Business Models

by Tim Cushing

Filed Under:
ebooks, innovation, shared pricing

Harvard Business Review Continues To Innovate On The eBook Front; Offers 'Shared Pricing' On Recent Publication

from the don't-bogart-that-info dept

Recently we ran a post discussing Harvard Business Review's decision to go DRM-free and platform independent. The author behind the original post, Joshua Gans, suggested that HBR's ebook policy could open it up to more innovative offerings that rewarded both the publisher and the authors for selling their books through HBR:
I have my own eBook coming out with HBR Press in a very short time. I’d love it to be the case that they decided to offer the book on their site with an explicit ‘sharing’ option. For instance, the normal ‘don’t share’ this book might cost the same as Amazon while the ‘sharing’ option may be somewhat higher but would say allow you to assign ‘ownership’ of the book to another person as well.
Gans' book, "Information Wants to be Shared," is out, and true to his word (and the title), there's a sharing option. It's a good idea, but one that is easier said than done. Fortunately, HBR was up for the challenge:
Now the first, snarky remark somebody makes when you release a book about sharing information is that it is kind of hard to share eBooks...Nonetheless, I believe it was very important to take that challenge head on and, as it turned out, the folks at Harvard Business Review Press were more than agreeable to some experimentation.

The idea was that when a reader recommends a book to someone else they are performing an extremely valuable service to authors/publishers. The problem is that, while with physical books, lending between friends can perform that service, trying the same thing for eBooks makes a mockery of the technology.
Obviously, once you've taken DRM and platform dependence out of the picture, sharing can become too easy, so to speak. And while Barnes & Noble and Amazon have certain books "lending enabled," the "lending" is done in the most literal (pretty much "physical") sense, with the copy vanishing from one device and appearing on the lendee's. Gans was looking for something that split the difference between "sharing" and "recommending" which would make it easier for those on the receiving end to pick up a "no strings attached" copy of their own. Selling through HBR made the sharing part easier, but setting a price was a bit trickier, leading to this compromise:
So here is the experiment they are running. If you buy my book (the price is $4.99) from HBR directly (which is DRM free and multi-format so it can be read on any device) or if you buy it from Amazon, Apple, B&N etc, you can flip to the last page of the book. You will see there a coupon. If you send that coupon to a friend, they can download the book from HBR (and HBR only) for just $0.99 (in its multi-format DRM free form).
The lowered price should make the "second-hand" purchase a no-brainer, especially if the coupon is sent their way by someone whose opinion they respect. The advantage for Gans (and HBR) lies in the potential addition to readership and the data collected during the experiment. But even if it turns into a publisher's worst nightmare, there's still plenty to like about it.
Will this work? It is hard to know. HBR will keep stats on this and hopefully I can share them in the future. Are there risks? Absolutely. All my readers could form a collective and potentially buy one copy for $4.99 and then a million for $0.99. A disaster! Actually, no that sounds pretty darn good to me. (I won’t speak for my publisher).
As Gans notes, he'll be tracking the results with interest, and hopefully HBR will let him share the data. As the ebook field continues to grow, any information on pricing experiments will be very useful for up-and-coming writers. 

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    Anonymous Coward, Oct 11th, 2012 @ 3:42pm

    All my readers could form a collective and potentially buy one copy for $4.99 and then a million for $0.99. A disaster! Actually, no that sounds pretty darn good to me.

    That's a key point that so many just don't (or won't) get. They this outcome as the alternative to selling 1,000,001 copies all at $4.99. When the real alternative may be selling only 2000 copies at $4.99.

    reply to this | link to this | view in thread ]

  2. icon
    Laroquod (profile), Oct 12th, 2012 @ 8:01am

    Here's what I do in response to this. I take that coupon, and I throw it away.

    reply to this | link to this | view in thread ]

  3. icon
    ltlw0lf (profile), Oct 12th, 2012 @ 8:36am


    They this outcome as the alternative to selling 1,000,001 copies all at $4.99.

    I'm sorry, but I think you accidently a word.

    However, I don't see how selling 1 book for $4.99 and a million for $0.99 is any different than selling 1 book for $4.99 and 2000 copies for $4.99, other than maybe the book should have been priced at $0.99 to begin with (obviously the publisher/author will see less income,) I believe what the key point you are missing is that the consumer may be more likely to buy at $0.99 and less likely to buy at $4.99, so it is likely that a book priced at $0.99 will attract more impulse buyers than a book priced at $4.99.

    reply to this | link to this | view in thread ]

  4. identicon
    birkin, Nov 19th, 2012 @ 12:50am

    This is a very great action. I can help a lots of people.

    reply to this | link to this | view in thread ]

  5. identicon
    Mike Russell, Nov 21st, 2012 @ 12:16pm

    Electronic media is leading us back to the patron model.

    There's no DRM on the planet that's going to stand up for long. The only real prayer that artists and authors have to make money from their work now is through a modern form of patronage. Sites like Kickstarter are a good way to help them do that. The bulk model we're talking about here is absolutely the answer. If you can get well-known through word of mouth, the people who care about your work really will pay you for it. Just look at what Louis CK did with his DVD special; he made way more money than if he'd gone through Comedy Central or somewhere else.

    reply to this | link to this | view in thread ]

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