Coming Soon: New York Times E-Bestsellers

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.

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8 Responses to Coming Soon: New York Times E-Bestsellers

  1. Tom Dupree says:

    From Lou Aronica via Facebook:

    I’m glad to see they’re doing this. It’s fascinating that they’re going to have this list (USA Today already includes e-books on their bestseller lists) when BookScan can’t seem to find a way to track these sales – ridiculous considering how many fewer accounts there are and how easy it is to record the sale.

    I’m guessing that you won’t be seeing a predominance of Random House titles. Instead, I think you’re likely to see a great number of low-priced titles. Many writers are using the Joe Konrath model and pricing their e-books at $2.99 to significant success. If the Times uses unit sales to rank their list (which they should, since they’ve never used dollar sales before), this bestseller list could have a big impact on pricing.

    Lower pricing is having a big impact on mid-level writers right now. It’s impossible to know where this is going to settle in. If we really consider this (as I do) akin to the dawn of the mass market paperback, is there something analogous about pricing as well? Back then hardcovers were $2.50 and mass markets were $.25 – and this drove an enormous sales spike. If the average hardcover is $27.95 now, is $2.79 the right price? You have to sell an awful lot to make that work.

    • Tom Dupree says:

      They have to measure units, not price. Shame on them if they don’t — that’ll obscure the data.

      Nice point on the analogue to mass market’s birth, one I hadn’t considered before. The difference here is that e-readers haven’t yet become a mass commodity (although you can also read a Kindle purchase on your smartphone, computer or tablet). I don’t even think all avid readers have one yet — some of them are determinedly sticking to their physical books. But once they penetrate more, you’ll be able to sell an awful lot.

    • Ruth Harris says:

      I’ve also noted the parallel between epub & the early days of mm publishing. I started out in the early 60’s as an editor/copywriter at Bantam & Dell & Lancer, a now-defunct (not because of me!) mm house. Lots & lots was being published, some of it good, some of it lousy; there was everything from sci-fi and horror to nurse romances and thrillers. Some of it sold, some of it didn’t but publishers thrived, writers could make a decent living (if one genre didn’t work, they could try another) and readers had a feast from which to choose. Because costs were low and distribution wide-spread (paperbacks were for sale everywhere back then), publishers, readers and writers could experiment and take chances and there was no big penalty for the inevitable mistakes & misjudgments. Additionally, writers like Mario Puzo, Lawrence Sanders and Bruce Jay Friedman emerged from that period.

      Many of the same factors are in play with epub and I’m thrilled to see publishing prospects open up again–for publishers, writers and readers.

      I myself started out writing hot-at-the-moment gothic romance (a genre ripe for revisiting?), turned to mainstream fiction and eventually became a NYTimes bestselling author. Inspired by Joe Konrath’s informative blog, I’m about to put my backlist up on Amazon — first one will be HUSBANDS & LOVERS, contemporary women’s fiction, guaranteed zombie and vampire-free.

  2. Ty Johnston says:

    Great points. I hadn’t thought so much about how pricing would affect this list, now now that I think about it, it’s obvious. Price will be a huge factor.

  3. Jenny says:

    The math behind the price point disparity in the hardcover and ebook formats for the Bush underscores why most publishers quickly embraced the agency model allowing them to set their own price points. The Bush hardcover is $35. You can get it for $19 at Costco, etc. The ebook is $9.99. That is a big incentive for ebook.

    • Tom Dupree says:

      Yes, it is. But consider two things. (1) Isn’t $35 a phantom number? How many people will actually pay anything close to that? That’s what Bush’s book lists for, not necessarily what it’s worth — and I don’t mean anything political, you can insert any other author’s name in there. For a longer book (say, INFINITE JEST), I might actually pay a little more to get the e-edition. (2) Shouldn’t the pubbers be blowing on that, er, Kindling of another revenue stream, the only one that’s growing like kudzu, instead of trying to make the fire weaker? I remember during the Apple fight, one publisher candidly said, we’re not exactly experts at setting price points. I agree: they’re experts at discovering and developing literary talent. Getting an author on THE DAILY SHOW is not the next dimension in marketing, nor is a transparent attempt at a viral “social network” deal.

  4. Good stuff, Tom! I was thinking about this recently. IMO, it’s a shame that this will push ebook prices down even further, but we’ll see how it all shakes out.

    • Tom Dupree says:

      Moses, as I explained above, most publishers are actively resisting lower e-prices (shop around online to see for yourself), and only time will tell whether this was wise or not. Authors and publishers will eventually get their fair share — in fact, through Amazon’s “retail model” they already do — as e-books take their eventual place as a new “mass market,” or, at the very least, another lucrative revenue stream, like home video turned out to be.

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