The first Kingston University Publishing Masterclass of the 2014/15 season welcomed David Roche, Chairman of The London Book Fair, former Group Sales and Trade Marketing Director at HarperCollins and one-time Chief Executive of Borders UK and Ireland.
Of all the striking images and startling stats David Roche shared in his fast-paced tour through the tectonic shifts in the publishing world, one small table caught my attention more than anything else. On a single day in February 2013, Roche informed us, you could buy the top 10 bestselling books in digital form for a little over a fiver – ten whole books for about the price of a pint of premium lager.
7 were available for 20p
2 for 99p
1 at the relatively exorbitant price of £1.99
Grand total: £5.37
Of course this could never have happened two decades ago, when the Net Book Agreement (NBA) was still in force, and Roche chose the collapse of the NBA as the starting point for his whirlwind tour through the changing relationships between publishers, booksellers and readers. Roche was full of biblical metaphors following the interment of the agreement: publishers being cast into darkness, and supermarkets, Google and Amazon dancing like seductive devils. Price, it turned out, was then a key theme in everything Roche later discussed: price as a way of building customer loyalty, price as an obstacle to backlist sales, and price as a dissonant consumer experience. ‘Price elasticity’, we learned, was as much of a publishing buzzphrase as ‘discoverability’, ‘cross-media’ and ‘direct-to-consumer’.
Roche used the example of pricing Dan Brown’s The Lost Symbol to talk about Amazon’s commitment to its customers. Amazon, like other retailers, had taken thousands of pre-orders for the sequel to the multi-million selling The Da Vinci Code when it dropped its price on publication day. Amazon took a massive financial hit in order to deliver the lowest market price to its customers; Waterstones and others couldn’t afford to do the same.
Price is also a factor behind why both publishers and retailers focus on new, frontlist, titles. Both, Roche suggested, blame the other party for putting all their efforts into pushing new books rather than exploiting the cash cow of content that is already out in the market. Why not milk the backlist cash cow? asked Roche. Because the high recommended retail prices of new books (set so they can be discounted by large percentages on bookshop shelves) make them unviable once they become backlist. Of course, maybe that means our ‘traditional’ pricing strategy is actually all wrong. One author, at least, agrees with what he describes as an ‘ass-backwards case’, pricing frontlist like backlist and vice versa.
Artificial distinctions like these, between the prices of the very same content in different scenarios, crop up all the time in publishing, throwing up dissonant situations for readers. Roche referred to three specific examples:
- The carving up of territorial rights, which means readers can’t necessarily obtain the same book in different countries. This may be maddening for those who want to purchase the book in what they perceive to be a global market, but it makes sense in the artificial reality of publishing. As author John Scalzi explains on his blog, ‘piecing out the rights to various publishers’ is likely to make him the most money, even if he does have to deal with ‘grousing’ emails from some of those who can’t legally buy his book.
- The seemingly nonsensical pricing of hardbacks, paperbacks and ebooks (all of which contain the same content), especially when, for instance, an ebook is more expensive than a hardback on the same day. Much of this confusion comes from consumers thinking ebooks are cheap to produce, as these comments on Digital Book World illustrate, which isn’t usually the case.
- Price-slashing promotions like the 20-pence ebooks offered by Sony (who took the financial hit themselves in order to promote sales through their ebook store), a price which was also matched by Amazon. The Guardian commented on this at the time, suggesting it could lead to ‘industry ruin’.
Smart pricing, can, however, pay off, and Roche spoke specifically about the smart thinking of some self-publishers. A great example is Joanna Penn, who spoke at Futurebook last year about launching books for free in order to bring in large numbers of readers who you can then convert to purchasers of your next book. Penn also suggested using promotional prices on backlist titles to drive sales on newer books and price-pulsing (dropping prices to drive recommendations on Amazon, before increasing them as sales start to peak). Setting the price of the first book in a series to free for ever (know as ‘perma-free’) makes a lot of strategic sense. However, it isn’t that easy to do on Amazon, as indie author Simon Goodson explains. Price-pulsing, as this post from Digital Book World demonstrates, also requires paying attention to rankings and sales data and – as the name suggests – an ongoing iterative approach. If this all sounds like a lot of work, it is. So it’s no surprise that Roche identified data analysis as a top skill for twenty-first century publishing.
Aside from employing experts to advise them on what price changes do to the customer relationship (something Roche says is already happening) how can publishers survive in a world where their books are selling for the price of a few sips of beer? Roche had two answers: develop new routes to market and seek out new revenue streams (both approaches I’ve previously written about on this blog). It feels almost disloyal to voice this in ‘Books Are My Bag‘ week, but perhaps book retailers aren’t the only or best way to get your books discovered or purchased… Roche mentioned Michael Morpurgo titles being given away free with McDonald’s Happy Meals, while kids’ ebook start-up Made in Me has forged a similar deal with the Giraffe restaurant chain and a Christmas promotion with clothing brand Boden. As for new revenue streams, Roche referred specifically to Faber Academy ‘s creative writing courses. The man who set these up, Patrick Keogh, had a lot to say about how to extend brands when he gave his own Kingston Publishing Masterclass four years ago.
Working with brands, data and price may not be what you thought you were getting into when you set out to work in publishing, but it is the new reality, as Nicholas Lovell set out in his recent book The Curve. It’s not all publishing is about, though. Roche made it clear that the publisher’s role was adding value to authors, something Bloomsbury Executive Director Richard Charkin echoed at Frankfurt Book Fair last week. While I wouldn’t go so far as agreeing with Charkin that ‘our customer is not the reader’, I would endorse the need to attract, support and develop authors. If we need to get our head around data, and incorporate it into the publishing process to make smart decisions, surely that’s one price we might be willing to pay, in return for working with great authors and great content. Roche seems to agree, since he ended his talk with this prediction about 2014, made by science-fiction author Isaac Asimov fifty years ago:
“The lucky few who can be involved in creative work of any sort will be the true elite of mankind, for they alone will do more than serve a machine.”
Would I say I’m one of the lucky few? You bet. Now, let’s raise a pint to celebrate.