15 September 2010
Pricing ebooks in the Australian market: what's going on?
I remember when we first launched Etitle in 2002 and an academic publisher wanted to get involved but they wanted to set premium prices for the texts they placed. Their model was the price of the book plus $40.00. The next publisher was the price of their book plus 10% minus our trading terms. The next publisher came in at different trading terms altogether. Nothing was easy. And that was THEN! It hasn't improved because each publisher has a different philosophy and a different mindset about the ebook market. Educational publishers look at it one way, reference and professional publishers another. If a publisher primarily released works for library consumption, it was easier to manage the transition (she says with hindsight). They had to provide both formats and give the libraries what they wanted or no sale.
Now I have no problem with an academic or reference book being the same price as the print. There is a lot of development work and the content has educational value. They are also higher priced items and they usually have a three year minimum lifespan. I have issues when publishers price their site licenses out of the market and then wonder why sales drop but that's a discussion for another day...
I fully support publishers charging more for enhanced e-books. If the product has more bells and whistles than a standard ebook (and by default the printed book), then the publisher has produced a superior product. Why should they not recover the costs of multimedia elements - videos, quizzes, links to webs etc.? That sounds perfectly reasonable to me both professionally and privately. Publishers will need to get their pricing right between a normal ebook and an enhanced one, although I'm getting ahead of myself. A lot of Australian publishers are still working on a "normal" ebook. I'll do a Ramble on enhanced books in the future..
Back to pricing. If we take higher priced scholarly, reference and academic works out of the equation, we are left with trade titles. As a consumer what has encouraged me to buy more books (as you know from my last post that doesn't always translate into "read more books"!) is the price point. A price point of US$9.99 to $12.99 for a trade title is a trigger point. If the book sounds interesting and it's a genre I like, there's usually not a lot of time between reading the blurb and pressing the "buy now" or "download now" button. This works really well for authors I don't know. It also works for authors who set their work in a place and time I love e.g. Florence in the 16th Century but I may find the author a little dull (Sarah Dunant comes to mind). At that ebook price point (anywhere under A$15.00) I'll still buy their works and read them, but I don't want to keep the book. It's a read now and throw away item (not that you necessarily do that on an e-reader but you take my point) I believe my price point threshold is A$15.00. Price it under that, make it easy to buy, and voila, it's a sale the publisher wouldn't have had before and one they wouldn't have had in print at the $32.99+ price point.
And as for award-winning, highly regarded books - like Markus Zusak's The Book Thief - I will pay up to AUD $20.00 to read the ebook. However this is where the trend changes. In my case the publisher benefited TWICE - they got the "e" first and then the "p". Why? Because I wanted to read the other anytime and not have to worry about battery life or where my e-reader was at that precise moment in time. It's on the shelf. I grab it. I may want to share it. Recommend it. Read it again (it's an extraordinary book). Somewhere down the line additional sales result - they've got the "e", "p" and hopefully sales from friends who realise what an incredible work it is.
We are already confused with setting the "retail" price of the book. Wholesaler discounts are another kettle of fish altogether. I had a discussion only recently with a publisher who couldn't fathom giving anything more than 40% to a wholesaler of ebooks. Last time I checked, said publisher was offering upwards of 47.5% discount to the chains and grappling with massive returns. (Alas my Ramble is not on the broader book trade here in Australia otherwise this would really open another can of worms!).
Your e-book sale is firm sale. Is it not? I haven't yet heard of someone wanting to return an e-book. And yes, our supply chain for ebooks is a long way from being organised and stable. When it comes to selling ebooks to consumers or via a wholesaler like Kobo or Baker & Taylor for their fabulous Blio product *, there are a lot of costs in the supply chain that need to be factored in. Technology is not cheap, security is a major issue. At the Digital Symposium one publisher leaned over to me and said "did you hear what I just heard? No one is making any money out of ebooks. We're all investing though."
Yes, but sell your content at the right price. Encourage purchases don't divert them elsewhere. Get your ebook rights. Get the supply chain happening and work with those people who know what they are doing. You can't afford not to.
Then again, after reading PubDate Critical recently we may all have second thoughts about this digital revolution? Or that publisher at the Digital Symposium was right. We're not making money out of it. Everyone in the trade is going through this. We've seen the shift to "e" in library supply. And how do we make it work? We are incredibly focused on our customer. At the end of the day, without them we don't exist.
Peter said it beautifully: The central tenet is to be aggressively and remorselessly customer-centric. That is hard for any business, for any industry, but it is the only way to break through into the future.
Just remember there are customers at every step of the supply chain. And get your pricing right.
* I should add I work for a B&T company and I love the Blio product :)