RE: The App Store Effect

["Sally Morris \(Morris Associates\)" <sally@morris-assocs.demon.co.uk>]

I well remember an unintentional experiment at a large publisher 
where I used to work

The digits in a journal's price were accidentally transposed in 
the price list, resulting in a significant price reduction.  The 
effect on subscriptions was non-existent (and the same was true 
when it went back up to the previous level the following year)

However, I agree with Joe that if publishers dared to 
significantly reduce the price of single articles, they might see 
considerably more sales to the 'casual' reader (provided, that 
is, this was combined with a sales interface of 'i-Tunes' 
simplicity).  The problem is that if the price is less than the 
pro-rata share of the journal subscription, libraries might be 
prompted to cancel as soon as they figured this out

Sally Morris
Partner, Morris Associates - Publishing Consultancy
South House, The Street
Clapham, Worthing, West Sussex BN13 3UU, UK
Email: sally@morris-assocs.demon.co.uk

-----Original Message-----
From: owner-liblicense-l@lists.yale.edu
[mailto:owner-liblicense-l@lists.yale.edu] On Behalf Of Joseph Esposito
Sent: 14 June 2009 23:02
To: liblicense-l@lists.yale.edu
Subject: RE: The App Store Effect

The "app store effect" is much more complex than Pogue suggests. 
Very surprising, as Pogue is usually a very well-informed 
commentator.

The problem with applying a model of low prices to specialized 
media such as research publications is that the content itself, 
not only the price and the format, determines the size of the 
market. How much larger would the readership of "The Journal of 
Retinal Surgery" be if it were half the price or free?  The 
elasticity of the market is not very great.  There would be some 
increase in readership, but in many cases (probably most and 
possibly all) the increase in readership would not offset the 
decline in margin.

There are exceptions to this.  In consumer media there is no 
question that lower prices bring in more users or customers. Even 
in research publications, there are untapped audiences for 
certain categories.  For example, I personally might want to read 
an occasional article in "The Journal of the American Historical 
Society," to which I do not subscribe, nor have I any training as 
a historian.  But there is nothing that could induce me to read a 
journal of statistical economics at any price.

I want to be very clear that in taking exception to the extension 
of Pogue's comments, I am not suggesting that the world of 
research publications is rosy or that all publishers have equal 
skill in establishing pricing models.

Joe Esposito