breaking away from the pack

Free Amazon Kindle eBooks, Advertiser-Sponsor Supported and Future Business Models

By on March 15, 2011 in Publishing Revolution

I’m a regular reader of Joe Konrath’s blog “A Newbie’s Guide to Publishing”. Joe’s blog today, “The List Experiment Update” made me wonder if we are seeing a revolution of sorts, not only in the publishing industry with the explosive growth of eBooks, but also in the business models authors will be using to reach larger audiences. How does an author balance a Kindle eBook’s price point with increasing demand for less expensive eBooks, to the point of free, or virtually free? And do that and still make the cash register ring?

It appears that there is considerable downward price point pressure being applied by the reading market. Story after story gets told on Joe’s blog and others, and on the forums, about how sales skyrocket after drastic price reductions. Joe’s experimentation is revealing. Very cool — balancing price point and demand. Is anyone doing formal research on this–acquiring and crunching data?

Will the shakeout be a business model that ultimately is based on free product while driving other revenue streams as a result? Remember the Grateful Dead, they pioneered “freemium” product — essentially giving away the recorded music (even letting fans freely record the live concerts), while making a killing on ticket sales, merchandise sales and other revenue sources. And this was before the Internet.

So…will eBooks pricing be inexorably driven downward, forcing authors to find alternate revenue streams to be competitive and to ring the cash register while meeting the demand for free, or virtually free product?

We may be seeing the evolution of the TV business in reverse — going from a completely paid model to a fully advertiser/sponsor supported model. There may be other revenue models we haven’t even seen yet (placing another author’s book promotion for cash in the back of your own Kindle book, a form of co-promotional sponsorship, is only the beginning). Corporate sponsorship, product placement, promotional tie-ins, consumer sales overlays of other products–I don’t think we have even seen the beginning of what this business will eventually look like. What do you see out there on the horizon or right in front of you?

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