Thursday, March 31, 2011

E-BOOK PRICING Part 2: Promotional Pricing - Or Here Be Dragons.

“Here Be Dragons” was a phrase written at the edge of old maps, indicating the point where the known world ended. In many ways, that’s the region in which e-book promotions are currently dabbling - in the area beyond the known world.

Not that that should stop any intrepid explorer - or storyteller searching for more audience. However, the e-book world as we know it today is - like those old maps - unlikely to be telling the full story, not yet.
Until digital accounts for the majority of genre fiction sales (>70%), we won’t have any reliable feel for how our audience as a whole is going to behave, and simply extrapolating from current audience behavior is fraught with risk - it might work, it might not.
Until the majority of genre fiction paying customers (>70%) switch to digital - and that’s a different point to the above -  our audience is unlikely to demonstrate predictably stable, reliable behavior, even as reliable as such pattterns usually are, because we are talking about a massive group of individuals.
Extrapolating from the present audience is essentially hoping that the woolly mammoth group of readers, those still determinedly and stubbornly reading in print, is going to behave in exactly the same manner as the early adopters reading on their iPhones. They might, but it’s more likely that they will not. And sizewise the mammoth group still dominate our available audience.
All that said, of course we’re going to try various promotions. And it must be stated that promotions don’t need to work for the audience en masse, but simply for a sufficient subset to generate a viable result.
I’ve picked only three promotional gambits to discuss, but the possibilities are as endless as authors’ imaginations.

a) permanently lowering the price of backlist - something I am sure we are going to see a lot more of from already established authors selfpublishing backlist. There are four points I’d like to throw out there for consideration in terms of how our audience might view this:
  • there is no “back” in “backlist” in e-books - it’s all simply “list.” A book that was first published 15 years ago is a “new” book to a reader who has never seen it before. The digital reader sees a range of books on the virtual shelf - all they care about is that those books are available for purchase, not the date when they were first print published. So is age a suitable parameter on which to discount works?
  • if this is being done to determine sweet spot price for the author’s works, is it too early (see the last post) to be doing this without risking unnecessarily lowering the value of the author’s works permanently? And permanent pricing is probably not the way to do sweet spot experimenting anyway, so I would be assuming this is not the motivation in this case.
  • is the author intending to send a message to the audience that the author considers these works of lesser value than more recent works? (we’re talking about permanent lower pricing of older works, not time-limited sales)
  • will lowering the permanent price of the author’s older works while trying to maintain a higher price for more recent releases be an impossible line to walk? Why won’t readers simply wait for the price of works to fall? Especially if, to the audience, there is no obvious difference between the older/lower priced and newer/higher priced works.
The above are questions each author needs to be comfortable answering, at least to themselves, when lowering the price of older works. I know where I currently stand on this, but I expect authors to differ, very likely widely.

b) temporary promotional pricing - “sales” price, time-limited. This can be and is being effectively used in a multitude of ways - too many to go into. My only concern regarding this is how difficult it’s going to be to gain visibility for any given “sale” when every author is doing at least one of these at any given time.
I know there are sites springing up listing the digital “sales of the week” - I suspect that having effective digital catalog(s) of sales offers is going to be a key development going forward. Without readers finding or being directed to such catalogs, the efficacy of sales will decrease as our ecosystem further develops and the sales arena gets increasingly crowded.
Beyond that hurdle, however, this seems one of the tried and true, and most easy to implement promotional pricing tools in any author’s locker.

c) e-specials - short works released in digital only at low prices. These are not the same as loss-leaders (full length works offered at minimal price), but are shorter works appropriately priced. e.g. novellas @ 1.99.
To me this is another very viable avenue of reaching new audience at permanently lower prices - this doesn’t rely on sales, but will always be there. It’s something that cannot be done in print, and is to me one of the primary attractions of the digital world. However, there’s one caveat which currrently limits the ability of established authors with significant print audiences to dabble in this arena - they can’t publish any shorter work that connects directly with an ongoing series without risking the wrath of the woolly mammoth. And a happily reading woolly mammoth is still very important to many established authors.
But established authors are still free to publish new and different works as digital only. I’m about to do so with my short story in the Royal Weddings collection (April 5th; 1.99). That story is not connected to any of my series. Similar in tone, period and place, yes, and typical of my work as far as that was possible (you cannot write a 20 page love scene in a short story, not even one that runs to 13K words), so the The Wedding Planner short story is a reasonable introduction to Stephanie Laurens’s storytelling - and I’m sure the other two shorts bundled with it - from Loretta Chase and Gaelen Foley - are likewise good introductions to their works.

Which brings me to a few wider points for consideration on the subject of digital promotional pricing:
  • major established authors with large print audiences are more limited in what they can, at this point in time, do, so those who don’t fall into that category should consider the period from now until more of the print audience shifts as a window of opportunity for actively trialing and testing and seeing what works to increase their audience. You’ll have clearer air and bluer skies now than you will have later.
  • things will change when the major genre fiction authors shift to digitally dominant publishing - do not for one moment doubt that. The sheer weight of their numbers guarantees that. But exactly how things will change is presently anyone’s guess, and I certainly do not claim to know.
I’m going to wrap up this limited examination of promotional pricing in our digital world with one observation: Ultimately, the point with any promotion is to entice new readers to try an author’s work - but the result of the promotion is not measured by the number who bought the promoted volume, but by the increased number who buy the author’s next work.
A Few Reflections of a more General Nature:
Authors are not interchangeable, at least not after a market matures. History (mystery series in 1940 to 70s; Harlequin category lines 70s to present) shows that as a genre fiction audience matures (in the sense of a maturing market), the audience buys by author (performer), not price, as they do for any entertainment product (why do you think MIRA and HQN exist?). But especially when a readership is in its emerging stages, then low price/interchangeable authors does work.
Price and the established reader - most established readers have a list of authors whose works they buy. They are have little if any interest in seeking new authors because they don’t have time to spare - they spend all their reading time with the books of authors they have already decided they want to read.
When established readers do raise their gaze and look for new authors to try, they are more likely to be swayed by word of mouth, not price. Price is something established readers distrust - low price is not going to compensate them for time lost reading a poor work.
Time - and their imaginations - is what readers bring to the equation when they read a genre fiction work. They have to put in the time and imagination to unlock and absorb the experience the work offers. Reading a book has a cost to readers that is not influenced by the price of the work.
Do not ever make the reader who has paid full price for your book feel like a dummy because she paid full price.
Someone (Selena Kitt, I think) said that she still values a Louis Vuitton purse even if she bought it at half-price at a sale. Naturally, one would. But if Louis Vuitton purses were routinely offered for half-price 6 months after their release, available at one click the world over, would very many still buy at full price?
As a 20-yr veteran of this business, my future lies in the hands of my established readers, and I will never forget that. I will never undermine my relationship with my established readers to race after a few “new” readers - I’d have to be daft.
Regarding the so-called “tipping point” - there’s clearly going to be more than one. We’ve already passed at least two. I believe our transition will not travel along a single smooth gradient, with e-book readership steadily and predictably increasing, but will instead be a series of plateaus, with the next rapid digital increase brought about by the next of a set of dominos, each of which has to ultimately fall, actually falling.
My prediction for the next tipping point’s cause - the next domino to fall - is a severe contraction in the availability of print titles in wholesale outlets, or the appearance of very low price or free e-readers. Or both those dominos could fall concurrently, possibly even connected by cause and effect.
Ultimately, however, it’s whatever finally gets the attention of the woolly mammoth enough to make it raise its head, scent the wind, and then lumber across to the daffodil patch and start to appreciate the new and various blooms that will herald the end of the transition and the final shift into our digitally-dominated future. And not immediately, but sometime after that we can expect to be able to discern long-term reliable patterns in e-book reader behavior.
(R)evolution is about transformation of an exisiting ecosystem brought about in this instance by the introduction of new technology. It is not about setting up a de novo system starting from scratch. We are currently in a transition from the old to the new, and there are groups who exist only in the new as well as groups who are still fimly in the old. The (r)evolution is progressing, but we need to strive for balance through the transitional phase, because we don’t want to disenchant the old by only catering for the new.
Free books, devaluing works, DRM and protecting works, effective promotion, the services publishers might offer authors - I had all these topics on my blog posts’ list, but over the last seven posts I came to realize that the experience of each individual author with, and therefore their opinions on and decisions about, such subjects, will necessarily be dictated by that author’s career. So opinions and experience will necessarily vary widely - and there may not be, and need not be, any true common ground.
As Nathan Lowell frequently says: Your mileage might vary. I’d go one step further - each author’s mileage is all but guaranteed to vary in our new digitally dominated world.
There may never be a time when one-size-fits all, not even of one-size-might-fit-some, in this brave new world of ours. And that’s by no means a bad thing.
That’s my current view, and I’m sure a lot of you have different views, but those are the elements of my thinking to date.

And that’s it from me…
I started this blog when I had time, energy, and a desire to work through all the issues we’ve touched on over the last 7 weeks. Posting on the topics forced me to research aspects I never would have otherwise, and I hope you’ve enjoyed going on this journey with me. But now life and writing have caught up with me, and I no longer have the time or energy to do justice to further exploration of, and speculation about, our ever-evolving ecosystem. I remain hugely excited by the possibilities opening up before all authors and readers, and will be watching with interest to see how we all survive, and just what our ecosystem eventually looks like once all the tremors and upheavals subside.
I will leave the blog in place (it’s the internet, after all) so it’ll still be here if anyone refers to it. If the posts and comments help any other inhabitant of our ecosystem to cope with this sometimes scary, often frustrating, shift to digital, that’ll just be cream. 
Or in publishing lingo, value-added.
Protect your creativity, write well - and don’t forget to nurture those daffodils.
CAVEAT: Nothing posted on this blog, or in its comments, should involve commercially sensitive information. Contracted authors please exercise due diligence in your comments.
All blog posts by the author should be viewed as personal opinion and postulation. Said opinions will alter to reflect changing facts.

Thursday, March 24, 2011

E-BOOK PRICING Part 1: The List Price

By “list price” I mean the price that a book is listed for sale, not a time-limited promotional price, or a subsequently discounted price - IOW, the price an author (or their publisher) initially puts on their work. I’m limiting this discussion to US list prices, as the US genre fiction market is the most mature, and the non-US markets at the moment are a largely random mess of prices, for various reasons that have nothing to do with authors or readers.
One of the few things I feel reasonably certain of is that ultimately genre fiction readers as a whole, our audience en masse, will define the price of genre fiction e-books, just as audiences always have and always will with all entertainment products based on a value-to-them-for-$-paid-and-time-invested judgment.
Consequently, the approach I’m taking to e-book pricing is to ask one simple question:  What are our readers willing to pay for genre fiction e-books?
Let’s start with now, today.
Check the Kindle and Nook stores, look at the majority of books on the genre fiction bestselling lists, look at the majority of genre fiction books selling overall throughout the stores. Look at the USA-Today list.
The vast majority of genre fiction e-books are selling at either the paperback equivalent price, or higher when it’s the e-book of a genre fiction hardcover release - e.g. Lisa Gardner @ 12.99, many others @ 9.99.
The genre fiction audience en masse appear to have accepted the genre fiction paperback pricing range (and it is a range, with influencing factors including length, author, publisher among others) for genre fiction e-books. On the issue of price, our audience as a whole and at this point in time doesn’t appear to distinguish between e-books and paperbacks.
Yes, I know a lot of commentators want to insist that e-books should be cheaper, for this reason or that, but again, go and look at the stores - our audience as a whole doesn’t care. 
To reiterate from last week: For any piece of entertainment, it’s the experience the audience pays for, not the ticket that gets them into the show. Words on a page are words on a page, whether it’s a digital or a paper page - to the genre fiction audience the end result, the end value, is the same. And they are demonstrating that that’s how they see it.
But there are other reasons to vary the list pricing of e-books - namely to optimize audience and commercial return. Those two parameters are of paramount importance to any storyteller, and also to their audience, and the digital format finally - finally - allows these to be optimized, in a way that could never be done with print.
I am, of course, speaking about authors experimenting with pricing to find what has been termed the “sweet spot price” - the one at which audience and commercial return are maximized.
At this moment in time, my prediction is that at some time during our (r)evolution, all authors/publishers are going to want to establish the sweet spot price for each individual author. Individually. Because to our audience en masse we, the storytellers, are individuals, and the digital world finally allows for that.
Once authors move to digital (either only or dominantly) there is no logical reason that broad-based, albeit audience-defined price ranges of any sort need continue to apply.
To my established author colleagues, does this picture scare you - the one where you are standing before your audience and essentially saying: you know me, you know my stories - how much are you, my audience en masse, willing to pay for my works?
The truth is we’ve been doing this all along, but have been constrained by the limitations of print pricing and the industry that necessarily surrounds print publishing.
In the digital world, we are no longer so constrained. We are free to deal openly with our audience, and I would hope that ultimately both storytellers and audience will be the better off for that.
Currently my only reservation about experimenting to define the sweet spot price is this: Doing such an experiment before the majority of an established author’s already established audience has shifted to digital is very likely to give skewed results.
To me, with a very large proportion (>90%) of my already established paying audience still buying in print (yes, right now), that’s a big reason to wait. Even though I don’t want to.
Yes, of course I’d love to be jumping in and playing in this new pool ala Konrath, Wesley-Smith, Eisler et al., but I’m a numbers person, and for me the numbers currrently say: No. 
Actually, that’s not true - they say No!
But that’s me.
I believe that in our digitally-dominated ecosystem, for each author’s works, the audience as a whole will make the value-to-them-for-$-paid-and-time-invested judgment that they always have, but in moving to digital the range of prices over which storyteller and audience can negotiate currently runs from 0.99 to 20.00.
Where any author lands sweet-spot-price-wise will be defined by the audience-en-masse’s perception of the value to them of that author’s works.
So how to define what a new author’s digital works should be priced at?
To me, this is the next (r)evolutionary invention required - we need some clever person to define a list of steps a new author can follow to approach what I view as a negotiation with the digital genre fiction-buying public.
That said, so far I’ve seen 3 different approaches and outcomes:
1) list low to reach a wide potential audience seems the way most have opted to go. An entirely legitimate strategy, which has been successful for some but not for others, but one that doesn’t solve the pricing issue - what of their next work? And the next? What is their sweet spot price and when and exactly how are they going to determine it? And (the potential worm in the apple) will starting out at 0.99 with a body of works impact on an experiment run later? I’ve no idea - I’m just asking the questions.
2) there have been several instances reported (on KB) of new genre fiction authors who have not succeeded at 0.99, raising their prices to something more in keeping with paperback prices for similar works and actually selling significantly better. Is this a case of sweet spot pricing in action with a different audience-generated twist?
3) others have from the first priced their works in line with the current paperback price range, and are gradually building decent numbers as they add works - very much akin to a print-publishing build over a succession of releases. I suspect this is sweet-spot pricing starting at a different point on the curve - trying to predict the sweet-spot before setting the initial price. Arguably the smartest move.
That said, I’m not advocating any particular stategy - there are pros and cons to all, and what works for one may not for another. To me the target should be getting the price right for the audience that wants to buy and actually read your work - and then come back for more.
For established authors, once they reach the point where they are comfortable doing the experiment, they can move up and down, and then decide which way to head. And yes, for some, the way might be up. For established authors already selling sufficiently well to get by, there’s no need to go in big leaps - a small but definite step using one title will point the way, and can then be followed with further steps, further titles, as appropriate. For established authors with lots of works, I see no reason to rush this process.
But for all authors, the mammoth in the corner is the huge overhang of genre fiction readers still reading in print who will eventually transition to digital. You can argue % until the cows come home, but it won’t alter the fact that there are a lot of such readers out there - enough to swamp the current digital genre fiction-buying audience and then some. And for many, perhaps most, of those yet to switch, their perceptions of value are already entrenched. Of course, perceptions can change, but I doubt anyone can at this point guess where the balance of value-to-them-for-$-paid-and-time-invested price perceptions for the audience as a whole will lie once the transition is closer to complete.
Nevertheless, for list pricing of digital works in a digitally-dominated future, my prediction would be that the pricing ladder will have a lot more rungs in it than at present, and each author’s position on that ladder will be based on the audience-en-masse’s perception of the storytelling value attached to each author’s name.
And that position might change over an author’s career, in either or even both directions.
From where I sit, the switch to digital is underscoring and emphasizing that every storytelling author - their body of works, their audience, their career paths, every aspect of being such an author - is individual. And that’s by no means a bad thing.
I’ve restricted today’s discussion to the list price of e-books - next week, in what will be my last post, we’ll look at the thorny issues of permanently lowering the price of backlist and e-only specials, and also temporary promotional pricing and the differences between e- and p- in that regard.
Next topic: will be posted on Sunday in the comments.
Next blog post: will be posted next Friday
CAVEAT: Nothing posted on this blog, or in its comments, should involve commercially sensitive information. Contracted authors please exercise due diligence in your comments.
All blog posts by the author should be viewed as personal opinion and postulation. Said opinions will alter to reflect changing facts.

Thursday, March 17, 2011

SO YOU WRITE FICTION. WHICH FICTION? ...or we need to explore what our product delivers to our customers before we try to price or market it.

In my experience as both reader and author, the lack of comprehension and attention to this question has led to more mistakes made in publishing, bookselling, and in authors’ careers than any other factor.
In what follows I’m going to make declarative statements rather than expound and explain (because I could explicate on this topic for hours), but don’t let that put you off questioning and discussing. The purpose of this post is to make everyone stop and think this point through - because we can’t have any meaningful discussion on pricing without a solid understanding of the product we offer our audience.
All writing is judged by how effective it is in achieving its purpose. e.g. scientific papers, travel brochures, how-to manuals, technical reports, and fiction. 
There are at least three types of fiction, each with a different purpose.
Literary fiction - is about the arrangement of words on the page and letters in a sentence. Might have a story, might be entertaining, but that is incidental and not the purpose of the literary fiction author. (OED, and also from the lips of major literary fiction authors)
General fiction - is about a subject, illuminating, demonstrating, discussing, revealing, examining, exploring the subject. Usually has a story, sometimes entertaining, but the purpose of the story is first and foremost to elucidate the subject, not to entertain. e.g. Cold Mountain, The Lovely Bones, Annie Proulx’s works, Phillipa Gregory’s works, etc. (listen to any interview with a general fiction author - it’s the subject that matters to them, both story and language are secondary to it)
Genre fiction - is all about the story - a tale told to entertain. Always has a story, and the telling (voice = language used) is critical. The entire focus is on telling a given story in the most effective and audience-engaging way possible. Genre fiction is the province of the storytellers who tell story to entertain.
Yes, there are authors who bridge forms, but they stand outside this discussion.
In shorthand, Literary Fiction is about the writing, General Fiction is about the subject, and Genre Fiction is about telling a story to entertain. These are three very different purposes.
A Potted History of Storytellers:
90,000 years ago - the tribes walk out of Africa. The oldest profession bar none is likely already established (that’s our profession, incidentally; no caveman ever paid for sex, but good storytelling is not something you can seize or force, only barter for or buy)
40 - 45,000 years ago - music starts to evolve; some cave paintings suggest rudimentary story forms
Oral format continues - shamen, bards, minstrels, etc; also troupes - archetypes emerge and evolve
Sole performers continue (Beowolf, Song of Roland, and other heroic tales; fantasy and romance already discernible) - troupes go onto the stage, playwrights emerge.
1400s - Morality plays (? the forerunners of the crime genre)
1440 - Gutenberg invents the printing press
1473 - Caxton establishes printing in London.
Late 1500s - Shakespeare, Marlowe, et al - playwrights are the audience’s darlings; the stage as we know it is established as a storytelling platform
Early 1700s - many sole performers switch from oral format to the written word - print format born, cloth-bound.
1740 - Samuel Richardson’s Pamela (a romance) is one of the earliest bestsellers. 
By this time in London, there are 2 distinct publisher types - those publishing “serious” works (the forerunners of literary and general fiction publishers) and those publishing entertaining tales for the masses. All cloth-bound.
Late 1700s to 1800s - Austen, Dickens, Scott, Wollestonecroft, Radcliffe, etc, etc, published with great sucess by the forerunners of mass market publishers
Early 1900s - Movies emerge as another storytelling platform (the death of the book is predicted by those who do not understand the difference between a platform and a format)
1931 - paperback books invented by Albatross Press (Ger)
1935 - paperbacks picked up by Penguin (UK)
1939 - Pocket Books established in US to publish paperback books for the mass audience
1941 - Avon Books established to compete with Pocket.
This led to the format switch from cloth-bound to paperback for genre fiction works.
Genre fiction paperbacks given various tags: penny dreadfuls, pulp fiction, mass market fiction, disposable fiction. Could more accurately be termed entertainment fiction.
To summarize:
- Ancient storytellers all used an oral platform (platforms are delivery media). 
- Then came the divergence of some (playwrights) to the stage, a different platform.
- Remaining oral storytelling shifted to the printed word, a platform with much greater reach than oral. For genre fiction authors, our platform/medium is the printed word, but whether that word is printed mechanically or digitally makes no difference to our audience.
- Some playwrights and print storytellers (screenwriters) shifted to the new audio/visual motion picture/TV platform.
Genre fiction authors, most playwrights, most screenwriters, all deliver the same story experience to their audience, each group via a different platform.
Our reality: Genre fiction = entertainment fiction.
Most genre fiction authors know this. Most instinctively and frequently use the sort of language that demonstrates they do. Most, however, promptly forget this fact, our reality, when it comes to making business decisions, and flip to treating Genre Fiction works as Literary or General Fiction works. But they’re not. Different purpose, different product, different audience, hence different market. And different competition, too. Different ecosystem entirely.
Why is understanding all this important in pricing e-books?

a)  because the shift from p-books to e-books needs to be seen in historical perspective - it is simply the latest in a series of format shifts the print-storyteller has undergone, from originally oral, to cloth-bound, to paperback - so now to digital.

b)  because this is just a format shift, and the product we deliver to our audence hasn’t materially changed since the dawn of time - we are still delivering a largely oral/aural experience, which is why “voice” is so very important in our game.

c)  because truly grasping the above illuminates this point: the physical thing that conveys our product to our audience does not itself have any significant value - not to our audience.
For millenia, our audience has valued our works (whether oral, cloth-bound print, paperback and now digital) for the storytelling experience they deliver.
For any piece of entertainment, it’s the experience the audience pays for, not the physical ticket that gets them into the show.
Going forward into next week’s conversation on e-book pricing, we need to first understand what our audience pays us for, and then compare what we deliver in digital format to what we deliver in other formats, and also what our storyteller-colleagues presenting via different platforms (movies, stage, etc) deliver to their audiences (essentially the same audience) and what $ value the audience places on their works in comparison to the $ value the audience places on ours.
In closing, a quick list of the elements audiences value in storytelling-based entertainments (via all platforms):
  1. escape
  2. reiteration and reaffirmation of the universal human values audiences believe important (justice always triumphs; evil is vanquished by good; love conquers/comes to all; etc)
  3. actively exercising and strengthening imagination (only genre fiction offers this - it’s a unique property embedded in the way our written words interact with the reader to create the experience the reader perceives)
And finally to repeat: The purpose of this post is to make everyone stop and absorb this point - because we can’t meaningfully address the issue of pricing without a solid understanding of the product we offer our audience.
Lisa Buchan commenting on Mike Shatzkin’s blog comparing the emergence of e-books to the emergence of mass market paperbacks on Mar 14th: “(This) harks back to the old marketing levers of the four "p"s - product, place, promotion and price.” 

The last two weeks’ posts have been about “place.” This week’s post is about “product.” Next Friday’s post will be on E-book Pricing - Part 1. The List Price. And the post after that will be about promotional pricing...despite the (r)evolution, nothing much has really changed.
CAVEAT: Nothing posted on this blog, or in its comments, should involve commercially sensitive information. Contracted authors please exercise due diligence in your comments.
All blog posts by the author should be viewed as personal opinion and postulation. Said opinions will alter to reflect changing facts.