So I’ve discussed the new business models that publishers are using to take e-books into account, and how they’re using digital rights management, but there’s one key thing we’ve yet to discuss; how on earth do we price these digital products? This is the greatest question of all, and everything I’ve written on this blog either affects, or is affected by pricing.
Frania Hall compares the digital phenomenon with the way paperbacks once changed publishing business models; publishers soon saw the strengths of this new method, because since then the ‘hardback…continued to support the initial investment and the following paperback…capitalised on the success of a title’ (Hall, 2014, p.163). But e-books are not so profitable, because they do not support their print counterparts, so publishers cannot treat them as ‘another sort of paperback’ (Hall, 2014, p.163).
This is all because consumers have different expectations with digital products.
Firstly, ‘there is an expectation that content on the internet should be free’ (Clark and Phillips, 2014, pg. 112), but there is ‘an understanding of the intrinsic value of the information’ (Hall, 2013, pg. 164) in published academic books and the like, so publishers need to reinstate the same added value for e-books in areas like trade fiction too, and ‘identify…the service they can offer to brand authors’ (Clark and Phillips, 2014, pg.112).
Secondly, consumers are ‘applying perceptions of one digital price model to another’ (Hall, 2013, pg. 164) i.e. low-cost subscription to watch unlimited films, or individually priced music tracks or game apps. Basically, consumers base price on the tangibility of the product, and to a certain extent they are correct. One does not own an e-book, they are only rented under certain terms and conditions, and it cannot be shared in the same way that print books are, so why should e-books cost the same?
Well, the thing that everyone seems to agree on is that we need to alter our perception of the relationship between price and value. With consumers expecting lower prices, publishers need to accept that ‘the value is the worth the consumer places on it’ (Gaughran, 2014), so trying to price e-books on the title’s intellectual value is no longer the publisher’s role. But the slightly less extreme is that publishers make it clear how they adding value; if publishers cannot price according to printing and warehouse costs, then charge according to ‘the value of the “brand” it comes from’ (Bacon, 2013). Bacon suggests that perhaps e-books should price according to ‘“premium pricing for premium brands”’ (2013), as seen in other areas of the technology and computer industry.
But most importantly, publishers need to see that e-books are completely different products to print books, and cannot be wedged into print business models. Instead they should focus on how to maximise the profitability of e-books: lower prices mean ease and spontaneity of purchase, so consumers may ‘buy more books for their ereader than they did in’ (Hall, 2013, pg.171).
So publishers may have to totally reconsider the way they decide on prices but there’s no reason why they cannot make it work in their favour whilst still meeting consumer demand.
Words: 522
Frania Hall compares the digital phenomenon with the way paperbacks once changed publishing business models; publishers soon saw the strengths of this new method, because since then the ‘hardback…continued to support the initial investment and the following paperback…capitalised on the success of a title’ (Hall, 2014, p.163). But e-books are not so profitable, because they do not support their print counterparts, so publishers cannot treat them as ‘another sort of paperback’ (Hall, 2014, p.163).
This is all because consumers have different expectations with digital products.
Firstly, ‘there is an expectation that content on the internet should be free’ (Clark and Phillips, 2014, pg. 112), but there is ‘an understanding of the intrinsic value of the information’ (Hall, 2013, pg. 164) in published academic books and the like, so publishers need to reinstate the same added value for e-books in areas like trade fiction too, and ‘identify…the service they can offer to brand authors’ (Clark and Phillips, 2014, pg.112).
Secondly, consumers are ‘applying perceptions of one digital price model to another’ (Hall, 2013, pg. 164) i.e. low-cost subscription to watch unlimited films, or individually priced music tracks or game apps. Basically, consumers base price on the tangibility of the product, and to a certain extent they are correct. One does not own an e-book, they are only rented under certain terms and conditions, and it cannot be shared in the same way that print books are, so why should e-books cost the same?
Well, the thing that everyone seems to agree on is that we need to alter our perception of the relationship between price and value. With consumers expecting lower prices, publishers need to accept that ‘the value is the worth the consumer places on it’ (Gaughran, 2014), so trying to price e-books on the title’s intellectual value is no longer the publisher’s role. But the slightly less extreme is that publishers make it clear how they adding value; if publishers cannot price according to printing and warehouse costs, then charge according to ‘the value of the “brand” it comes from’ (Bacon, 2013). Bacon suggests that perhaps e-books should price according to ‘“premium pricing for premium brands”’ (2013), as seen in other areas of the technology and computer industry.
But most importantly, publishers need to see that e-books are completely different products to print books, and cannot be wedged into print business models. Instead they should focus on how to maximise the profitability of e-books: lower prices mean ease and spontaneity of purchase, so consumers may ‘buy more books for their ereader than they did in’ (Hall, 2013, pg.171).
So publishers may have to totally reconsider the way they decide on prices but there’s no reason why they cannot make it work in their favour whilst still meeting consumer demand.
Words: 522
- Bacon, B. 2013. 7 Must-Consider Strategies for Ebook Pricing [online] Available at: http://www.digitalbookworld.com/2013/what-is-the-value-of-an-ebook-hint-it-has-nothing-to-do-with-the-cost-of-paper-and-ink/ [Accessed: 23/11/2014]
- Clarke, G. and Phillips, A. 2014. Inside Book Publishing. 5th ed. Oxford: Routledge.
- Dredge, S. 2014. Amazon ebook pricing battle intensifies after 'Authors United' ad [online newspaper article] Available at: http://www.theguardian.com/technology/2014/aug/11/ebook-pricing-amazon-hachette-authors [Accessed: 23/11/2014]
- Gaughran, D. 2014. The Great E-book Pricing Question. Let’s Get Digital [blog] 7 April. Available at: http://davidgaughran.wordpress.com/2014/04/07/the-great-e-book-pricing-question/ [Accessed: 23/11/2014]
- Hall, F. 2013. The Business of Digital Publishing. Oxford: Routledge.
- Publishing Technology. 2013. The downward trend of average ebook prices in the UK and US [online] Available at: http://www.publishingtechnology.com/2013/08/downward-trend-ebook-prices/ [Accessed: 23/11/2014]