Report: What are the Most Effective Pricing Models?

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The relationship between the creation of artistic works and the sale of those works has always been an uneasy one, and it seems to be a particularly thorny issue in publishing. Experienced industry panel George Walkley (Head of Digital at Hachette), Jo Henry (Director of Nielsen Book Research) and Nicholas Lovell (Director at Games Brief and author of The Curve) met at Byte The Book’s February event to thrash out the issue…

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Host Justine Solomons thanks February sponsors ePubDirect (sitting on the pink sofa in the front row).

Discussion began with the question ‘What’s a fair price for e-books?’, to which George Walkley rather succinctly replied ‘What the consumer is prepared to pay’. He noted that publishers are of course freer to experiment in the eBook market than they historically have been in the traditional one, and that the majority of eBook titles fall between £3.99 and £4.49. This was ‘fair’, he suggested, since it’s less than the average paperback and if you were to nominally break down the cost to the reader in entertainment hours, at 20-25p per hour an eBook works out significantly cheaper than cinema, theatre, music or indeed almost any other art form. Generally speaking, he concluded, a fair price is a relatively low one, but equally readers ought to be grateful that they can buy a bestselling novel for the price of roughly one and a half Starbucks…!

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Justine Solomons with panellists, right to left, George Walkley, Jo Henry and Nicholas Lovell.

Jo Henry then introduced some research statistics to the discussion, opening up the controversial subject of 20p eBooks. Research has shown that people will happily spend small sums of money on something they know nothing at all about, and for which they have no particular guarantee of quality. Nielsen has found that twice as many readers will take a punt on a book if it costs less than £1 (as compared to when it’s averagely priced), and in fact the evidence is that recent 20p bonanza sales have actually helped to fuel several bestsellers in their early days of publication. However, when half of people buying 20p eBooks apparently say that they would have bought them anyway even at a higher price, publishers may be looking at a win-some-lose-some dynamic on that front.

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Nicholas Lovell asks who is in the audience plays Candy Crush?

Gamer, business guru and author of The Curve Nicholas Lovell was full of vibrant sound bites and a no-nonsense approach to building a brand. His book essentially poses the question ‘How do you make money when everything’s going free?’, and one of his central principles seems to be: don’t fight it. If it’s possible to give something away free, explained Nicholas, somebody will do it, and your job as a content creator is not to resist this but instead to find other ways to monetise your brand. The threat, he underlined, is not from piracy – it’s from competition. The answer to surviving on these mean streets, therefore, is identifying your small core of superfans and then creating product that they will happily pay a premium for. Kickstarter has proved that this works in music, with artists using their albums almost as a promotional tool (with next-to-no profit margin) while at the same time charging high fees to perform private concerts in the living rooms of their superfans. Crucially, concluded Nicholas, people don’t value content itself, but rather a collection of emotional responses connected to that content. If you can tap into that, you can rise above digital piracy of your work.

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Another full to capacity crowd at The Club at the Ivy.

In summary, there was an optimistic atmosphere amongst the panel and the audience, as well as a feeling that while the industry has been somewhat rocked by the sudden onslaught of free and reduced-price content, the opportunities for connecting with readers in the future – whether superfans or casual fans – are exciting and wide-ranging.

Words by Chris Russell, photos by Daniel Solomons.

If you enjoyed this report why not book to join us at The Club at The Ivy on Monday 24th March 2014 .

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