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Results of an Ebook Pricing Survey

With the increasing popularity of ebooks, and the increasing prices, and increasing complaints about the increasing prices... :) ... I thought it might make sense to ask people what they thought were fair prices for ebooks.

Thus I started an Ebook Pricing Survey and have collected enough responses so far to present the results to date. (Feel free to take the survey and add to the results.)

I was curious to explore the differences in pricing along several dimensions:

  • Novel-length vs. short story length
  • New release vs. older work
  • Fixed pricing (generally paid up front) vs. "As You Liked It" variable pricing, based on reader satisfaction (paid after reading)

You can view the actual, up-to-date results here, which also have links for more in-depth statistical analyses on each set of results.

Interesting data the survey has reported at this point is as follows:

For fixed, up front (before-you-read) pricing, people have said about $8 is a fair price for a new novel. That's the average amount reported. Of course this is a curve, and that's the mean. One standard deviation to the left, which would be a point at about which 93% of people would think $4.40 is a fair price. (Assuming few people would be insulted at how low the price was and would demand to pay more.) At one standard deviation to the right, around 93% of people think $11.40 is too high a price to charge for a new novel-length ebook.

[Footnote: It's useful to note that whether a book is locked with DRM or not is also a dimension of concern for people, but I didn't explore that one. A common number I've heard is that people feel a DRM-locked ebook is worth half the price of a DRM-free ebook. (Since you can't move it among devices easily, can't give the copy to a friend when done, can't give it as a gift, may lose the ability to read it if the vendor disables the service, goes out of business, or capriciously cuts it off (as Amazon did to Kindle copies of 1984, of all the delicious ironies), and so on.) So it's hard to say how DRM-free-ness plays into these prices. A survey for another day.]

For older releases of novel-length books, $4.67 was the average preferred price. The price that would make around 90+% of people happy would be $2.65, and people statistically thought that $6.69 was too high for an older release novel. That puts $9.99 pricing and above into question on Amazon, Apple's iBooks, and so on. One expert in pricing told me people will generally actually pay more than they say they'll pay, but if anything it demonstrates that people do feel the prices are stiff. This of course interacts with the elasticity of demand (how demand changes with differences in price). While publishers are hoping to find the mathematical point at which they make maximum profit, that may not necessarily coincide with what authors want. For example, authors might be willing to take slightly lower profit for a given title if it came with a greater increase in readership (readers who might go on to buy their other works). That is, authors may be wishing to optimize a different set of variables than publishers. And it's difficult to measure the elasticity of demand for each book, let alone at each point in time, so the prices chosen may certainly not even be optimal.

For short stories, the fair upfront price was reported as $2.28 average for new short stories and $1.24 for older ones. To make readers really happy (or so they say), asking about 75¢ for new stories and 34¢ for older ones would do the trick. Excessive prices would be at about $4 and $2 (new / older).

One interesting phenomenon with ebooks is the frequent lack of identification of length: Both novels and short stories are listed as "ebooks" without regard to characterization of length. It's often able to find some indicator of length if one looks (word counts, file sizes in bytes, etc.) but this is rarely mentioned prominently. A question it raises is whether readers care that much about length vs. price if you don't bring it up first. It doesn't seem right to me to ask the same price for a 2,000 word short story as a 100,000 word novel, but perhaps ebook readers really aren't that into the distinction.

"Pay As You Like It" Variable Pricing

My next set of questions were about the idea of paying for a work after reading it, with the compensation based on how much you enjoyed it. The impetus for this was tipping in a restaurant, where (in the US, anyway), the social convention is to reward the server around 15-20% of the bill for average service, 20-25% if one thought the service was particularly good, or for service one didn't care for, 10-15% — but not zero. This also explores the idea of paying after reading in general — again, as one does in a restaurant. Apparently few people walk out without paying; observation suggests it's rare, as restaurants don't seem to take precautions to prevent it. So it's conceivable that people could be willing to pay after reading instead of before, if that were the social norm.

The survey thus asked questions about what three price points are felt to be agreeable for novels and short stories based on how much one enjoyed them. For novels, the average desired prices for liked-it / average / disliked-it were reported as roughly $9 / $6 / $3.50. For short stories, the average of the desired prices were basically $3 / $2 / $1.

Whether people would actually honor such a system is an open question. For the heck of it I've decided to try an ebook pricing experiment, as detailed here. I've just posted these as torrents so we'll see how it goes — I'll report back what kind of response I get. If nothing else it should be an interesting experiment.


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

— Andrew Burt


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