Are Americans really paying 10x more for an ebook than us Brits?
Short answer: NO. The data looks at purchases on a price comparison site, and doesn't tell us much at all about the behavior of the typical consumer.
Over the weekend a Boing Boing article did the rounds. It looked at book pricing and purchase data in the US and the UK and came to a surprising conclusion: In the US, the "revenue maximizing" price for a typical ebook is about $10. In the UK, it is about $1.
So... what does the analysis mean for pricing ebooks? How should you address these two big English-speaking markets?
First, he analysis is not based on a random or representative sample of ebook buyers. Instead it comes from ebook price comparison site, Luzme (http://luzme.com/
). Thus we are looking at a particularly price sensitive group of customers here
-- customers who will shop around for a bargain, and not commit to any one platform.
The ebook business in the UK appears to have more variable pricing, meaning that shopping around is rewarded more. Luzme's own analysis pointed to this... but until you realize that they're a price comparison site it doesn't make much sense, because most people don't shop around for ebooks. But for those that do, the degree of bargain available is larger in the UK.
If you use Luzme in the US right now, the "best price" for the 5 best selling books listed on the homepage would be 42% less than the 5th best price. So, by shopping around you could save 42%.
But the UK version of the site offers you 64% off compared to the 5th best... saving half as much again.
Luzme's data showing Britain's love of a bargain needs to be treated with caution. What it actually shows is that British users of Luzme save more than American users. In the UK, it pays to shop around for ebooks.
The data doesn't tell us the optimum list price for a book in either market. It does tell us that some people will pay a high price, and lots people will pay a low price. If you can find a way to sell high most of the time, and cut the price low occasionally for everybody else, you get the best of both worlds.