
The Myth of the 99 Cent Book - barredo
http://www.baekdal.com/opinion/the-myth-of-the-99-cent-book/
======
patio11
I fail to see how receiving 70 cents per e-book sold is a _radically_ worse
proposition than seeing $2 for every on-dead-treebook sold.

You know what you call an author's principle source of income? A day job. This
is true for the overwhelming majority of authors and has been since time
immemorial. A change in market power from publishers to Amazon will not wipe
out the stunningly lucrative career option that being a midlist author was.

~~~
jonnathanson
This.

Most people don't realize that the _vast_ majority of authors -- even your
J.K. Rowlings, Stephen Kings, and John Grishams -- make their money over a big
volume of works, rather than on any individual work. Amanda Hocking, with her
much-storied, self-published millions, is no different. She didn't get rich
off a single book; she got rich because she cranked out 20 bajillion books at
once.

If anything, the new economics of publishing will push things further in this
direction. The pressures of this market will favor prolific authors over one-
hit-wonders. It's debatable whether that's a good thing or a bad thing for
authors and, ultimately, readers. You could certainly describe it as the fast
foodization of the book world. But the new dynamics would simply represent an
acceleration of an existing model. After all, the John Grishams of the world
were already massively richer than the modern-day James Joyces of the world
before Amazon showed up. That's not a new or particularly startling
phenomenon.

~~~
cfn
A prolific writer is in a better position to make a killing but bad user
reviews may eventually put an end to it. A big difference from the past is
that self-pubbed authors can receive up to 70% of the sales whereas they would
get 10% or less with legacy publishing. This greatly reduces the threshold of
success (if measured as being able to live off writing).

~~~
jonnathanson
A fair point, but then, middling to bad user reviews don't seem to have slowed
down mass-market juggernauts like Dan Brown and James Patterson. In theory,
user reviews help keep a check on absolute fast foodization. But in praxis,
they haven't really mattered all that much. Though I suspect they will matter
a lot more a few years from now, when we'll be seeing more and more authors
get their starts in self-publishing. (And right now, they seem to matter more
at the extremes than in the middle: people pay attention to one-star reviews
and five-star reviews, but the muddy middle doesn't seem to register as
easily).

As for the treshold of success: agreed on most counts. The costs of entry and
the barriers to making a successful living have been lowered. But the tricky
part is that authors will increasingly bear the burdens for their own
publicity, marketing, etc. Successful authors of the future will probably have
a lot in common with successful entrepreneurs in the app market.

~~~
pmichaud
In my experience, if the book isn't a blockbuster with a huge marketing
budget, ratings make or break it. If someone searches for a book on amazon,
and finds a "maybe," they look at reviews. If the reviews are consistently
good, they buy. If there are bad ratings, they don't.

I've had books go from selling consistently to selling almost nbothing just
from one or two negative reviews.

~~~
sethg
I think this is where small presses (or specialized imprints/brands from
larger publishers) can make a big difference, even in the post-paper-book
world, for authors that appeal to a niche market.

Last week I was browsing the SF shelves at the local about-to-close Borders,
and I ended up buying a book I had never heard of by an author I had never
heard of without even reading the first chapter. One reason I took that risk,
of course, was that it only cost my five bucks. But the reason I picked _that_
book out of all the titles on the shelf, most of which were even cheaper, was
that it was put out by Haikasoru (a small press specializing in translations
of Japanese SF), and I really liked the last Haikasoru book I bought, and I
read the editor’s LJ, and I like his taste.

~~~
cfn
Quite true. And going beyond ratings and prior knowledge, are the
recommendation engines that may also create some networking effects. Also, an
anti-thesis for the submitted article can be found in many articles by Joe
Konrath: <http://jakonrath.blogspot.com/>

------
billswift
This post makes the same mistakes many critics of the Laffer curve make. The
Laffer curve, despite their simplistic criticisms, does not say that lower
taxes increases revenue, it says that there is a "sweet spot" where tax rates
maximize revenue; if your rates are higher than that, then lowering them will
increase revenue, but if the rates are lower then raising them should increase
revenue.

Similarly with pricing schemes; there is some price point which will maximize
revenue, often it is lower than the seller believes, but not always. J A
Konrath on his blog has discussed his experiments with pricing and revenue
several times over the last few years (<http://jakonrath.blogspot.com/>).

~~~
JayWilmont
The concept you want is "price elasticity".

------
larsberg
I'm not sure this author actually reads the 0.99 books from Amazon. I read
quite a few of them (kicked a bad video game habit), and it appears many
authors of the SciFi multi-volume publish book 1 at either free or 0.99, with
the rest of the books in the series around the 2.99 price point.

Like apps, I will buy almost anything at the 0.99 price point. But at 2.99,
I'd probably skip the first book unless I had a recommendation, and for all of
these "long tail" authors, there is little chance of me discovering them. But
with this pricing model, the top-100 books are always churning up a few new
authors every week for me to check out.

It's very interesting because it is so different from the app or standalone-
book models.

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sethg
Nick Mamatas (who is both a writer and a small-press editor) once argued that
the true market value of an ebook, at least for fiction, is around 99 cents,
because that’s how much a typical book costs in a used bookstore. (Not having
visited a used bookstore in a while, I have to take his word for it.) In other
words, if you want to read a novel and you don’t care about its format, you
can get one for 99 cents.

~~~
larrik
Seriously, I've replaced my new book buying habit with used bookstore visits,
NOT with ebooks (I've never payed for an ebook, but I do like Project
Gutenberg)!

It helps that I mostly look for obscure sci-fi, which is quite under-
represented in new book stores.

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smackfu
Taking logic to absurd extremes doesn't prove it is wrong in general, it just
proves it is wrong at the extremes.

Look at games on the iOS App store. Would anyone sell a polished game for $1
back in the day? No way! A game is worth $20-30. Yet developers are making a
killing selling them for $1, the minimum allowed price. And yes, this does
hurt the people who think they need to charge $10 for their game, because they
think there is only a small market. But that doesn't mean the people charging
$1 are wrong.

~~~
ctdonath
New delivery mechanisms have changed the, er, game. When the audience has to
get in a car, drive to a game/book store, physically peruse voluminous units,
etc. just to identify and purchase the product, the practical audience is much
smaller than the potential audience. When the acquisition process is
simplified to tap-tap-tap-[password], the practical audience equals the
potential audience.

A ballpark guess is Angry Birds is probably selling some 10x as many copies
via on-a-whim instant downloads vs. the go-to-a-store-and-get-a-cardboard-box
model.

------
prof_hobart
"Another example is if you write a book for a nice market, totaling 20,000
potential readers. And you predict that for the price of $9.99 you will reach
35% of that audience."

If you're able to reach 35% of your total possible audience at $9.99, then of
course you're not going to make more money by slashing to $0.99. But where did
the 35% figure come from?

How about I pluck the figure 1% out of the air instead? And pluck 50% out as
the figure I'd reach at $0.99? Suddenly the economics look totally different.
I'm now making 5 times the amount at $0.99.

Unless he's got any particular basis for his figures, mine are just as valid
as his (and based on my personal buying habits on the iPhone, mine are not
entirely unreasonable. I have spent far more in total on $0.99 apps than I
ever have on $9.99 ones and I very much doubt I'm the only one. I know books
are different, but there's no fundamental reason why you couldn't see a
similar pattern).

I'm not suggesting that authors definitely would make more money. But basing
your argument on what seems to be a figure plucked randomly out of the air
isn't a good way to prove your case.

Oh, and whilst we're at it, why does the long tail apply to $0.99 books but
not to $9.99 ones?

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robertskmiles
It seems to me that this article is pretty clueless

The part about the relationship between price and sales shows a total
obliviousness to basic economics

> _A 99 cent book may bring authors a lot more money than $9.99 one._

> ... _I don't know where they got this idea from. It is not true._

> _Sure, providing something at a discount yields a higher sale, but it is not
> at the same rate._

The author has sort of independently reached _some_ of the conclusions of
simple economics, but honestly you'd be far better off just reading the
wikipedia page of Elasticity of Demand
(<http://en.wikipedia.org/wiki/Demand_elasticity>).

The question is pretty much just " _Is demand for ebooks elastic or
inelastic?_ ". I don't hold it against the author, but they're really
reinventing wheel, and the wheel they've come up with is kind of wonky.

> _Every other type of product cost more today than 10 years ago. A bottle of
> milk costs more today than in the past. A bicycle costs more than in the
> past, a meal at a restaurant cost more today than ever before. The gas
> prices are off the scale (but for other reasons as well.)_

That's just dramatically factually untrue (in real terms). Yes, with
inflation, a lot of things now cost _a larger number of currency units_ than
they once did, but in real terms bicycles (to use their example) are a lot
cheaper than they were, because they can be mass produced in enormous numbers
in China.

> _Content is the only industry in which the price of content has dropped. ...
> Every other product costs more. Content costs less._

I might be wrong here, but I believe just about all manufactured goods have
substantially fallen in price in real terms since the 60s.

tl;dr This person needs to read a high-school level book on economics (or just
the chapters about Inflation and Elasticity of Demand) before telling people
how to price their goods.

------
kamikazearun
The whole article is based on a strawman. Who contended that reducing price
per unit by an order of magnitude would result in an equal increase in volume?

Pricing at a dollar is a definite advantage for certain products which have
mass appeal and have potential for massive volume ( Ex: Angry Birds ). People
are significantly more likely to buy something that's only mildly interesting
if it costs an insignificant sum like a dollar.

If you sell a textbook on Applied Thermodynamics for a dollar though, you sir
are an idiot!

~~~
ctdonath
Per a prior post, a book is only worth what it costs used. Amazon lists used
books titled "Applied Thermodynamics" starting at $0.51. If you're one who
realizes education is nigh unto free (personal review & certification being
the expensive bit), such textbooks are only worth a buck.

Note that that the textbook market is skewed to artificially favor expensive
titles per school requirements and publisher racketeering. Considering it is
AFAIK a fairly settled topic, at least in an educational setting, without such
price-fixing the introduction of yet another textbook on Applied
Thermodynamics would command a far lower price than the typical $50-$150.

Yes, the simplified lead premise is a strawman. So is saying selling a
textbook dirt cheap is idiotic. Both are used as a lead-in to a valid detailed
discussion of what does constitute reasonable pricing.

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SNK
"Every other type of product cost more today than 10 years ago. A bottle of
milk costs more today than in the past. A bicycle costs more than in the past,
a meal at a restaurant cost more today than ever before. The gas prices are
off the scale (but for other reasons as well.)"

Lying so egregiously to _this_ audience is insane; ever heard of computers?

~~~
sethg
There’s no Moore’s Law for novels.

There have been some technological improvements that make writing more
efficient (e.g., word processors), but the process for making most other
consumer products has become efficient at an even faster rate. The Baumol
effect predicts that this imbalance will lead to more expensive novels and/or
cheaper novelists.

~~~
kstenerud
Cheaper novelists. Like with apps, the new publishing model lowers the bar to
entry, resulting in a substantial increase in publishing authors.

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EponymousCoward
This guy is seriously misunderstanding the long tail. First of all the long
tail is an opportunity, not something that "dies" (his words). It's an
opportunity for authors because what authors have today is the opportunity to
self publish and instantly receive global distribution and in the case of say
Amazon sit on a store shelf that has millions of visitors a day. On top of
that, they take 70% of the books retail price.

So all this and he's going to cry about the price point dropping?

For the record my book buying rate has probably gone up 10x since Kindle,
partly due to price partly due to convenience.

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Triumvark
Prices float toward the marginal cost of production.

Saying that's heading in the wrong direction is like saying that we could make
a better plane if we just had less gravity.

~~~
JayWilmont
Despite how poorly this guy describes price elasticity, I do think he has one
decent point: that if the "customary" ebook price becomes $1, that is too low
for most authors to make it. Based on just a gut feeling, I think the sweet
spot would probably be $3-6 for ebooks.

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brackin
Making $10 of ad revenue is actually very good for a small blog. People don't
just do these things to become millionaires but for a mix of recognition and
for fun. Doing things for fun is still very prolific...

