In January 2010 we noted the launch of an initiative called “Harvard Business Review Short Cuts.” An Amazon press release at the time said that “Short Cuts are individual chapters and summaries from Harvard Business Review Press publications that are broken down by the time it takes to read them (i.e. ’30 minute read’ or ’10 minute read’). They are specifically chosen to give business readers quick and informative business information and theory while they drink their morning coffee, wait for a meeting or travel for business.” Six months later, the initiative looks like a failure, despite heavy promotion by Amazon and the valuable imprimatur of the Harvard Business Review Press. Most of the titles are languishing far out the “long tail” in Kindle Store sales rankings, i.e., over 70,000 in most cases. Part of the problem, it seems likely, is that the “Short Cuts” series is overpriced, with a list price currently set at $3.99, discounted 20 percent by Amazon to $3.16. Even at $2.99, a reader wanting to work through all eight to 12 chapters of the full books from which these short-form ebooks are drawn would have to shell out roughly $25 to $35. One would think that anyone with the wherewithal to be able to digest Harvard Business School materials with his morning coffee would also be capable of the number-crunching necessary to determine that the convenience of bite-size ebook chapters is more than offset by the high price. At $1.49 to $1.99 each, “Short Cuts” might well be a winning proposition.

Sometimes bad pricing decisions result directly from bad publishing decision. An old friend and organizing colleague told me with some excitement that he was approached by a publisher with a proposal to collect some of his essays, speeches, and blog posts on labor organizing in what became a nice little 96-page paperback and ebook. Had my friend (and even perhaps his publisher) come to me first, I would have counseled them that as a first-time author with little marketing budget and a 96-page book for a niche market, they would have done well to price the paperback at $9.95 and the Kindle edition at $2.99. I would have told them how they could have secured print and ebook packages with a truly professional appearance and feel with a total front-end expenditure of less than $100, and earned, at the prices just quoted, royalties of $2.05 for every Kindle edition sold, $2.13 for every paperback sold to bookstores and libraries, and $3.82 for every paperback sold at Amazon.com. At these affordable prices, I would have been able to give the book a significant marketing boost via my Kindle Nation Daily blog, and my friend’s first experience as an author would have been a successful one. Instead, probably because he didn’t want to bother me, he made a bad deal with a publisher who made a bad deal with a printer and ebook publisher. Because of cost slices taken by intermediaries at each step of the way, they were stuck pricing the paperback at $12.95 and the ebook at $7.99. At those prices, the paperback and ebook are languishing far out the “long tail” in the Amazon and Kindle bookstores with sales, in a good week, of a copy or two a week. The unsustainability of the prices also makes it impossible for me to help: the author’s a great friend and I love him like a brother, but my Kindle Nation readers would laugh me out of the Kindlesphere if I recommended to them that they spend $7.99 on a 96-page ebook.

The lesson in that final case is a simple but essential one for everyone from the first-time self-published author to the Big Six publishing company executives responsible for property acquisition and the economics of pricing and cost: books of all kinds, but especially ebooks, must be priced based on the value proposition they present to their prospective buyers and readers. If you get forced into setting a high price because of your costs for editorial and creative, property acquisition and royalties, pre-press and publishing, or the slices taken by publishers, aggregators, distributors, wholesalers, or retailers, that high price is your problem, not the customer’s. Unless you have a truly hot property for which customers will pay above-market prices, the fact that you can “justify” your price based on costs is irrelevant. The book will not sell.

“Kindle is a great way for authors to make different lengths of their writing available and to reach diverse audiences with their work,” said Stephen King in the press release, but he probably never expected the “different lengths” of his books to become quite the hindrance they would become to his sales and the viability of his pricing strategies.

King had hit the sweet spot 14 months earlier with Ur, a 40,000-word novella that featured excellent product placement for a Kindle that was, perhaps to some tastes, pretty in pink. Ur, priced at $2.99, quickly became the #1 bestseller in the Kindle Store. I figured that the 18,000-word Blockade Billy would achieve similar success, but King killed off his own chances for another bestseller by pricing the new ebook at $7.99, almost triple the price of Ur, despite the fact that Ur was much longer.

Blockade Billy never penetrated the top 25, and by the time the price was reduced to $4.99 the title carried the burden of several bad reviews from members of the Kindle community who were offended by the ebook’s high price. The opportunity for high visibility that comes quickly to most King books when they soar instantly into the top 10 had been lost, and significant focus had been placed on the notion that Blockade Billy provided too little bang for the buck. Blockade Billy was 44th in the Kindle Store for the last week in April, 36th for the month of May, and slipped to 77th in June and 149th in July: high levels indeed for most authors, but not the top 10 territory to which King has grown accustomed.

So what’s really going on here? Has Stephen King been reduced, like a baseball stringer for his local newspaper, to the indignity of being paid by the word or the column inch? Absolutely not, but he and his marketing or publishing people need to be aware of the price consciousness of Kindle readers so that they can set prices that will optimize sales and royalties and avoid creating a backlash that puts the focus primarily on pricing. Blockade Billy is a great baseball yarn. In all likelihood, had it been priced at $2.99 to begin with, it would have followed Ur at least into the top 10 in the Kindle Store, gained far more visibility, and ended up selling at least three times as many copies as it has sold in the $5 to $8 price range. It would, in all likelihood, have remained in the top 50 throughout the baseball season, and King and his people would have earned more in royalties despite the lower per-unit retail price. 


As novelist J.A. Konrath wrote recently on his publishing blog: “Three bucks is a more than fair price for a full length digital book. (Full length is over 50,000 words.) If it’s under 50k words, go ahead and price it for less. Or put a few short pieces together to make a long piece.” 


With his huge following, King may be able to get away with a higher pricing standard than Konrath sets for the rest of us, and he proved with Ur that he can charge $2.99 for a novella and do just fine. But as he should have learned with Blockade Billy, there are limits, even for him.