The 99-cent e-book?
As some of you are aware, my original business plan was to sell my self-published short-stories for 99-cents, my novellas, for $2.99 and my novels for $4.99. I thought that these prices were fair, created differential pricing between three quality products, and were cheap enough to encourage buying. It turns out that I may have been wrong. According to David Carnoy, the standard price for an indie e-book is $2.99 and may be dropping to $2.99 99-cents.I had figured that $4.99 would allow me to differentiate myself from the big-box publishers who were overcharging customers. According to Carnoy, the digital revolution in publishing is, like music before it, pushing a race to 99-cents.
In some sense, what's happening in the Kindle Store is what's already happened in Apple's iPhone App Store, where developers have been forced to lower their prices to 99 cents to compete (recently, Angry Birds' maker Rovio told fellow developers to get used to pricing their apps at 99 cents). The price erosion isn't that great yet on the Kindle; there are still plenty of $9.99 and higher e-books out there from traditional publishers. And many of them still sell very, very well. But with so many more e-readers and iPads out there, the market has grown large enough--like the iPhone market did--that you can actually make decent money at 99 cents, particularly if you crack the Top 100.
Carnoy highlights the experience of Christopher Smith, whose "Fifth Avenue" became an Amazon best-seller, dropped his price from $2.99 to 99-cents and watched his sales soar into six figures. His strategy seems to periodically drop his price to 99-cents every once in a while to spike sales and maintain his Top 100 ranking on the Kindle Store. Then he returns his price to $2.99 and reaps the higher margin from sales attracted by his high ranking. It seems to be working well for him.On the other hand, Jesse Brown of Macleans believes that the Internet is becoming a 99-cent store where everything music to books to movies to videogames is sold at the magic price of 99-cents. According to Brown:
One dollar minus one penny seems to be the magic number when selling virtual goods that can otherwise be easily acquired for free. Self-published authors are discovering that when they drop their sticker price from $2.99 to $.99, sales shoot up, and their titles rapidly climb the charts. Rovio, makers of Angry Birds, have built a multimillion dollar business, a buck at a time, and now preach the gospel of that sweet spot price. Kindle Singles are Amazon’s bargain-priced short e-books, which are breathing new life into long-format journalism. Nine of the 10 best selling apps right now on iTunes are priced under a dollar. As different industries experiment with a range of pricing schemes for their wildly divergent products, they are all arriving at the same conclusion: 99 cents.
So this seems to leave me with two possible business models. The first is where I sell Novellas for 99-cents, Novels for $2.99, and drop the periodically to drive sales. The second option would be to sell everything for 99-cents. Personally, I more inclined to the former option as this would allow drop my price periodically, like Smith, to boost readership and give me something interesting to announce on my website (eg. "It's Canada Day. All books for 99-cents"). However, if Brown is right, then we're all going to end up at 99-cents anyway.One change is for certain. I will have to give away short stories for free. While they involve hard work and dedication to craft, they don't simply have the value proposition that a full-length novel would have. Instead, I can use them as a way to attract readers (who doesn't love free?) and build an audience for my full-length novels and novellas. They will also provide valuable experience in navigating the e-book self-publishing environment, even at a modest loss.Regardless of whether or not the ideal price is $2.99 or 99-cents, the goal remains the same: to publish and sell books. However, the pace of change is shocking in the industry. My life's work, once priceless in my eyes, is now probably worth 99-cents. Would you buy that for a dollar? I'm hoping so.