The results from our pay-what-you-want ebook pricing experiment are in
DRM and pay-what-you-want pricing
Not too long ago I announced a project my artist friend and I were working on: an exclusively-illustrated, DRM-free ebook edition of Lewis Carroll’s Alice’s Adventures in Wonderland. We wanted to make an ebook that we ourselves would love to own: hand-crafted with attention to detail, beautifully illustrated, and most importantly, free from restrictive DRM.
Releasing a DRM-free ebook gives some authors the shivers, because the assumption is that readers will share those ebooks amongst themselves and leave the author out in the cold financially. But we didn’t think that readers would always prefer to share rather than buy. We have more faith in our readers than that—and besides, we knew that sharing of books and files is a great way to build publicity and to gain new lifetime customers for books we might create in the future.
So we decided to try an experiment. It went something like this: For the first week the ebook was available, we’d offer it on a pay-what-you want basis. We set a suggested price of $5, and people had the option of entering their own price—including $0, which meant they could download the book for free. After all, if people were just going to share a DRM-free ebook, then who would volunteer to pay anything for it?
Given the option, would readers always pick free, leaving us poor and penniless? Or would people pay what we suggested, or more, or less?
I really didn’t know what to expect. If you had asked, I’d have said that 75% of people would have paid nothing, and the rest would have paid less than our suggested $5. Fortunately, our payment provider, Gumroad, has an option of pay-what-you-want pricing, so setting all this up was a snap.
The results are in…
…and they’re much better than we expected!
45% of buyers paid more than $0 for the ebook. That means that 55% of buyers downloaded it for free. That’s almost a 50-50 split—a much better ratio than I’d have guessed.
The suggested price was $5. The average purchase price for people who paid more than $0 was $8.65. That’s right—on average, people paid around 73% more than we asked them to. That’s spectacular—assuming the number of sales would have been the same, we actually made more money than we would have had we offered it at a fixed price.
The highest amount offered was $50. That one was, admittedly, an outlier. (And not one of our moms!) The next-highest amount offered was $25, and there were more than a few payments in that range.
The lowest amount offered was $4, of which there were a measly two sales. It seems that either people took the ebook for free, or they paid around what we suggested for it. Almost nobody thought it was worth less than the suggested price.
All in all, these are very interesting—and very encouraging—results. There’s no doubt in my mind that offering a DRM-free ebook was a great idea, and likewise there’s no doubt that this experiment was a great idea.
In the meantime, we’ve fixed the price for Alice’s Adventures in Wonderland to $2.99, which is lower than the average people offered to pay, and much lower than the cost of a paperback book. We decided to set it that low because there’s already a lot of versions of Alice in major ebookstores, so price is something we have to compete on.
(Update: this ebook is no longer available for sale.)
We’ve also put it up for sale on the Amazon Kindle Store, the Kobo Store, and very soon, the iBooks store. But if you’re going to buy it, please buy it directly from our website—that way we get 100% of the revenue, versus a measly (and frankly pretty insulting) 35% from Amazon and co.
If you have a spare minute and you enjoyed our ebook, we’d also appreciate it if you left a review at Amazon or Kobo. That’d go a long way towards supporting your fellow book creators.
(You might be wondering why we’re not listed on B&N. It turns out that B&N aggregates reviews for books that have various versions, and it displays those reviews on every version’s sales page. That meant that when we posted our version of Alice, it prominently featured over 1,000 reviews for other versions of Alice—and many of them, including the top ones, were bad reviews for other publishers’ versions. After numerous emails to B&N went unanswered, we decided we’d rather not list there at all than be listed with bad reviews from other people’s books. If anyone from B&N is reading this: Amazon is eating your lunch, and bad author relations isn’t going to help your situation any.)
More ebooks to come
We also have a new project in progress: a retelling of Grimm’s fairy tales illustrated by fourteen different artists. We’re not quite sure how we’re going to price that project. Doing another pay-what-you-want scheme is possibility; or, we might offer it at a fixed price, with the option to download for free for the poor and credit-card-less. It’s still up in the air, but whatever we decide to do, rest assured we’ll share the results with you.
Thanks for all your support!