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.
Thanks for this, I’d been wondering myself. So sales numbers are up but the net profit per product is smaller. How are the profits looking in that sense?
Much faster to the break-even point. Much.
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
@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.
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
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.
So the front end is not covering the price difference of pricing it at 1.99 vs. anything that was normally $7.99 or higher.
Most of what we release wasn’t priced that high to begin with.
@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.