Print and Prices

Book prices are much influenced by the cost of production. Magazines are different, the most successful magazines have their size limited by the quantity of advertising that they can attract at an appropriate rate. For this reason, very large fashion magazines can be priced quite low on the street. Book publishers will say that they price to 'the market', and it is a naive mistake to suppose that one can publish profitably be achieving adequate margins at 5, 6 or 7 times the unit cost. Nevertheless the range of book prices is remarkable. What other product type spans three or four orders of magnitude in its pricing from £1 to £3,250 for the multi-volume Oxford Dictionary of National Biography? Of course the physical volumes of the ODNB cost a very great deal to produce.

But the marginal distribution cost of adding one more subscriber to the list for an online service is close to zero, which is why you can get a one month subscription to ODNB for only £25 (+VAT). The annual single user price of £195 seems too steep to catch any but a very exclusive market. I suspect that once OUP manages to 'forget' that it priced the multivolume book at £3,000+, the market-makers in that august institution will realise that they should be able to attract a large digital audience at a much lower price. Hundreds of thousands of copies of the old Oxford English Dictionary were sold in a completely unreadable microformat, (was it 24 pages photo-reduced to each page?), in the 1970s and 80s. The books were shifted mainly as a premium offer by the book clubs but an amazing number were sold with a magnifying glass in the binding because the photoreduced pages were too small to be read with the naked eye. Actually the OED is completely unreadable even when you have discerned the type with the glass wobbling in your hands. The OED thanks to this huge promotional boost may be the most purchased least read book of all time (the two volumes in their slipcase look great on your shelves). The ODNB is highly readable in comparison.

At this stage in the development of the ebook market, book publishers who think about digital pricing tend to work back from the print price, to find a satisfactory, ebook price at 50% or 60% or X% of the list price of the print work (think of £195 annual subscription as the mortgage payment on a book -- I bet that is the way OUP fixed their subscription price). It will take a bit of time before publishers and marketers realise that the cost of production, in the sense of 'unit cost', has no conceivable bearing on the digital pricing, whether for outright sale or for an annual subscription. The chances are that in the medium term ebook prices will migrate to some more or less fixed pricing levels: $2.99, $4.99, $9.99, perhaps $19.99. Simplicity will be a virtue and digital books will be seen as having some natural price points (cf CDs or DVDs).

Pricing digital books for institutional use is a completely different matter. This is an area in which book publishers who want to service institutional markets with effective subscription services will need to do some creative thinking. Charging as much as possible will not be a clever long-term strategy.