The e-book marketplace is redefining what people expect to pay for books
In May 2009, Participant Media released the documentary Food, Inc., highlighting the negative impact of industrial production on what we eat. The film was a considerable critical success and the DVD version is still No. 4 on Amazon's bestseller list for documentaries. PublicAffairs has an agreement with Participant to develop books intended to enhance the subject of the films, and Food, Inc. did well enough to make the New York Times paperback bestseller list, with net sales to date of 85,765 copies for the print book from all retailers, plus thousands of e-books. Amazon sold many of those copies, so PublicAffairs agreed to feature the e-book (now two years old) as an "Amazon Daily Deal" in late August, selling it to Amazon at a substantial discount. Amazon then set the price at $1.49 and heavily promoted the Kindle edition on the site and mounted a significant social media campaign to prospective customers.
In its one day on offer as a Daily Deal, Food, Inc. sold 14,158 e-book copies--an astounding number. Sales for the previous day sale were 9 copies. If there was any doubt left about the potential for mass sales of e-books, that removed it.
Amazon features a different book every day. On Labor Day, it was "a gritty noir novel" called The Grove, by John Rector, discounted from $7.99 to $1.99. The sales numbers for these books are not made public, but I have to assume that 14,000 is not an unprecedented total. One obvious conclusion to be drawn from these types of promotions is that price is a major factor in book sales. From its launch of the Kindle in 2007, Amazon has been committed to driving down the price of digital books while selling the reading device itself at a healthy mark-up from its cost of manufacture. Kindles are now available for as low as $114, if you can tolerate advertising, and the highest priced device is $379. The assumption among publishers has been that Amazon's long-term intention is to condition consumers to the lowest possible price. Selling at a loss as Amazon was doing was clearly not a viable strategy for the company, so publishers assumed that Amazon's goal was to insist that vendors drop their prices to the point where Kindle sales would be profitable. The publishers' resistance eventually led to agreement on the concept of "agency" pricing, in which Amazon takes a 30 percent cut of the price. These days, e-book sales run the gamut from free to roughly the price of a trade paperback (the Kindle price for Food, Inc. is now $8.52, and the printed book is discounted to $10.17). But selling 14,158 e-books copies in a single day is proof that price is a determining factor for consumers in choosing what books to buy.