conversions and look at new strategies to reverse the declining pricing trend. I’m talking about rich content.
Let’s work on integrating features in the digital product which simply can’t be replicated in the print version. Once we start creating products that truly leverage the capabilities of the devices on which they’re read, I believe we’ll end the race to zero pricing.
Formats
If you’re a publisher, you’re forced to deal with mobi files for Amazon, EPUB for almost all other e-book retailers, and probably PDF as well. Despite all the sophisticated tools and techniques we can access, it still requires extra work to deliver content in all these formats, especially as specs change and capabilities are enhanced.
Fortunately for us, help is on the way, and its name is HTML5. I believe that in the not too distant future, we’ll be talking less about mobi and EPUB as we focus more of our attention on HTML5. After all, HTML5 is one of the core file formats on which EPUB 3 and KF8 (Amazon’s next-gen format) are built. Additionally, HTML5 already supports many rich content capabilities we need to address the pricing opportunity noted earlier. HTML5 is supported by all the popular web browsers, so there’s no need to wait for mobi or EPUB readers and apps to offer richer content support; let’s just use the underlying technology capabilities of HTML5 and turn every browser into a reading app.
In the second part of this discussion I’ll share the other two reasons why I’m so excited about publishing’s future: direct channels and evolving tools.
Piracy, pricing, and ebook hoarding
How is ebook pricing changing our behavior?
I was on a conference call recently talking about piracy with Joe Karaganis, Brian O’Leary and Ruediger Wischenbart. At one point someone mentioned that piracy can be avoided when content is made available at a reasonable price and in all convenient formats. That begs the question: What’s a “reasonable price”?
I asked the group if they felt $9.99 is the answer. All three of them said that’s too high. Maybe we’re too focused on the 99-cent phenomenon and, of course, it’s hard to state a “reasonable” price when talking generally about all types of books (e.g., trade, technical, etc.) Nevertheless, it’s disturbing to think that the future of ebooks features a race to zero on pricing.
As long as publishers are offering nothing more than quick-and-dirty p-to-e conversions we can’t really expect consumers to pay more, especially since the e-version loses functionality (e.g, lending restrictions, can’t resell). I mentioned when richer products arrive and they leverage the device capabilities they won’t have to be as cheap as the quick-and-dirty conversions. Joe and Brian weren’t very optimistic about that. Brian pointed out that $9.99 has become such a standard in consumers’ heads that it will be hard to break that price point.
Joe then brought up a very interesting point: Pirates tend to be ebook hoarders. He noted that the definition of a “personal collection” has changed from dozens or hundreds to thousands of titles.
That’s when I remembered that I’m an ebook hoarder too. Low ebook prices have caused me to change my behavior. When a book is $9.99 or less I don’t even think twice about clicking the buy button. The result? I now have more unread ebooks on my Nook than I ever had before. And the number is growing. Every week. I’m heading towards a situation where one day I’ll have bought far more ebooks than I can read in the rest of my life and I’ll bet I’m not alone.
What we’re creating here is a world where lots of content is purchased but much of it is never read. Is that really what we want? Is there actually a benefit to publishers and authors when consumers pay a higher price and therefore have more skin in the game?
Consider these purely hypothetical scenarios:
- Scenario #1: An ebook is priced at $1, sells 100 copies but only 3 buyers actually read it.
- Scenario #2: That same ebook is instead priced at $20, sells only 5 copies but every customer reads it.
Which scenario do you prefer as publisher/author, especially if you’re looking to sell the next book in the series?
Publishing News: Week in Review
Ereader complexity, the problems of ebook pricing, and how HTML5 can help publishers
In the latest Publishing News: Are readers using all the extraneous toys on ereaders or are they more of a hindrance to reading; Todd Sattersten chimed in on the complexity of ebook pricing; and Marcin Wichary made a case for HTML5 in the publishing space.
Ebook pricing power is undermined by perceived value
Wide ranging ebook pricing and deep print book discounts leave consumers scratching their heads.
BizBookLab owner Todd Sattersten discusses the issues surrounding ebook pricing and perceived value, and he suggests it might be time to bring back the serial novel.
Piracy isn't just about price
A piracy research report makes a strong point about pricing, but results may be too narrow.
The "Media Piracy in Emerging Economies" report offers good insight about the realities of pricing, but the "Don't Make Me Steal" manifesto offers a broader perspective on why people pirate digital content.
The power of promotional pricing
We've been running an ebook "$9.99 deal of the day" promotion for some time now, and customer response has been quite positive. There's also some very interesting sales data coming out of these promotions. It's no surprise that promotional pricing increases sales; the balancing act is in making sure that overall revenue increases (offsetting the per-unit revenue decrease) as well…
Cookbooks: The highest priced iPad book category
Just like the iTunes app store, the iBooks app on the iPad spotlights the Top Paid (and Top Free) books within each category. Here are some charts that compare the average price (by rank)1 across the major categories. The average price of the Top 50 titles across the major categories range from $7-$15. Cookbooks, History, Biographies are slightly higher priced,…
Long Tail iTunes Book Apps Are More Expensive
In an earlier post, I examined the average price of the Top 100 PAID apps and noted that the relationship between price and popularity was somewhat dependent on the category. But in the Book category, I concluded that the Top 10 PAID apps were on average cheaper than those ranked 91-100. But what if we examine all Book apps, will the long tail apps be pricier?
"E pluribus tunum: Uniform prices for online music are no way to maximise profit"
This research suggest maximum value in a digital media market like iTunes (for both producer and consumer) comes from a combination of subscription/membership fee and per-item purchase: "Charging an "entry fee" for use of the service and then a small, fixed per-song cost for downloads turned out to benefit both the seller and the buyer. The most revenue, according to…
Inside Look at RAND's $9.95 Ebook Pricing Strategy
Recently, the RAND Corporation announced that it has revised the suggested retail pricing on all RAND ebooks to $9.95 each. RAND ebooks are available through a wide variety of wholesale and retail partners. The press release provided some explanation for the decision, also discussed in Publishers Weekly. I have been asked by Tools of Change to provide some additional…