Robot 6

Digital pricing: The e-book sweet spot [Updated]

Price vs. sales: The picture tells the story

So, last week Mark Millar complained that while his digital comics sold well, the cover price was less than that of the print comics, and once Apple and comiXology took their cuts, there wasn’t much left for the creators.

Millar seems to think that if his comics were priced higher, the creators would make more money, a blogger who did some analysis on e-book pricing has a different take.* Although it sounds like a paradox, creators may make more money by lowering prices in order to make more sales, according to one blogger’s analysis of e-book pricing. David Slusher looked at the prices and sales numbers that writer Joe Konrath posted at his blog in 2009. Some of Konrath’s thrillers are published by Hyperion and he self-publishes others, which means he could compare his sales on Kindle for both sets. What he found is that cheaper books sold better. Slusher graphed the numbers and after some additional analysis, came up with $2.99 as the sweet spot at which the price and sales balance out to maximize the author’s take.

This is, admittedly, a single data set, but the books were all comparable; there was no promotional push on any one of them to make it stand out from the others. Given the different type of market, the sweet spot might be different for comics. But Slusher’s point is just the opposite of Millar’s: The cost of producing your book (creative team, typesetting, whatever) is the same whether you sell 10 copies or 10,000. Distributors, be they Apple or Diamond, take a percentage, so that doesn’t change the picture either. And what Slusher is arguing is that you make more money by keeping the price low and selling more units than charging a lot and only selling a few. If anything, it seems to me this would go double for comics, which are to some extent a disposable medium. It’s a lot easier to justify spending one dollar than three on 20 minutes’ worth of entertainment; the question is whether lowering the price will bring in two extra readers — or four.

Edit: Millar didn’t say he wanted prices to go up; I inferred it from his comments. Robot 6 regrets the error.

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12 Comments

This has been my essential argument with digital publishing in comics for years. Companies used to say “cost of paper” then it was “digital coloring” or “retailer shelf space” to explain away the ridiculously increasing price point, but all along its been nothing more than simple greed, as proved by Millar with his ludicrous statement above.

I’m ESPECIALLY disappointed in Millar because, due to his success in other mediums, he could really help usher in a new age of reader increases.

Digital comics should be $1, same as most songs. Popular books like X-men, Avengers, Batman, Justice League should all be selling a quarter million units per month under that price point.

Comics are a niche market, and creators have to stop thinking they deserve to be paid like rock stars.

We’ve seen a *tremendous* amount of success on HIGH MOON with the .99 cent price point for 20 pages of content. I can only speak from my experience, of course.

Thanks for the link love. This one post has caught a level of traction that frankly surprised me. If I can boil down 2000 words into one sentence, it would be “Regardless what you initially think is the optimum price, this is a testable hypothesis and if you experiment sufficiently the data will show you the right answer.” Digital marketplaces are low friction, which leads to elasticity. If your gain is better than linear (which it was for the Konrath data), cut the price in half, you get well more than double the sales.

The whole mindset of “the retail price must be higher so we clear more money” might be exactly the opposite of market reality. Test it out and graph your own data, and MAKE MORE MONEY so you keep in business and keep writing and drawing.

Just so whomever wrote this is is aware, here’s mark’s response to the article you posted.

http://forums.millarworld.tv/index.php?/topic/96422-more-on-digital-comics/page__gopid__2256106#entry2256106

Regards,

John Hendrick.
(MW MOD)

And I included the mod thing just so no one jumps on and accuses me of defending Millar because I am in fact a mod on his forum. I’m not hiding that fact and think everyone that reads this should see Mark’s response.

.99 is a great price point for digital comics. Anything more than 1.49 is wrong. I am currently looking into this with my mini-comics.

“Given the different type of market, the sweet spot might be different for comics”

thats what I’m thinking cause really, how many web novels are there? really is there as much a demand for illegal download novels? Think of the demographics and the fact that you’re more likely to know a comic fan that read novels then in reverse. Also look at the type of people who buys digital novels.

not talking as some one in the know how, just a customer from personal observation

Brigid Alverson

January 18, 2011 at 3:05 pm

@cetriya Actually, there is a demand for illegal download novels—some publishers won’t release their books as e-books, and some e-books are not available in different territories. (Regional restrictions seem to be a big reason for comics piracy, judging from the comments on manga sites.) For a discussion of the topic, start here and follow the links:

http://www.teleread.com/ebooks/e-book-region-restrictions-continue-to-frustrate-would-be-buyers/

I think 99 cents is a satisfying number when buying media for the iPhone/smart phones.
Mp3s cost that much and so does Angry Birds. Why would anyone want to pay more for a comic?

Couple points that tend to get lost in these discussions:

1. The cost of distributing comics digitally is not zero. More to the point: If you don’t go ALL digital — if you’re still printing some comics, but fewer of them, in paper form — then your publishing costs actually go UP, because per-copy printing prices rise on a very steep curve as print run numbers go down. The digital consumer will tend to wave off this problem: After all, I’m living in the future, why isn’t everyone? But it’s a real problem for publishers. No major publisher can jettison its print business and hope to survive, a situation I suspect will continue for at least the next ten years.

2. Every time comics prices are discussed, people argue that if you lower the price, sales will magically quintuple and everyone will make more money. I’ve never seen it work. Digital is a different beast and, to a large extent, a different market. I love digital comics and am very, very excited about the possibilities for reaching new readers. But I agree with Mark that we need to tread carefully.

I don’t understand the pricing of these digital comics at all. Most comics are the same price they are in stores or they are 1.99 instead of 2.99, but for a lot of the older stories it is either cheaper or very similar in price to buy the trade than it is to buy all the individual issues online. For Wanted the issues are only 1.99 each but after buying all 6 issues that is 11.94. Talesofwonder.com sells the trade for 13.99, so 2.05 more, but then you get all the extras that come along with trades (forewards, cover gallery, etc,).

No matter how much Apple is taking for a slice of the pie it still sucks to pay almost the same for something that you don’t really have. If these same comics were only 0.99 I’d be buying them all the time. As it stands I cannot justify the cost points being so similar. To use Wanted as an example again, if I buy if on my iPhone not only do I miss out on the extras in the trade but because of DRM how can I lend it to a friend? Or resell it on eBay or something if it turns out to be something I don’t like?

Until some big changes are made with digital pricing I just can’t see it lasting as a viable comic book market.

Stuart, you are using the dismissive language “sales will magically quintuple.” For the original analysis I did (which I stress was NOT for digital comics), it’s not magic but empirical observation. I didn’t fabricate the data based on a conclusions I hoped for, that’s the actual sales figures J.A. Konrath published.

You’ve got a fatalism in here. What if digital comics doesn’t reduce print runs but serves as a sales funnel by giving potential new fans an inexpensive way to become invested in them? Rather than a one to one copy replacement, what if they are a market expander? Comics have never been more regarded in mainstream culture, yet fewer people buy them than ever. It seems possible that giving the iPhone/iPad users an easy entry point could begin a resurgence of interest in and demand for comics that could result in a larger market.

BUT, step one is to not drive away the potential interest at square one with a price that’s too high. Publishing worries too much about the unit price for digital goods and too little about total revenue, which was my original point.

Dave: I wasn’t specifically addressing your study. But I will say I think you’re extrapolating a big point from the sales figures of a single author without a high profile. And those sales figures, in aggregate, are very small — which is not a reflection on that author, but illustrates the small size (at this point) of the ebook market. Your point is taken, but I’m not yet convinced you’re talking about a pattern that’s applicable to the larger market.

I tend to agree that, for comics in particular, e-publishing will expand rather than cannibalize the market. But that’s still mostly theoretical right now. Ebook readers are still allearly adopters, whose buying patterns often don’t match up to those of the larger readership. And comics are a step behind prose publishing, because until the iPad there wasn’t a decent way to read them electronically at all.

I also think underpricing content isn’t necessarily the way to go. There’s a sweet spot that has to be reached, between the cost of producing good work (in competition with other entertainment industries) and a price that consumers will pay. Early adopters are more likely to complain about high prices, and to pirate work if they feel those prices are too high. The larger public can certainly be driven away by high prices, but they’re more concerned with convenience and legality. Once we have cheap, ubiquitous Android and/or Windows tablets available in the U.S., comics will have an actual platform to build a readership, and we’ll be better able to see what works.

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