The only way to cut through and get some clear perspective is to do what strategists should always do, that is, see it through the eyes of the customer. Be CUSTOMER-CENTRIC. It's not easy but it's essential.
As a new consumer of ebooks, here's an early stab at what I would like to see:
1. Simultaneous publication with the first version of the print book.
Some major US publishers are getting spooked by Amazon, and delaying their ebook release dates for a few months. They're trying to protect print edition sales from being undercut by Amazon's nasty $9.99 price. Instead of seeing hundreds of thousands of new and enthusiastic Kindle owners as an opportunity they're seeing them as a threat, because some of those enthusiasts would purchase the print book if the ebook weren't available. Some. Maybe 25-30%? Let's do the math:
Print revenues without the ebook available: 10,000 x $15.00 net = $150,000.
Print revenues with the ebook also available: 7,000 x $15.00 net = $105,000
ebook revenues: 3,500 x $12.00 net = $42,000
(I've assumed ebook sales to be 50% of the print book sales if both versions were available, as Amazon seems to be suggesting this is their current, for now at least, sales ratio).
So you can see revenues are pretty much the same under both scenarios.
2. ebook prices should be lower than the initial print version by 30% at least, and then decreased sequentially just as print books are now.
Let's look at what the customer doesn't get by purchasing an ebook: a well-designed and printed package which incudes an arresting, beautiful cover; something to place on a bookshelf for all to see and pick up for years and years; something to lend to family and friends; something to sell second hand; a felt sense of where you are and how much further you've got to go - the standard 'flick' thing. What you get instead is just the content, in a standard typeface, with clumsy accessibility. It's a pared down, decontextualised experience, well and truly.
What I'd dearly like to see, and would be willing to pay extra for, would be the ability to purchase a 'print and ebook combined' package at my favorite terrestrial bookstore. If I could buy the printed version of Wolf Hall and get the ebook version thrown in for either free or another five bucks, that would be wonderful. That would entail a partnership agreement between the bookseller, the publisher and Amazon, so that when I walked out of the shop I carried the thick-as-a-brick paper version and knew that the ebook version was sitting snugly in my Kindle. A real 'home and away' package!
Regarding prices, there is a great deal of confusion in the industry on this subject. There's this quite silly notion that the ebook has to be the same price for all time. Rubbish. The whole point of sequencing cheaper versions of print books, from the initial hardback, to the trade paperback, through to the mass market paperback, is to make the book available, in an orderly fashion, to wider markets at lower prices. People don't want the mass market paperback - they want the mass market price. Ebooks therefore, where no printing costs have to be lowered accordingly to protect margins, can also undergo a lower price process. In the first year of publication they could be 70% or so of the hardback price, in the second year 50%, and finally 30%, or some such gradation. Not all books have to follow this tradey sequence of course, but many do. You can't have a situation where the ebook is $10.00 and the paperback $8.00. (I'm talking US dollars here, as this is where the debate is. We're a long way from the action in Australia, unfortunately, and will be until local titles are readily available on the Kindle, the iPhone and then all the others).
3. Choice should be part of the standard offer.
Publishers should stop seeing the so-called 'enhanced ebook' as part of the pricing solution, as in 'Throw in some audio, video and added extras and we can charge more and solve our revenue problems'. As a customer I want to be able to chose - either the basic or enhanced version, or a print/ebook combination, or some other appealing package.
So in summary, publishers should embrace this new market aggressively and optimistically, and stop being scared witless and defensive. Focus on readers and customers and their needs and preferences. As for Australian publishers, for god's sake get off your bums and get on with it.
