The Fifty Dollar Novel
Would you pay fifty dollars for a new novel?
I’ve suggested before that we may see that for hardbacks in stores.
When I wrote it recently, one of my readers, beccadi, commented that a price point like would drive many people out of the market.
I gave some explanation at the time, but I do think that the scenario could probably use a fuller fleshing out.
First, let’s define this a bit more.
I’m talking about the publisher’s list price…not necessarily the price a customer pays in the store. However, I do expect brick-and-mortar bookstores that stick around to be either: used bookstores; or full-priced, full service stores. I’m saying this from the perspective of a former bookstore manager, by the way.
Second, I’m not talking about a special commemorative edition that might be released at the same time as a less expensive “standard edition”. I’m talking about what would be the standard release for a new novel by a bestselling author.
Third, I also want to be clear that this isn’t a prediction. :) It’s a possible scenario. I do think it seems increasingly likely since I first suggested it…
Okay, with that out of the way…
Let’s take a look at where we are now.
Looking at the twenty books that Amazon lists as the New York Times hardback fiction bestsellers, the average price is $27.13. The highest priced one is $35, the lowest priced one is $24.95. Ten years ago, it was $24.53…highest was $28, lowest was $14.95. Twenty years ago, it was 19.58: highest $24.95, lowest $6.98.
Even just looking at those trends, we could project $50 as an average by 2072:
However, I’ve been talking about this happening at a vastly accelerated pace…within the next decade.
Rather than just the predictable price increase one would expect (especially in a product based in large part on natural resources), I’m suggesting this would be a deliberate strategy.
Why would it make sense to rapidly raise prices?
As beccadi asked, wouldn’t that price a lot of people out of the market?
This is where the difference in thinking between a consumer and a supplier comes into play.
A consumer tends to think in terms of just their own transaction with the supplier. That’s perfectly reasonable: to that person, it is them interacting with the company. A consumer thinks, “Why would they raise the price to fifty dollars? They would lose my business.” They may presume that other consumers will feel the same way.
The supplier, on the other hand, has perhaps thousands of customers (maybe even more). The supplier thinks in terms of populations of sales.
It’s perfectly fine to lose sales, if you make up those sales in other ways.
You could lose one set of customers and gain another set that was equally large…or a smaller set that spent the same amount of money (either by buying more items at a lower price or fewer items at a higher price…or, of course, the same number of items at the same price).
You can never sell something to everyone: people have different motivations for buying things.
Many, probably most, people want to get things for a low price.
Some people want to pay more for things, and to have other people know it. It’s a status thing. If you buy a $100,000 car or a $10 million house, you may do it partly so that other people know you can afford the luxury.
A status seeker might not buy that $100,000 car if only cost $10,000…even if it was the exact same car.
Books used to be in that category, owned by the elite, sometimes in hand-tooled leather covers.
If you are a bookstore manager, or a publisher, you need to be looking at the future.
Will you be able to compete with e-books on price? No, that seems very unlikely. Even though it is possible to find a hardback for less than an e-book, that doesn’t tend to be the case if you are looking at the list prices. It’s usually because a retailer (like Amazon) has discounted the p-book (paperbook). If the Agency Model collapses, which it may under pressure from the US Department of Justice), Amazon will again presumably resume discounting e-books.
You are not going to survive against e-books by competing on price.
Let’s look at these sales motivating factors:
If you are going to keep making hardbacks and selling them in stores, you can’t win on price, selection, or convenience against e-books, certainly. Ignore those in the strategy.
You can win on service, possibly. You can win on status. You do win on Familiarity, for now. You win, in a sense, on trust: people worry that their e-books are going to disappear somehow.
So, let’s say you choose to leverage status.
You start deliberately making books for the elite. You improve the quality of them…making them out of nicer materials, making them heirlooms. Books have been declining in production value for decades. If price savings isn’t an issue, reverse that.
Make books beautiful things that you show off…like diamonds.
The bookstores can also up their service: employing more and better informed salespeople (which also raises their costs).
Don’t count on discounting: that may be “distasteful” to the new market.
Mass market paperbacks are rapidly declining anyway: drop those as a strategy.
Continue to make high quality trade paperbacks: maybe $25. That’s for aspirational readers, people who would like to be in the elite, but aren’t quite there yet.
Are you going to lose a lot of customers with this strategy? Yes, you plan on it.
The clear question: would you have been able to keep those people anyway? Maybe not.
Will you attract different customers…ones who spend more at a time? Yes, that would be the idea.
When you got to the holidays, your more expensive books would be more attractive as gifts…because they are luxury items.
More expensive hardbacks also justify a higher price for e-books.
So, here’s the basic idea:
You lose forty-nine people who would have spent $10 a month on books, and replace them with one person who spends $500 a month on books. During the holiday season, those people who usually spent $30 on books for gifts now spend $50 (buying one book as a gift instead of three…but it’s a more impressive gift), and the big spenders buy books as gifts who wouldn’t have done it at all before.
I’m not saying that the publishers will do this, or even should do this…but it does seem like one possible way for them to continue to make hardbacks.
This post by Bufo Calvin originally appeared in the I Love My Kindle blog.