Last December, ECW Press and I ran an experiment. For one week, they dropped the price of my mystery novel to $1.99 (ebook versions only).
They ran this experiment mostly to indulge me. My gut said – and still says – that the industry standard price of $10 for an ebook is too high. My proposed ideal ebook price was $4.99. I think that's a fairer price (relative to print books), and I think people would buy more ebooks if they were cheaper.
ECW Press disagreed, but they ran the experiment anyway. They're an innovative press – they're interested in experiments; they're interested in what the book buying public has to say. They're also good to their writers – I had a question, and they were willing to help me answer it.
So for one week, Dead Politician Society was $1.99 on iBooks, Kobo, and Kindle.
During the Experiment
The blogosphere was amazing. Word caught on, and lots of people helped me spread it. Comment sections were alive with debate and support, and these bloggers were kind enough to host me as I talked about the challenge in its various stages along the way.
The Results(If you hate math, skip ahead to the numbers in bold.)
Kobo – no change
Kindle – sold 35x as many books as the rest of the month combined
iBooks – sold twice as many books as the rest of the month combined
Adding actual book sales from all 3 sites, 5.5 times as many books sold during the promotion period as they did in the rest of the month. Since the promotion period got inadvertently extended to cover 9 days (both Kindle and iBooks had the price lower for an extra day on either side) here's the math I'm going with:
5.5 times as many books in 30% of the month = 18.33 times as many books per day, on average
$1.99 per book as opposed to $10.99 = 18% of the regular price in revenue
18 times as many books x 18% of the revenue = 3.3 x the revenue of a normal week
* I should note that because of the blurry edges of the experiment dates, we were forced to do some estimating re: Kindle and iBook sales. We think we got it right, but if we made any errors it's in favor of the lower price.
The Interpretation
Me: Awesome. More people are reading the book (which is great for a new writer – I care way more about readership than sales). And if sales dollars are up, even better – no skin off the publisher's back. My conclusion is easy – price matters, and lower is better.
ECW: We think people are buying the books because of the promotion, and not because of the price. We really don't know what the e-book market looks like, but we know a few things: Market surveys show that most readers agree that $10 is a fair price. A lower price doesn't get us very good placement on the sites. Under $7 is not sustainable for publishing books in any medium.
Other Factors Brought Into The Discussion
* Dead Politician Society was recommended by the CBC Mystery Panel as a holiday read. Immediately afterwards, Canadian sales spiked noticeably for a few weeks. Both ebooks and paperbacks sold at about five times their normal rate – for an increase in sales revenue of 5 times the norm (more than during the experiment). (Point in ECW's favor: promotion, not price driving sales.)
* Statistics show that books bought for under $5 are far less likely to ever be read. (Point in ECW's favor: Since the whole goal is increased readership, that negates the benefit of selling more books.)
* Lower pricing can devalue a book. If the industry standard price for an ebook was lower, that would be one thing. But to lower the price of Dead Politician Society to half while other new releases are being sold in the $10 range could make it look like it was cheap for a reason, thus deterring potential sales/readers. (Nobody's point – this is speculation.)
* The blogosphere really got behind this challenge. People were excited to help me prove my point. (Point in my favor: A lot of readers find ebook pricing unreasonably high across the industry, and they voted with their wallets and word of mouth.)
The Conclusion
While ECW Press is happy that the experiment went well – it got a bunch of people reading and interested in the book – they don't want to lower the price on a permanent basis.
I'm cool with that. If it was my call, I'd lower the price to $4.99 – mostly because I think keeping prices high isn't good for the industry as a whole, and I love that line from Ghandi: “Be the change you wish to see in the world.”
But I feel like ECW has listened to my questions and given me way more leeway than any big publisher would have. And they're probably making the right call from a business point of view: Lowering the price of my one book (or even their entire list) would not cause the industry to roll over and change their pricing – it would only make their books look less valuable. I understand ECW's decision not to sell their writers short. In fact, I appreciate it. I'm working with a phenomenal team of people who value the written word and will do everything in their power to make it thrive.
Source: Goodreads - The Results are In
43 comments:
Thank you for that, Clarissa, I'm just about to enter the eBook world and was thinking about pricing. Carole.
Fantastic post. I think the e-book industry is still volatile in its infancy. Ten bucks a book is high for me too. The 4.99 you suggest seemes perfect but I don't know the other side of pubbing. I'm sure we will see wide swings for a while until the e-industry settles down and matures. I think a good balance between e-books and paper is what we need.
I'll be honest. As much as I balk at shelling at $10 for an ebook, when I see a book that's $1.99, I automatically think of an author on his or her knees, weeping: "Someone please buy this piece of garbage, please, please, please."
I know it's stupid, but it's a gut reaction that I can't help.
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This is great Clarissa. I'm sending this link to my publisher, as they've been debating this very point. WiDo is pricing new releases at $4.99, but wants to experiment like this with other titles and run promotions. First however, the formatting problems have to be fixed.
Clarissa - Such an interesting post! Price really does matter, and readers do consider it when they're deciding whether or not to buy a book. But I also think there's a point of diminishing returns. If the price is too low, it can turn out not to be as profitable and some readers may even be put off. It's a very delicate balance.
Thanks for the great post, Clarissa.
We ALL need to know this information since ebooks are in all our futures.
Michael
That's a very telling experiment. I usually don't purchase book for more than $9.99 but that is really pushing it. I really like e-books from $4.99-8.99.
This is really interesting. I agree with Michael: knowing this kind of info is important.
Very interesting post! And I agree...the $4.99 price point seems a more reasonable option. :)
Great post and interesting to find out- wow e-books are going for almost as much as some great paperbacks!
I agree with the limited time low price but I'm also one of those cheapskates who waits for those sales. I rarely buy books right out of the gate. I go for paperbacks. I wonder what the prices will be five years from now.
I find the free to 2.89 are usually crappy books. The 2.99 to 4.10, it is hit and miss but usually better than the super low price ones. I don't buy ebooks over 6.99 unless the author has a proven track record. For that kind of money, I'll just get a print version I can put on the shelf. I have about 189 books on my Kindle. I just got the think in late December. I have two that cost more than 5.99.
Tirzahlaughs
Thanks Clarissa for posting and thanks for these comments. I think people here are right - it does seem to be about finding the sweet spot between an appealing price and one that doesn't scream "I'm so cheap I must be desperate." It will be interesting to watch what happens with the industry.
I think that the real value of a book is in the writing, so the cost of an e-book should be slightly less than a printed book, but only enough to account for reduced cost of production and distribution.
If consumers push down prices too much, we will all suffer the consequences, for example of poorer editing and proof-reading.
My book started out at $4.95 but my publisher just lowered it to $2.95. I know that means lower royalties for me, but if it sells more books, then that works for me.
Great to hear about the results of your experiment!
I agree with you 100%. I *never* buy new Danish books because they are far too expensive, and of course ebooks should cost less than paperbacks. Anything else is cheating the customer. Besides, they must be more environmentally friendly which should also be a concern.
Now it is a bit difficult to lower the price of my 99-cent collection, but I have already thought about offering that one for free as my ´promotional offer´when I publish a new collection.
It makes such a big difference to sales! And quite honestly, there's no need to pity the author! With higher royalty rates for ebooks, I make more on ebooks selling 70 per cent less than my hard copy then I would selling a hard copy at the full price! Er... if that makes sense!
The problem I have with buying ebooks that are priced beyond $4 or $5 is the fact that some books I've recently read that have been "self" published contain more errors in the text and formatting to suit me; I find reading such a book very distracting, unless it's a really stunning story and then I try to overlook the errors. Even so... With a book that's published by a publisher I trust--meaning I'm confident that it has gone through many editings and will contain few if any "errors," if I've spent $10 or more for it, I feel good about the purchase (on a limited budget I have to be careful). If this makes sense....
Ann Best, Author
Thanks for a great post! My personal feeling is that e-books should be less than paper back, you're not getting the cover art and actual paper, after all, but not so low that it makes the product look cheap. So if the paper back sells for 10, I'd pay 7 or 8 for the e version.
Carole, hope it helps.
L.A., you make a valid point. We need to find a balance.
C. N., I agree. However, I have no problem shelling out $0.00 for the classics and many mainstream authors are giving away books as promotions.
Margo, so cool! I'm there! Thank you.
Karen, what formatting problems?
Margot, exactly. Now where to find the balance...
Micheal, glad you liked it.
Googlover, wow, $5.00 is the most I like to shell out but I do buy a lot of books.
KM, so glad you found it helpful.
DL Hammons, it does. I agree.
Summer, yeah, it's sad but maybe the price will go down once paperbacks are no more...or, it will go through the roof.
Hannah, I wonder in five years too.
Tirz, some of the best books on my Kindle are free classics. However, I'm usually buying from $1.99 for great quality classics to $7.99 for best sellers. No more than $10. That's for sure.
Robin, thanks for letting me post your results. You did us all a huge favor.
Des, you make a valid point there. I think as the quality of e-published books increase, it will force even those who self-publish to increase their quality.
Alex, let us know how it works out.
Dorte, I love buying books for the low cost of $0.99. Even if the book sucks, I wont feel bad about buying it.
Talli,it makes perfect sense. Personally, if I sell 99% ebook and 1% paperback, I'll be happy.
Ann, yes, you make a good point. I guess a person need to use discernment when choosing.
Elle, yeah, those are great prices.
Very interesting. I would agree she got a bigger bump because it was promotional (and people helped spread the word)... I guess my thought though, is the eBook should cost about half what the currently selling hard copy is selling for, so a new release that is $29 in the store, would run about $14.99 in eCopy, but when the paperback comes out for $8.99, then the eCopy drops to $4.99 (so early eCopy buyers are paying extra for being EARLY--which is why a lot of people won't wait for paperbacks (though I get that we want to own some books in hardback)
They really should do their testing on value based on intent to buy, rather than 'what is fair'--people say and do different things.
Truth be told I won't pay $10 for an e-book or a paperback. Maybe because for the last year I've followed Konrath an a few others very closely and maybe because I feel that's just gouging the public.
I've read good books by Newbies for under $5 in e-form and real stinkers by well-knowns in print for much more. As with anything else it's about what a perceives makes the book good and what they are willing to pay to own -- on a shelf or on a device.
Under $5 is an incentive. I've purchased e books because of the price point where I might have otherwise not.
Great information. Thanks for gathering it and sharing.
Encouraging and informative. Thanks.
This is a great post. I've been following the ebook pricing debate for a while. I find it interesting that so many pinned authors are split on the issue. Personally, I'll buy anything under $10, but i'm pleased when I pick up a new book for less than $5. Of course my TBR list is long. Really really long.
Lexi over at her blog has not only slashed the price of her fab ebook Remix but is now reaping the financial rewards too - yes Amazon is paying her hard cash from the sales of her ebook!!! So pricing is very important!!! Yay for you and ECW!!!
take care
x
Interesting experiment. It seems to me that the market research was not necessarily asking the right question. If you ask 100 people whether they think $10 is a fair price for a book, I can imagine most saying yes. But ask them if they would shell out $10 there and then for the book, most (nearly all?) would say no. The real test would be to then say, OK, if you wouldn't give $10 would you give $5? The reason people wouldn't pay $10? - risk, I suggest. Somehow you feel better about gambling $5 and possibly ending up with a book you don't like than you would feel about wasting $10. (Too obvious? Not to the publishers apparently)
Take Talli's book. It is way out of my genre comfort zone, but I bought it to support Talli (and yes, I really enjoyed it!). If it had been $10 I would not have bought it, even to support Talli. I rest my case.
:Dom
This is interesting. I know I'm more willing to take a risk on an unknown author if the book is cheaper and yes, I do expect the books to be cheaper if they are e-books. I think it's rude to charge the same amount as paper books.
Clarissa, good post. I think $10 is ridiculous for an e-book (most paperbacks are less than that now if they've been out a little while.) I think between $3 and $5 is a good price. I like Talli's answer. The royalties on print are so low compared to ebooks.
Denise:)
This was very interesting and very informative. I've often wondered why digital books are priced so high especially given when there is no paperback counterpart. It helped me see more of the factors that go into pricing. Thanks!
I would think $ 4.99 is perfect for an e-book. Lower than that and you need really huge margins to even recover costs, but I am not sure I would spend more than that on an e-book.
Thanks for sharing this.
This is an interesting and thought provoking post. I've been following the thoughts of authors such as J A Konrath, and their arguments are extremely compelling. Having said that, your comments and those of some of the replies to your post suggest that too low is not helpful. There's definitely got to be some truth in that.
It's a shame there isn't real market research on this that we can have access to as authors. I find it hard to believe that the market in general thinks $10 is a fair price for an ebook. I rarely pay more than that for a paper book, and there is a real sense that they have much lower costs selling ebooks than paper books. Fairness of pricing comes into the equation as well as value.
The business end of the equation wants to squeeze every penny out of EVERY product they sell. It's no different with ebooks. Seriously, ten bucks for a normal print of an ebook is TOO DARN HIGH! It's even too high for a printed paperback version (in my humble opinion). Great and thought provoking post Clarissa!
This is really good information, Clarissa and Robin. Thanks for sharing. As a reader, I tend to look for the ebooks under $5.00 first. If I pay more than that, I prefer to buy the hardcover or paperback...or get the book from the library.
I avoid ebooks over ten dollars. It's just too much. I love cheap little reads. I both buy them and read them.
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Two great posts, Clarissa (as I scrolled back to read the previous post.) I personally think $10.00 is high. I can buy a delicious read at Costco's for almost half that and tend to stay in that range on my e-reads, with, yes, lots of dips to $1.99. It's the free sample that hooks me. If it's good stuff for $1.99, yep, I buy it. And why not $1.99 as quantity and quality can go together, with quantity pulling in more weld-deserved money for the author.
Wow, this is really interesting! I also think ten dollars is too much for an e-book, but five dollars isn't much so it's easier to 'pick it up' as you're buing other stuff. definitely a good marketing/promo tool!
This question occurred to me, and I thought it seemed appropriate for this comment thread:
Why is $9.99 okay for an album on iTunes, but too much for an eBook?
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That said, I love print books but read mostly ebooks on my Torch for many of the reasons listed: easily portable, have lots of selection at hand, can read in the dark easily.Programming
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