I read an article from Digital Book World this morning about recent price reductions in Harper Collins ebooks and the seemingly little effect it had on sales. Thanks to the Department of Justice ruling (United States), Amazon and other ebook sellers were able to discount ebook prices. The article by Jeremy Greenfield had this interesting quote:
If an ebook’s price is lowered from $10 to $8, for example, it needs to sell about 25% more copies to maintain the same level of revenue. I didn’t observe any sales rank bumps that would indicate a 25% bump in sales.
My conclusion from the article is that it doesn’t appear price is a major factor in a buyer’s decision. Of course, there will always be readers that will gravitate towards the free ebooks. But a two dollar difference in an ebook doesn’t seem to encourage or discourage sales.
So the question I have is this: Why discount ebooks if you are not going to make up the amount in increased sales?
Are we witnessing a paradigm shift in book discounting?