Critters^TM Workshop

An Ebook Pricing Experiment

Over on the forums for Demonoid, a bittorrent tracker site (with considerable pirated material), there was a discussion thread entitled "Price Gouging" on ebooks. Readers and ebook fans posted commonly aired thoughts about the high price of ebooks as well as the annoying DRM (which publishers have generally felt are needed to enforce the prices and prevent piracy).

I tend to agree with those thoughts — that ebook prices are awfully high, and DRM is extremely annoying — so I've been doing some experiments to explore the alternatives.

These experiments are in response to sentiments like these that readers posted there:

I honestly feel that publishers are trying to kill ebooks.

One of the fastest growing areas of entertainment right now is Ebooks, so the publishing response to that popularity is to raise prices, sometimes drastically.

I am all for supporting authors. I know how hard they work their butts off to first get published then to actually keep an audience. That's why normally I didn't have a problem spending $6.99 on an ebook. But there is no way in hell I am paying $9.99 for an ebook when the paperback is $9.99!!!

I think the sooner the authors actually go into working for themselves in the ebook market, the better

To which my response was:

I agree, not just with the quoted bit but also the rest of what everyone's said above. In fact it's why I signed onto Demonoid — to post ebooks of my work (I'm a professional science fiction author).

I'm actually doing it as part of an experiment, to see if it's feasible to connect directly with readers. I frequently hear from people they would pay a fair price for ebooks if they were given the opportunity, especially DRM-free ebooks, as opposed to being forced to pay gouging prices up front for DRM-locked books, which I hate too.

So the first step I took was to do a survey of what's a fair price, and moreover, to see what fair prices were based on how much people liked a given ebook they read. It's at http://critters.org/surv if anyone is interested in seeing the results or adding to them. [And an analysis of the survey results is here.]

I know I've felt ripped off a few times buying an ebook or app that really didn't live up to the expectations the advertising had set for it, but dang it, you've already paid for it and there's no money back. In the survey I thus asked people several questions to get at feelings about fair prices based on whether an ebook is new or been around a while, whether a novel or shorter length, and paying up front vs. paying based on how much you liked it.

The idea behind the "Pay as you like it" was tipping in a restaurant. (In the US, anyway, where servers earn a sizable amount of their income based on tips, which are based on quality of the service they provide. I know this isn't as common outside the US, but it's the payment model we use, so you just mentally know there will be a tipping amount to add on, along with taxes. For average service the common standard is to tip around 15-20% of the bill, with 20-25% if you liked it, and maybe 10-15% if you thought the service was poor.)

The relevant aspects for this experiment being that established convention is (1) you essentially pay the server after service is provided, not beforehand (whereas you generally pay for a paper book before you've read it all) — you don't walk out without paying for your meal; and (2) you compensate them based on the level of their service — more than average if you really liked their service and less than average (but usually [i]something[/i]) if you didn't like their service, and you certainly pay for the food in any event (except in really rare cases where you complain how bad it was).

Thus the model for paying for food and service in restaurants seems like it might be a fit for paying for ebooks: Download it, read it, and pay a fair price, possibly even based on how much you liked it. But paying something even if you didn't like it but you did read to the end. (Well, with an upfront payment system you've paid even if you never read it, but that doesn't seem especially fair to me. So I figure if someone doesn't read it they shouldn't have to pay, but it only seems reasonable if they read to the end they should pay something. And of course authors do have bills to pay so we can't give everything away free; though I really don't hear that from readers, that it should all be free, so that isn't, or shouldn't be, an issue.) Authors, like restaurant servers, need to pay bills and earn money from their writing, thus many authors and publishers are concerned about having their work posted around by someone else where readers read it free, sort of like walking out of the restaurant without paying. Even in a library the library paid for the copy of the book they lend out. However, I hear readers usually saying they get it that authors need to be paid, and they're willing to pay, if there was a way, and the price wasn't exorbitant.

So — the survey suggested "Pay as you like it" pricing for novel-length ebooks of around $6 if it was ok, $9 if the reader liked it, and $3.50 if the reader wasn't feeling it. For short stories the pricing has come in at about $2 average, $1 if it disappointed, and $3 if was good. (And these are the prices I've posted as suggested "as you like it" payments in one ebook, and in the other I put in even lower prices.)

As one professional price-setting person pointed out to me, people will usually say less on a survey than they'll actually be willing to pay. Which is probably why publishers charge such gouging prices, as they know people will pay them. Grudgingly, of course, and with complaint, as this thread is about, but they know it probably maximizes their profit to charge more.

Well, I've always thought that it'd be nice to charge a price people thought was fair, rather than a gouging price. Hence, my experiment.

To test out the theory that people will pay after reading, for non-DRM'd ebooks, and pay an amount they feel comfortable with, I'm torrenting some of my ebooks. I've included links in them to a payment page so when the reader is done they can pay what they think was fair.

For ease of reading I posted the first as a PDF, and the second I did in PDF/EPUB/MOBI/LIT/HTML formats. What other formats would people want to see authors post in?

For ease of payment I put links in the books to both PayPal and AmazonPayments, plus for the second one I included a way to mail a check or cash, or even upload a scan of a check. If anyone has suggestions for making it easier to pay I'd love to hear them.

I'm really hoping this experiment is successful, and I'll be able to tell other authors "Hey, this works!" The downside would be if it fails, and there are lots of downloads but few or no payments, that would only, unfortunately, prove the publishers are maddeningly correct in their high pricing and insistence on DRM to force people to pay up front. I really hope to prove that isn't the only way, as I hate DRM, and, like I said, I agree with the sentiments of what everyone's posted in this thread. I'm very curious and optimistic to see how this works out.

Sorry for the length of this post, but I'm a bit passionate about not liking price gouging and DRM, and hoping I can show there's a viable alternative.

I just barely posted the torrents so I'll report back what I've found as the experiment goes on. And if anyone has ideas how to improve on the idea, I'd love to hear your thoughts, so please let me know, either here or via http://aburt.com/contact.php — thanks.

For the curious, the two ebooks I've torrented so far are here:

I'm trying some other experiments too, and will let you all know how those play out.

Thoughts?

I'd love to hear your thoughts, so please share them in this thread. Thanks!

— Andrew Burt