Paulo Coelho Ebook Sales Jump Way Up Thanks To $0.99 Sale
from the boom dept
We recently wrote about Paulo Coelho convincing his publisher, Harper Collins, to run an experiment, in which they offered up nearly all of his ebooks for just $0.99 (the one exception being his most famous book, The Alchemist). In the comments, we had an interesting discussion, in which someone suggested that even dropping the price by 90% would mean it was unlikely that he got 10x more sales to make up the difference. Others pointed to similar experiments — such as those by Valve, in which dropping prices by large amounts increased sales by much, much larger percentages.
Paulo himself contacted us to share some of the initial results — pointing out that, according to Amazon, the sales of a bunch of his books increased between about 4,000% and 6,500%. Yes, that’s multi-thousands of percent increases. I would think that more than made up for the difference in price…
One hopes that this will send book publishers running to their nearest economics text or professor, so that they can be taught about price elasticity, and why lowering prices can often make you more money.
Filed Under: 99 cents, ebooks, paulo coelho, the alchemist
Companies: harper collins, valve
Comments on “Paulo Coelho Ebook Sales Jump Way Up Thanks To $0.99 Sale”
Cue the trolls claiming that this is only an exception in…5…4…3…2..
They’re just trading analog hundred dollar bills for digital pennies.
Paulo Coelho Ebook Sales Jump Way Up Thanks To $0.99 Sale
Thanks to? How do you know that for sure? Correlation vs. causation and such.
Just a reminder...
Percent increases really aren’t the right way to report gains after 100%… too many folks are confused. A 100% increase is a 2x gain, 1000% is a 11x gain, 4000% is a 41x gain.
That’s damn impressive. Given that the marginal cost is 30%, this translates to a 41x sales increase at 1/10 the price. That’s a 4x increase in revenue. Not a bad experiment… real test is to see if it holds form for a few weeks.
Two Books Weren't Offered at $0.99
The other was “Aleph,” at least on B&N.
I wonder how sales of THOSE books (consider them experimental controls) have fared during this time.
Economics 101…
5 * $4.99 < 50 * $0.99
For those too lazy to figure this out:
$24.95 < $49.50
So, now his books are much cheaper than most other books, so he sells lots more. However, if every book sold at $0.99, these particular books wouldn’t stand out as they do now, and so probably wouldn’t sell as much.
Its possible that lower prices would in general increase sales, but it seems unlikely that the increase would be as dramatic as in this case.
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Sometimes, one need to careful correlation vs. causation. At other times, common sense suffices.
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Well sales (and income) sure as hell didn’t go down with it all did they?
I’m just waiting for people to claim that one of the largest selling authors on the planet is somehow an exception.. Exception to what? Your idea of how things work?
Though with people starting on the cause/correlation line I think I can see the reality denying crowd having many months of whining about how sales may have gone up, whatever, but none of that matters, because you cant prove that it’s because of X or Y or Z..
Their choice to deny reality of course, just as it is reality’s choice to bite them on the ass when it feels like it.
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But it sure would encourage people to drop their buck and give the book a try and not feel like they have risked a lot of money.
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so your point is what that you should wait until everyone drops their price so you gain no benefit whatsoever
if anything that statement means you should make the price change as soon as possible to make sure your one of the lucky few who will cash in.
BTW it totally false, people are simple going to buy more books, rather then buying 1 book, and pirating 12 they will buy 13.
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Res ipsa loquitir, Occam’s Razor and such.
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Let’s see. The increase posted in the list (the percentage) is the increase that came after the sale was instituted. So that means that the first book sold nearly 150,000% more after the sale than before the sale. How that can be the result of anything but the sale is beyond my comprehension.
~_~
Quidquid latine dictum, altum videtur
(I also have this on my nameplate by my office door. Nobody has yet asked what it means, nor has anybody smirked/laughed when reading it…)
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And everyone knows that 2+2=11
The math speaks for itself, if you bother to use the right numbers.
(The math equation in this post is in base 3.)
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Let’s be fair, there could well be other factors at work here. Not to go all “this can only work for…” on everyone, but the first question I had upon reading the article was “What kind of promotion was done around this price drop?”
-Did the retailers put big banners up on their home pages and such advertising the price drop? Related, could most authors do the same thing (no….)?
-Would the sales blitz have been the same in terms of total sales across the total time period if the price had always been $.99 and never the higher cost that was then lowered for the sale?
I tend to agree with low prices on eBooks, as regulars here probably know, but let’s not immediately pretend that there CANNOT be other factors at work here than just the $.99 price….
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So take a clue from Valve. They sell games at full price (note that it is not 1.2x higher like most eBooks) for a while. Then they half the current prices for games older than 2-3 weeks, or sooner for less popular ones. After that they have bargain basement limited time sales. You also have differences prices in AAA titles and indie games.
The general principles are the same so why can’t book publishers do this?
Re: Re:
Stupid book publishers and authors have to pay distributor fees to places like Amazon of 65-70% on 99 cent ebooks. Valve software distributes it’s own games. DUH! Also, way more people play games for recreation than read books. Way more people watch movies than read books. Way more people watch TV than read books. Reading books is at the very bottom of the entertainment pole for the majority of people and that’s just a FACT. So these other entertainment forms have a wider potential customer base than book sellers.
I know you want to bring up Twilight & probably Harry Potter as examples of huge successes, but please don’t.
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While this is true, it’s possible that it was because of the sale, rather than being the inevitable result of anyone putting their book out for $1 from the start. If there was a lot of publicity around the price drop, then that almost certainly contributed.
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They’re just trading 1 ten dollar bill for 40 one dollar bills. There’s no way that that could be sustainable.
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Yeah! Maybe it was coincidence! We can never see this hidden power of causation anyway! (Right Hume?)
Heck, personally I don’t think sales went up at all, seems more plausible to me that I’m a brain in a vat who’s being made think sales went up.
(Philosophical scepticism: When reality proves you wrong, just deny reality exists. Boom. Who’s wrong now?)
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I won’t touch ebooks as they are now (DRM, enforced extra device, high price). I am an avid reader. I can’t afford many books, so I typically peruse the library. At a price of one per pop? I could see myself budgeting for that.
Granted, in my case that situation will be changing soon, but still, the lower the general price point the larger the market becomes. In most cases, this is an exponential relationship. This means you need to come fairly close to the extreme before the multiplicative decrease catches up.
The marginal cost of ebooks is tied to running the download servers. Until the price reflects that cost, the publishers can easily keep pushing the cost lower to capture a much larger market and more revenue. Win-win.
but the publishers will say this is just a fluke, a flash in the pan, it wont last. it will be anything except a success, just wait and see!
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Nah. They’ll just go all Hollywood and blame it all on piracy.
Sales are not the only benefits of it, at sub-dollar pricing you don’t get people complaining or trying to find solutions for problems that arise, they see it as what it is a rental and pay up again for another copy if anything goes wrong with their copy, they rest assured they will be able to get something at a low cost and that encourages reoccurring expending which should be the goal of any company, to keep people expending and not buy once.
People buy a lot of media, the accrued value of all that expending is why they will not buy something at higher prices more than once and that is why you don’t get to set new restrictive rules that aren’t possible on physical media.
Paulo Coelho is going to get less costs dealing with complaints and more repeat sales over the lifespan of the work.
Even if he had a DRM on the books, which it has in some distribution channels, by being low priced people don’t care anymore they just buy a new copy to a friend or family.
39x to 64x increase in sales just show what that means.
In fact $0.99 is a premium, it should be in the range of $0.05~$0.25. That is the price range charged for services that see a lot of monthly spending, that is what people will pay every moth and don’t complain about it, just look at your gas bill, your water, your cable, they all are priced under that scheme and there is a reason for it.
Re: Anon Coward May 4th
“Sales are not the only benefits of it, at sub-dollar pricing you don’t get people complaining…”
WRONG. At sub-dollar pricing ALL we get are complaints. We get nothing but complaints because one rule of business holds true and that is, the lower your price point, the worst the customers are. 99 cent customers are the hardest to please. They whine and complain about everything imaginable. they blame everything on authors and publishers. I’ve seen them give one stars to authors on Amazon and proceed to say that they ordered the book and it came late in the mail. The author takes the blow for poor mail circulation. It’s just tiring, and like I said, despite amazon’s efforts, I doubt ebooks will last. If all authors can hope to earn is under a buck then forget it. That coupled with the ongoing whinning and complaining is just not worth it.
Just a reminder...
Valve found that games will continue to sell well after a sale and sometimes even spike a few weeks after a sale. They believe people buy the game on sale, talk about it with friends if they like it and then the friends are inclined to buy it even if its back at full price.
http://www.geekwire.com/2011/experiments-video-game-economics-valves-gabe-newell/
Just a reminder...
whoops wrong article. The one where he talks about purchasing trends before and after sales is older than that one. Sorry I am on my phone having problems tracking it down. But if you search for Gabe interviews from ’10 ’11 you should find it.
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If I hadn’t read Techdirt’s article relating to this yesterday, I wouldn’t hae known about the price drop and therefore wouldn’t have bought the ebooks yesterday. So, indirectly my purchase of the books was due to the price drop, but the more direct cause was Techdirt’s coverage of the price drop.
I’m not saying I represent that 15000% (especially since I bought from B&N, not Amazon), but still.
~_~
Quanti Canicula Ille In Fenestra.
~_~
Dude, that’s awesome. And I definitely had to look it up.
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Not to go all “this can only work for…” on everyone, but the first question I had upon reading the article was “What kind of promotion was done around this price drop?”
My first thought also. Followed by the thought that having a Techdirt article or two about the price drop certainly didn’t hurt things either. If this price range becomes commonplace then that kind of hype won’t be sustainable.
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The first book isn’t one of Paulo Coelho’s, it’s by someone else.
Just a reminder...
Hmmm…gain in what sense?
100% is a 1x gain over the existing value.
100% of 2 is 4 so you gained 2(1x) not 4(2x).
A 1000% increase means a 9x gain (10-1).
So the formula for gain could be put like this.
(percentage/100)-1
Or did I miss something?
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Using the magic e number formulate the sale figure projection of those prices over time.
LoL
You see at $4 I don’t think that many people will come back again to rebuy that product, now if the price is ultra low how much that encourages people to rebuy that thing over and over again? Reasons could be to give it as a gift, to replace and existing problematic copy, to buy for another platform, etc.
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Also how much does ultra-low-prices decreases cost with maintance of services on the part of the vendor?
That would be good to plug into the formula too.
Wasn’t this drop in price just a temporary sale, rather than a permanent price drop?
If so, many of the purchases might be by people who planned to buy (and in many cases would have bought) the books eventually anyway (at a much higher price) and are just taking advantage of the sale.
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Those may all be factors here; however, most people have *some* sort of a budget, and if they can buy ten times as many books for the same price, they will often buy a whole lot more stuff. So it seems quite likely that price elasticity is somewhat like what Coelho suggests.
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But it could only work for that guy!
…..and that chick
…..and all those other guys
…..and all those other chicks
…..and the intersexed individuals
~_~
rectus dominus
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It will fallow a bell curve of course, like any other sale graph will fallow the same thing the question is at the end of that curve how much did you get for it?
At lower prices your market share expands, also it increases the casual expending and decreases maintenance costs.
How much people wait to reach the resources necessary to acquire something at price X and how long people reach the necessary resources to acquire a lower Y?
To visualize the situation think about coffee, if in one place it costs $4 and in the other place it costs $0.40, how many people will walk in on the $4 over a period of time and what the interval will be compared to the other place?
At $4 a pop you go there in special occasions at $0.40 you probably go there every day, that is $2.8 every week against once a month in the other, at the end of the year who got more?
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ereaders arent really that high priced, for example geeks.com always seems to have them in the $30-$60 range, the nook simple touch can be found for 60-70 refurbished sometimes even on their own site.
i do agree about drm sucking, but at least stripping nook book drm is fast and simple 🙂
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4,000-150,000% sales boost based on people who would have bought at full price…..not very likely.
and from what i have read, I really think the author would keep the price at .99 perpetually if he could. but his publishers likely will want it back up at “full price”
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I’m in college. $30 is a lot.
Are the sales because of the price, or because of stories on sites like Techdirt?
Cause and effect… who knows?
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Are you saying Techdirt, and a couple of stories on one subject are enough to get books (or software, or to take the argument to extremes movies) on top of the money charts?
Well I’m glad you think we have that much power here..
However you really need to think about updating your medication..
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reality should be by consensus
/sarc
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So it seems quite likely that price elasticity is somewhat like what Coelho suggests.
Oh I agree. I was just thinking that these numbers should be taken with a tiny grain of salt and may not reflect what will happen over a longer time span and a wider scope.
Personally, I think the $0.99 range for a electronic copy of a book is right on target. I can’t explain why, but that is how much I value it. Any higher and I would rather spend my money on a dead tree version or not at all.
Re: Gwiz
@GWIZ, Then go somewhere else. You think books should cost less than a cup of coffee? Don’t you have an Ereader that cost over $130? As an author, I am “extremely reluctant” to price my work at 99 cents because I don’t want to cater to people like you. In general, what I have found is that “customers” that talk and think like you do are hostile, demanding, cheap, forever complaining and forever trying to squeeze another nickle out of somebody.
With ebooks, you save money on gas ($4 per gallon today) because you get to download from home. Ebooks also have adjustable font, and can carry thousands of books on them wating to be read. No more awful traveling fees to carry those books on board an airplane? The ebook features also include a text-to-speech, allowing people to listen to the book instead of reading it. But for you, something is not right. You don’t feel right paying more than a cup of coffee for “these” features (These features can only be used on ebooks).
Personally, as an author, I will be moving my books back to print, and leave ebooks alone. Too much drama. Not enough money to be made. Honestly, I don’t see ebooks lasting very long. I really don’t. Not without authors anyway.
the old business model is dead and buried
I think the figures speak for themselves, the old discredited business model is dead and buried.
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reality needs more nuance.
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reality needs more nuance.
missing the point
The price of digital downloads, e-books, was obscene, 99 cents is a far more realistic price, but to focus on whether or not it would increase sales of e-books, as I predicted it would, is to completely miss the point.
http://keithpp.wordpress.com/2012/05/01/a-book-for-the-price-of-a-song/
An e-book is not a book. A Kindle is not a book (try loaning or lending a Kindle). Only a book is a book.
http://keithpp.wordpress.com/2012/04/22/nothing-is-as-good-at-being-a-book-as-a-book-is/
The e-books could have been given away.
Has it led to an increase in the sales of books?
This will not happen immediately, give people time to read a downloaded e-book. Do they like it? Do they go out and buy a book? Do they recommend the author to a friend?
A book only gets read if it is leant or given.
We are seeing the same with music. You cannot like a piece of music until someone has shared it with you.
That is why bandcamp is so good, it lets you listen to an album on-line, it enables sharing, and it makes buying easy. But even if you do not buy, or download for free, if you like, you are likely to share with your friends.
http://keithpp.wordpress.com/2012/02/07/sharing/
http://keithpp.wordpress.com/2012/02/08/bandcamp/
http://keithpp.wordpress.com/2012/05/03/why-give-music-away-free/
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>Are the sales because of the price, or because of stories on sites like Techdirt?
Not likely to be the latter. Shills like you always insist that sites like Techdirt are insignificant in the long run.
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drink less beer 😛
missing the point
“A book only gets read if it is leant or given.”
not really true, many of my friends have read books based purely on my suggestion and word of mouth, sames true for me, many of the books I have where grabbed due to somebody telling me “hey you gotta read this”
I dont really think your implication that ebooks/ereaders arent good is true, I will say, I wouldnt lend out a high end ereader, tho, some of the cheaper ones wouldnt be bad as lender units…cheaper then some hard cover books I have bought inthe past.
But does he eat cannibals?
Cue references to obscure ’80s music in 5…4…3…2…
But does he eat cannibals?
I “Total”ly get it! LOL!
good for him, he can win the race to the bottom…
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And those cute girls taking pictures of themselves on Motherless that the trolls were looking at before coming here to go on the attack. THEM it would work for!
/sarc off
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What part of “sites like Techdirt” are you not grasping? I am not saying Techdirt alone.
http://lmgtfy.com/?q=Paulo+Coelho+99+cents
Try that on and wake up to the smell of fresh brewed spamvertising.
Bummer
Prices went back up on some of them. I was gonna snag camera boy but it’s back up to 9 bucks.
Two Books Weren't Offered at $0.99
The other was “Aleph,” at least on B&N.
Aleph is his most recent book (came out last year) and is from a different publisher, so unrelated to Harper Collins…
I wonder how sales of THOSE books (consider them experimental controls) have fared during this time.
That’s a good question…
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Correct. But the price is the same 99 cents.
~_~
maybe because no one cares thst you know latin? What a snob
Re: ~_~
… um.
Just a reminder...
well, i’m not Sure, but i believe that for figures over 100%, %/100+1 = multiple.
100% gain is 2x the sales, 1000% gain is 11x the sales, and so on.
so… if those are ‘increased by x%’ you’re using, you don’t need the -1, just leave off the plus… but if they’re ‘percentage of original figure’ and you’re trying to find the gain as a multiple from it, then you’d be right.
i think?
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with digital goods i would not expect it to change anything at all, unless it was such a huge increase in sales per time that it overloaded their hardware’s ability to handle it. at which point there’s a one-off hardware upgrade cost, possibly.
point is that the per item cost of digital goods (as opposed to the ‘i made a thing at all’ cost*) is near, if not actually, nil.
* which is a different thing and is covered by your initial per-item profits and, once payed off, no longer matters at ALL. if you sell enough items that your per-item profit covers this expenditure, your product is a success. if not, it’s a failure. that means increasing Items Moved is more important than increasing sale price per item for overcoming this Provided the market for the item in question is large enough. (you put the per item price higher if there are insufficient customers to buy enough of the item at the lower cost to cover this, And said customers would still pay the higher cost. if they Wouldn’t, then the product would seem non-viable and you just lost out. oh well, such is life, move on.)
that’s my understanding of it anyway. I’ll admit to not having any relevant qualifications beyond actually reading, paying attention, and using my brain.
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But please don’t forget those writers who are too unpopular to sell many copies at 99c for them a $15 or $20 cover price may be necessary – unless you want their moms to give them the money directly instead.
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Okay now I am getting confused.
I thought I had a handle on this percent business.
There was the 1% boo
and the 99% that was everyone else – yah
but now your the 15000%
so are you the booyahyah?
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Reminds me of my favourite joke
There are 2 types of people in the world
those who understand binary
and those who don’t
No wait, I did that wrong
Let’s see there are 10 types of people in the world
those who….
Just hold on, I know this one. Just a sec, kay?
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Geez, why not just go the whole hog and tell him to drop out altogether. It’s irresponsible people like you that are ruining the youth of today.
Re: Re:
@Anonymous Coward on May 5th,
All he said was stop drinking so much beer. You are so dramatic about everything. And you’re on here…giving your opinion. People aren’t interested.
missing the point
having looked at and responded on Keithpp’s blog, its very clear he feels ebooks are of zero value, a quick rundown of the whole thing is, he only thinks paper books have any value and that everybody should agree with him because “an ebook is not a book”
I guess that also means an FLAC album is not a cd, only a cd is a cd..(true but misses the point)
I tried to point out that you can lend and share DRM free ebooks, and infact you can do this much easier then with dead tree books but he just responded with the same “an ebook is not a book” and “why would anybody want an ereader even if its cheap” (paraphrasing actually)
to me, ebooks at 99cents or less are a great deal if you have a decent ebook reader, and you can get a decent reader for 20-30bucks, you can get a great one for 45-60…sure thats more then buying a paperback, but most hardcovers I have run across in recent years are 20bucks or more….so an ereader and reasonably priced ebook would be a better option for me, specially seeing as its much easier to carry a small ereader then a big heavy hardcover book(or even a paperback.)
meh, just wanted to save any new readers some time.
all you can take from his blog is “ebooks suck and have no value, buy real books”
false premise
Some have argued that such a dramatic increase in downloads would not have been seen had all books been at this price.
Maybe, but this is to argue from a false premise. I do not choose one author over another on the basis of price. Books are not a commodity, though publishers do their best to treat as a commodity.
In Aldershot charity shops on one side of the street books are priced at 99p, the other side of the street British Heart Foundation sells at an overpriced ?2-50.
If I am looking for a book, I look in the 99p shops first, only with reluctance do I go in the BHF shop. But what I do not do is go into the BHF charity shop see what I want, but then buy something I do not want at 99p because that author was cheaper.
The volunteers in the British Heart Foundation charity shop know their books are overpriced (books they get for free), but if they try to sell at a realistic price, an overpaid manager descends on them from head office. The old discredited business model once again rearing its ugly head.
http://keithpp.wordpress.com/2012/05/06/to-know-the-price-of-everything-and-the-value-of-nothing/
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if i work at a fast food place in NYC, they won’t pay me $30 an hour just because it is New York.
If you want to write, you write, if you make it you can quit your day job. if not, you can still write.
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Agreed. But he’s well known and bookstores already promote him enough (BECAUSE he’s a good seller so more profits). I’d say the same marketing around earlier releases for the normal pricing was done here with some emphasis to the small price tag. So hmmm yes, I would argue that MOST of the increase is due to $0.99 price tag.
About right
That seems about right for a price of an old book… I would buy more old books at $0.99 and not buy same book at $9.99 (which seems to be the going extortion… uh, price).
Think any of these useful idiots ever took economics and actually KNOW about supply and demand??
? I'm a reader, not a mathematician!
No intellectual here. Just me.
I bought ONE of his books as I’m not familiar with him and even at $.99, I want to make sure I’ll like him before I buy more than that.
0 sales at 9.99 compared to 1 at $.99. A dollar more in sales than would have been if I hadn’t purchased on sale, because I would NOT have purchased at the regular price.
That might not mean a lot by itself, but a few thousand sales add up, even at $.99. The % math aside, I’m assuming there would have to be at least one sale for each gain in sales rank points which would put the number in the thousands.
I will share my opinion with others, who might read it and share with more people, possibly more of his books sold through all that word of mouth and THAT is where the real results of this “experiment” will show up.
Special Sales are not usually about how much you make or lose now..it’s about finding new buyers and generating interest that will increase future sales. Will all these people who haven’t read him before this decide he’s worth the extra money? Or will they decide they’ve read a few authors just as good who sell regularly under $5? Will they decide to enjoy what they got on sale, but stick with the lower priced authors who they enjoyed as much? My own experience has led me to believe that the higher price does not necessarily guarantee a BETTER read than what I’ve been getting cheaper. Or even less typos. 🙂
My WISH list has about 100 $9.99 ebooks on it. My actual PURCHASED ebook list contains over 500 .99 to 2.99 ebooks, plus 1000 or so snagged during temporarily “free” promotions, which often resulted in actual purchases of more books from those authors that I liked. (I read a LOT) Several hundred dollars spent, less than $50 spent on “published” authors.
I am not the only person out there finding lots of new favorite authors amongst the indie authors and relegating my old favorites to the rear of the line. I happen to be one of the masses that made paperbacks profitable and libraries popular. I’m assuming that publishers aren’t stupid. (well maybe they are, I’m not going to assume anything at this point) HOPEFULLY, they will figure out that the agency model has opened up the market share to the indie authors and smaller publishing houses and those authors are finding an audience. That buy ebooks and are willing to give them a chance.
Distribution fees are 65%
VALVE is a major company with millions of dollars and many, many games. They can afford to offer a couple for 99 cents. It’s not fair and totally skewed to compare ebook authors with a major company like VALVE. Also, Valve has it’s OWN DISTRIBUTION PLATFORM called STEAM. So I think they get to keep the whole 99 cents. Ebook authors (and publishers) must pay a distributor: Amazong and others to distribute their wares. In the case of Amazon, they take 65% of the 99 cents, leaving the author/publisher with FAR, FAR less than you suggested. Please redo the math to reflect this. Authors DO NOT earn 99 cents on 99 cent ebooks, or anywhere close to that amount.