Bundling – Publishing’s Next Battleground

The following question is deceptively simple, and we urge you to take your time responding. How much time?  Three or four months. You’ll need that much.  A lot rides on your answer.

Here’s the question:

When you purchase a print book you should be able to get the e-book for…

  • a) the full combined retail prices of print and e-book editions
  • b) an additional 50% of the retail price of the print edition
  • c) an additional 25% of the retail price of the print edition
  • d) $1.00 more than the retail price of the print edition
  • e) free

The subject of this little quiz is bundling, a common marketing tactic in which two or more products are packaged and sold at a single price. In this case the package is a printed book plus its e-book iteration.

As simple as it sounds, bundling is shaping up to be the battleground for clashing publishing philosophies, and the time will soon come when publishers will have to choose one of the above strategies and put it into effect. Misjudging consumer attitudes could prove to be a big mistake and possibly a ruinous one.

The essence of bundling is to offer customers a discount for selecting the combo instead of the individually priced components, so choice a) above is a non-starter.  But choices b), c) and d) reflect just how aggressive a discounter wants to be and the various thresholds at which consumer resistance is expected to melt.  A good argument can be made for each and as the bundling issue warms up you can expect to hear them all endlessly debated.

Yet even the cheapest package – a dollar or even less than a dollar over the cost of the print edition – may not suffice to capture the consumer’s fancy. Why? Because many people believe they’re entitled to get the e-book free with purchase of the print book. How large is public support for that position?  We need to take a poll to find out, but if anecdotal reports are any indication, they may be in the overwhelming majority and they are unquestionably the most vocal. You will certainly hear their outpouring of joy when one publisher steps up to offer a print and e-book combo for the price of the print edition alone.  Our own prediction? Free will become the standard, and even ten cents above free will be a competitive disadvantage.

Economic factors aside, consumer negativity toward double-charging is a contributor to piracy. Comments sent to us in response to postings about piracy strongly suggest that the public expects digital versions of books to be tossed in for nothing when a printed book is sold, and if it isn’t tossed in, many of those customers will feel no compunctions about downloading an unauthorized copy. They simply feel entitled to it. Libertarian spokespeople like Cory Doctorow have articulated this sense of entitlement, and though some feel that their arguments go too far, there is a solid core of realism in their position. We can condemn the immorality of consumer attitudes ’til the cows come home; and we can (quite reasonably) complain that if people were willing to wait for the paperback reprint they should be willing to wait for the e-book reprint. It makes no difference: the public’s sense of entitlement creates an environment susceptible to the allure of piracy.

With so many sound arguments in support of heavily discounted bundles, why have we seen so little of it in book marketing? The answer is that it is harder to assemble print/e-book packages than it looks.  Publishers that control both formats are in the best position to do it but the technology is not yet in place.  Customers purchasing the latest James Patterson or Nora Roberts novel in a bookstore have no simple way to download the e-book in the same transaction. The publisher might offer a discount coupon but that requires a number of steps  and clicks that discourage a quick and easy procedure.

What is wanted is a one-click experience: “Click here to order the print and e-book.” Such a deal might best be offered by a publisher on its website.  However, the price of that bundle might undercut the prices offered by retailers or e-tailers for the individual components, and for publishers to compete with their own retailers is to cut their own throats.

Amazon is in a good position to offer print/e-book bundles but hasn’t done so yet, probably because it recognizes the complexity of the issues.  Book pricing is already fraught with so much angst that adding bundling to the debate will undoubtedly induce cardiac infarction among book people already near apoplectic with worry.

For the record, we at E-Reads strongly support the position that the e-book version should be included free of charge with the purchase of one of our print editions and are working to overcome the technical obstacles to implementing our conviction.

We invite your comments and look forward to seeing the debate over bundling heat up on the next stretch of road to the future of books.

Richard Curtis

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16 comments on “Bundling – Publishing’s Next Battleground

  1. I would take a different view of this. It’s not only a matter of finding the price point at which consumer resistance melts; it’s also a matter of having unique (bundled) SKUs which can then be sold directly from a publisher’s Web site, offsetting the Amazon and B&N cost advantage for online sales. It’s a nonstarter for a publisher to try to disount something from its own Web site, as the retail channel will rebel. But creating unique SKUs through bundling develops a direct marketing channel without engaging online retailers on a pricing basis.

    Furthermore, this is easy to do if you have the technology. Here comes the plug: we have the technology at GiantChair and are already implementing it. Bundling will herald a new marketing phase for publishers, in which direct sales from their own Web site become play a key role in their overall marketing mix.

    Joe Esposito
    CEO
    GiantChair

  2. I agree that offering a bundle as a unique SKU via DTC channels is the best route; effectively a “publisher’s exclusive” instead of the retailer exclusive, side-stepping competitive pricing issues. Bundling is the great no-brainer that the techies have seemingly been unable to solve, so I’m intrigued by Giant Chair’s claim.

  3. Bundling ignores the most important reason I bought my Kindle.

    Compare. I have 500 books on my Kindle. A couple of clicks and I can find and be reading any one of those books I want. Now, try to find any one book in a library of 500 print books.

    I live in a small apartment not a large library. The Kindle offers me my library contained in a small space with easy access.

    So why do I need the print and e-book together?

    Bundling keeps the print fan happy but ignores those of us who are moving our reading to the e-format. I just wonder if the cost of bundling is necessary for the publisher.

  4. I agree with Michael, above. On one level, bundling is going backwards. I don’t WANT anymore print books.

  5. Richard, I don’t want print to die until Google has every books written available as an ebook. I recently bought several used out of print in copyright limbo print books by favorite authors such as Ross Thomas, Craig Rice, and Norbert Davis. Of course the bundle issue does not apply to them yet.

    I prefer the system where the customer decides what format he or she wants. I have bought 3 new hardcover books in over thirty years. I would always wait for the title to come out in mass market or trade format. I didn’t expect both. I see no reason for the publisher to increase his cost by bothering with the bundling format, unless there is an demand for it.

    Everyone has there own reason for choosing the format they use to enjoy the written word, but I am sure you will agree it is the content, not the format, that matters.

  6. Karen, I know you feel like I do and love books. Perhaps someday others will understand the love of books is not about paper but words.

  7. I have been asked to provide an example of a publisher that bundles print and electronic books that are sold directly from the publisher’s Web site. Here is an example from Fahamu Books: http://j.mp/coe55e.

    Joe Esposito

    • @ Joseph It would be useful to know how much the publisher charges for the individual print and e-book components, so that we can calculate how much the customer is saving to purchase the package.

      Last March Barnes & Noble announced an initiative in bundling – see http://tinyurl.com/3ax9k8k – but I’ve heard nothing since. They may have discovered that bundling p and e is no walk in the park.

      RC

  8. Free bundling is clearly the way to go, at least for hardcover and trade paperback books (in my view). For a mass market paperback, I might say a dollar more, though I wouldn’t be hard-nosed about it. This doesn’t mean that the ebook shouldn’t be available separately, presumably for a lower price. No one would be forcing anyone to buy a paper book who didn’t want to.

    And that free (or cheap) bundled ebook should be in the customer’s choice of format.

  9. I agree with Jeffrey. Option e, but only for hardcover. Hardcover and trade paperback are more expensive. The reader pays more. Presumably, the author receives more per read.

    As I understand it, there are additional/different costs in formatting a manuscript for print vs for Kindle (etc). Therefore, there’s insufficient margin in mass paperback to cover the inclusion of an extra feature.

    I believe that the more rights I license to a publisher, the more I should be compensated. If copyright owners can get royalties of 50% from you, Richard, on an e-book, or 70% from Amazon, I don’t see the logic in “giving” ebook rights to publishers at the same royalty rates they accept for print.

  10. “Amazon is in a good position to offer print/e-book bundles but hasn’t done so yet, probably because it recognizes the complexity of the issues.”

    Actually, I have to contradict you there. Amazon actually did used to offer such a service three years ago: Amazon Upgrade. However, it never had a chance because of, ahem, greedy publishers.

    http://www.amazon.com/gp/help/customer/display.html?nodeId=110744011

  11. Thomas Nelson Publishers started their NelsonFree program over a year ago where you get a free copy of the ebook and audiobook when you purchase the hardcover. Here is their description of the program:

    “The NelsonFree program allows readers to experience their content in multiple formats—the physical book, the audio book, and the e-book—without making multiple purchases. Traditionally, if readers want something beyond the printed word, they have to buy another copy of the same book. With NelsonFree, the everyday price of the hardcover book includes both the audio and the e-book.

    “Accessing the content is easy. After readers purchase a book with the NelsonFree logo, they receive a code that enables them to download an audio MP3 file and several types of e-book files, including EPub, MobiPocket, and PDF.”

    Link: NelsonFree: More Book Formats for One Price

  12. For me, I’d rather get a coupon for a print book with the purchase of an e-book rather than a free e-book with a print book. This allows me to share the reads I really like with my friends, annotate in a natural way (for me), and, for those books that have durable value, allow me to build a hard library. There are many books that I purchase (and re-sell to) Half Price Books that do not have this enduring value. I won’t read them again, so I am indifferent to an e-book or a print one. I wouldn’t redeem the coupon for those.

  13. Agree with michael: Bundling? No interest. Even more: Which publisher does exchange my print books for e-books? I have hundreds. For what price? And one step further. How much for unlock? Think Apple DRM -> MP3. Back to bundling: e-book plus audiobook – maybe even b)

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