On Pricing eBooks, Part 2
Rubber Buggy Blogger Bummer
The previous post, On Pricing eBooks, touched on the relative value of an ebook to the writer and to the purchaser, and now I’d like to add some more observations on pricing and the donation model.
Assuming the material isn’t infringing copyright, there are only two rules for producing an ebook:
- Make it readable–spellcheck, organize the copy coherently, and don’t get goofy with the layout
- Don’t go into hock to publish it
That second point actually contributes to the pricing issue. Those who can afford it can opt for professional design and editing; those who can afford it are very likely established in their niche. The professional presentation of their work further reinforces their professional reputation–and makes it more likely that they can command higher prices.
The assumption, therefore, is that low-end pricing equals low-end production values, and therefore implies less-professional content. We all know that this isn’t necessarily the case, but it ends up looking like that anyway. The sales volume for the low-end pricing, however, potentially makes up for any loss of status; in fact it can create the market that leads to a high-end status, so in the long run it’s cool.
Who suffers? The guys in the middle price range. This price range is too high for most readers to take a risk, and the perceived value is too low when compared to the high-end market. So you can go high or you can go low, but the middle price range is most likely to see the least income from sales, and least profit–the middle range authors tend to pop for professional design and editing, vastly increasing their costs. This is basic market stuff, not original to ebooks.
The “sweet spot” price for Amazon and Kindle ebooks seems to be $2.99, which provides both high sales volume and yet some income for the author. This is where I got the idea to suggest $3 for a donation. It’s not so high that those who cannot contribute a lot feel uneasy if they don’t, but it is not so low as to provide no compensation. And it is just a suggestion. The donation button will also be available for those who simply enjoy the blog.
I do not like that only those with extra money are entitled to information. Isn’t there value in getting information out to the largest number of people? Isn’t there something more important than profit? Is my precious working time more valuable than your precious, thirsty mind and soul?
The donation model is intended to provide mutual support between the maker and the recipients, but with special consideration for the recipients. Like the standard product/price model, more recipients are potentially more support.
An example of a successful donation model is Panera Bread, which has spent the past year setting up test shops without cash registers, asking customers to donate a suggested amount instead. They report that 60% donate the suggested amount, 20% leave more, and 20% leave less. But everybody eats.
A few years ago Torrentfreak.com reported that Nine Inch Nails and Radiohead opened downloads of some of their music to the donation model and did extremely well–but that less-established bands were not likely to make good money this way. Nonetheless, it is still considered a good business model, simply because it grows an audience and generates good will.
There is a post at DRM News about how a freeware SIM game called Dwarf Fortress opened up to donations–and ended up making a profit. Techdirt.com reported that another game called World of Goo tried the donation model with an attached survey. They not only made money, they learned something interesting:
Few people chose their price based on the perceived value of the game. How much the person feels they can afford seems to play a much larger role in the decision than how much the game is worth.
This brings us all the way back to the value and price discussion, and my assertion that they are two different things. Many for-profit blogs and businesses offer freebies, intended as carrots to entice customers to purchase other goods and services. The better the quality of the free product, the better the perceived value of the priced products. Giving away some of the good stuff is good business practice, whether you’re selling ebooks, subscriptions, or widgets.
Nonetheless, the paid model, even with freebies, still greatly restricts the dissemination of information and further separates the Haves from the Have Nots. Using freebies to entice buyers for high-priced products is the traditional marketing ploy of creating demand. This is the same process that leads to hypnotic pitch pages, time-limited specials, perceived scarcity, etc. It works pretty well, at least for a while, until the market tires of the product.
The donation model offers everything for free–and yet nothing for free, by asking for a donation. While there are plenty who abuse it, it also allows for customers to take conscious action based on their own situation and value system. It is mutable rather than concrete, and likely works better in some circumstances than others, but it can work.
This leads me to speculate: the donation model allows access, but also an opportunity for parity; if you sell your own work for, say $15, would you be willing to donate $15 for mine?
The Minimalist Woman’s Guide to Having it All will be available on Tuesday, 14 June. Stats from The Great Donation Experiment will be shared as soon as there are enough numbers to be useful!