Yesterday, Dean Wesley Smith linked to a great post by Zoe Winters about why she doesn’t agree with charging $.99 for novels, and why that should never, and will never, be the standard price for novel-length fiction.
For the record, I agree with both of them. When the editor is done with Masters and I’ve got a final draft ready to go (there have been some unavoidable delays in the last couple weeks on that front; unfortunate, and annoying, but I understand stuff happens so I’m not too terribly antsy about it), there’s no way I’ll price it that low. I keep going back and forth between $3.99 and $4.99. I’ll talk price points a bit later.
But that said, I think there’s a key economic principal that both Dean and Zoe are missing. Now, I’m not an economist. I’m just a guy with an MBA. But I’ve done a bunch of reading on matters economic, and routinely listen to economics podcasts. And I think I stayed at a Holiday Inn Express once. So allow me to elucidate, por favor.
Price serves a very important purpose in economic realms. It’s a signalling mechanism, a way to let people in the marketplace assess the relative value of their options, so they can make a rational choice about how to use their resources. Hayek wrote extensively on this subject. Don Boudreaux, the chair of the economics department at George Mason University, wrote an article in the Concise Encyclopedia of Ecnomics (CEE), hosted by the Library of Ecnomics and Liberty, that talks about this concept better than I can. I suggest you take a read. Beyond that article, there are literally dozens of others, written by top economists on just about anything you might wonder about when it comes to economic theory, public policy, or things like that. A disclaimer: econlib and the CEE is hosted by George Mason, which is about the most anti-Keynsian place in the country. As an institution, it has a very libertarian slant, but from what I’ve seen they do a good job of keeping their biases out of their scholarship. As much as anyone can, really. Now, I agree with their biases, but that doesn’t mean we shoudn’t be aware those biases exist.
Getting back to the topic at hand, if price is a signalling mechanism, and fiction of all lengths, shapes, and sizes gets priced at $.99 indescriminately, then the signal we’ve sent to the consumer becomes confused, muddled, and chaotic. How is the buyer to evaluate what he’s getting for his money, or whether he’d get better value going somewhere else? Oh sure, you can put word counts in your product description, but I think writers project a bit when they think that solves it. I’m 35 years old. I started writing fiction last December. Before then, if you’d told me a document was 2,000 words or 20,000 words, I would have recognized that one is longer than the other, but in terms of what that really means…yeah, not something I thought about. Now granted, somewhere nestled in the back of my mind was the 250 words/page that I learned back when I had to write essays in school. But it wasn’t something I routinely accessed, if you know what I mean.
So I think just throwing a novel out there at $.99 muddies the waters. When I can get a short story, novelette, novella, novel, or a door stopper for the same price, it’s a poor representation of value. A poor signal.
My idea of pricing goes like this:
- $.99 – Short Stories < 10,000 words
- $1.99 – Novelettes 10,000 – 20,000 words
- $2.99 – Novellas 20,000 – 50,000 words, Collections of 5 Short Stories
- $3.99 – Novels 50,000 – 75,000 words, Collections of 10 Short Stories
- $4.99 – Novels 75,000 – 100,000 words
- $5.99 – Novels > 100,000 words
I think this pricing scheme works well, both in terms of signalling to the consumer what he’s getting for his money and in terms of paying the author proportionate to the amount of work required to produce any given piece of work.