The New York Times announced today that it will begin printing weekly e-book bestseller lists beginning next year. The Times is the gold standard for bestseller lists, by far the most prestigious of them all. When these lists begin appearing, pay special notice to books issued by Random House and its many imprints. This is the only major publishing house which has resisted Apple’s “agency model” for selling e-books, thus allowing e-retailers to set whatever price they choose. In Apple’s model, the publishers set the prices.
This equates to a $9.99 (loss-leading, for the retailer) price point for the electronic editions of most new Random House hardcovers, including the recent books by John Grisham and George W. Bush. That price alone helps you identify a Random House title. With most other publishers, the e-price on a new hardcover is $12.99, $14.99, $15.99 and north. Some publishers even have the gall to charge more for an electronic edition than for the paperback reprint, and I’m sure they think they’re being smart by implicitly dampening e-demand in favor of more lucrative hardcovers. But once again, making it more difficult and/or expensive to buy your product is bad marketing, always has been, always will be — especially when it’s the fastest-growing segment of your industry.
For veteran users of electronic readers, there’s a knee-jerk resistance to an e-edition for sixteen bucks. It reminds us of the way record companies used to gouge their customers before Apple’s iTunes made it easy to buy individual songs, as cheap as $.99. (Note that iTunes retail prices have begun to creep upward; now a single is $1.29, and Taylor Swift’s new album, the hottest record in America right now, costs you $13.99. This is why many people are flocking to Amazon’s digital music store, where the same album in MP3 format — indistinguishable to all but audiophiles — is $3.99!) Newer users, like those who get their first e-readers for the holidays this year, won’t know the difference. I talked to one lady this summer, an ardent Kindle user, who said she didn’t mind paying a premium for the electronic edition, because of the convenience and the ability to satisfy an impulse: a book can be hers before she’s even finished reading the review. OK, we want to know how many people bite at the higher price point, whether it really makes a difference to business in general, whether you can make money by letting the retailer go as low as he likes (Random House, and just about every marketer of packaged goods in the world), or whether early adopters were unwisely coddled with an unsustainably low price point (Apple, and most other publishers). We need to know — and very soon now, we will.
So here will be the fun with the coming Times e-lists. Will $9.99 Random House titles dominate? Today’s Times also reported that George W. Bush was blowing out in its digital edition. Compare its e-price with the physical hardcover, even discounted. Grisham’s new novel, the first to go digital upon release (and, to be fair, a return to his bread and butter, the legal thriller), is also rocking the Kindles. Is the price point a tailwind for these e-editions? Next year, we’ll have much more information to help us find out.
March 2011: This month, Random House joined the rest of the major publishers in switching to an “agency model” and setting its own prices. Goodbye, $9.99, and we’re now routinely treated to the spectacle of e-books which cost more than paper editions. Separately, HarperCollins has placed a limit on the number of times an e-book can be lent by libraries. Some libraries have struck back by boycotting the publisher’s e-titles.
April 2011: In two separate stories, we get the first indication that e-pricing does make a difference in sales, and Amazon opens the Kindle to library lending.