So yes, I know it’s nearly Christmas Eve and I know I should be turning my brain off, but this blog post about ebook pricing by Declan Burke came across my radar today on Twitter (and yes I know I should have turned Twitter off too) and I couldn’t not reply.
Declan writes about his experiences with pricing the ebook version of his novel, Eightball, which he says started off at $1.99 and ended up at $7.99. He also briefly mentions the different pricing structures from publishers, and discusses the attitudes of some readers who appear to think that all culture should be free.
But the main bit of Declan’s post that caught my eye was his discussion of cost and value:
The other odd thing, from a personal point of view, is exemplified by the drop-off in sales for EIGHTBALL BOOGIE once its price started to go up. The e-book fan (or anyone with even the vaguest grasp of economics) will very probably be screaming right now at the screen a variation on, ‘It’s the economy, stooopid.’
I understand that. I really do. But from my point of view, EIGHTBALL BOOGIE is the same book regardless of whether it’s $1.99 or $7.99: it’s not a quarter as interesting, or funny, or thrilling, at the cheaper price, and it doesn’t come in at 25,000 words rather than 85,000 words.
It’s not my place, by the way, to say that EIGHTBALL is interesting, funny or thrilling. I’m just saying that whatever qualities the book had at the $1.99 price, those qualities remain the same regardless of whether I charge $7.99 or give the book away for free.
I suppose my central concern, when it all boils down, is that fans of e-books are confusing cost and value. That’s not to say that very good books aren’t being sold for $1.99, or $0.99, or even being given away free. But it’s patently self-limiting for a reader to impose an arbitrary price of (say) $4.99 on a book, and state that he or she refuses to pay any more, regardless of the quality of that book.
Unfortunately, I fear that Declan confuses inherent value with market worth, and the two are very different indeed. As writers, we would all like to think that our work has inherent value. The blood, sweat and tears that we leaked all over the page should, we tell ourselves, be valued by others as much as it is by us.
But the price that the public is willing to pay has little to do with any sense of inherent value; it is directed by what price the market will support. When it come to deciding what price we put on our ebooks, it is not sufficient to think about our concept of inherent value. We would all love our ebooks to sell by the shedload at a nice, high price. (And if we’re famous, they might well!) But for most of us, we should instead be striving to understand which price will maximise our profits. If we sell thousands at £1.79, is that going to bring in more profit than if we sell hundreds at £5.99?
And this is where almost every single blog post and news article I’ve seen on the subject falls flat on its face. The horrible, uncomfortable, inconvenient truth is that for independent ebook sellers and small publishers, we have no clue whatsoever as to what price will maximise profits. We just do not have the data. We have a few anecdotes from both ends of the spectrum, from the “I sold $millions” so the “I sold sweet FA”, and a very little from the middle where people are selling “enough”, for whatever value of enough they care to assign.
What we don’t have is what the big publishers have: Numbers. It’s impossible to compare the sales of a handful of books at different prices and draw any meaningful conclusions, because the books are not equivalent goods. My novelette Argleton is not equivalent to anyone else’s book because it’s not a perfect substitute.
If you’re in the market for a hammer, one is pretty much a perfect substitute for another. If I buy a hammer from Shop A, I am not going to buy a hammer from Shop B. But books are not substitutable goods. If someone buys Argleton, that doesn’t mean that they then don’t have any interest in buying Eightball.
Even comparing sales of the same title over time is more complex than saying “It sold a lot at $1.99 but nothing much at $7.99”, because market conditions change. It’s only in the large-scale aggregate that the numbers starts to provide genuine information. And sadly, that kind of data isn’t available to the likes of independent and small publishers.
So what do we fall back on? Belief.
I believe that my biggest problem right now is that not enough people know about my writing. My sole purpose is to introduce as many people as feasibly possible to Argleton in the hope that they will like it and be interested in my future work. That means that I believe that giving away Argleton for free is in my best interests.
But I also ideologically believe that free goods do not necessarily cannibalise the sales of the same goods offered commercially. We have some interesting data from people like Cory Doctorow, Lawrence Lessig and Tom Reynolds that even if they don’t increase sales, CC-licenced copies of books do no harm to sales either. For them.
Of course, things could be different for other authors or other genres but again, the truth is that we simply don’t have enough data to say one way or the other.
Additionally, I believe that me giving away my books free has no impact on what someone is willing to pay for Eightball, or any other book, because the two are not substitutes. I’ve heard the argument that authors who give away their books are undermining authors who sell their books, but I’ve not seen a jot of evidence, or even logical reasoning, to support that point. The book market is not a zero-sum game.
And I disagree with Declan over the idea that giving away books is a “race to the bottom”.
For now it seems that many authors are happily collaborating in a race to the bottom on price. The mantra is very much quantity over quality, to the extent that many writers, in a desperate bid to get noticed and put one foot on the bottom rung of the slippery ladder, are now giving away their books for free.
There’s a certain kind of logic to this, although it only exists inside the e-publishing bubble, which appears determined to eat itself. Because once you give away one book for free, the expectation is that all your books will come at no cost, an expectation that derives from an entirely understandable mentality that runs, ‘Well, if you don’t value your work, why should I?’
I’m a teeny tiny sample, but by this logic no one should buy the Kindle version of Argleton, but they are. By this logic, no one should ever buy any of Cory Doctorow’s books, but they do. And also, by this logic, no one should ever give good, honestly earnt money to a nobody writer on the promise of delivery of a book, which could be fundamentally shite, and with absolutely no guarantee that they are going to get what they paid for and then, knowing all that, actually pay more than the book itself is worth. And yet, they have.
Our beliefs are sculpted by our experiences and our ideologies. My experiences appear to show me that giving books away whist also selling them, and tapping into an amazing community of generous supporters to achieve the publication of a physical book not only works, it is profitable. My belief is that people will happily pay for books that they like and that those who pull the “culture should be free” line out of their arse are the same people who would not have bought my book anyway, so there’s simply no sale lost.
But, just like Declan, I lack hard data.
This, sadly, means that rather than eating our own young, independent authors and small publishers are doomed to chase our tails, cherry picking the case studies to fit our ideologies and rejecting the points of view of those who disagree with us.
There is only one cure to this: Independents need to have a standard set of data that we all regularly submit to one big database which we can then pull reports from. We need, collectively, to share what numbers we each have, because that’s the only way we’re going to get the kind of scale we need to turn anecdotes into data. And data is the only way we’re going to get meaningful insights into how book buyers really behave.
We can’t afford to fanny about getting all ideological and relying on our beliefs to determine our business strategies. My biggest worry about my current strategy is that I could be horribly, hideously wrong, but I have absolutely no way of testing my hypothesis on my own. If I am wrong, then I will change my strategy immediately, because I’m not interested in proving myself right. I’m interested in creating a new career for myself where I get to live comfortably and make up stories for a living.
How about this £7.99 for a complete book or 49p for about 3 chapters or variations on this. I don’t mind spending £7.99 on a book but it is a risk. If you are in a shop you can flip and get a pretty good sense of whether you will like a book. But it is much more difficult to judge digitally. But I would happily take a 49-99p punt on a few books and then go on to only pay the full amount for the book I enjoyed.
Hi Suw –
Many thanks for the mention, and for another take on this topic.
For the record, though, I’m not confusing inherent value and market worth. The piece on my blog wasn’t intended as a think-piece designed to figure out the ideal price for Eightball, and how to maximise profit. The point I was trying to make was that my book, and my work, does have inherent value, and that value, having published it independently, is whatever I decide it is. If the market disagrees, then good luck to it.
Having said that, of course, I should also say that I’m not in the business of seeking to earn a full-time living from writing, largely because I like my job. So I do appreciate that I’m coming from a different position than most writers who are dependent, or are hoping to be dependent, on their sales numbers.
Thanks again for a fine post, and the very best of luck with Argleton. If you fancy dropping over to Crime Always Pays in the New Year and doing a Q&A, I’d be delighted to host it.
Cheers, Declan
belief has more power than we may think ..
attributing anything to outside forces, market or otherwise, sabotages one’s ability to create one’s reality, to the degree that one is able.
so …
Suw – as you asked for my thoughts, I’ll say I liked a lot of your post and a lot of Declan’s (and Stuart Neville’s comments below that). It’s such a complex issue that it would be impossible to debate either effectively, so I’ll just quickly say what I think.
It seems to me there are two ways to look at the issue of ebook pricing.
The first is what you want to or are willing to charge as an author. If you want your book in as many hands as possible, then pricing it low seems a good choice – but there are people who simply won’t buy bargain-basement ebooks due to (probably generally realistic) fears over quality. If you want to maximise profit then, to be honest, I don’t think it matters what you do, and much of the ebook pricing discussion seems to me like a fruitless search for patterns in chaos. I suspect if you had the full data-set you’d see pretty much the same thing at every price-point: a few titles selling big numbers, followed by a swift drop-off and a long tail, where the big-sellers are caused by a confluence of a factors it’s impossible to emulate.
I might be wrong. But the only success I’ve had has been down to luck – or factors outside my control. If true, then all you can really do is watch your own sales and experiment with pricing. You need x number of titles and y amount of luck, with a very slightly inverse ratio between the two (x goes up, y goes very slightly down).
I’m more interested in the other way of looking at it, which is what people are willing to pay, and in this regard I think Declan makes valid points. The cost of a book should relate to the value gained from reading it. The value is the experience of the story, which remains the same regardless of delivery method. In fact, I often find the “ebooks should cost less” argument disingenuous. I’ve read people practically evangelising ebooks – less shelf space taken up, can carry around easily, instantaneous delivery anywhere and everywhere, easier to read, etc, etc – and yet all that added value somehow means ebooks should cost *less*.
Too many people (not you guys; you know who I’m talking about) are confusing the value (social, personal and cultural as well as commercial) of buying and reading a book with its profit. I don’t even think ebook pricing is analogous to online music pricing: I think it’s all part of an ongoing process, involving perhaps all digital media, that sees a cultural expectation of content costing less and less. Which is not a good thing. My heart is with new ventures like Kickstarter and Pledge as possible future models.
That said – tl! dr! – I would take issue with one thing you saw, Suw. It is a zero-sum game. There are a limited number of readers with a limited amount of money. Lowering prices raises the number of titles they can buy. But even more zero-sum is the amount of time to read. Attention, as always online, is the key currency here, and it’s going to be in increasingly short supply.
@Liz, Certainly serialisation is a good way to go for some. It’s a tried and true method, but it brings its own challenges: Are people going to be interested enough to keep buying? Will they feel nickle-and-dimed and resentful? Will they go and tell all their friends and increase sales over time? All questions that are hard to answer ahead of time!
As for risk with digital purchases, you can get a feel for a lot of ebooks by reading the free sample (in the case of some, you can read the whole thing first!), so that can help you decide and mitigate the risk a bit. But we do need more data on what price point is an impulse buy, what is a bit more considered, and how books perform at different prices from a profit point of view, rather than straight sales figures.
@Declan, Thanks for coming over and responding! I think the fact that you’re not looking to earn a living writing is a key bit of context. In that scenario, your pricing is actually more of a statement of your assessment of the value inherent in your work, rather than a calculation made to maximise profit.
That’s an entirely valid way of looking at things, but I think it is important to the wider discussion to distinguish between pricing which is making a statement, and pricing which is aimed at maximising income for the publisher/author.
The point that I was trying to make, possibly badly, is that in the latter case, our own opinions of our work’s value are irrelevant to the market and what it thinks is a fair price. What we need to do to figure out the most effective price point is share lots of data so that we can see how books perform in aggregate.
Thank you also for your kind offer of a Q&A in the New Year. I should be delighted to take you up on it, and would be only too happy to host you here too!
@Gregory, Yes, belief does have power, but its power is limited. I am quite happy to believe that Argleton has the power to sell the 3000 copies a month that I would need to give up my other work. However, I need to do a bit more than just believe in order to make it so. 😉
@Steve, Thanks for your comment! It is indeed a complex issue. I’m not sure if there are patterns in the data, because we don’t have the data to look at. It may be that you’re right and that the variability in quality of the ebooks around would mask any patterns caused by pricing. But we won’t know unless we look and at the moment we can’t even do that.
Luck certainly is a factor, which is why comparing a few books wouldn’t tell us anything. But given enough data we might get some broader trends showing themselves.
You make a good point about the value of the words to the reader being theoretically independent of the medium, but that’s not quite how people see it. The physical object has more value precisely because of its physicality, and I think that’s an attitude that’s not going away. Physical books will, I think, always be perceived as more valuable than digital books regardless of the benefits of the digital.
As for zero-sum, we have to separate out the buying from the reading. A zero-sum game means that if I gain, others must lose, but in buying books that’s not strictly the case. Yes, people have budgets, but those budgets are flexible and the size of the market fluctuates with the state of the economy etc. So we’re not looking at a strictly competitive market because people can choose to move money, say, from their movie watching budget to their book buying budget if something juicy comes up. Yes, there are limits, but they aren’t hard.
As for attention, there are indeed only 24 hours in a day, but attention isn’t equivalent to buying – people can buy a lot more than they actually read, and many keen buyer do. Especially with ebooks, the impulse buy means people can fill up their ebook readers with more words than they can ever actually hope to read. But even with attention, the competition is not between individual books but between other forms of entertainment and books, so we’re back to the whole “it’s a bit more complicated than that” position again. (And again, we’re back to needing more data on what people do with their time and what encourages them to read more and watch TV less.)
However, it’s buying we’re more concerned with, although we hope that buyers also read. It’s the buyers who keep us in gin and tonic.
One last thing, I disagree that there’s a broad cultural expectation that content should cost less and less. There’s plenty of evidence from the music industry — which although not equivalent certainly has some useful lessons for books — that those who download a lot of music also buy a lot of music. Yes, there are some people who download without intent to buy, but we must not assume that the overly-vocal freetards represent all enthusiastic downloaders. The evidence tells us a different, counterintuitive, and for some very uncomfortable story, one I’ll come back to in the New Year.
I hope you don’t mind me jumping in. I’m a consumer of books. Not very many in the last few years admittedly, but more since I acquired my Kindle when it launched.
The first thing I do when considering *any* book is to compare prices across retailers, both digital and physical. I’d prefer to buy digital (and I’d prefer it to be DRM free, but that’s another story) but I won’t pay the same, or nearly the same, price as a physical book.
Why? Because, in my head, there’s so much more cost and overheads involved in fabricating, transporting, storing and selling the physical book, that I feel that I’m being ripped off paying the same price for an ebook. It really is as simple as that for me.
@Suw
Oh totally. It’s just my speculation, and it would certainly be interesting to see the data. The problems I see are that: a) so many other factors than price will contribute to the success of a book; and b) it will be very difficult – perhaps even impossible – to get a truly comprehensive and useful sample. For example, knowing 100 books succeeded at 0.99 and only 1 at 5.99 doesn’t tell you anything practically useful; you also need to know how many books overall were published at each. People change their pricing too. And so on. But I would love to see something concrete to draw conclusions from, definitely.
And fair enough on the zero-sum thing – I know I’m stretching the definition of the term. When you combine cumulative cost, time to read, limited space on top 100 lists (a key source of advertising), more and more books being published, etc, it does begin to seem that way to me, but I take your point, certainly about direct competition.
And I agree totally about illegal downloading. Morally, I don’t like it. Practically, I don’t believe it hurts – and there’s nothing I can do about it anyway. It’s actually legally that I meant. I’m used to reading newspapers, articles, information, research and so on for free. I tend to associate the internet with access to stuff, a lot of which I would pay for – or pay more for – in the real world.
@Steve
I completely understand that viewpoint, even if I don’t share it. In reality, the manufacturing (etc) side of things is a surprisingly small percentage of the cost of a book (less than 20%, I think), but perception matters – it feels like it should be a lot more. I just find it odd sometimes that so much of the ebook pricing discussion focuses on what the reader isn’t getting – a physical book – and that it should be factored into cost. But people are choosing to eread for a reason; there is presumably some added value separate from them being cheaper – convenience, etc; sometimes literally not having to have a physical book – and it’s rarely suggested that this should be a factor too.
Dickens tried that publishing a chapter at a time approach, although it might be that the book market has changed since then
@suw – popped over to your Kickstarter entry. Interesting to see the distribution of support levels you achieved for Argleton. Zero at $40 but 14 at $100+…don’t know what that says but I’m guessing you might repeat the ‘experiment’ to see how support changes. The good news was that you achieved more funding than needed. Well done you.
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