Money, Meet Mouth — an update

Yeah, I’ve pretty much sucked at the regular-blogging thing. The usual excuses: Busy, busy, busy. Not only with Adamant stuff, but also Real Life stuff (like prepping to move out of the place we’ve lived for the past 8 years — the wife and I decided that if we’re not leaving town, we should at least take advantage of those things we like about the town, and live closer to campus and downtown).

I’ve had a lot of requests from folks though, asking about how my “app-pricing” model is going. I’ve responded privately, of course, but rather than re-type the same thing over and over again, I figured I should just make a public post to explain. (“No. There is too much to ‘splain. I will sum up.”)

Short, sum-up version: I’m sticking with this. It’s no longer an experiment. It’s my business model.

Slightly longer, with some math (but not exact dollar figures, despite gamer demands for “openness”, as I prefer to keep income a personal matter) version: I started the “app-pricing” model on January 3rd. As of this coming Monday, I’ve been running on that model for 6 weeks. In the past, I have run sales where I’ve dropped prices to a dollar, and those sales generally have lasted a week to ten days at most. My concern for the new model was whether this was sustainable, or whether it was a temporary sale-driven behavior.

I think that 6 weeks, far longer than I have ever run any sale, is a fairly good initial indicator of sustainability. It’s long enough to view trends, to see if an initial spike was followed by a drop-off, etc.

The result: Sales for these 6 weeks have been more than double the sales of the same period last year.

More than double. 218%, actually. In what has traditionally been our worst sales period.

Even more interestingly, it’s been constant. An initial jump when we first announced (expected that) — but then it really didn’t drop. At all. It’s been sort of a plateau of constant sales a that level — slight upticks when new product has been released, but only slight.

So it looks like I’ve hit something here. Which is a really, really good thing — because I’ve also been dealing with the flip side of that equation over in the print-and-traditional-distribution side of things, where we were hit with a fairly large chunk of unexpected returns from the book trade (I’m looking in your direction, Borders), and that resulted in a massive hit on our income there (since we’d already been paid for those sales, and now needed to have our current earnings adjusted by our print partners as a result). Fucking OUCH.

Generally speaking, digital continues to surprise us, and the future looks bright, while at the same time, traditional print-and-distribution shambles along like a zombie, occasionally smashing us in the face. Or something. My metaphor generator is acting up — I should probably get it looked at.

10 Replies to “Money, Meet Mouth — an update”

  1. I hope this continues to go strong for you, I think you in an excellent position because of your large catalog. Though I am extremely curious how this would have affected the revenue on a product like Icons if you had started out with the app pricing. Since your sales numbers would have to be up by (wild guess) 700% to break even with the same revenue.

    Oh also are you saying revenue is up 218%? or sales #s are up 218%?

    Revenue is really all that matters to me as a publisher.

    Steve Russell
    Rite Publsihing

  2. @Steven: I meant to be be clearer, but I see I didn’t put the sentence in that I was intending (after the bolded bit): I’m talking about DOLLARS, not units. Income is up 218% from the same period last year.

    ICONS, (and a few other products we release), doesn’t really have a “break-even” point — it’s a royalty situation. So a percentage of income goes to royalties, regardless of sales. Increased sales income means increased royalties, but the percentage remains the same.

  3. Icons: I wholly understand the idea of royalty precentages, but the % does not change based on how much you charge only the amount changes. So even if your only making (random number for ease of calculations 50% royalty, you still have to sell 7x the number of icon copies to make the same amount of $ you would selling it at $15 a pop (again wild number, I don’t know what the PDF of icons originally sold at).

    Its good to hear that your making more Income, I love to see publishers doing better, six weeks expresses some sustainablity for a large catalog like the one you posses.

    However, I would like to see how this compares on an individual product that is normally 3x the sales prince a new release. If you sold (random number for ease of calculations) 100 copies of Icons PDF in the 1st 30 days of of release at (random number) $9.99, you have to sell 500 copies at $1.99 to break even.

    If you say that is happening then I believe you, but you have not said that, you have said you total monthly income has increased, but I would suggest that this sis because you have a large number of older back catalog items that are generating sales that would not normally be selling. This would suggest for an existing company with a large back catalog its awesome, but for a start up company with one product your still better off going with the higher price.

    Of course I could be wrong.

    Steve

  4. Steven — our new releases have moved approximate 3.5 times as many copies as the normal, full-priced new releases did when launched.

    Extensive back catalog certain helps — this is a Long Tail business — but the change is also visible on the front end.

  5. @SR : This would suggest for an existing company with a large back catalog its awesome, but for a start up company with one product your still better off going with the higher price. — This is my main argument for keeping our pricing at $9.99 for our Adventure Setting PDFs. I just can’t get my head around selling a 110-page adventure setting for $2 – especially when it is the only thing in our catalog.

    @Gareth: Most DTRPG sales come from front page click throughs. Hence the reason running banners on their front page is so expensive (shakes fist at the publisher point system!). I wonder how much of your sales over the last 6 weeks has been because of better placement of your products in the Top 100. If memory serves me – when you made the announcement many many of your products suddenly shot up that list and were featured on the front page of both DTRPG and RPGNow.com (CONGRATS!). So… while I hope this is indeed a sustainable model for you to follow, I’m still doubting the effectiveness for micro-press publishers with only one or two items in the catalog.

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