The second best-selling book in America, a thriller by Lisa Gardner called Alone, was first published in hardback in 2005, when it cost $25. Now you can pick it up for just $0.99–but only as an ebook. And its ebook sales are the sole reason it is now topping bestseller lists.
There are a few things going on here that are notable:
1. Lisa Gardner’s latest thriller hits shelves on March 8, so it’s clear that her publisher decided to release this older title at a steep discount in order to generate buzz around this author.
2. Books, like other media, are suddenly being priced like apps. This has far-reaching implications for how all media will be priced in the future, and could indicate a race to the bottom as consumers become increasingly unwilling to pay a premium for new titles when classics come cheap.
Anyone who pays attention to Apple’s App store has seen this tactic before: game developers regularly discount older titles to $0.99 in hopes of climbing the charts – the idea is that they make up on volume what they lose on each sale, because a buck is the magic price point at which impulse buys occur. Plus, getting onto the most-downloaded list, whether you’re selling an app or a book, generates enormous amounts of additional sales.
According to Pamela Paul (mp3 - podcast), the newly-installed children’s book editor at the New York Times Book Review, the average fiction bestseller nets between 50 and 60 percent of its sales in ebook form. Nonfiction readers are a little less progressive in their tastes, and sales of nonfiction bestsellers are usually 30-40% from ebooks.
Compare the pricing of Alone to Donald Rumsfeld’s memoir, currently #1 on the non-fiction bestseller list, and you begin to get an idea of how surreal the pricing of Alone (or perhaps of Known and Unknown) really is: The ebook version of door-stopper book costs $19.99, which is actually more than the discounted version of the hardback.
What this points out are three themes that will be increasingly important to how books and other media are sold: the first is that publishers are going to start selling more and more back-list titles at discounted prices in order to capture a market that is otherwise unavailable to them – think of it as the market currently occupied by the used books that will cease to exist once the world is full of ebooks with their DRM.
The second theme is that bestseller lists and the frictionless purchasing experience of ebook readers will encourage publishers to game bestseller lists just as app developers game their equivalent on the app store. Maybe you’ve heard about how that’s working out for game devs: by most accounts it’s led to a deflationary price spiral and a race to the bottom.
The final thing worth noting is that the current pricing scheme for ephemeral media–ebooks, iPad magazines, etc.–is due for a correction. With successes like this, even major publishers are going to find it too tempting to juice sales by discounting titles. As consumers seek out more affordable media, prices will go down.
We can expect this process to be repeated again and again for anything sold in this fashion. But perhaps that’s irrelevant: aside from books, I can’t think of anything else that is still priced the way it was before the advent of the Internet.