At last week’s Digital Publishing seminars, we touched on the topic of how to price an ebook. There are many ways you can arrive at a price. It’s a really important issue, affecting the publisher’s profitablility, the author’s livelihood, and the consumer’s willingness to get on board with ebooks.
So I was interested to read this thoughtful post by Teleread’s Joe Wikert in which he reviews some recent coverage of the issue. The post covers several of the well-travelled approaches to pricing.
From my own point of view, I think that whatever pricing model we adopt, it has to start with identifying the value proposition that the consumer sees, not the proposition that the publisher believes they should see. You then have to assemble a business model around it. In other words, build the product to match the price the consumer will pay. This may be a very high price with a very low cost (many academic journal publishers and reference database providers enjoy this advantage). Or it might be a low price point that we have to build to.
One advantage we have at the moment is that acceptable production values are low and most ebooks are simply facsimiles of p-books, cheaply produced at a low marginal cost. That gives a lot of pricing flexibility to publishers. Wikert makes this point in his posting, too. This is an ideal time to test and grow the market by ensuring as many consumers as possible can enjoy good books digitally. As the cross-subsidies disappear over time — the ebook becomes the primary edition, quality and feature expectations are higher, and the digital edition has to bear most of the book’s total costs — the price will probably need to rise. And so it should.
But right now, we often seem to be trying to defend ebooks’ high prices in the face of consumer protest out of fear that, once cheap, they’ll never be expensive again. And to defend this position, maybe we’re offering early adopters a raw deal — high cost, low quality, cumbersome experience, but you can still pay full price — when we should be rewarding their tenacity.
I don’t think pricing can be considered properly just yet because if you agree that it focusses on the consumer, then you need to have some idea of what the price elasticity will be, i.e., if you lower the price, how many more sales will you get. The problem is, with no readers, and no ready place by which potential clients can find out what is offered, you can’t really answer that question. You need some website like Amazon’s, and these take a lot of effort. So, in my opinion, how to get widespread availability of a standard reading device and a mechanism by which purchasers can “browse” is the first priority.
I think we need to learn from what is happening in the UK and USA on pricing. My understanding is that the UK is setting ebook versions at the same price as print. This is in spite of surveys showing that reader expectations were that the ebook version should be half the price of the print version.
Ebooks or Kindle versions on Amazon are often abridged versions of the print text – and often replicate the audio version.
The other consideration is that ebooks have generally been selling extremely well online in the pricing points $19 – $69. These prices have no correlation to print.
Over the 3 years I have been in digital publishing I have found that the price correlates to the perceived value of the information being offered – not the media delivering it.