eBook Survey Findings - The Bookseller's Digital Conference

Some interesting responses below to a survey conducted for the The Bookseller’s Digital Conference Futurebook in December ’09.

These provide some more pointers on where the industry thinks pricing is going - it concluded that cheaper ebooks and an Apple ebook reader / ereader will be the key factors driving digital publishing forward – these two points appear to be mainstream now, never mind that the latter point relies on the supposition that Apple will bring out an e-reader.. even if it does.. improvements to iPhones and iPods might mean that we’re using these devices for reading as much as for music, browsing and communications. An Apple eReader would help capture a market of readers with a dedicated content channel while expecting those readers/consumers eventually to end up using one device for multiple purposes.

Another finding worth commenting on is the expectation that high street bookshops in their current guise have the most to lose, but that they have the opportunity to exploit the shift in the market by changing their role to that of a service provider to owners of eReaders and continuing to promote reading, authors, events..and yes, even selling a few printed books too.

Key findings of the survey:

· More than 88% of respondents thought bookshops would lose out from the growth in digital sales, while 55% said they did not support the revised Google Settlement.
· 44% had read a digital book but only 19% had purchased one. 30%said that e-books should be same price as a paperback book, or cheaper (53.6%).
· Parity pricing of print / ebooks was seen as a hindrance to ebooks sales growth.
· Low priced e-books could devalue other editions (and the work that goes into writing, editing and producing a book).
· The dilemma: consumer expects to pay less for a digital product – like a downloaded album.
· The publishing industry would undergo huge changes with the emergence of new digital products. More than 67% said that book trade professionals should re-skill to take advantage of digital media.
· High street bookshops have most to lose from the increased use of digital content but there are potential gains for all by making reading more accessible and through appeal to younger audiences - ie mobile.
· High street bookshops should provide range of services for readers - technology, some printed books (e.g. children's books, maps, art books), advice, author readings, seminars, learning centres, event hosts, etc
· Quality of content will suffer – more does not mean better.
· Importance of interoperable e-book formats and devices.
· Mobile phones: despite the emergence of mobile phone apps, 42% said that most people would read e-books on a dedicated e-reader in the future.
· Apple would emerge as leader in the e-reader market, with Amazon second, with Sony third.
· Google Settlement still a problem - 55% did not support the revised Settlement, and 58% thought this version would be approved anyway by the US court.
· By 2025 16% said that more than half of sales would be from digital content, and just 5% said the electronic market would be less than 10% of total sales.

More than 50% of the respondents were publishers, the rest booksellers, librarians, agents and authors.

Ebook Pricing an Unknown Quantity

A survey of 840 international industry representatives conducted at this year’s Frankfurt Book Fair, in cooperation with buchreport and Publishers Weekly, confirms the lack of consensus in the publishing industry as far as ebook pricing is concerned. While most publishers suggested that ebooks should be cheaper than the same (or equivalent) print version, the range of the discount suggested by publishers varies enormously.

The responses reflect, I believe, the wide range of publishing experience, types of book and level of sophistication in pricing calculations (including gut feel favoured by many publishers). The responses raise a number of questions about ebook pricing:

Do publishers start from a position where they strip out print and distribution costs and thereafter price to achieve the same margins as print – or do they see this as an opportunity to squeeze higher margins?

Do they give a little more discount to reflect the absence of returns – ie to take account of books which otherwise would be returned to the publisher from booksellers in exchange for a refund ?

Do they – following any discount to relect zero print and distribution costs – add back in a percentage to reflect the cost associated with piracy risk?

Are the growing number of conusmers who are used to purchasing music, say, off iTunes, more inclined to favour a flat-rate price – like on Amazon front list titles?

Another consideration – linked to the piracy consideration, but from the consumer /reader side – is whether a discount should be factored in to allow for limited usage of an ebook. If a ebook is made difficult to share then can it be considered by the consumer as a less useful product? ....on the other hand if you believe that the sharing of print books leads to increased sales of books, then the restricted sharing opportunities of ebooks should lead to a more shallow discount to maintain margin.

The point I’m illustrating here is that ebook pricing is not so scientific (yet)! Other known unknowns – I believe – could be in the variable cost of sale of using different channels and formats ; how far publishers will consider use of advertising revenue – e.g. like Spotify for music – in exchange for ‘free’ to end-user content; subscription rates buying consumers access to whole /sections of publishers’ catalogues ; whether mobile access to ebook content should in fact be at a premium, rather than discount, to the print.

Here are the results of the survey:

The price for an e-book should be:

More than the printed book: 4% of respondents
Same as the printed book 15% of respondents
10 per cent cheaper than the printed book 11% of respondents
20 per cent cheaper 17% of respondents
30 per cent cheaper 14% of respondents
More than 30 per cent cheaper 16% of respondents
A standard price as with Amazon ($9.99) 15% of respondents
Other price model 6% of respondents