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.

13 comments:

  1. Stephanie, the only thing I don't agree with you on in this--to a certain extent--is that pricing does play a part in the decision-making that sometimes goes behind finding new authors to read.

    For myself, I know I never buy hardcover or even trade for that matter. For the number of books I want to read and the higher sticker price on those, I can never justify it to myself that one book is worth double what I pay for for a mmpb.

    What I'm seeing out there, and yesterday, I did the math on the number of books priced under $2.99 on Amazon's Top #100 Historical Romance list. That number, much to my surprise, was a staggering 40%. Currently, #1 and #2 are $.99 books, both books reissues, one by a 6 time RITA award winning author. I see Barbara Samuel initially had her books priced at $2.99 but has recently dropped them all down to $.99 and now they are all making appearances on the lists.

    My initial thought was why can't an RITA award winning book find a very receptive audience at $2.99? Because, IMO, there are so many full-length novels--many reissues from well-loved authors--coming out at this price point, competition for reader dollars is fierce. It does sadden me to see, although, I do understand the reason authors would do this.

    Yesterday was the first time this whole low pricing on self-published books gave me pause as to what's to come in the future. Not for well-established authors whose readers would gladly follow them to thine kingdom come, but for aspiring and newly published authors seeking to break ground where pricing could very well be their worst enemy. If all reissues and books from new authors are all priced between $.99 - $2.99, there is no price advantage. The advantage would then go to the author who has the bigger following, and that will naturally--on the most part--be the currently or previously NY published author.

    As I've stated on another board, I see the lure of pricing low to attract new readers but what I'm also seeing in authors is an impatience to see results immediately by making the pricing their only true selling point. Today, an author has to more than write a widely appealing, great piece of fiction, they also have to market and promote it just as well. I think in many cases, I'm seeing the entire marketing and promotion part coming in one package and it states, "Try me for $.99."

    Bev

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  2. Wow, excellent post and so right. As a reader, the initial price is the one that sets all future expectations, so if $.99 to $2.99 is the entry price it becomes the market price for all future works. It's difficult (and costly marketing wise) to raise prices in any industry.

    And how many free books actually sell other books at "full price?" I'd be curious to see numbers. If they are connected books, perhaps. It's worked well for Baen for over 10 years. But the majority of books that are free on Amazon don't make most readers who take advantage of the offer go and buy the rest of the author's list at full price.

    The one thing most self-publishing authors of their lists have in common is the lack of any or consistent marketing plans. And marketing is a HUGE cost. Readers still buy by word-of-mouth. They do. So back to the question, how to generate word of mouth.

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  3. Good info. I see nothing wrong with a *special* to get the attention of readers or even get new readers.

    One thing I do have a problem with is when the e-book price is the same as the paperback price. I'm not saying give the book *away* for a $1.99--unless it's a periodical special--but it's digital not paperback. Give some difference in pricing.

    No, I'm not diminishing an author's work and time with my thoughts, but if the paperback book is 8.99 then make the digital a couple of dollars lower. For sure I'm NOT going to buy a digital (e-book) for the same price as the trade paperback.

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  4. Blogger is not my friend today. Maybe it's April Fool's day . . . trying to post for the third time.

    Speaking as the author of the book in the #2 spot referenced in Beverley's post, I have raised the price to $2.99 which I had always planned to do on April 1. We'll see what happens when the new price hits.

    I've viewed this whole self-publishing endeavor as an experiment. So far it has surpassed my wildest dreams.

    Thanks for the post, Stephanie. I'll go back and catch up on the others this week.

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  5. Stephanie, thanks for doing this blog. Your comments over the past several weeks have been fascinating and definitely food for thought.

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  6. I hate blogger, it just ate a rather lengthy post.

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  7. I'll speak up, too, since that is my RITA winner at the top spot. I did originally price all the books at 2.99 for the very practical reason of getting 70% royalty on the price, but they had been up since October and although they were sort of selling sometimes, I thought the 99c experiment would be worth a try. Like Gina (hello my friend!) I'd always planned to raise the price again April 1 to see how it played. (It seems to be taking awhile for reasons I don't understand).

    The bottom line for me is I am an entrepreneur. I'm playing around to see what the market will bear, what works, how to get my books into the hands of readers who might enjoy them. One of the things that's brilliant about digital is the fact that I don't have to sell 100,000 copies or 250,000...I can sell 10,000 or 50,000 and be very happy and successful. And I'm not reliant on an anointing from a publisher who pays the bookstores to put my books in prominent places.

    I agree that we are in the very early stages of all this, and I have no idea how it will all shake out as time goes by, but for now, this is a good place to experiment and figure things out. There's a lot of freedom in that. At this point, I don't know what the ideal price for one of my books is. I do think, and this is only my opinion, that the price of frontlist digital puts them out of the running as popular ebooks for the most part. I thought it would be a good plan to put my digital frontlist books on special when my new book came out in January, but they just wouldn't do it. I can understand the pressure the publishers are feeling from bookstores, but that directly impacts my sales, and that's frustrating.

    IMO, the sooner the publishing industry and brick-and-mortar stores figure out ways to embrace and profit from digital publishing, the safer and more secure paper books will be, and that really matters to me as a reader.

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  8. This comment has been removed by the author.

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  9. Um, no, my comments were not removed by me.

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  10. I think readers DO look at how old a book is. The two things retailers always used to price a print book were format (hardcovers cost more, then trade paperback, then MM paperback) and newness/age. The price of the book came down after it had been out a while. People are used to that model. They don't expect to have to pay as much for a 5-year-old book as a brand new book.

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  11. "My initial thought was why can't an RITA award winning book find a very receptive audience at $2.99?"

    Just an FYI: I bought a couple of the Barbara Samuel books ... when I heard about them. Someone online, possibly on Twitter, mentioned that she'd made them available on Kindle. I don't remember what price they were at when I went looking, but I'd have been willing to pay $3 for the ones I don't already have.

    It isn't always the receptiveness of the audience. Sometimes the audience doesn't know it's there. Maybe by the time the audience heard about it, the sale price was in effect. Author who are self-publishing their backlists as ebooks need to do a better job of getting the word out. Join backlistebooks.com or something.

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