On Pricing

[lampros]

This started as a reply to Ben's thread "Making Money, Making a Living" (http://www.indie-rpgs.com/forum/index.php?topic=17668.0). After I typed the reply I saw that the thread was on hold, but I thought someone might be interested in this anyway.

yours,

a

Let's put it this way -- suppose that there's a guy who's a martial artist, and enjoys it, and is good at it, and likes to teach it, but also has another job.  Is your argument that this guy shouldn't charge money for his martial arts classes?  I don't see how the value of his work is related to whether or not he has another source of income.

Right. But maybe he shouldn't charge for his classes anyway. What if he enjoys teaching Martial Arts? What if, because he's just a guy teaching on his own, he can only get four students at $10 an hour. The real cost of giving away is teaching isn't just the $40, but the fact that he could be teaching 20 if he took people for free. That's an issue worth considering when making an Indie RPG.


/quote]
And I don't see why the value of something should have anything to do with the production cost.  The cost of a game is (cost of production and distribution) + (value of game as art and as tool).  Why should one necessarily equal the other?  That makes no sense to me.

Seconded. I work at Barnes and Noble, and our pricing has only the vaguest amount to do with the physical cost of producing the books. An advanced programming manual sells for $40, a basic programming manual sells for $20. A thin magazine on beading sells for $10, cosmo (which is giant) sells for $2.

Basically, its "charge what the market will bear". If I'm buying socks, I can comparsion shop to find the cheapest socks? But books are highly indivualized, if I want Book 2 of the Blue Elf series, I can't comparsion shop between that and Book 2 of some other fantasy series, cuz they're not the same atall. So publishers charge what they think they can get, and there's a lot less competition than in other industries.

The competition is all in attracting new readers. If I'm debating between two fantasy series I've never heard of and they both look pretty decent, price is a consideration. This factor is one reason paperbacks are so cheap. Paperbacks aim to get new readers into an already popular author. This factoralso helps explain the success of TCGs - the starter's only $10.... RPGs might have something to learn here.

Thee is one other trend I've noticed in book pricing:, items which appeal to a larger audience sell for less. (partially because we have to compete with supermarkets and whatnot.) But that trend doesn't come close to explaining our pricing, and I'm not sure how it would be relevant to an Indie publisher.

Yours,

a

[Victor Gijsbers]

Thee is one other trend I've noticed in book pricing:, items which appeal to a larger audience sell for less.

That would be largely explained by the fact that larger editions = less production cost per unit, wouldn't it?

[Josh Roby]

Very correct, Victor.

Lampros, Cosmo costs less to produce per issue than the Beading magazine, for two reasons: (a) size of the print run, and (b) advertising revenue.  In fact, Cosmo probably generates more advertising revenue than their production expenses -- the cover price is only there to convince people that they're getting something of value when they sign up to be an audience for the ads.  In contrast, the Beading magazine most likely requires sales revenues to maintain profitability.

The advanced and basic texts are the same deal: since more units of the basic will sell than the advanced, the company will print more copies, the price per unit will go down, and the publisher can charge a smaller price for the introductory text.

Mind, I'm not saying that production cost is the only factor in determining a price -- far from it -- but you should be very careful when assuming that a bigger book cost more to print than a small one.

[Gregor Hutton]

Just to chip in that while the cost of the physical making the book is a factor for sure, it doesn't necessarily dictate the cover price. The publishing corp I work for in my non-gaming life sells books that vary widely in cost, even if they are physically the same size, and cost the same to print, bind and distribute.

A 256-pp book of student revision material on some academic topic will have a far lower sale point than a 256-pp book by a respected acadmic in that field. The student book might be $20 while the academic's life work could be well over $100, if significant enough. The publisher can put the price this high as you are paying for the information in it, on top of the physical book itself.

I think there are parallels there in gaming books, with things like reformatted OGL material having a lower price point than an original book by a valued author.

[guildofblades]

>>Lampros, Cosmo costs less to produce per issue than the Beading magazine, for two reasons: (a) size of the print run, and (b) advertising revenue.  In fact, Cosmo probably generates more advertising revenue than their production expenses -- the cover price is only there to convince people that they're getting something of value when they sign up to be an audience for the ads.<<

Actually, a magazine like Cosmo will generate nearly all of its revenues from advertising. The cover price is there to entice retailers to sell then thing, because the retailers are making their money that way. And as an extra inticement, the magazine publisher will often sell their magazine dirt cheap, so the retailer gets a larger slice of the cover price. That is also why magazine publishers can sell subscriptions at such a reduced price off cover price, because they really don't need to make a profit off the cover price, just cover the administration cost of billing for those plans, sorting and mailing them.

Ryan S. Johnson
Guild of Blades Publishing Group
http://www.guildofblades.com

[lampros]

Very correct, Victor.

Lampros, Cosmo costs less to produce per issue than the Beading magazine, for two reasons: (a) size of the print run, and (b) advertising revenue.  In fact, Cosmo probably generates more advertising revenue than their production expenses -- the cover price is only there to convince people that they're getting something of value when they sign up to be an audience for the ads.  In contrast, the Beading magazine most likely requires sales revenues to maintain profitability.

The advanced and basic texts are the same deal: since more units of the basic will sell than the advanced, the company will print more copies, the price per unit will go down, and the publisher can charge a smaller price for the introductory text.

Mind, I'm not saying that production cost is the only factor in determining a price -- far from it -- but you should be very careful when assuming that a bigger book cost more to print than a small one.

Right. Basically, my point is that quantity sold is not the only consideration by any means

yours,

alex