The value of books

What they're worth, not what they cost

A few years ago I was part of a team evaluating a consumer magazine that had recently started to lose money.  The primary reason it was hurting: on a per-issue basis, readers paid less than half what was needed to support the magazine when advertising revenues were soft.

The magazine reached an affluent audience whose readers live in homes that had more vehicles than occupants, among other measures.  These readers were able to pay more - much more - for their subscriptions.  But they weren’t doing so.

We recommended a two-part response.  The first: ask for more money and see what happens.  Our hopes were not high, as the magazine had tested higher prices in the past and found that subscribers fell off faster than prices rose (a bad combination).  But a confirming test made sense at the outset.

The second: examine the value proposition for current and untapped subscribers.  It was a niche publication, so we weren’t trying to grow it significantly, but we wanted to research whether people paid less because they didn’t think the magazine was worth very much.

The client did the first thing, with poor results.  The follow-on research was never done.  The business and editorial staff felt strongly that they knew their audience, and that they were giving readers exactly what they wanted.  In their view, subscribers just didn’t understand that they should be paying more.

Over time, the magazine continued to struggle, reducing both its rate base and its frequency.  Years later, it has not substantially changed what its readers pay.

Although this is a magazine example, it applies to book publishers, who are grappling with how to price and when to release e-book versions of their titles.  Constrained by a trade model, many publishers have little or no direct experience with price testing.

Faced with evidence that consumers on average pay less than $10 for e-books, book publishers have sounded a lot like my erstwhile client: “Don’t they know how much work goes into a book?  Readers should realize that they need to pay more.”

Via Twitter, Jane Litte pointed me to a post at The Consumerist that puts a dart into the argument that publishers need to convince people to pay more for content.  Their writer, Chris Walters, picks apart the notion that content should cost what the reader can afford.  Walters makes a well-reasoned call for book prices that match what consumers value.

I understand that the current business model makes it quite hard for traditional publishers to survive if the majority of digital content is sold for less than $10.  But I do think that the majority of digital content is being sold for less than $10 for a reason, and it’s not because Amazon said so.

Publishers can either increase the perceived value of their digital products, or they can change their business models.  Arguing that prices “should” be higher won’t carry the day.

Posted by Kat M.
Mar 06, 2010  at  09:53 AM

Can you tell I’m making my way through your blog?

I publish nonfiction how-to ebooks, and I sell mine for significantly more than $10—I sell it for a little less than the market will bear.

But in fiction, I don’t want to *buy* any novel or story that costs more that $10.  Even though I know how much goes into producing a novel… even though a lot of my friends are writers… I still only want to pay $5 - $8 for an ebook. 

This is in part because I’m used to buying paperbacks, and that is how much paperbacks cost.  Different format, but same content, so the comparison makes sense to me.

If I were getting more than just the content, I may pay more!  But there’s nothing else there—no publisher brand connection, no connection with a scene or community, no relationship beyond that of the content. 

If I were an entertainment publisher, I’d work with the price that people were willing to pay—what the market would bear, vs. what I wish the market would bear.

Posted by Brian O'Leary
Mar 06, 2010  at  11:17 AM

I’m glad that you’re making your way through the blog, and even more grateful for your comments.

It’s great that you can price your own books higher; you’ll get no argument from me on that front.  Your perspective on what a novel is “worth” to you is interesting, as digital platforms do come with the expectation that they will deliver a new and different experience.

I’ve seen demos for some newer platforms - Blio and Copia, most recently - that may help publishers offer other content (Blio; might be very useful in a how-to environment) or develop a connection with community (Copia).

Interestingly, a lot of these new tools are not being developed by publishers.  Not sure what that says, but worth mentioning.

Posted by Kat M.
Mar 06, 2010  at  02:12 PM

“Your perspective on what a novel is “worth” to you is interesting, as digital platforms do come with the expectation that they will deliver a new and different experience.”

I think that digital platforms *can* come with expectations of a different experience, but doesn’t necessarily *have* to.  I was one of the first to get a Nokia 770 tablet (still have it) for the purpose of reading ebooks, technical junk, and whitepapers in PDF format.  To me, this is the same basic experience as reading books/journals, just self-illuminated and portable.

For pleasure reading, I like novels for themselves, and I don’t desire anything like a “novel-plus,” at least the way things are now.  None of the extra features currently suggested for fiction books have much value to me.  I just want the book to read in a more converient format.

Now, if it were something that couldn’t really be compared to a book on a screen reader, that would be different.  For example, I would be all over some kind of interactive fiction game, like a serial book / Myst-like game combination. 

I’d also love a collaborative RPG-like project, like a pencil and paper game, but with a much wider community, and on a mobile device.  But not for itself—not just because it was a novel format.  It would have to be entertainment that I truly desired to consume for the content’s sake.

I’d say that I was sorry for the lengthy discussion, but if you’re like me, this is the whole reason you blog!

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