Publishers have several considerations when it comes to their approach to libraries, including which library models they’ll engage with, eBook format compatibility, catalogue genre and anticipated readership. But how should publishers price their catalogue for the library market?
Vearsa is very proud to work with several digital library networks, including Baker & Taylor, 3M Cloud Library, Overdrive, Wheelers, Gardners, Ebrary and EBL (under ProQuest),EBSCO, BiblioBoard, OneClickDigital, RM Books, Follett, Library Ideas and very soon,Hoopla. Based on insights from several of our library partners, we have assessed the effectiveness of key pricing strategies.
Publishers may opt to apply a single additional rate to their DLP across their catalogue and use this at their library pricing, e.g. Library Price = DLP + 15%. This means library pricing remains ‘in-line’ with retail rates, yet still earns the publisher additional revenue.
Similar to this, publishers may choose to use their print editions as a library pricing basis for eBooks - Overdrive, for example, who supply thousands of public libraries worldwide, suggests that a reasonable markup for library pricing is 25-40%, using the print retail price as the starting point.
Although this is a straightforward strategy, and an interesting concept to experiment with, publishers should be aware that libraries are not receptive to heavily inflated pricing, and so percentage increases should be marginal. Librarians will not blindly purchase content – like any other consumer, they will ensure the price they are paying is a fair one, and may check retail pricing as a comparison when deciding whether to make a purchase.
Maintaining Retail Pricing
Publishers may choose to maintain the same rates for retail and library pricing. This is unfairly regarded by some as ‘giving content away for free’ – publishers feel that library patrons shouldn’t have free access to their content, potentially at a small per-lend expense to the library.
However, this is an extremely effective strategy when it comes to library selection. Wheelers Books, Australasia’s largest online supplier to schools and libraries, have found that pricing of eBooks for libraries is generally declining, as libraries are becoming far more price conscious than they used to be. As a result of this, library pricing is now about the same as regular retail pricing, as publishers respond to the needs of the library market.
3M Cloud Library also feel there is most opportunity for publishers if they stick to their retail DLP. Their customers (mostly public librarians) are much more inclined to purchase content priced at the consumer digital list price with perpetual ownership. This would particularly be beneficial for children’s content (for aged 0-7), which typically sees fewer sales than other juvenile content. Generally, $40 USD is typically the price point at which they encounter hesitation or resistance from libraries.
Wheelers have suggested that those publishers wary of lowering their library pricing to retail rates could specify limited lends to ‘compensate’ for the pricing structure, and that many publishers are seeing success in this approach – for example, publishers could state that the eBook purchase is for 2 years or 52 lends, whichever comes first. Interestingly, this approach aligns itself to the life of a print library book (which will typically wear out after 2 years of use).
OneClickDigital, who supply a large network of UK, AU and US-based libraries, employ a similar multi-cap model, whereby publishers can lend digital content simultaneously 75 times, after which the library would need to renew their purchase. They offer this alongside their one user/one lend model, which means libraries would renew their purchases after 7 years.
An autonomous pricing strategy is one that would be independent from a catalogue’s current retail pricing, so publishers would effectively ‘start from scratch’ and consider the pricing of content on a title by title basis, keeping in mind the pricing’s appeal to the libraries.
OneClickDigital have noticed that the most effective price points are generally between £7 and £12 in the UK. When pricing gets up to around £16, library sales will tend to peter out.
Hoopla, the digital arm of Midwest Tapes, find that titles that are priced more cheaply will generally have more success in library selection, with the ultimate sweet-spot being $1.99-$2.99. Titles priced here will gain access to the largest number of Hoopla’s network of libraries. Since Hoopla’s library partners pay for content for each short-term loan, they have the ability to block more expensive content from their patrons selection – like any consumer, libraries want more bang for their buck.
This approach is fairly labour intensive, but takes into consideration the likelihood of titles being selected by libraries, regardless of the title’s retail price. It makes sense to acknowledge that there are price points that libraries are not willing to go to when spending on content within their strict budgets, and to find pricing that libraries will find acceptable.
Taking into account the price points that libraries are most receptive to is very likely to increase a publisher’s success when it comes to libraries selections.
Severe Price Inflation
Libraries are sometimes faced with hugely inflated pricing for mainstream eBooks, as they regard access to best-selling titles as a critical service. Extremely inflated library pricing can sometimes be several times the retail price of the ebook. As an example of this, Cuyahoga Country Library System acquired 300 digital copies of Fifty Shades of Grey for almost $24,000 in 2012.
While chart-topping best-sellers may be considered worthy of hugely inflated pricing (and a significant portion of a library’s budget), price inflation is largely ineffective for content outside this very small commercial pool of titles that are significantly high-demand.
OneClickDigital find that pricing is often relative to the perceived popularity of the title – if it is a household name, libraries will pay more because they get the best loans, while a lower price point may be appropriate for lower tier authors and backlist content.
Almost all library networks we discussed this with concluded that libraries will not purchase titles if they feel they are over-priced. Significantly inflated pricing will never be well received, and will undoubtedly negatively impact a publisher’s success in the library market.
In summary, feedback from our library networks suggests that effective library pricing is pricing that is realistic and on a par with retail rates, while any type of price increase from retail pricing should be minimal and in-fitting with the popularity of the title.
However, there is no ‘one size fits all’ solution when it comes to eBook pricing. Vearsa permits publishers full control over their local and library pricing, and we support and encourage any publishers who wish to experiment with any kind of pricing strategy. Publishers wanting to trial their library pricing also have the option to run short-term pricing promotion exclusively for their selected library networks.
Check out our infographic from Book Expo America on pricing genres per territory here.
Author: Helen Burnett - Retailer Manager at Vearsa.
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