The most complex thing about digital books? Pricing
The market for digital books is quickly growing and evolving, and as it does, publishers and retailers are starting to accumulate enough data to notice some important emerging trends.
Even though statistics concerning digital book sales are still quite scarce – at least to the public eye –industry professionals have access to information that indicates that each year, the average price of self-published digital books is decreasing on a global scale.
According to chief content officer at Kobo, Michael Tamblyn, the price of traditionally published digital books remains fairly consistent, while self-published authors continually reduce the price of their digital books.
Considering around 20% of Kobo’s sales come from self-published authors, this trend has a significant impact on their business model.
Kobo and other publishers and retailers are aware that pricing strategies from a few years ago aren’t relevant anymore, and that they need to be updated according to these new trends.
In contrast to Tamblyn’s claims, Dan Lubart, founder of technology services company Iobyte Solutions and sales analytic at HarperCollins, suggests that the average price of traditionally published digital books is also dropping.
However, this data, which he presented at the Publishers Launch conference in May, was limited to the US and wasn’t indicative of global trends.
Unfortunately a lot of industry commentators are always so concerned with what is happening in America that they forget to look at trends from around the world.
The average price of a digital book varies significantly across international markets.
For example, the average selling price of a Kobo digital book in America is USD $7.20, in Canada it’s USD $8.12, and in the UK, it’s just USD $5.76
At the moment, the UK leads the US when it comes to discounting books, and has the most competitive digital book market in the English speaking world.
Josh Schanker, founder of a website called BookBub, which informs members about digital book sales, says that experimenting with temporary sale prices can have positive outcomes for publishers.
Although traditional publishers are more likely to keep their prices stagnant, some have been mimicking self-published authors and offering their titles at a discounted price, for a limited time.
According to Schanker, the greater the discount, the greater the response rate.
Books discounted by 90-99% attract 300% more clicks and purchases than those discounted by 60%.
And if that’s not incentive enough… digital books most significantly discounted tend to sell more copies once they return to full price.
Selling cheap books, or giving them away for free, allows readers to experience new authors.
And when they find an author they like, they generally go back for more.
Discounting books to attract customers is an interesting idea, and in light of Schanker’s statistics, an effective marketing strategy.
Cheap or free digital books might even have more potential to attract readers to a new author than a new digital bookshop.
Between July 2012 and March 2013, Sony’s UK store ran a promotion where it sold digital books for just USD $0.30
While Kindle UK and some other retailers matched these prices, Kobo didn’t, but what’s interesting is that Tamblyn said they didn’t notice any difference to their sales.
People seem to be loyal to their digital book retailers and aren’t affected by discounted prices at competing stores, even when the books on sale aren’t in a proprietary format.
On top of that, evidence suggests that giving away books for free only really helps authors who are already well known or successful.
23,180 people downloaded her book, but only 782 (roughly 3%) committed to paying the small sum of £1.50
What these figures indicate is that even though people were interested in reading her work, not many were prepared to part with their money for an unknown, first-time author.
And in today’s uncertain economic climate, this story would be quite common for new and developing authors.
Evidently, free isn’t always the best option for everyone.
Sometimes selling digital books at a discounted price is a more economical choice, because any profit, even if it is only a few cents per book, is better than none at all.