A number of people have suggested that the publishing industry could afford to learn from the mistakes of the music industry over the last twenty years. Here is another possible mistake they should consider.
Peter Kafka at All Things Digital: MediaMemo reports on an earnings call from Warner Music Group in which Warner revealed it has seen its growth slow significantly since it implemented variable pricing on music back in April, moving from all-tracks-99-cents to a .69/.99/1.29 tiered scheme.
Warner CEO Edgar Bronfman Jr. argued that the pricing change has been a “net positive” for Warner. But he also suggested that in hindsight, perhaps it wasn’t a great idea to raise prices 30 percent during a recession.
So here’s the question for the book industry, which has been working very hard to boost the price for its digital goods: Which lesson do you learn from this?
Pricing psychology is a funny thing. More people will buy something that costs $9.99 than something that costs $10.00, despite the difference being only a penny. Something in the human psyche just likes nines. If only one penny makes such a difference, how big a difference will five dollars make?
