Thursday, May 12, 2011

Tracking a Bestseller Through Price Changes: American Assassin

Vince Flynn’s American Assassin, published by Simon & Schuster in October 2010, was a Kindle Bestseller by December 8, when this study began, offered at $12.99 in the Kindle edition. From that date until January 10, 2011, the book sustained a normal, steady downward trend on the bestseller list, from #22 to #53.


On the 10th, the digital price dropped to $8.99; two days later, American Assassin’s ranking spiked to #33 and held its position above #40 for a week.

On the 17th, the price was raised again, adding another two dollars to the original. Now offered at $14.99, Flynn’s book plummeted during the next five days to rank #78 and resumed its original downward trend until exiting the list in early February.

Looking at the numbers, you could conclude that the book’s ranking took a beating as a result of the price increase.  But the graph shows that this book merely resumed its original trend after a week-long boost generated by the reduced price.

So, should we continue to assume that price and ranking are always linked?  Directionally, yes, but there appear to be some indications of where ‘inflection points’ may be – in other words prices where the consumer market is more or less sensitive to small changes in price.

For one, the drop to $8.99 not only raised the title’s ranking, but that ranking remained essentially flat for a week (rather than resume a downward trend from its new position).  At this point we must note that price changes may have been only one of many factors, such as breaking media or promotions, ultimately impacting this performance, but this is ‘interesting’ nonetheless.  Perhaps even more interesting is to note that this book’s performance didn’t appear to suffer when its price was eventually raised another $2.00 above the original - and the later drop in rank only restored the title’s original descent curve in the rankings. In other words, the net effect of raising the price from $12.99 to $14.99 did not seem to alter the title’s original “ranking decay” trajectory. (I’ll have more to say about the concept of “ranking decay” in a future article.)

It may be that American Assassin could have been successfully priced at $14.99 from its on sale date and traveled the same path through the winter weeks. It may also be that had it be kept at $8.99 it would have remained on the Kindle Bestsellers list far longer than it did and resulting revenues might have been even greater.  I will expand on this concept with a larger set of titles in a future article and welcome any suggestions for such titles.

Wednesday, April 27, 2011

Shift of Kindle Bestsellers Towards Price Extremes

This chart shows the number of titles on the Kindle Bestsellers list that fall within each of four selected price bands each day. The shift of the market towards premium titles (over $10) and super-discount titles (under $3) is significant of late. Even since the disruption of March 1st when Random House went agency and repriced a number of bestsellers from $9.99 to $12.99, the trend has continued. Our working hypothesis is that as the increasing number of books in the super-discount band become available, that segment of the buying market will continue to congregate there. What follows is that the remainder of buyers as a segment are less price-sensitive than the entire market was, resulting in stronger support for premium priced eBooks as opposed to value priced eBooks (under $10).
Chart 1: Daily Price Band Distribution of Kindle Bestseller List
daily price band distribution of kindle bestseller list
* Totals may be less than 100 on certain days due to exclusion of games and other non-book titles.

Today there are 35 super-discount titles (below $3) and 40 premium titles (above $10). Three months ago (1/8/11) those numbers were 26 and 19 respectively. Part of this shift is explained by the Random House change on 3/1, but the trend has been strong since then. Both of the middle bands have lost 6 titles each since 3/2.

Iobyte's eBook MarketView tool enables publisher, authors, agents and other interested parties to study the dynamics of the eBook retail marketplace in various ways. For more information, please email us at info@iobyte.com

Tuesday, April 26, 2011

Romance Bestseller Lists Trending Away From Large Publishers

On March 1 - the day that Random House joined the Agency model for ebook pricing, the Big-6 publishers* collectively had 27 titles on the Kindle Romance Bestsellers List (total of 100 titles).

On April 25 those same Big-6 publishers collectively had 13 titles on the same list.

Big Publisher share of the Kindle Romance bestseller list fell 50% from 27 to 13 titles in roughly eight weeks.

In that same period the same group went from 39 titles to 19 titles on the Nook Romance Bestseller List.  More titles but the same 50% drop.

So that seems to be the industry-wide trend...but what are the differences between the retailers?

Well for one thing, we see that Amazon has about half as much Agency Publisher share as B&N.  What's more interesting is the distribution of agency titles across the list.

Today (4/25) there are 8 agency titles in the top-20 Nook slots.  Nearly half of the agency titles on the list are in the top-20, making it pretty top-heavy.  Top 20 slots in Kindle Romance?  Two agency titles. 

Chart 1: Price of top 20 books on Kindle and Nook Romance lists - 4/25/11



The average price of the entire lists are pretty similar ($4.13 for Kindle vs. $4.17 for Nook) but the premium-priced titles just can't crack the top of the Kindle list.  If fact, there are 12 titles in what we call the discount price band ($0-$2.99) compared to none on the Nook list.  That is probably the biggest takeaway from this analysis. 

Kindle Romance is increasingly dominated by low-cost ebooks under $3.  The trend has been strongly downward all of 2011 and shows no signs of reversing.  Barring seasonal changes, it appears that premium Romance titles are going to be harder and harder to place on the list - certainly at the top.  This is one of the most glaring differences in consumer behavior between Kindle and Nook but it's not the only one.