The True Cost Of Today’s Price?

To catch you up, earlier this week Adamant Entertainment (shepherded forth by the mighty Gareth-Michael Skarka) made an announcement: all their digital RPG products will now be subject to an “app-pricing model,” which is to say that they will cost you, the consumer, $1.99 a pop.

Then I caught sight of DriveThruRPG’s take on app-pricing, which you can find on Fred Hicks’ Tumblr (in short, it becomes a race to the bottom).

Obviously, given the name of the Adamant pricing initiative it highlights the current disparity between games you’d buy for your iPad ($1 to $10) and games you’d buy for your Xbox 360 ($40 -60).

I’m not knocking Gareth or his approach here: I hope it works for him. He’s done the math, he’s the publisher, and he sees this as the right move. And it may very well be. I am not a publisher — I’m just a wee little writer, belly so low I’m like a snake in a wheel rut. I just write stories. (This is a lie, of course. The writer is always more than just the writer. Or, he damn well better be. The ecosystem is changing, peeps.)

Except, of course, next week — provided that Kindle formatting does not destroy my brain and Space Jesus and Doom Buddha don’t decide to add “humans” to the list of mass animal deaths going on — I’m going to be releasing my short story collection, IRREGULAR CREATURES, to the Kindle store for $2.99. What we’re looking at right now is that while we have to make some bold moves and set competitive prices it remains unseen what the true cost of that price-setting may be. I don’t have any huge feelings on game pricing particularly, but I damn sure have feelings about fiction pricing.

So, this is just a random coagulation of thoughts about price (and cost).

These thoughts are not from an expert. They are from my addlepated monkey’s brain.

They make no conclusions. I’m just as confused as the next chimp down the line.

Here goes.

How I Pay For My Yacht Made Of Human Infants

I’m a freelancer, and I do so full-time, which means I have to make enough annual money to put food in my mouth (and soon, a baby’s mouth) and keep a roof over our head. And to support my “tentacle porn” habit.

If I were to release a product myself — like, I write it, I release it, I sell it — I’d need to make something close to my freelance rate to survive. So, if I released a product that were, say, 70,000 words, at the end of the day I need to make somewhere in the neighborhood of $3500-4000 just to not feel ashamed of myself. (And, really, let’s be honest, I should make more. Because in my mind, I’m worth it. In my mind, I’m also a ninja. Just so you have that as a point of reference.)

Selling at a buck a pop, I need to sell 3500 copies. That’s me selling it directly. Selling it through another venue, I’d need to sell somewhere around twice that, right? Seven thousand copies or so.

Doubling the rate changes things. Obviously it halves what we’re looking at for sales. And forgive me if this is dull as paint: I’m just babbling out loud, like that guy from A Beautiful Mind. Except, uhhh, I’m not a math genius. Tentacle porn-addicted ninja, yes. Math genius, not so much.

Going to three bucks gives me a little more breathing room. I’d get 60-70% most places out of that that three buck price, which means I’m getting roughly two bucks for each e-book sold. Means that I only have to sell like, 1750 copies to not feel like an asshole.

That’s about what I’d be worth to a smaller client. (Bigger clients pay more — uhh, or rather, they do in a perfect world.) The question is, is it fair to equate what a client pays me with what an aggregate audience pays? A client pays work-for-hire and it’s one and done. An audience pays me, and I have the potential to make fifteen bucks or fifteen-thousand bucks.

Is three bucks the sweet spot for something like that?

Or is that just a price too low?

None of this figures in the reality of paying a cover artist or an editor or what it costs me in time (and time is money) to market it. Freelancing doesn’t require me to do any of that. Publishing does. Nothing in a freelance contract says it’s my job to get artwork or find reviewers. (Novelists have it a little differently — technically they’re not responsible, but they earn out per sale so it behooves them to put time, effort, and maybe even a little money into pimping the book.)

The concern comes into play when a publisher — not the writer-as-publisher — begins to lower those costs. Because that means they’re not going to be able to pay someone like me, Mister Freelance Ninja Motherfucker, what I need to make to survive. Uh-oh.

Price Perceptions Of The Devil We Know

Three bucks doesn’t seem like an awful price for a digital novel, but is it too low? You’d pay more than twice that in the store for a hardcopy — and, for established authors, you’ll pay a lot more ($10-15 for an e-book).

For an established author I love, I’m totally on board with that price. That’s the tricky part about determining the value of intellectual property — this isn’t a widget that has clear supply and demand. This is a limitless ebook written with the candyfloss and unicorn dreams of one’s imagination (and yes, time). For an author I’d love, I’ll pay the full price on the book. Hell, you could tell me that prices are going up, and I’ll pay it. You hand me a new Joe Lansdale or Robert McCammon novel and tell me it’s $40, fuck it, here’s my money. And you want me to stick my dick in this mysterious hole? I’ll do that, too.

For things we love, we’ll pay a lot.

I don’t know what that means, but it’s worth noting.

Once You Go Low, You Can’t Go High

It’s like doing the limbo — you go too low, you might wrench your back in that position. Forever.

The pricing of apps — hell, the pricing of everything digital — has started to erode my sense of value, and I don’t really like it. I will no longer take easy risks on (bare with this next phrase) high-priced low-priced items. What is a “high-priced low-priced” item? A CD ten years ago in a store cost $16.99, which was bullshit. Digital costs have dropped those CDs down to $7.99 – 9.99.

Which is, by the way, a very nice price. Generally comes out at less than a buck a song.

And I’m now reticent to pay that price. Why? Because a company like Amazon offers a lot of sales. Because I used to get MP3s for free. Because I can buy Angry Birds for two bucks and get a billion (estimated) hours of play. No, I know that app isn’t a CD, but when it comes down to time spent on the entertainment I procure for myself, it still matters how much mileage I get out of a product. I will no longer take a risk on an artist for like, less than five bucks.

That’s insane. I feel like a total asshole. I have to consciously push past that inclination.

Price erosion in the marketplace has eroded my concept of value for — well, most types of entertainment. I think prices used to be too high, no doubt. But now I’m worrying that prices are going too low. The combination of the “culture of free” and plummeting prices has rewired my brain chemistry to make “pssh!” or “pfeh!” noises when a product goes above $4.99.

But again, that’s only for unknown quantities. For known quantities — a band I love, an author I dig, a game sequel I know is going to be rock solid — that’s not at all a problem.

It does make me less likely to take risks and buy unknown (to me) material.

That is not a good thing.

Word Of (Foot In) Mouth

Word of mouth helps that though, doesn’t it? A book, film, band, whatever feels like it becomes “known” to me when someone I trust tells me that it’s awesome. And then it moves from that nebulous “Ehh, if it’s not five bucks I’m not buying it” zone to the more robust, “Well, I’ll pay what I need because I want this thing.”

I don’t know how you can really make that work for you outside of writing the best damn book you can write and just hoping that it gets people crazy gonzo geeked about it.

It comes back to this: what we really want, I think we’ll pay for.

But are we pricing low to sell to people who don’t necessarily want what we’re selling?

Are We Undervaluing The Creative Sauce?

Are there dangerous, long-term costs to such price-slashing? Maybe.

We live in a world where art and creative craft is already suffering in terms of value: can’t get funding for arts, libraries are closing, more and more you see pleas for free writing, free artwork, free this, free that. By pricing low, are we just keeping up with the realities (maybe), or are we contributing to the long-term erosion of what creative stuff is worth? Again, you price low, you have to stay low. Do we set a new low watermark for What The Written Word Is Worth?

Hell, maybe we’re just over-entertained. Maybe we have too easy access to entertainment — so much is available to us now that the competition is at an all-time-high for our (increasingly unstable) attention spans. Low price combats that and keeps smaller authors competitive, which is a good thing (in theory). And it makes it likelier that someone will take a risk on you — also not a bad thing.

In the short term, the low prices seem like a good thing. I just don’t know if we’re playing the short game without thinking of the long con. I genuinely don’t know — I’m pondering. Asking, but not answering.

Curious to get your thoughts. I recognize that this post is a muddy, mumbly “me talking out loud” post, but hopefully it spurs a little thought in that direction.

What is creative material worth to you?

What is it worth if you know and love the author (or band, or filmmaker, or game designer)?

What is it worth if it’s an unknown quantity?