Friday, May 27, 2011

eBook Pricing and Value: Lessons from Shareware during the Early Pleistocene

Free-form Friday

In March, Jennifer Mattern discussed e-book pricing with Zoe Winters in a post at

Zoe initially priced her novellas at 99 cents because she wanted to build her audience. After a while she decided to increase prices. Money was part of it:
"I realized I couldn’t maintain decent earnings at that price because although I sold a little over 6,500 ebooks in June of last year, that’s just hard to maintain. If you aren’t the ebook flavor of the month, it’s just not sustainable for most people. I started raising my prices, partly in response to the realization that to make a living I needed higher prices."
But it was the attitude of the people buying her books at 99 cents that pushed her over the edge:
"I’m not saying everybody who buys 99 cent ebooks is “bad”, but, there is a big number of readers who buy at 99 cents just to hoard. They don’t read, they just buy thinking maybe they’ll “get around to it”. But they didn’t invest enough money in it to really care if they ever read it or not. And many who do read, act “entitled”. A strange but true rule of business is that the customers paying the least amount for a product or service always complain the most and try to squeeze more out of you. ...

"Then there was the fact that I wanted to cultivate a loyal following and most people who expect ebooks to be 99 cents aren’t that loyal. They’re shopping by price as their main deciding factor. I just don’t want those readers. Anybody that price sensitive just isn’t the demographic I’m going after."
As I read, I flashed back to the heady days of shareware in the late '80s and early '90s. The pre-Internet world of modems and dial-up bulletin board systems became a remarkably efficient way to distribute software without the costs associated with major software publishers--who were very good at putting boxes with disks and manuals into stores and catalogs.  [Does any of this sound (cough)e-books(cough) familiar?]

There are plenty of parallels we could mine, but let's look at pricing. Shareware authors had the same choices: undercut to build audience or charge more for value. The interesting thing about software is that higher-priced packages tended to do better because (to make a gross generalization) people buying software for their personal computers associated value, quality, and security with the higher price.

Of course, it's not as simple as expensive = good. But there is a tendency to treat something that's cheap as ... well, cheap.

This is not to say that you should never price you ebook at 99 cents--it might be a market savvy thing to do if it's the first volume in a series (after all, the classic shareware games gave the first volume away in the hope that people who enjoyed the game would purchase the other volumes)--but do you really want people to think that your books aren't worth any more than a three to four minute long song?

Image: Photography by BJWOK /

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