OpenBooks.com is not like other ebook sites – instead of users paying a pre-set amount every time they make a purchase, our users are able to read the whole ebook before deciding what to pay, if they will in fact pay at all, based on what they feel it is worth.
The decision to use the ‘pay as you feel’ price model was all about how we perceive the current ebook distribution model, which has its roots in the pre-digital era. With the current, ‘normal’ distribution model, money takes precedence over everything else. When revenue is considered more important than the actual quality of the product, or in our case, than the quality of the book, the industry begins to resemble the music industry somewhat, with bankable ‘pop-stars’ appearing who can't sing without auto-tune. In publishing, this means that neither quality authors nor readers are being treated properly – stories which are complex and require some thought are considered risky and the end users end up feeling dissatisfied. Readers turn to piracy because they feel that otherwise they are paying for books of a lower and lower quality, and piracy leads to less trust between the authors, distributors and readers, and a further race of arms with technologies such as DRM and changes to the law forbidding sharing and open distribution.
It really doesn't have to be this way. At first, pay what you want may feel awkward, but it makes sense with the different ways we consume literature now, as well as other forms of media. There of course has to be a revolution, especially in the common mind-set that open sharing is not stealing, and that readers need to have right to choose. That's why we chose this model and we will try to push it further more this year as we believe that it will pay off.
The ‘pay as you feel’ business model was given a high-profile platform in 2007 when British band Radiohead released the digital version of their new album ‘In Rainbows’ with this option. This was not done to force a change in the music industry, but more as an experiment, showing that there is room for innovation in the marketplace. Sites like Wikipedia also operate under a similar, yet more subtle, business model – they provide a free service, but still need to make money in order to survive, and so allow their users to make donations in order to keep the service running. It’s likely you may not have even noticed this, but many sites offer users the opportunity to pay if and when they feel like. Evidence therefore shows that the ‘pay as you feel’ model is one which can easily be translated to other industries or formats.
‘Pay as you feel’ allows for a greater amount of understanding between everyone involved, and the consumers aren’t left feeling as though they’ve been squeezed for every penny – if the product or service is of high quality, it’s more likely they will pay a fair price for it. For smaller producers, the process of releasing something with a ‘pay as you feel’ model is often enough to create free publicity, and for larger producers, their fanbase will often mean a guaranteed return, and a company operating with a ‘pay as you feel’ model has the potential to build a positive reputation and following, leading to increased payments in the future. It even removes the risk of a product being labelled ‘too expensive’ in online customer reviews – it’s only as expensive as they’ve decided it should be!
I met recently with the opinion that our model is similar to the streaming of music, that it gives too much to the users and too little to the authors. Recently British band Portishead tweeted that they had earned £1,700 after-tax from 34 million streams of their music. This seems low, but commenters quickly calculated that at the same time the music company, who legally own the music, earned from £230k to £290k. This is the inequality that we disagree with and are hoping to change.
‘Pay as you feel’ was not our first choice of business model. We put some thought and research into other models, especially paying what you want with charity addition and recurring fees, but even though each of them may have given better and more predictive financial results, none of them gave the feeling of fairness, boldness and distinctiveness we were after. We really wanted our users to feel trusted, and we believe that in the long-term this will prove to be beneficial. That's why we allow users to download the whole book, read it and pay when they are ready.
The results we have seen so far are really encouraging. We made the prediction that we will have around 100 payments in the first three months, around five thousand downloads and the average payment will be around $1. It's still very early to make long-term predictions but so far we have excelled in every category – we currently have over 300 payments, 10 thousand downloads and the average payment is around $4.5. Of course, because we just started, users are testing and we are yet to see if it becomes a trend. One of the promising observations is that users generally like our recommended prices and our ‘hard choice?’ feature, with the majority of the payments using it or paying the same as, or close to, the recommended price.
On the other hand, we have lost three authors who felt discouraged that they plenty of saw downloads but not as many payments as they would have like. This is quite normal, and we always try to talk to the new authors who are uploading their books to OpenBooks.com and provide them with the basic info about our distribution model, i.e. that it typically takes around three weeks from the moment of download for a payment to be made.
And that's what we are after – we are working hard on the ease of use of the service and the ease of payment. Whilst the ‘pay as you feel’ model may feel odd to business managers, it does not mean it doesn’t work. It requires a certain level of respect and trust between producers, retailers and their customers which appears to be missing somewhat these days, but it has the potential to revolutionise the consumer market as we know it and introduce a new degree of fairness which we believe everyone deserves.
Tomasz Staniak, CTO, OpenBooks.com