The Guardian/Edinburgh Book Festival debate about the future of books (in the age of Kindle) garnered over 200 posts on the Guardian website- thanks mainly to an excellent and provocative piece byEwan Morrison.
One big question left hanging is how much can authors charge for an eBook? Most authors are too busy to think about “pricing strategy” so here are some thoughts-
This is one of those important but boring topics as it can be the difference between having a livelihood or not-
How much can you charge for ebooks?
In theory at least it should be possible to hold up the pricing on eBooks and avoid a race to the bottom. By this I mean not charging 99 p but several pounds for a new book. Just what the price elasticity is on a new book is unclear and the waters are being muddied by Amazon (See why below)-It may not be the price of a new paperback but nor should it be the price of a download from Itunes. It is somewhere in the middle- and the extra cash and margin make all the difference (Especially as explained in earlier post Amazon are offering good terms to those who publish with them-Publishers hate this but it could be good for authors. In theory they could charge less and make more)
I know that sounds odd but bear with this
Every book is a unique product. If I want a William Boyd novel (just to take an example) I want a particular book. I don’t want something like it. I like his work, his way of plotting and writing. I don’t want someone else. I want the new Boyd. Boyd may decide not to charge as much for an e-book as for a paperback but as there is less cost in a digital file than in a printed book (cheaper to make and distribute) he should in be able to make as much margin or even more and still charge a reasonable price. A price that is good enough value not to invite mass piracy
Note on piracy. Global studies show that the levels vary enormously around the world- very high in emerging economies but relatively low in the USA-the country which ironically brought us Napster and so had a hand in promoting piracy as something that was not a crime but that people felt was their right. Anyway back to the plot
Boyd can set the price- and may have more control over the price that if he sold through Tesco or Waterstone- who have for some time discounted heavily to compete with each other
So far so good.
But why does is not working in practice right now?
A) Who controls the cash register?
The likes of Amazon control the cash register. In fact whoever controls the cash register whether it is Tesco or Waterstone or Amazon is in a strong position to set prices. They also compete with each other so it is not just a question of driving down supplier prices but also being competitive with each other-they don’t like to be undercut.
B) The short term pricing tactics of Amazon
Amazon is buying market share with a cheap device (The Kindle) and cheap eBooks. Recession is a good time to buy market share and they are trying to establish themselves as the eBook seller with scale and reach (soon opening in India). There is little hope for out of copyright authors which are being pushed out very cheap or free to get people into the Kindle habit-so cheap in fact that most people will not bother with piracy. Once you have the complete works of Jane Austin for less that £1 or nothing there is no way back.
Having said that as the market grows it will segment. Take the Jane Austin example. There will be some opportunity for a deluxe added value eBook- including (say)pictures of Jane and her times /contemporary reviews etc-in future (full colour) kindles and other e-book readers. This may add a bit of value-and there will be a market for people who want a more visual pleasure, more care and extra interest than the bog standard e-books (that Amazon currently pushes out for out of copyright authors.) Although it must be said ROI will be an issue- if you spend a lot on developing such a deluxe version you need to be careful that it can be priced in such a way as to make your money back
What hope is there?
A) Amazon in the longer term
Amazon is a retailer and so, unlike Google, does not really want to be providing free things. Google doesn’t care if it gives the world away for free as long as you use their service and they can therefore sell advertising. Amazon will want to publish and sell products that are valued and not commoditised. Once it has secured its dominant position it will want to trade up. Remember Tesco under Jack Cohen used to pile it high and sell it cheap- now it Tesco’s sell Tesco’s finest and all manner of premium brands.
B) Authors develop their own followings
The digital revolution is not just something that has made the likes of Google and Amazon uber-rich. It has also put control in the hands of authors. Authors can connect directly with readers using any number of free and low cost platforms (Or they can hire people to help them do this. It is time consuming after all)
With a bit more money you can do a JK Rowling – and take complete control as she is planning with Pottermore. She is not just doing this because she is rich. Communicating and selling on digital platforms is much cheaper than before and is coming down in price all the time and she wants to keep control of her creation not just see eBooks knocked out at 99 p and knocked off by pirates.
Once you have a following- what marketing types call brand loyalty-you are in a position to set prices.
I expect a new generation of writers who know about social media ( and enjoy its potential for connection) to emerge and do well- they have a power to reach their readers that the previous generation did not have. Amanda Hocking is much cited and John Locke has secured a book-publishing contract through self publishing with S&S.
Readers like to follow the authors they like. They are interested in their lives, influences and how they work. Go to any book fair and you will hear authors asked questions about these topics. Some authors may be uncomfortable with this and see it as just extra work- but it has always been hard work to get published and then have to do the promotional tour.
So, simply put, part of the solution is to have what brand managers call “a communications strategy”
C) Don’t think “discounting sells “
New books do not have a known price-unlike milk or bread- so the price is what you say it is. (Members of the art market are past masters of this-boosting value by managing perceptions)
Pricing also positions your work. If you say you are cheap, people may assume that it has not been produced with much care. So your new novel may not cost as much as the new Boyd – but don’t knock it out for 99p.
You need something else that brand manager’s have-a pricing strategy. If you price the same as Boyd it says that you are a quality author. You can come down in price from there. It is difficult to go up from 99 p
A new kind of publishing company?
Authors then need different kinds of advice today.
Better on digital communications and how to sell off the full range of digital platforms including social media
And much more hard headed when it comes to issues of price and margins.