The history of digital reading in a fascinating one and I believe exploring its development arc helps predict the trends that may lie ahead. Thinking about what worked early on – meaning what was read in digital form – use cases where search, find, and quick read were the primary means of interacting with the content, such as encyclopedias and reference works, directories and other data driven compendia.
Demand Pricing for Ebooks
A stir was created recently when Sourcebooks announced the delay of the ebook version of a brand new title for fear of cannibalizing print sales. CEO Dominique Raccah said, “Hardcover books have an audience, and we shouldn’t cannibalize it,” adding, “It doesn’t make sense for a new book to be valued at $9.99.” Read the rest of this entry »
17 Responses to “Demand Pricing for Ebooks”
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Dan Holloway
on Jul 20th, 2009
@ 3:51 am:I’ve come across this topic a lot in the past week. It seems that whilst the e-book is in its relative infancy we have a chance to get things sorted out properly so as to avoid falling into the endless problems that beset paper book pricing. Of course, there’s a problem, because “sort out” will instantly smack of cartels and price-fixing like the ludicrously protectionist Net Book Agreement. In fact, therefore, the only thing that can really sort the issue out is the market.
And what that means is that we have to debate lots, and try lots, and see what readers respond to. Thsi is the one thing that’s missing in this whole debate – a real focus on readers – on what they want and how they behave. I think the people who really engage with readers in the bottom-up market of e-culture are the ones who will succeed quicker.
To throw my opinion in as a writer – I give e-books of my novels away for free, and I always will. I am thoroughly committed to the 1,000 true fans model, and am also committed to my readers. I want as many people as possible to read my work. And I genuinely believe that if they read it and like it, enough will buy the paper book to help me earn a living – eventually. And if they don’t like it enough to buy the paperbook – at least I gave them the chance to find out before they spent their cash on something they really do want – which has to be good for them (and as a writer, my first thought is always for my readers), and for me, because I haven’t hacked someone of by getting them to shell out for something they then don’t enjoy. Win-win.
There is currently a lot of fear in the industry about e-books being free. I am at a loss to think of any reason other than the good old protectionism at which the industry is so good (always done in the name of the author, ironically – listen up, I don’t WANT someone fighting my battles; I’m gnarly enough to stand up for myself, thank you). If free books are no good, people won’t come back – so established authors have nothing to fear. If they are better than the works of establihed authors, then those authors don’t deserve their slice of the pie.
Thank you, Evan, for another very informative contribution to such an important debate. My blog on the matter is at: http://agnieszkasshoes.blogspot.com/2009/07/free-is-not-four-letter-word.html I will watch the discussion here with interest.
Very best
Dan
http://www.danholloway.wordpress.com[Reply]
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Aaron Pressman
on Jul 20th, 2009
@ 4:58 am:Evan, very interesting post but I’m a little confused by your conclusion. In the pre-e-book world, the bigger and hotter the best seller the more likely it was to be discounted heavily by retailers. And only the super-sellers are sold at the biggest discounters like WalMart and Costco.
I’m not saying I understand this logic or that it fits very well with basic economic theories about pricing but it was/is the reality for print books. So it seems to fly in the face of the notion that ebooks should start out at higher prices to capture peak demand. What am I missing?
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Karen Syed @ Echelon Press
on Jul 20th, 2009
@ 6:00 am:The solution here is to understand that each business works on its own model and there will never be a solution to the problem that fits every publisher or retailer.
Amazon can work on a loss with their eBooks because it makes up it’s lost revenue in big ticket items like computers, cameras, other electronics, etc. They don’t bottom line those items, because they are tangible.
There is no middle ground when you have different publishing houses with different needs and requirements.
The eBooks I sell at http://echelonpress.com average $6.00 and they are every bit as good as the best sellers, in some case, I think better. That price works for us and we make money. But we don’t have the overhead that a much larger publisher might have.
It is difficult for anyone who does run a business to understand a businesses needs.
As for the demand. People also need to realize that there is a 90% chance that if a reader buys an eBook they never intended to buy the hardback so there is actually an increase in revenue, not a loss.
Karen Syed
http://klsyed.com[Reply]
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trav
on Jul 20th, 2009
@ 6:29 am:Good post. You make a good case for demand pricing. I’m intrigued by the way you connect marketing/publicity in helping push eBooks and for eBook readers to be considered when plans are being made and specials being offered. It seems that eBooks are often just an after thought in a publishers strategy.
I’m hoping, maybe in a soon-to-be-penned post
you can follow up on your idea of
““ebook co-op” program that effectively swaps in-store marketing for added discount.”
This, to me, seems to be a key concept that would help many consumers and even some slow-to-rise pubs fully accept, demand pricing and eBooks as a whole.[Reply]
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Phil
on Jul 20th, 2009
@ 8:48 am:You’re reading your Amazon/Kindle publisher contract incorrectly, Evan. They are paying publishers on net, not list. The contract I’ve seen is 35% of net, or $3.50/sale. Even though the publisher is not incurring PPB, inventory and warehousing costs, none can survive on $3.50/Kindle copy sold.
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Evan
on Jul 20th, 2009
@ 9:11 am:Just to be clear – I am not reading anyone’s contract – I am stating what is the most common trading terms between a publisher and a retailer such as Amazon. Every publisher deal will be slightly different, but I can assure you that the majority of major publishers will have terms similar if not identical to what I described.
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Aaron Pressman
on Jul 20th, 2009
@ 10:21 am:Phil – that’s the self-publishing term sheet. Major publishers are not selling to Amazon on those terms. They are collecting a fixed percentage of the retail list price they themselves set, and it’s been reported that it varies but is usually around 50% of the retail list price. That means on many $9.99 Kindle ebooks, Amazon is paying out more to publishers than it collects from the customer.
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jc
on Jul 20th, 2009
@ 12:19 pm:Great post. I’m curious though: If the book industry should be careful not to disenfranchise ebook readers by releasing titles in hardcover first, why doesn’t this apply to the movie industry where they release to theaters long before DVD/Netflix/iTunes? Or could you argue that we’re we getting to a point where that applies to them as well?
Much of the concern we’re seeing now surrounds consumer conditioning. If ebook buyers get used to purchasing books for $9.99, then that’s what they’ll expect forever more. If they become used to having the ebook available at the time of the hardcover, then they’ll expect that, too. In many ways, we’re already too late to do anything about ebook pricing or release schedule. Amazon made up our minds for us.
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Jussi K
on Jul 20th, 2009
@ 12:20 pm:This is a bit of a waste of time, isn’t it? Everyone with an eye to the future understands that all e-books will be pirated and distributed for zero dollars. Even if you set the price to 99 cents or whatever you are WISHING for.
Meanwhile, all the 5-to-10 dollar pricing strategies are just a marketing opportunity for the not-big and not-published writers and/or publishers to have their share of the limelight.
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Barnes & Noble eBook Store Great News For Consumers | Gravitational Pull
on Jul 20th, 2009
@ 6:50 pm:[...] questions in the comments of posts by publishing consultant Mike Shatzkin’s ruminations and Evan Schnittman, who works for Oxford University Press. I wonder what impact Barnes & Noble’s $9.99 [...]
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The Sourcebooks experiment with Bran Hambric: publishers in the early “establishment” stage of ebook adoption - The Shatzkin Files
on Jul 20th, 2009
@ 7:57 pm:[...] Evan Schnittman makes the point that holding back the ebook has consequences. It dilutes the impact of the publisher’s marketing efforts. It could encourage piracy. Evan’s solution is an introductory promotional price that is raised when initial demand has ebbed and he has a notion (which I don’t quite understand) of how publishers can get retailers to collaborate on that. I don’t think that’s the answer. First of all: it strikes me as backwards. The ebook price should be a dollar more than the print book for the 3 weeks or so before the print book comes out when an ebook could be available. Then it should be the same as the print book for the first couple of months so that it doesn’t disturb the bestseller list possibilities. Then it should drop sharply to reflect the lower cost (to publisher and retailer) of providing ebooks. [...]
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Cathy Macleod
on Jul 21st, 2009
@ 1:40 am:When I feel a hardback price is too high I wait a few months for the paperback edition, and I’m prepared to do the same for the ebook version. The market will eventually sort itself out. Meanwhile, interesting challengers on the pricing front are the Secondhand Booksellers. I was ready to pay $16 for an ebook novel, then bought it paperback instead at Abebooks for $1 plus $8 postage, condition as-new.
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Dear Author: Romance Novel Reviews, Industry News, and Commentary » Blog Archive » Link Round Up Tuesday
on Jul 21st, 2009
@ 7:57 am:[...] Schnittman of Oxford University Press disagrees with the delayed [...]
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Dave Creek
on Jul 22nd, 2009
@ 5:10 am:Seems to me that since you’re not publishing a physical book, that e-books should be less than the hardcover or the paperback price, and even less than $10.00. If I’m paying, say, $8.00 for the paperback and receiving a physical object that had to be manufactured and shipped somewhere, why do I have to pay more for just the words?
The price for an e-book should be a dollar or two less than the (eventual) paperback, and the money should be split 50-50 between the publisher and the writer. Talking about the hardcover bringing in more money makes no sense if the expense of making the hardcover eats up much or most of that money.
Dave Creek
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Evan
on Jul 22nd, 2009
@ 7:29 am:The basic problem with your suggestion is that you assume manufacturing costs are the majority of the cost of creating a book. The “words” as you say, are generally the greatest expense – if you are talking about general trade books. So if the value of the “words” are needed to recoup the costs, then it stands to reason that all versions should be priced to extract the maximum return on investment. Furthermore, ebooks are sold on consignment, where as print titles are bought in advance in bulk. The cash that generates is by definition more valuable to a business than the trickle of income that ebooks bring in. See the first posting on this blog, Why Ebooks Must Fail to get an understanding of trade book economics.
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The Daily Square – Ako Edition | Booksquare
on Jul 22nd, 2009
@ 4:30 pm:[...] Demand Pricing for EbooksEvan Schnittman makes an argument for demand pricing for ebooks — and smarter pricing strategies by publishers. [...]
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Creating experiences out of content | Digital Business
on Jan 5th, 2010
@ 3:11 pm:[...] being generated in the publishing sector continues to build when it comes to the pricing of ebooks (Evan Schnittman’s post in July) and digital rights management (DRM) where the publishing sector is seeking to [...]
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Tags: Amazon, Apple, Baker & Taylor, Barnes & Noble, Books, Business, Costco, Digital Publishing, Dominique Raccah, E-book, ebooks, Fictionwise, Google, iPhone, iPod, iTunes, Kindle, Music Industry, publishing, Sony Reader, Trade Publishing, Wal-Mart, Waterstones
There Will Be Disintermediation
The first two parts of this series, Disruption and Generation On-Demand, explored my own personal content consumption disruption and traced it through the seismic shift in my reading, listening, and watching habits. My experience seems to align with the generational experience of content at one’s fingertips, on-demand. I called this phenomenon Generation On-Demand because this generation has grown up with and expects that everything and anything (content) be available to them, however, whenever, and wherever they want.
4 Responses to “There Will Be Disintermediation”
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Gary Arms
on May 11th, 2009
@ 5:43 am:As someone who teaches the Online Generation, I think it will happen the way it did with music and the way it is now happening with movies and TV shows. People with no ownership stake will put content on line so that others can “share” it. And so the dike will be breached. I agree completely with Evan’s analysis of the Online Generation and his prediction that they will increasingly ignore anything not in the cloud. Anyone who teaches knows it is increasingly difficult to get students to read books. There is a small but significant young audience for books, but a distressingly large portion of the younger generation will not read entire books unless required to do so by professors. When the online generation does research, they do it almost entirely online. Publishers and authors will continue to squabble. Again, I agree with Evan’s analysis; they will never come to general agreement. Meanwhile, the cloud will expand, gobbling up everything that exists in digital form. In music, it appears that artists will continue to make money but most of their revenue will come from live performance, the sale of tee shirts etc. To a considerable degree, the music industry has lost control of its product. “If you can’t beat ‘em, join ‘em.” The success of Hulu suggests that TV and movies can make money selling ads on their own site, a site that is easy to use, reliable and free of viruses. A huge amount of print (especially periodicals) is already on line; the magazines sell ad space too. This is the single most important problem facing all content providers. The future will belong to those able to adapt to the new environment.
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The Daily Square - Rockin’ of the Ten Thousand Edition | Booksquare
on May 11th, 2009
@ 4:32 pm:[...] There Will Be DisintermediationEvan Schnittman looks at the messes and possibilities we’re facing, and asks what happens on January 1, 2013. Will there be disintermediation? [...]
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Another copyright reshuffle that’s in the cards - The Shatzkin Files
on May 12th, 2009
@ 5:11 am:[...] Schnittman at Black Plastic Glasses posted the final chunk of a 3-parter yesterday that contained a real shocker (to me) at the end. The 3-part post shows through [...]
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AmazonEncore Is Amazon’s First Step Toward Dominating Publishing | Dear Author: Romance Novel Reviews, Industry News, and Commentary
on May 17th, 2009
@ 3:01 am:[...] effectively wrests control of the entire value chain. (Authors, if you don’t know what disintermediation is as it relates to publishing, you should and yes, we will talk about the very last paragraph in that blog article soon). Like [...]
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Tags: App Store, Apple, Audio CD, Authors Guild, Business, Digital rights management, DRM, ebooks, econtent, Evan Schnittman, Google, iPhone, iPod, iTunes, Kindle, publishing
Disruption
Disruption is the first part of a 3-part series on the zeitgeist of the digital era and the significant impact it has on publishing and all other content businesses. Disruption is personal as I look at my own content consumption over the years and document its transformation. There are no answers in part 1, just the facts as I understand them and the questions they spur.
Read the rest of this entry »
7 Responses to “Disruption”
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MikeShatzkin
on May 5th, 2009
@ 6:48 am:Evan, I think just about everybody buys less music as they get older. Two reasons.
1. You get introduced to music much more readily and frequently when you’re young and single and music is inextricably bound to the discovery of social opportunities with those of whatever sex interests you.
2. As you get older, your stash of stuff you KNOW you like gets bigger, and you never stop listening to it. So your NEED for new new music diminishes.
I bet if you checked you’d find that the pace of adding new ARTISTS has slowed even more than the pace of adding new music.
None of this applies to the other forms of content because they don’t tend to be reused the way music is.
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Topics about Harry-potter | Disruption
on May 5th, 2009
@ 7:26 pm:[...] [CinemaRatty] Latest Articles added an interesting post on DisruptionHere’s a small excerpt…a bit of sports… all (except NFL games) on TiVo … I went to the movies by choice (taking the kids to see Harry Potter doesn’t count.) Why… [...]
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Generation On-Demand « Black Plastic Glasses
on May 6th, 2009
@ 2:52 am:[...] On-Demand is the second of a 3-part series. The first installment, Disruption, explored my personal content consumption over the years and ended with the observation that [...]
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Will Hawkins
on May 6th, 2009
@ 5:24 am:Evan,
It’s a very interesting article. I can relate to the diminishing amount of TV you watch each
week, fewer movies watched and music purchased.I find that I am reading more in my forties than ever and most of it is through blogs or my
mobile phone. I read the same amount of books but not on a Kindle or other device.The difference in habits now to those I had ten years ago to do with when I read books and news, watch TV or listen to music. More often than not, I am reading on the underground, listening to the radio through the web at home while working, or watching a video on my
mobile phone.Reading, watching and listening are far more fragmented in when I do them, whereas in the past I would have devoted long periods of a day to each of them.
Will
[Reply]
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There Will Be Disintermediation « Black Plastic Glasses
on May 11th, 2009
@ 3:28 am:[...] first two parts of this series, Disruption and Generation On-Demand, explored my own personal content consumption disruption and traced it [...]
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Best of… « Black Plastic Glasses
on Jun 11th, 2009
@ 5:31 am:[...] 4 is a series that started with Disruption, moved into Generation On-Demand (a phrase coined with Fast Company contributing writer Adam [...]
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Tags: Amazon Elastic Compute Cloud, Amazon.com, App Store, Apple, Barnes & Noble, Barney Miller, Blu-ray, Books, Brady Bunch, cable TV, DVD, ebooks, Evan Schnittman, Harry Potter, HD, hollywood, iPhone, iPod, iTunes, Kindle, movies, radio, recors labels, studios, Television, TiVo, Ulysses S. Grant
Tommy
In 2006 The Smithereens did something really unique – they did a covers album. Actually, they covered an album. The Smithereens recorded the Beatles breakthrough album, Meet The Beatles, from the first track through the last. Meet the Smithereens is a fun romping and wonderful re-imagining of the spirit of the early Liverpool Beatles as heard through the power-pop chords and Marshall amps of New Jersey’s Smithereens.
Read the rest of this entry »
3 Responses to “Tommy”
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Miico » Blog Archive » Tommy
on Apr 26th, 2009
@ 11:46 pm:[...] the rest here: Tommy Tags: covers-album-, early, ever-wrest, first, first-track, liverpool, nachos-cases, national, [...]
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Daily News About the Moon : A few links about the Moon - Monday, 27 April 2009 01:00
on Apr 27th, 2009
@ 1:18 am:[...] Tommy [...]
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Evan
on May 9th, 2009
@ 4:24 am:http://blog.oup.com/2009/05/the-who/
[Reply]
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Tags: Amazon, Audio CD, Dennis Diken, iPhone, iPod, iTunes, Jim Babjak, Keith Moon, Music, Pat Dinizio, Pete Townshend, Smithereens, The Beatles, Tommy
Mike Shatzkin
on Mar 23rd, 2010
@ 6:08 am:
Very thoughtful and original post. You make a critical point that textbooks matched the ecosystem of learning: one class moving at a constant speed from a common starting point to a common ending point. And clearly, digital change enables our learning materials, at least, to be much more nuanced than that.
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Chris Cosner
on Mar 24th, 2010
@ 12:38 pm:
Thank you for this post.
Re: “The basic assumption of each text is that students all come in at or near the same level and leave at or near the same level.”
Having taught a foreign language from various textbooks, I can say that there is no class in which everyone is assumed to be at exactly the same level, though it is perhaps always a quixotic hope. The teacher inevitably makes adjustments for as many students as possible. FL textbooks are designed to be used in precisely this way. Many include sets of questions in the introduction to help the student determine what to work on, as well as tests at the end of chapters. Students naturally learn to work with the textbook at their own pace. A good teacher expects more from advanced students and recognizes real progress in the less advanced students.
I’m not sure there is anything earth-shattering a digital book can bring to *this aspect* of the textbook. It is up to the author to create a pedagogically sound design, and up to the teacher to coach the students on how to use the textbook.
One way a digital approach might address the problem of different levels of ability is a kind of rental or buy-in to a whole set of textbooks, so the student is free to move forwards and backwards through the material preceding and subsequent to the class.
But even this may be resisted by educators. After all, the student is always free to go to the library for more material, or to work with a tutor if they are behind. The whole point of a class is to be working together on a subject, to be on the same page. That motivates less advanced students to catch up, and it helps the ‘advanced’ students to solidify material of which they may not yet have a perfect grasp.
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The iPad: Gateway Drug to Digital Learning? « Black Plastic Glasses
on May 5th, 2010
@ 3:46 am:
[...] my last post, What’s Next in Digital Reading I explored my notion that there are three kinds of reading; extractive: immersive, and pedagogic. [...]
How do you read? :: Work+Place Discussing Workplace Trends
on May 14th, 2010
@ 1:57 pm:
[...] an ardent reader I was interested in the three kinds of reading described in What’s Next in Digital Reading? (found via Interstitial [...]