Pricing and the Author

20 Mar

So much for sentimentality. Let’s talk money, which is much, much better.

This huge thing with the pricing–normally I’d let it pass, but seeing as this is the stuff of my nightly dinner conversations, I figured I’d hop in after all. I know, our dinner conversation must be riveting, but I am married to a strategy consultant, after all. You’d be amazed the kind of stuff I get out of him for stories. Like he explained Nash Equilibrium and Game Theory to me a few months back (he used the white board and everything!) and I wrote a whole paranormal romance based on it, no shit. Yesterday he explained a combination equation for me so I could figure out how to make a very particular clockwork calculator work in my WiP. It’s awesome.

Right, pricing, sorry.

I asked him today to explain to me why e-book pricing is such a cluster fuck.

As Aaron said last week, people will pay what they pay. The reason we’ll pay what we pay and get indignant about anything else is because of reference prices. This is what happens with brand new products–like Kindle was the first, so Amazon priced the thing astronomically, and so in our consumer brains, that’s our reference price, regardless of actual cost of development and manufacture. When they dropped the price, it looked much more reasonable, and we began to consider it an affordable luxury. The argument people are making against $.99 ebooks is that it’s fucking up the reference price for ebooks. That’s not even an opinion, it’s a fact. I’ll come back to it later, but hold that thought.

As a separate but related issue, pricing something too low devalues it in the mind of the consumer, which has been proven over literally centuries of human experience and experiment. It’s like that thing with the wine list at a restaurant. If there are, say, three Chiantis on the list, one of them will be relatively cheap, one will be somewhere in the middle, and one will be nearer the three digit mark.  I’ve seen a bottle of Chianti that I got in a shop for $9.99* listed as a $35 “middle” bottle in a restaurant–and that’s not all the stupid “corking fee” we get here in VA. It’s because it was the middle bottle, and they know people who have no idea what kind of quality to expect in a given bottle will always go for the middle. It looks reasonable in comparison to the expensive one, and must be better than the cheap one. So that restaurant is getting not only the store markup, but also the completely invented extra double digits they tacked on to screw you, minus state sin taxes/corking fee (which can’t be more than the price itself).

The expensive bottle might sell to someone trying really hard to get laid now and then. The cheap bottle never sells. Who wants that crap? But they don’t need to sell those bottles, because they exist mainly to convince you to buy the middle one at a jacked up price. And they’re moving that shit like it’s hot.

Price isn’t just about what people will pay, is what I mean to say. It’s a coded message about the product’s quality and desirability. Imaginary, invented, but real in the mind of the consumer, because by the time they have any actual indication of quality, they’ve already paid for the damn thing. Some will say they don’t believe in that–well, that’s awesome. I don’t believe we have the right slaughter and eat animals, but I’m shit out of luck, because that’s how things work.

The exception to this rule is when you know and trust the source of the product–in our case e-books. If someone I know prices an ebook for $.99, I won’t fear for the quality. If I don’t know them and they beg enough, I might try it out of sympathy because it’s cheap and I’m bored that day, but if it’s actually good, I’m always surprised, not gonna lie. I will, however, go and spread the word, which explains the brisk business some $.99 ebooks do. Their authors got out there and crammed it down peoples’ throats (or already had an audience), and people were pleasantly surprised. That’s why it’s such a rare thing.

There is no wrong or right about it–if an author wants to price their ebook at $.99 and plug away, that’s awesome. (If I want to go without eating meat, what do you care?) These authors don’t mind about perception of value or if someone else thinks they’re pissing in the sandbox, and I don’t either.

Here’s the opinion part: I think it’s officious of other authors to importune cheap ebook authors to raise their prices on the grounds that they’re pissing in the sandbox. Go to it, indie friend–that is your Indie Style, and there are those who will love you for it. They are your audience. You are true to yourself and them, and that’s why you went indie in the first place. Yeah, yeah, we’re all entitled to an opinion and no one likes to see their own market get screwed up–I mean, this is their livelihood, and I’m sensible of that. But the bottom line is that no author has authority over another. That’s why it’s called independent publishing. It’s the “you’re not the boss of me” defense at its finest.

I also think it’s dangerous to talk about attracting “the right kind of readers”. Apart from how absurdly easy phrases like that are to to turn inside out and cry “elitist bastard!”, it’s actually referring to something sensible–loyal readers who give a shit. Yeah, you target your audience, and if like in Aaron’s example they’re yuppies who drive Toyota Priuses and swirl their overpriced Chianti in overpriced tapas bars, you can get them to pay $4 for green beans. And you should. Know your target patsyconsumer. But that’s not what this conversation is about–it’s about a sensible way to price and sell ebooks so that people–any people with the potential to be interested–have the proper balance of curiosity, expectation, and satisfaction in the transaction.

But Balaji the Pricing Guru says there is a solution available to relative unknowns who can’t get away with selling their ebooks at a price nearer to the Amazon/iBooks/whatever reference price–but who still don’t want to piss in the sandbox, and/or dislike the idea of devaluing their own work in the eye of the average book consumer. And that solution is: discounts. It’s how every store in the world convinces you to try new crap you don’t need–discounts, placement, and packaging. And don’t get me started on bundle deals. Holy god, Amazon is the devil. The brilliant, rich devil.

No, I won’t pay $6.99 for a no-name author’s first ebook about killer leprechauns. And if the thing was $.99, I’d be like, “Uh, yeah, of course it is,” and never think of it again. But it’s priced at $6.99, the cover rocks, the blurb/excerpt is hilarious, and there’s a week-long special for St. Pat’s where a coupon makes it $.99 (use special secret code PISSOFF13 at checkout!)… hell. I’d buy it. I’d have been tricked into buying it, and like I have so many times I’ve been tricked into buying crap I don’t need, I might even thank them for the privilege.

And on a closing note, I just want to say that this is completely academic for me. I don’t self-publish and I have no plans to. I’m not good or intrepid enough to self-publish, myself, but I do consume a fair amount of self-published fiction, and I believe it’s important as a cultural phenomenon. American publishing began as a bunch of indies with bright ideas and no powerhouse industry giant that would put them out there. I tell you this because it’s the angle at which I’m coming from this pricing thing.

I work for a publisher, I do help to set prices, and this is the stuff I think of when we have those three hour discussions. (Really. Three hours. Then again, we’re magpies.) But that’s not what we’re talking about.

*Let’s not get into what it says about me that I actually knew what the bottle went for retail. In my defense, it’s only happened once, but it did, at least, reinforce my husband’s point about pricing tricks.

20 Responses to “Pricing and the Author”

  1. Mark Deniz March 20, 2011 at 4:23 pm #

    As someone all too aware of those three hour conversations, I am so glad we have them, and I’m so glad you wrote this post – I don’t think enough people are looking at all the sides here at all, and yet, when they do, things make a teeny bit more sense.

    • Mark Deniz March 20, 2011 at 4:24 pm #

      And I love my little avatar here too, where the HELL did it come from?

      • Katey March 20, 2011 at 4:36 pm #

        Hahaha it’s gravatar enabled, but maybe your gravatar is linked to your personal site, not the Morrigan one (which you’ve used here)? If you don’t have a gravatar it automatically assigns you a monster icon.

        That one is particularly brilliant.

        Thanks, though! Our three hour discussions of money have certainly refined my thinking on the subject, and Balaji is a good teacher, thankfully.

  2. Michael Stone March 20, 2011 at 5:04 pm #

    Mark tortu–I mean regales me with three hour Skype sessions too. Has he tried to enroll you in the Burnley FC Supporters Club yet? No? He will. :)

    Excellent post. It says what I’ve been thinking for a long long time, but far more eloquently than I could have expressed.

    • Mark Deniz March 20, 2011 at 5:47 pm #

      Ok, I’m going for a new gravatar here ;)

      What do you mean torture…torture…I’ll have you know when I get my foam replacements for my headset headphones, then you’ll know torture!

    • Katey March 20, 2011 at 6:12 pm #

      Ha! Well I am awfully chatty, god knows, when I get going. As this post proves…

      Thanks though. I always figured we kind of had the same stance on these sorts of things. (Because we’re right! Er…)

      And no, no enrollment yet, though I’m open to it as I love anything to do with soccer or football or whatever it’s called on whichever continent.

      US Soccer–well. We’re working on it. :/

  3. Alexa Seidel March 20, 2011 at 5:05 pm #

    Somehow, the $.99 issue is all I seem to be reading about today. I like you blog entry, especially the idea of discounts. It’s like this thing in bookstores where you buy two books for the price of one; of course you will pick the book that has an interesting sounding title and a great cover. Come to think of it, discounts helped me discover some fantastic authors and their books, never really realized that before.

    • Katey March 20, 2011 at 6:07 pm #

      Exactly! Me too! They’re sneaky, sneaky jerks. (In an awesome way.)

      I just feel like it’s a trick the big guys use against us–maybe one or two of the little guys might find a foothold with it, too.

  4. Kalen O'Donnell March 20, 2011 at 7:38 pm #

    Huh. Awesome post Katey, and of course you know its of particular interest to me at the moment and something I’ve been thinking a lot about. Discounts and tricking the customer is a tack I honestly haven’t thought of yet, hmm…lol. Yeah I wouldn’t ever be comfortable carging 6.99 for a self published ebook of mine, not because I don’t think its worth that but because of the fact that I’m not looking at it from the perspective of how much the cover price is. I’m looking at it from the perspective of how much money am I taking home from the sale, and since I can go way cheaper than 6.99 and still walk with far more than I’d earn out through a traditional publisher, it feels dishonest to pretend that I’m not being more than fairly compensated for my hard work.

    By the same token though, I don’t think I’d ever really be comfortable pricing a self-published ebook of mine for 99 cents for the whole perception of value reason. I know that its more than possible to earn out very well and very quickly that way and move a lot of product that way. But I just don’t think I could ever stomach saying oh hai here’s this book I spent months and months slaving away over, what the hey, have it for a buck. Umm, no thanks.

    So it of course all comes down to finding a middle ground. Which is easier said than done.

    But discounts, there’s an idea.

    • Katey March 21, 2011 at 12:46 pm #

      Yeah the first time he suggested discounts (and bundling, which doesn’t really apply here, but just as a way to move stuff), I was kind of boggled. The more I thought about it the more I was amazed.

      But yeah, no one ever prices anything (in industry) based on how much actual effort went into it. Yet I, like you, would have a hard time pricing something at 6.99 if I did it myself. I have a sliding scale–like up to $3 for self-pub that I don’t know, something like 6-7 for midlist, and up to 13-15 for something I really must have now–especially if it’s only out in hardback!

      But when I think of it, that’s just what I’ll PAY. Not what the price is. God, pricing people are scary evil geniuses…

      Anyhow, feel free to bounce things with me as you go through your decision making process. I’m excited for you!

  5. Cate Gardner March 21, 2011 at 4:19 am #

    Outstanding post, Katey and the wine analogy…yeah, totally get that (though for me substitute the wine and think handbags). As you know Strange Men hit the ereader world a week or so ago at a rather controvesial price (ahem and sigh and ahem again) and I have my own set of thoughts about the price that are not nearly as eloquent as yours.

    P.S. Why does Mark get a cool avatar? Mine sucks and I worry looks a little like me ;)

    • Katey March 21, 2011 at 12:42 pm #

      I think yours is adorable! :D

      Yeah, on the one hand, it’s different in your case because your collection wasn’t self-published, so there was some gatekeeper action and no one’s relying solely on the price for a quality indicator. I know, it means nothing with self-publication–I don’t think of them as different, especially, but the market does in general.

      But then, I’m over here grinning over my hard copy. Ha!

      Handbangs, is it? Now THERE’S a fun addiction.

  6. Aaron Polson March 21, 2011 at 8:15 pm #

    Why is everyone smarter than me? I want to say these…things…but the…stuff…gets…stuck in my head.

    Now, what happens when the consumer can’t tell the difference between “self/indie published” and traditionally published? Does the consumer care?

    • Katey March 21, 2011 at 9:59 pm #

      I would LOVE to see some data on that. I don’t know that there’d be much of a difference for most people, but the “educated consumer” would probably care. But honestly, what kind of percentage is THAT?

      Yeah :/

      And if there is ANYTHING smart in that post, it’s Balaji’s. The bit where I overused the word “fuck”? Alllll me. So sad.

  7. Aaron Polson March 21, 2011 at 8:28 pm #

    Okay, I’m back. I just uploaded We are the Monsters for Smashwords and set pricing to “reader chooses the price”. Hows that for taking a chance? I’ll report on my latest experiment, soon…

    (of course I’m 1754 in the queue.)

    • Katey March 21, 2011 at 10:00 pm #

      That’ll be fascinating. It’d be awesome if we had some way to collect data on whether those people knew who you were/had read some of your fiction and what it was. Damn this lack of data! *fist shakey*

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