After Amazon and Macmillan engaged in a battle of wills over eBook pricing this weekend, we went straight to a digital pioneer for more thoughts about price war. Today’s guest on the Morning Media Menu was Andrew Savikas, the VP of Digital Initiatives at O’Reilly Media.
We talked about his company’s upcoming digital publishing conference, Tools of Change–running Feb. 22-24. Last week O’Reilly reported 104 percent growth in eBook revenue, and Savikas gave a glimpse into his company’s eBook pricing strategies.
Press play on the embedded player below to listen. The show will be archived around the mediabistro.com network all morning.
Here’s an excerpt: “We learned very quickly and very clearly that the price elasticity of demand for an iPhone app [eBook] was very high. For example, when we raised the price of an iPhone app from $5 to $10, sales fell by 75 percent overnight. That’s a pretty loud and clear signal from the market. On the flip side, we’ve done some experimentation on our own website. We sell quite a bit of eBooks. In fact, our eBooks outsell print books three to one through our direct business. There we find that customers are actually not that price sensitive. We’ve found a good price–right around 80 percent print–and we feel like we are offering them something that they’re willing to pay for.”