Pre-Pub Pricing (Baker Books)

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Bohuslav Wojnar | Forum Activity | Replied: Mon, Feb 8 2010 8:14 AM

Whatever we say, when I see books like this one (Transforming Worldviews: An Anthropological Understanding of How People Change, Author: Paul G. Hiebert) I can't help and pre-order it Smile

Bohuslav

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Mark Barnes | Forum Activity | Replied: Mon, Feb 8 2010 8:16 AM

Bobby,

I'm afraid I still don't agree. The point is that none of us know what would happen if electronic books were heavily discounted, because beyond base packages, no-one's really tried it. The community pricing program is absolutely ideal to trial new pricing structures, but Logos doesn't seem to be able to persuade copyright holders to use it. Why not?

Community Pricing ensures that the publisher gets what they need, whilst the consumer pays only what is required to meet those costs. Until we get some major modern works on Community Pricing, or something similar to it, we'll never know how an imaginative pricing structure would affect profits and sales. The fact that Baker and/or Logos are not willing to experiment with this (nor any other publisher for that matter) says to me that publishers are too locked into 20th century pricing structures and haven't truly embraced the digital age.

I feel I ought to say that I'm not saying we should get something for nothing. I suspect my investment in Logos will be approaching $10,000 by now. All I'm suggesting is that innovative pricing could extend the reach of books, making them more accessible, and potentially without affecting publishers margins. Selling e-books for MSRP just because it's the MSRP is not innovative, nor clever.

Mark

Posts 513
Bobby Terhune | Forum Activity | Replied: Mon, Feb 8 2010 8:25 AM

Robert Mullen:

 In eBooks as a general practice and very much so in Christian software getting more product penetration while even maintaining the same revenue amount should be seen as a major benefit (market share in the secular world and furthering the Kingdom in our circle) and that is forgoing the thought that a lower price will often increase total revenue. The way business is transacted is really, really changing and I think publishing houses are slow to change with it.

Robert, I'm baffled by your thought that Christian publishing houses want to sell more books but would be willing to make the same amount of revenue for doing so. Who is Logos trying to compete with that they need to sell twice as many books for the same profit, thereby increasing market share? Right now Logos is really only competing with itself in the windows platform, it is the dominant platform for serious bible students and pastors. Logos got to this dominant position not by lowering their prices to take market share from their competitors, but by making a profit and offering a superiior product. Bob has stated that there are plenty of lost cost bible products for those who need them on the market today, it's just not Logos's market that they are going after. These are business that are trying to make more money and stay in business. What about Logos who has to incur extra support cost for each new user they aquire for a reduced profit? I want Logos to continue to make money so that we can have things like better tagging for perviously sold books, that will probaly not in itself be a money maker for Logos, but a great thing for us users. It's stuff like this that keeps me happy with Logos compared to how the competitors handle older content in their products.

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Mark Barnes | Forum Activity | Replied: Mon, Feb 8 2010 8:39 AM

Bobby,

Imagine you're a Christian author. You spend two years writing a book. Publisher #1 offers to sell 10,000 copies of the book for $1. Publisher #2 offers to sell 1,000 copies for $12. Publisher #3 offers to sell 100 copies for $150. All publishers offer 10% royalties.

Who do you choose to publish your book?

Posts 142
James Macleod | Forum Activity | Replied: Mon, Feb 8 2010 9:08 AM

Mark Barnes:

Bobby,

Imagine you're a Christian author. You spend two years writing a book. Publisher #1 offers to sell 10,000 copies of the book for $1. Publisher #2 offers to sell 1,000 copies for $12. Publisher #3 offers to sell 100 copies for $150. All publishers offer 10% royalties.

Who do you choose to publish your book?

Mark,

There is a big difference between offering and delivering the sales.

I think the point you are missing with relation to Logos and iTunes is that iTunes has a massive client base. The market for Christian books would be much smaller.  You saturate the market and it is finished. I'm thinking the number of people that want the latest Lady GaGa song is a lot bigger than the people that want an electronic version of the New International Commentary.

Posts 299
Robert Mullen | Forum Activity | Replied: Mon, Feb 8 2010 9:10 AM

BobbyTerhune:

Robert, I'm baffled by your thought that Christian publishing houses want to sell more books but would be willing to make the same amount of revenue for doing so. Who is Logos trying to compete with that they need to sell twice as many books for the same profit, thereby increasing market share? Right now Logos is really only competing with itself in the windows platform, it is the dominant platform for serious bible students and pastors. Logos got to this dominant position not by lowering their prices to take market share from their competitors, but by making a profit and offering a superiior product. Bob has stated that there are plenty of lost cost bible products for those who need them on the market today, it's just not Logos's market that they are going after. These are business that are trying to make more money and stay in business. What about Logos who has to incur extra support cost for each new user they aquire for a reduced profit? I want Logos to continue to make money so that we can have things like better tagging for perviously sold books, that will probaly not in itself be a money maker for Logos, but a great thing for us users. It's stuff like this that keeps me happy with Logos compared to how the competitors handle older content in their products.

I personally don't think they will make the same amount. I think if they sell 1,000 units of ICC at $1,800 they will sell 10,000 at $400. Those are not actual numbers but the gist of what I am getting at. Does it cost them anything significant to sell 9,000 extra books on an electronic platform? They will make more than twice as much revenue in this model. If they see Logos as a competitor for their print sales vs. a partner who's revenue stream needs to be maximized then they clearly would not be interested. I think anybody stuck in the mindset that physical media is the primary delivery medium in the future has a rude awakening coming. That said I know many publishing houses are resisting this just as strongly as record companies and movie studios.

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Bobby Terhune | Forum Activity | Replied: Mon, Feb 8 2010 9:48 AM

Mark Barnes:

Bobby,

I'm afraid I still don't agree. The point is that none of us know what would happen if electronic books were heavily discounted, because beyond base packages, no-one's really tried it. The community pricing program is absolutely ideal to trial new pricing structures, but Logos doesn't seem to be able to persuade copyright holders to use it. Why not?

Community Pricing ensures that the publisher gets what they need, whilst the consumer pays only what is required to meet those costs. Until we get some major modern works on Community Pricing, or something similar to it, we'll never know how an imaginative pricing structure would affect profits and sales. The fact that Baker and/or Logos are not willing to experiment with this (nor any other publisher for that matter) says to me that publishers are too locked into 20th century pricing structures and haven't truly embraced the digital age.

I feel I ought to say that I'm not saying we should get something for nothing. I suspect my investment in Logos will be approaching $10,000 by now. All I'm suggesting is that innovative pricing could extend the reach of books, making them more accessible, and potentially without affecting publishers margins. Selling e-books for MSRP just because it's the MSRP is not innovative, nor clever.

Mark

 

Mark,

First off I want to thank you for the wonderful videos you have made available to us, I have two pastor friends that have been greatly helped by your work as well as myself, you've done us all a wonderful service.

I agree with your goals to find a better "new and innovative" way to market ebooks to end users, I think Bob and Logos are trying to do the same thing. For whatever reason non copyrighted works of decent value have languished in community pricing, while works of sometimes lesser value (to me at least) get published in the prepub process. I can't imagine what it would take to get front-list books to work in that process, but I do believe Logos has tried to make it work.

I think, based on various comments made over the years, that both of us would be surprised how small a percentage of the Logos user base actually uses the prepub system. Bob once said the price on the prepub page is the result of years experience of knowing approximately how many users they expect to sign up for a given type of title divided by the expected costs. If we want better prepub pricing I think getting more users involved in the current prepub process would reduce costs to some extent.

I don't expect Bob to tell all the facts that we would need to make a truly informed statement about pricing structures compared to the cost of staying in business. But, we know enough already to know several things, copyrighted or not, Logos editions of books are not cheap to produce, 2nd is that publishers are still scared that ebooks have the potential to hurt their current business model and thereby their viability to stay in business. 3rd is that the current copyright laws are not getting any more lenient, and authors and their heirs expect to derive income off of their works for quite some time into the future. 4th is the fact that ebook sales are not large enough yet to use economy of scale for consideration in the pricing mix. All this brings a great complexity to the process.

In the end I'm just not sure how we can achieve the goals you state in your last paragraph, I not against them, I'm not sure at this stage, if the timing is right to put pressure on the publishers and Logos to lower there price to reach more people. Is reaching more people better for the Kingdom of God, Yes! But Logos would then need to change their business model to that of a nonprofit ministry. It would be interesting to know how much profit Logs make each year, and divide that by the number of resources they sell to know what a resource would need to sell for just to break even financially.

There are many titles that make it through the prepub system and then that's it for sales, once the price goes back up. Logos has their own version of back-list ebooks, ones that are no longer selling. Should Logos do away with the prepub system, and make the prepub price the every day price? Or should you and I pay for getting Logos books into publication at 20.00 for each title, so that later once cost are covered they can sell them to others for 1.00ea in a new discounted bundle? Personally that's exactly what I don't like about the current prepub system even though I support it.

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Bobby Terhune | Forum Activity | Replied: Mon, Feb 8 2010 10:02 AM

Robert,

I think I understood Bob correctly when I say it does cost Logos more money to sell those 9000 extra copies, why even that Logos salesman on the other end of the line feeds his family by commissions earned selling. What your thinking does not take into account is authors expect to receive a certain amount per copy of their work sold, wheather it be print or electronic. The publisher has some latitude in that their cost are covered somewhat by the paper medium sales, and for older back-list titles it is all gravy for them.

Posts 299
Robert Mullen | Forum Activity | Replied: Mon, Feb 8 2010 10:20 AM

BobbyTerhune:

Robert,

I think I understood Bob correctly when I say it does cost Logos more money to sell those 9000 extra copies, why even that Logos salesman on the other end of the line feeds his family by commissions earned selling. What your thinking does not take into account is authors expect to receive a certain amount per copy of their work sold, wheather it be print or electronic. The publisher has some latitude in that their cost are covered somewhat by the paper medium sales, and for older back-list titles it is all gravy for them.

It does cost more money assuredly but not in the old physical media mold where there was printing, binding, packaging, and distribution eating up significant parts of the cost. Now the first three are gone and the final one is reduced as far as per unit delivery goes. It really is a new world and I personally believe that Bob and Logos gets it (in spades based on what they are doing with L4.) I do not think the publishing houses get it at all. I think they are living in a world of fear for the loss of their business model. They would be better adapting to it but it is hard to change.

Posts 168
Bill Gordon | Forum Activity | Replied: Mon, Feb 8 2010 10:31 AM

Electronic books offer far more profit to publishers than traditional books.

Expenses are lower because there are no printing costs and no storage or transportation expenses. Also, there is no risk that the publisher will have to take back inventory that stores cannot sell. Nor is there any risk that the publisher will print more copies than can be sold.

Revenue is also potentially higher.  For example, there are no used books directly competing with the books sold by the publisher. Remember the besting book The Da Vinci Code by Dan Brown? The hardcover lists for $26.40 but used copies are currently selling for 40 cents. The paperback lists for $14.95 but used copies are now selling for a penny. Unlike traditional books, most e-books cannot be resold after you read them. In addition, publishers never have to worry about a book going out of print since there is no cost associated with maintaining an inventory.

The profit margin for e-books is much higher than traditional books. This is why customers expect to get a price break when purchasing an e-book.

Posts 513
Bobby Terhune | Forum Activity | Replied: Mon, Feb 8 2010 10:32 AM

Robert,

I think you are not getting what Bob said in his earlier post on this thread. I quote

 "Electronic resources are not inherently cheaper to produce than paper; the paper / plastic that a book or song or movie are delivered on is not the big part of the production cost. And in many cases (especially books), the e-books sell many fewer copies. (Growing, but still single-digit percentages.) So fewer copies have to cover very similar production costs."

I think, that you think the physical medium is the larger percentage of the cost to produce a book, Evidently it's not. This new world you're talking about has problems. Amazon tried to force publishers to accept lower prices so that Amazon could sell more copies in their Kindle format. Apple comes along, and upsets the apple cart by saying prices need to be higher so that all parties concerned can make a living. Guess who is winning that battle? Well it's not Amazon with it's low cost ebook for the masses. Innovation is good, but at 9.99 for a current best seller is not good for the publisher, the author and even Amazon itself, since they have to sell it at a loss to do it.

Posts 299
Robert Mullen | Forum Activity | Replied: Mon, Feb 8 2010 12:05 PM

BobbyTerhune:

Robert,

I think you are not getting what Bob said in his earlier post on this thread. I quote

 "Electronic resources are not inherently cheaper to produce than paper; the paper / plastic that a book or song or movie are delivered on is not the big part of the production cost. And in many cases (especially books), the e-books sell many fewer copies. (Growing, but still single-digit percentages.) So fewer copies have to cover very similar production costs."

I think, that you think the physical medium is the larger percentage of the cost to produce a book, Evidently it's not. This new world you're talking about has problems. Amazon tried to force publishers to accept lower prices so that Amazon could sell more copies in their Kindle format. Apple comes along, and upsets the apple cart by saying prices need to be higher so that all parties concerned can make a living. Guess who is winning that battle? Well it's not Amazon with it's low cost ebook for the masses. Innovation is good, but at 9.99 for a current best seller is not good for the publisher, the author and even Amazon itself, since they have to sell it at a loss to do it.

The discussion is getting a little circular. My main point is that there are fixed costs and per unit costs. The fixed cost is whatever it is regardless of the number of units moved. It has to be recouped in general revenue. It does not matter how many units it takes to generate that revenue. The decision to publish a work is going to revolve around the expected revenue not the sheer number of units. In the electronic medium, scanning, linking, contract negotiation, development, etc. are all fixed costs up front. One they are set you need X dollars of revenue to get your ROI. Selling additional units does not add appreciably to the cost. That up front cost was already understood when the decision to publish was made. If you can generate more revenue (increasing your ROI) by pushing more units at lower price without the per unit cost becoming onerus then you would clearly desire to do so from profit motive alone. This does not hold true for physical forms of media where a far larger portion of the cost is in the per unit portion.

Posts 513
Bobby Terhune | Forum Activity | Replied: Mon, Feb 8 2010 12:37 PM

Robert,

One last thought, in print publishing once a cost to produce is determined someone decides how many copies they expect to sell and then once the copies are shipped it's pretty much done for them.

I would think in ebook publishing via prepub pricing we have a different set of issues. The prepub preports to "Cover Costs" not profit. For every copy of a book that is sold whose costs have been covered, Logos incurs further costs to some extent. Salesman commissions, customer support costs, payment plan administration, web site maintenance, credit card processing fees, and well as bad debt write off's, regional sales reps and so forth. All of this is for a much larger customer base than the print publisher has to deal with. It would seem to me that an ebook publisher like Logos has more costs potentially that the print publisher does.

You said;

" If you can gererate more revenue (increasing your ROI) by pushing more units at lower price without the per unit cost becoming onerus then you would clearly desire to to so from profit motive alone"

I agree with you on that, but if it was possible to do so, don't you think Logos would have already been doing it years ago? These people we're talking about (Logos & Publishers) are motivated by profit and are running their business to generate profit. It's hard to believe they have all missed the boat of opportunity here.

Posts 299
Robert Mullen | Forum Activity | Replied: Mon, Feb 8 2010 12:54 PM

BobbyTerhune:

I agree with you on that, but if it was possible to do so, don't you think Logos would have already been doing it years ago? These people we're talking about (Logos & Publishers) are motivated by profit and are running their business to generate profit. It's hard to believe they have all missed the boat of opportunity here.

I think Logos would in a heartbeat and I think they get it. Everything I see them doing tells me they get it. The problem is getting the old media publishing houses to get it. In the Apple App store the discovery was gradual and could be tested with reasonably tame consequences. With a $2,000 commentary set it is much more unsettling to simply lower the cost and hope for the best. I think an offshoot of community pricing might work where Logos and publishing house agree to a limited time special off where a given resource is offered at a lower price to all who commit (and they would need to commit with no out) to purchase but the actual sale not being made until a fixed number of orders are received. It would be an interesting experiment. Honestly I am not holding out great hope for any of this, more just hoping that the discussion goes on record for Logos and their partners to see. Personally there are a couple of these ~$2K commentary sets that I would buy tomorrow if they were announced around $400. That is not hyperbole either. I would literally place my order the very second I could. In my case God has blessed my family financially and I could afford to purchase these $2,000 resources but would not because I do not think it would be wise stewardship. I simply think volumes like that are priced for libraries and institutions with the thought of sharing and not priced in such a way that it is clearly responsible for an individual to purchase them. That is simply my take though and not meant to reflect on anyone else's feeling.

Posts 513
Bobby Terhune | Forum Activity | Replied: Mon, Feb 8 2010 1:34 PM

I believe you are correct about the pricing model being based on limited distribution to library's and well off scholars. What we are asking for is a model for a whole new customer base that these books were not designed towards. but that only really applies to limited print runs of expensive titles.

We do have some hope on that frontier though, the Sheffield Academic Press titles are on prepub for between 10.00 & 20.00 each, these volumes retail for 100.00 to 150.00 when first released, and some of these titles are very recent as well. The problem is these titles have a very limited appeal, and I suspect this thread was started for much more modestly priced books than what we are talking about. You are unique, not many of Logos's customers would pay 400.00 for anything above their base package. Bob has said very few customers buy any books beyond the base package.

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Robert Lombardi | Forum Activity | Replied: Mon, Feb 8 2010 2:44 PM

This explanation doesn't make sense. I recently listened to a musician explain how it is much cheaper to produce MP3's than CD's. I would imagine the same is true for electronic vs. paper. A book has to be printed, bound, stored, shipped, handled. An electronic book just needs to be converted into the Logos format once. This doesn't make sense that the print book is cheaper than the electronic. Somebody is pocketing some extra money somewhere.

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Bob Pritchett | Forum Activity | Replied: Mon, Feb 8 2010 3:03 PM

Robert Lombardi:
Somebody is pocketing some extra money somewhere.

That's just not true. It may be true in the future, and may even be true for Kindle-type e-books, but it isn't true today about Logos-compatible editions. In a paper book you use italic type to indicate emphasis, Latin phrases, maybe quotations. In a Logos book we have to have someone look at it and mark it up correctly, so a word lookup correctly goes to the Latin dictionary, etc. If the author writes "Josephus, in the first chapter of his Wars of the Jews, wrote that..." they just print it. We have to tag it and link it correctly to the exact right reference. Take a look at a commentary, full of "and then in v. 5, Paul writes" type references. Is that verse five of the chapter this commentary section is on, or verse five following the earlier reference to verses 1-4 in a different chapter? A human has to review and tag these ambiguous references, which isn't done in print.

 

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Bob Pritchett | Forum Activity | Replied: Mon, Feb 8 2010 4:10 PM

All this feedback is fascinating, and I appreciate it. (Though I must confess the stuff that borders on character assassination is getting on my nerves. I'm glad you're all so passionate about Logos, but come on, we're just offering something for sale. You can buy it or not. It's not a moral point, it's a business transaction.)

The funny thing is, nothing is being offered at over retail price. We're just all so used to thing being offered for less than list price that list price seems like some kind of offensive thing.

I harbor all kinds of fantasies about how we can equip the world for pennies. We even try a variety of experiments to make it happen. The problem is, it just doesn't work. There's too much friction in the market, too many people who want hand-holding or to ask questions or get support, and it costs (even in this electronic age) too much to get the word out.

Zondervan is a $200+ million company. So if every nominal Christian in America sent them $1 a year, they could make everything they produce each year available to all.

Why don't they do this? Because it woudl cost more than $1/person to administer and support the program, and even then people would say things like "I hate all their books! I don't want to send them $5 a year [for a family of five] for that stuff! They publish <whatever-heresey> and I won't support it!"

And, even if we DID all sign up for the program, how would they find the right mix of content to deliver? What if they only did protestant canon material and annoyed some people? What if their BIble translation was too literal, or too dynamic, or too conservative? What if their Christian fiction was all Scottish highlands based when everyone wanted Amish romance?

So they do what works, even though it costs those of us who purchase their material more, and keeps the content in fewer hands: they produce products they think will work, at prices they think people will pay, and then the market tells them if they're right, what it wants more/less of, etc.

The idea that this experiment with Baker (and the release of Zondervan titles) is some kind of conspiracy to move everyone to more expensive content is ridiculous. I'd be offended if it wasn't just silly.

We need to generate millions of dollars of revenue each year to meet our obligations. (Payroll, rent, computers, phones, coffee, etc. for 175+ people.) We literally can not take advantage of you. Because every single day we need you, collectively, to be buying more content from us, or we go out of business and are unemployed. Yes, there are predatory business practices. Sometimes a big company cuts prices and drives competitors out of business, then raises prices. It can take a while for the market to punish this, and for little competitors to re-emerge, etc.

We don't have this strength. There are myriad places you can buy the content we sell, in many formats.

We aren't in a geographically constrained market. You are our only customers. We don't have people in cities around the world subsidizing our attempt to manipulate prices in your town. The Internet is one town. If we want to be in business next year, we need to take care of you -- all of you -- this year.

Again, publishers are struggling to survive. Most Christian publishers have been laying people off. They are in no position to be rubbing greedy hands together and manipulating prices higher so they can roll around in rooms full of cash. They just want to eat. The $9.99 e-book is not an accurate reflection of the market's new cost structure, (though it may be someday), it's one company's subsidized attempt to destroy its competitors. (Amazon.com now works directly with authors to create e-books and print on demand titles. They are trying to kill traditional publishers, and have been eating losses in e-book sales to reset consumer expectations, which they're apparently doing successfully. And I'm not making any judgment on this -- it's the nature of competition -- I'm just saying the $9.99 is a number with artificial influence.)

We are now experimenting with new models with publishers in response to your requests. As many of you have kindly pointed out, nothing about our new Baker deal changes anything about existing deals. We aren't raising prices. If we didn't do things this way, we simply would not be offering these titles. Success with a Baker title is just that -- success with a Baker title. There are components of the deal (that I won't go into) that make it a unique situation. The publishers who've chosen other paths aren't seeing any reason to change their program.

It's also important to note that this is not a price increase. This is an attempt to get for these titles what the publisher is already getting for them. The alternative isn't to offer these cheaper, it's to not yet offer them at all. There isn't a comparison between Baker Book A with "this model" vs. "last month's model". Last month these books were only available in paper, and the wholesale price was the same. (The only difference is that we aren't discounting the retail they way some paper vendors might, but we have real costs and scale issues that are different from online paper retailers.)

With regards to the description of pre-pub: It's interesting to see how pre-pub has taken on a very specific meaning for many of you, and that's fine. In my mind, though, it still means one thing: We offer it for sale "pre-publication", and only produce it if there's enough interest. The discount for early orders is an incentive to force decisions, not a promise inherent in the words "pre-publication." 

So what's the incentive when it's offered at full-price? Well, the book itself. If there aren't enough orders, it just won't be available. 

This non-financial incentive will probably only work with "hot" titles, but that's fine. For titles that aren't "hot," we'll be forced to offer a time-based discount, as we presently do for so many things.

These discounts and the false sense of urgency they create could seem a bit silly. Why not just set one price and offer all the titles at that price forever? Isn't that more fair?

Maybe. Except it just won't work. Because of real-world issues like cash flow, and the need to minimize money-losing projects, etc. To sell one copy I need to pay 100% of productions costs. It may be true that every book will cover production costs over the next 10 years, but that means we'd need massive amounts of cash to do 10 years worth of production up front, to be earned back over 10 years. And cash itself costs money. So this false sense of urgency we create with pre-pub discounts isn't really false. It is a way to identify your top priorities, incentivize early decision making, and share the benefit we receive from your early decision making with you. And ultimately it cuts our costs (by eliminating our need to pay interest on the money required to cover 100% of production costs before the first sale).

With regards to incremental costs, and the extra units we'd pick up by making things cheaper... the problem is there's limited demand for the content, and people don't all value it the same. Yes, 300 copies of a commentary set at $1,000 nets $300,000. And maybe I could sell more copies at $500. And 600 x $500 also equals $300,000. But somewhere you stop picking up new customers as fast as you drop the price. At $1, the commentary is a steal. But I don't have 300,000 customers. Moreover, there may not be 300,000 people who care about it anywhere on earth. So what about 30,000 people at $10? We still don't know enough likely buyers. 15,000 at $20? Well, we know that many buyers, but at $20 people start to wonder if they really want that set, or maybe would rather have a different set. And if there are three $1,000 commentary sets, I'm going to need 45,000 customers at $20, etc. 

And even if I sold 15,000 copies at $20, I now have distribution and customer service and tech support costs for a lot more people. And with $20/unit, and customer service reps costing more than that per hour (when you add up salary, healthcare, phone, computer, space, coffee, etc.), a single phone call wipes out all the revenue.

There is a price-demand curve, and it's mysterious. Halving the price doesn't always double sales. Sometimes it triples sales, sometimes it doesn't affect them at all. (You can drop the price of a unicycle from $160 to $80 and I still won't buy one. You can drop it to $5 and I won't buy one. Turns out, the same goes for a Coptic lexicon, and even some large Bible commentaries. Some things I just don't need or can't use.)

We use community pricing to show you how these curves work. The fact that the curves have different shapes shows this. If demand and price are perfectly linked, the curve is straight and perfectly horizontal. If there's any peak, it reveals a "magic number" at which revenue is maximized.

Now, all that said, I still like the fantasy models where we're able to give you more for less. And they aren't complete fantasies. Government works this way: everybody gets taxed, and then services no one would buy (or could afford to buy, like national defense) are made available to the whole group. Cable television works this way, too: you pay $50+ per month and millions of dollars of entertainment is piped to your house. You could not afford any of those movies, and yet you get them all for $50 because the cost is shared with millions of other people.

The only problem is, you and I both don't like much of what the government chooses to do (on our behalf), and we often don't care much about what's on TV either. So we still go and buy services, products, and movies directly. We pay $11 to sit in a theater sometimes to see the movie we want to see right now, instead of staying home where it's likely there are 10 movies available simultaneously, already paid for in our cable subscription.

What's the answer? There isn't just one. It's a messy world, full of many opinions, different ideas of what's important, competing priorities, and limited resources. We're working through it, just like you. In our defense, I'd argue that Logos offers more pricing models and more transparency than any other digital content provider. We have "stuff for sale." We have sales. We have pre-pub. We have community pricing. We have stand-alone books and bundled products and once-in-a-while crazy discount systems like Logos March Madness. At some point we'll offer some things by subscription, too.

On average, 300 people participate in each Community Pricing offering. I know for a fact that if every Logos user put a bid on every Community Pricing book, the price on every title would be the posted minimum. We'd make money, cover costs, and deliver each title at the lowest price shown. (We could even slide the scale down for most. titles to around $2 or less.) The problem is, there are some books some people don't care about at any price. And other people want to engage in game theory to minimize their own risk. True, it works for one person. But it raises the overall costs to the community. (I'm not complaining -- it's how we all work, and how economics works.)

I run the numbers on creative pricing all the time. I would love to offer a $20/month deal that made everything we ever produced (and more each year) available to every subscriber. At $240/year that would be a better deal than what most of you invest with us each year, and would make a massive library available. The problem is, it would take tens of thousands of customers. And a lot of convincing authors and publishers. And there'd be complaints/cancellations because this year there were too many Hebrew books, or Greek books, or Calvinist books, or Wesleyan books, etc. And we'd have a whole new world of costs finding and keeping subscribers. And sadly --  the big problem -- there simply may not be enough people who care enough about Bible study to invest $240/year. (Or at least not enough to equal the revenue earned the way we're doing things now.) Even some of you might say that a single purchase of Bible Study Library meets your needs for years, and you don't need to keep paying for more books, because you can't read all the ones you have.

But we're still working on it, and someday, may be able to make it work.

I appreciate your feedback, and don't mind the criticisms. I hope, though, that you'll appreciate that our desire is to serve you well. Yes, we want to make a profit. But we're trying to do that while making as much content available to as many people as possible.

 

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Mark Smith | Forum Activity | Replied: Mon, Feb 8 2010 4:15 PM

Robert Lombardi:
This doesn't make sense that the print book is cheaper than the electronic.

Compare apples to apples. It is cheaper to produce a paperback book than a hard cover, mp3 than CD. They are the same content, the binding/delivery form of one is much less costly. If you charge the same for both, then, barring other differences, you will making more profit on the paperback/mp3 edition.

Electronic texts like Logos can't be directly compared to print editions or CDs. If an electronic text could be produced by using the data files that made up the print edition by simply pushing a button, then charging the same for such a text produces greater profit per sale for the reasons you cited. The trouble for Logos is that there is no such button to push and you are not getting an equivalent to the printed book. You are getting much more (at least for some types of texts). While we might not like to pay the same (or more) as for a hard back book, the cost may be justified by the additional benefit we receive for the extra features Logos provides. Those costs are not necessarily offset by the savings you pointed out.

For me the difference comes when a text truly benefits from being published in Logos format. A text with little need for hyper-linking, pop-ups, etc. does not have as much added value in Logos format so I'd be reluctant to pay the same premium for it than I would for texts in which hyper-linking, pop-ups and the like truly enhance the electronic version. Right now most of the Baker titles on pre-pub seem to be of the former nature and therefore will not make it into my shopping cart.

Pastor, North Park Baptist Church

Bridgeport, CT USA

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MJ. Smith | Forum Activity | Replied: Mon, Feb 8 2010 4:19 PM

Bob Pritchett:
Though I must confess the stuff that borders on character assassination is getting on my nerves.

On my nerves too. Thanks for stepping in.

Orthodox Bishop Hilarion Alfeyev: "To be a theologian means to have experience of a personal encounter with God through prayer and worship."

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