Why Bundling Is Good

There's been some discussion about bundling ebooks and print editions recently - because lots of us have been talking about it in connection with the Amazon/Waterstones deal. 

Inevitably, this has led to a counter-discussion which wants hard evidence for bundling being a surefire winner. Philip Jones raises the issue in today's FutureBook email, and points to Evan Schnittman's 2010 blog post taking issue with the idea.

The contention - and it's not by any means without merit - is that consumers split on this issue: ebook buyers buy ebooks, paper book buyers buy paper. I'm not sure anyone has numbers for this any more than I have numbers for people wanting bundling, but it seems to lead to a lot of head-nodding when mentioned. Parenthetically: as an industry in a modern environment we do a surprisingly small amount of high-grain demographic research - or perhaps I just never get to see it. But consider the competition - supermarkets and tech firms do a lot of work and take great pains finding out who their customers are, how they live and what they want. Indeed, occasionally they go overboard in their efforts.

The thing about book bundling is that it's good whether or not the market is boiling over for it. Yes, really. Because:

1. Publishers selling direct can afford to price bundles aggressively because they're not paying a big rake-off to a retailer. They can sell the bundle at a price which competes excitingly with the single product from other sources. And they get...

i. new customers

ii. customer data

iii. a secure route to market which is not dependent on a retailer who may for example abruptly remove buy buttons

iv. positive publicity and the start of a strong relationship with people who buy books (vital in a world where DRM is the anti-filesharing equivalent of a papier mâché crash helmet)

And then there's:

2. Behavioural Economics. I bang on about this endlessly, and I do not pretend that I understand the nuances. However, remember the Economist pricing model from Dan Ariely's Predicatably Irrational? Online-only $65, print-only $125, print-and-online $125. What does everyone buy? Top slot. What happens if you take out the print-only subscription? Lots of people buy the online-only subscription. Right now we don't have the combined option, so we can't sell it, which means more people than necessary are buying ebook-only, which is cheaper, hence everyone's fretting about the 'race to the bottom' on book pricing... 

The point is that bundles don't have to be a hot commodity to do any number of things which are probably good for the trade. They just have to exist and be wisely deployed to change the face of how people see pricing, for example. They only have to be a little bit appealing to get people to notice that a publisher has set up a direct-to-consumer sales system and explore it. And that's before you take into account that people often don't know what they want until someone offers it to them, or that the right price makes the bundle a no-brainer.

Comments

eBook bundling consumer research (with a twist)

peter.hudson's picture

Sam, it was interesting to read the stats from the study in the UK on eBook bundling.  My company undertook a similar market research study in the US and found that 30% of eReader owners had purchased at least one eBook edition of a title they already owned in print within the last 12 months.  Of the 70% who had not, about half of them cited financial reasons as their principal inhibitor.  When we asked if they would be interested in a bundled eBook at various discounts we found that over 60% of eReader owners would be interested if a bundled eBook was offered at a 75% discount relative to the full eBook price.

However, I should note: our study was a bit different because we were not asking about eBook bundling at the point of purchase.  Rather we were asking about people's interest in buying an eBook after the fact... "a posteriori eBook bundling". That may seem odd, but we are developing a system which will allow print book owners to purchase an eBook after the point at a similar discount.  The full study can be found on our website: www.eyourbooks.com.

Bundling prices

The question '(What) would you you pay for an e-version of a print book?' isn't the same as the question '(What) would you pay for a bundle?' though. I wonder if the answers would be significantly different if the question if the cost of the pb+e or hb+e bundles were presented already aggregated?

Actual e-book bundling research....yes, I know

Sam Missingham's picture

This is 9 months old, but, as far as I know the only actual research on bundling and whether real customers would go for it. 

In August 2011, The Bookseller and BML undertook an online survey of 4,000 book-buyers in the UK - 54% female and a spread of ages and book-buying habits: The Reading the Future report.

We asked the question: “How much more would you be prepared to pay for the digital version of a print book you were buying” to gauge possible consumer interest in owning print and digital versions..

Exactly half of those questioned simply were not interested in having a digital edition of a print book they had just bought. Of the other 50% that were interested, almost half (24% of total respondents) thought that the e-book should be available for free. Overall, 26% (just over half of those interested in the e-book idea at all) were open to paying for this feature, with 1 in 10 of those questioned willing to pay up to £1 extra for a digital edition of a book they bought.

Exactly the same amount of those questioned (10%) would pay £1-£2 for an e-book version, with half that amount (1 in 5) thinking £2-£5 was a fair price. Only 1% of respondents felt a price tag of over £6 was right.

Respondents’ desire for a free e-book version increased with the weight of their book-buying. Thirty percent of heavy book-buyers thought an e-book should be free with print books, while only 21% would pay for this.

At 30%, medium book-buyers were most amenable to paying for e-books owned in print.

Other variances for this could be seen by gender and age.

The Reading the Future report contains significantly more research on buying habits, if you'd like more info, email me: sam.missingham@bookseller.co.uk

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