The role of belief in ebook pricing and what to do about it

by Suw on December 23, 2011

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.

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