Pre-Pub Pricing (Baker Books)

That's strange. One or the other number must be a typo. Yes, pre-pub is supposed to be a discount off even the Logos "sale price" which is often lower than the SRP. Given that the SRP for the print version is $19.99 on Amazon.com (and you can get it for significantly less there), I think the "Pre-Pub Special" price must be a mistake.

Dan Pritchett? Are you reading this thread? (He'd be the one to look into this.)

If I paid the suggested retail price, I would want to receive a paper copy along with the digital book.

If Baker is planning to do like Fortress and others, and sell the paper books at retail with a CD included, I am disinclined to sign up for a retail price prepub without the additional paper copy as at least an option.

While I'm very pleased to have the Baker titles, calling them pre-pubs but at full price feels misleading. The fact they did it with Zondervan titles as well doesn't change that.

The Who’s Afraid of Postmodernism? title is about 80% higher than the same book on Kindle. (Didn't check the others.)

Just to give an example of how ridiculous these prices are; one of the resources has a SRP of $17.99.

Logos eBook: $17.99

Amazon Paperback: $12.23

Kindle eBook: $9.99

I like having books in my Logos library, but NOT that much.

I will NOT pay full retail for ANY book (print or Logos). NOBODY pays full retail for books these days. This is absolutely ridiculous.

Here's my take. I am willing to pay MSRP for an e-book if it has a demonstrated benefit to being in Logos. Mostly these include dictionaries, commentaries, and original language tools ect. However, when it comes to the "trade paperback" category I am much less willing to make these purchases. Many of these books do not contain enough information to consult many times. Mostly they would be read and shelve material; paper works better in this regard. So, I would only buy this class of ebook if 1) the discount was good OR 2) I found myself flipping through the paper book often and decided that there was a definite benefit to getting it in the Logos format, then I could sell the print copy or keep it for loaning purposes.

I think Baker and Zondervan are potentially cutting off a large portion of revenue. It will be interesting to see what happens to this pricing model.

Well, i shall not be investing much in the Baker stuff on Pre-Pub, for all the reasons given on this thread. I checked the price at Amazon to see how it compares & it is way out. Something is not right about all this & no rational has been given by Logos for this. Has there been a change in Logos philosophy when it comes to Pre-Pub? I would love to hear from Bob or Dan concerning this matter.

I now have a good reason not to invest heavily as i would have liked in digital books. It seems to me Baker & Zondervan are taking their customers for a ride. Hmm..what a gravy train! Stupid Ted, no one is forcing you to buy, just don't buy the Baker product should be your motto of protest.

I already have enough Logos product and Pre-Pub orders to last me a life time. So it does not make sense for me to throw away my money. Baker and Zondervan are entitled to have their products in Logos & i am also entitled to keep my money in my pocket! I am happy for those who regardless of the hefty price tag will still make the purchase and also happy that these great title are available in Logos.

That said, no offence to you guys at Logos as i suspect (i may be wrong) that Baker are responsible for setting the price. I shall still be looking at the Pre-Pub page for other good deals but i shall let the Baker stuff pass me. I may consider having Hoehner's Ephesians Exegetical Commentary if it appears in Logos but even at that i will not be amused. Just my opinion for what it is worth.

Ted

When you compare the per page cost of these Baker resources to the per page cost of “the complete works of Stephen Charnock” (which in my opinion is an outstanding resource), you have a very large difference.  Stephen Charnock’s pre-pub price is 2.5 cents per page, and is 70% less than its retail price.  The Baker pre-pub’s range from 6.5 cents per page, to over 11 cents per page and is selling at retail. 

I think that the Pre-pub section should not list items for sale that do not meet certain discounts off of retail.  Either that or the pre-pub page description should not read:

“The Pre-Pub program is a win-win for Logos and our users. Users get a deep discount in exchange for placing a pre-order for a specific product and Logos gets the assurance that sales will cover costs before incurring expenses”

Everyone is trying to figure out pricing in the new world of digital content.

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.

Some of our publishing partners have chosen to only license older, backlist titles that have already paid for themselves in print. Many users have requested Logos-compatible editions of the latest, freshest resources. On these resources publishers generally get 50% of the retail cost of paper sales, and as much or more on other e-book platforms. (Amazon's sale of e-books at $9.99 is generally at a loss -- they pay the publisher half of the retail, and eat the difference. It's believed they're doing this to A) sell more Kindles, establish themselves as the de facto channel for all e-book sales, a good place to be for the future, and C) force publishers and authors towards a pricing model of Amazon's choosing.)

When you see a paper book's retail price, you can be pretty sure the publisher is getting around 50% of that. If you see it sold for less than retail, it's because the indistinguishable retailers (every bookstore is pretty much the same, and every "web site and a warehouse" is, too) are competing 

So you can see why publishers have been reluctant to do low-royalty licenses of their latest and greatest titles for e-book editions. They want (or rather, need, to stay in business) that "half-of-retail" on the first round of sales. And if the first round of sales are going digital, they still need to make as much on the digital copies.

Back when digital was always 4-5 years after the initial sale, and the book was on the backlist or out of print, any revenue was gravy -- the book had made its costs in print. That's not true when e-books start selling the same day as paper, and start taking a bigger share of the purchases.

So if Logos is a retailer, why don't we chop 25% off the list price, like Amazon or some web retailer? Because we don't (yet) have similar cost structures. Our sale of the book for Logos format costs more to execute and support than Amazon's. Amazon gets a paper copy, puts it in a database, and ships copies to you. Then they're done. We do more technical work, have to continue to update the software engine, provide tech support, etc. (Amazon may have to support you on the Kindle, but that's easier than supporting Logos desktop software, and you had to pay the for the Kindle. Our software was "free" -- with the cost of writing it supported from our cut of the book's sale.)

Will Baker books get cheaper? I don't know. Possibly. We may get some efficiencies. Publishers may decide to lower their prices after the book's been out a few years. (They do this now -- the paperback edition is just an excuse to sell it for less a few years after the hardback.)

In some ways, it's up to you. If you value front-list titles enough to pay front-list prices, we'll sell them. If you'd rather pay back-list prices for back-list titles, we'll stop offering these fresh titles and sell just back-list. This is an experiment.

As for accusations of profiteering, greed, etc.... it just seems silly. The beauty of capitalism (and I do think it's beautiful -- if ruthless! -- just like the other laws of God's universe, including the ruthless beauty "gravity") is that excessive profits are wiped out by competition.Trust me, publishers aren't getting rich, they are struggling to survive. We're doing a little better at Logos -- we're better prepared for the e-content world -- but we're standing on quicksand. It's changing every day.

If you think the full-retail price for a Baker title is too much, you can buy it in paper at lots of prices, on the Kindle, soon on the iPad, etc. If Baker and Logos are going to charge full-retail for a Logos-compatible edition, it needs to be worth it, in both tagging, functionality, support, and timeliness. If not, you will all take your business elsewhere.

The good news is, we haven't taken anything of the "old model" away. We're still offering fantastic deals on lots of books on pre-pub. But the old model never had this simultaneous print/e-book release of new titles, with the latest books that are being required by professors, used in today's classrooms, etc.

I welcome your feedback on whether or not that's important.

Blair, thank you so much for asking the question. I looked at several of the Baker pre-pubs and instantly began to wonder about the price. Shortly thereafter, I saw your post in the forum which, based upon the discussion, even got Bob involved. Many of the posts, along with Bob's explanation, helped me to understand the pricing system a little more. Now that we have 24 inches of snow outside, and it's still snowing, I will have a lot of extra time to review all the conversation, as it relates to your initial question, in this thread. Your inquiry helped me a lot!

Be blessed, my brother!

Christina

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.