How to price a book in a digital age

The price of a book is different for a paperback, hardback or eBook. However the factors which influence that price are becoming increasingly hazy. I’m going to discuss where the value of a book is derived from and how technologies might change the pricing models of the future.

Traditionally a hardback would retail for more than a paperback. This was in part due to it’s higher unit production cost and part due to the improved aesthetic and tacit appeal to the customer. Based on a similar line of thinking publishers and consumers are both looking to value eBooks on the same basis. The unit cost of production is almost zero and they have very little aesthetic or tacit appeal. On this basis they should cost less.

However digital books provide faster delivery and are also becoming increasingly handy as more and more devices support eBook reading, both are valued advantages. Ebooks also have the potential to transcend static words and pictures to become interactive with links, videos, audio clips and embedded games.

My opinion is that a book’s value comprises 2 factors:

1) A value based on access to the content (this is a fixed figure)
2) A multiple of that initial value, based on the customer’s experience of the product

1. Value based on access

The value of access to the content is set by the consumer. This value does not include the form in which the content is delivered – it is purely how much someone would pay to access the content in its most basic form. The value varies between customers and only they know how much they are willing to pay as each customer has different intentions for the content.
A business may be willing to pay a very high price for content if it leads to a commercial advantage and will be looking to make many times their investment in the book content.
A hobbyist may will obtain value from the new skills learned or answers they receive.
A novel reader will determine the book’s value by the enjoyment they anticipate they will get from the book. This will often depend on the market hype among their social circles.

The question for a publishing business is: Which price optimises both the market size and profit? This is a job for some consumer research. To accurately gauge the price of a book, consumer opinion should be recorded and data extrapolated from existing and previous markets and trends. For a publisher, accurately obtaining the value of content therefore comes from being connected with the consumer. Social media is opening up new possibilities in low or no contact research through passive records of reader activity or through introducing gaming elements into the research process to provide a fun incentive to get consumers involved.

2. Value of the customer’s experience of the product

The value of the way in which the customer experiences the content provides a multiple on the value of the content. I think this is the case regardless of the unit cost of production. An unwanted hard back will not be bought over a wanted paperback. However, offering the customer a way to experience the content which increases the usefulness or pleasure to them will be worth something extra over its more basic companion.

When it comes to eBooks the value of access to the content is the same as if accessing the content in print. The difference is the form in which you deliver the content. As the quality of the experience depends on the device it is hard to gauge the multiplier effect. For most without an eReader or comfortable portable device, reading an eBook is uncomfortable and so the multiple reduces the value of the book. To those with a good reading portal it doesn’t diminish the value. This, in my opinion is the dilemma and where eBooks have displayed serious limitations up to now. The method of experiencing the content has been so poor that no one has bothered purchasing. However, the current trend of dedicated eReaders, tablet PCs and large screen smart phones has increased the quality of the user experience and as devices get better this multiple on the value of the content is only going to increase.

So, how to price a book in a digital age? There is a real need to change with the times and adapt as the market evolves. The market size of consumers with high quality devices which enable a good user experience is low at the moment so the price of a digital book has to be low enough to appeal even on these devices. As this market increases it should support a higher price.

What do you think? What would it take for you to buy an eBook at the same price as a printed book?