Major publishers have all reported declining e-book revenue over the past two years. The main problem is that the average price per title has increased from $9.99 to $17.99 for a mainstream bestseller. This has resulted in the paperback being significantly more affordable than the digital edition and readers are gravitatating back to print. The biggest issue facing publishers is how to make the price of an e-book dynamic, so when the paperback comes out, the price of the e-book price comes down. Vistaar is hoping to solve this problem with their drive optimized price management software to react faster to the latest market trends and effectively scale the price via algorithms.
Bryan Glass the Director of Business Development at Vistaar explained the premise of their technology to Good e-Reader “Vistaar provides pricing software called Market Price Optimization (MPO). MPO prices every title at the right price at the right time. This is accomplished through Vistaar’s pricing framework; Opportunity Driven Price Management. We start with business rules framework to ensure alignment with strategy and a science based recommendation as a starting point. We provide visual aids and readily available data for decision making as well as a prescriptive opportunity identification to help focus on pricing opportunities. MPO uses self-correcting methodology that ‘learns’ over time and provides continuous price change monitoring & prescriptive course correction.
In late October Vistaar established a relationship with Open Road Integrated Media to give their e-book portfolio an advantage by making sure their prices remain competitive. Matthew Shatz, senior vice president for sales & business development at Open Road commented, “We are at the forefront of innovation in publishing and we are looking for ways to improve our ability to operate in an increasingly dynamic market. With our large e-Book catalog, Vistaar’s technology will enable us to be more market and data driven in our pricing approach and in turn increase sales for our authors and our partners. In Vistaar, we have an ideal partner with proven technology, team and pricing expertise. We’re very pleased to partner with them on this strategic initiative.”
I asked Glass about the Open Road deal and what it means for both companies. “The Open Road deal involves e-books initially with the intention of adding print books at a later date. They wanted to start with digital first since they felt it would make them most impact and then tackle print books later. Our pricing software can handle both physical and digital, it’s a matter of where you want to start, pick an area that makes the most impact or go with a big bang approach. In addition to Open Road we are working with a top 3 music publisher that is using Vistaar’s pricing software for their digital catalog and they are starting to expand to physical content and we are in discussions with other book publishers that are looking at both digital and print.”
He went on to say ” We simply provide the pricing framework and the strategy allowing Open Road or any of our digital customers to manage pricing, there is no involvement from our end for submissions . They manage submission and the pricing strategy at their end. How to price is dependent on your strategy, for example to increase revenue. the system will suggest a price to maximize sales, or recommend maximum margin. We don’t pick your strategy we help enable your strategy. Over the time the system learns and corrects the strategy.”
Vistaar is focusing their efforts on Amazon, Apple and Google right now and they claim their technology can deliver up to a 5-10% increase in annual digital revenue and this is absolutely game changing for smaller publishers.
Michael Kozlowski is the Editor in Chief of Good e-Reader. He has been writing about audiobooks and e-readers for the past ten years. His articles have been picked up by major and local news sources and websites such as the CBC, CNET, Engadget, Huffington Post and the New York Times.