Does three make a trend? In recent months, both former Gawker editor Emily Gould and GigaOm’s Michael Wolf launched their own e-book ventures. Now Lifehacker editor Jason Chen has left Gawker Media to launch an e-bookstore of his own, StoryBundle.
Chen will sell bundles of DRM-free e-books under a pay-what-you-want plan; he imagines the average price of a bundle will be around $5 in most cases. He is modeling StoryBundle after “Netflix (NSDQ: NFLX), Rdio, Steam and indie game bundles” — particularly Humble Bundle for games — that “deliver content without having a bunch of physical stores get in the way.” Chen believes “making things easy to buy, easy to get and easy to consume will be the key to StoryBundle’s success. I just have to think about what I personally want as a reader, then do that.”
Chen didn’t give me many details on the kinds of books he’ll sell, though he said the first bundle is coming in “early spring.” He says he is “publishing [selling] in all genres” and plans “themed bundles of different genres down the line.” He did not elaborate on how many authors have signed up so far, but said “we have authors in various stages of being signed up.” He’s finding authors, he says, in “all the ways that you could imagine: Approaching them, recommendations, searching online, them approaching me, asking around, browsing lists, etc. The more books I can sift through, the higher quality the titles will be in the bundle.”
StoryBundle is most unorthodox in the way it charges for content and the way it pays authors. First of all, readers pay what they want for a bundle of e-books. Not only do they decide how much they want to pay, they decide which percentage of that payment they want to go actually go to the authors. That payment is split among all the authors in the bundle. They designate the remaining percentage of their payment “to charity and to keep the site running.” (Readers can choose to give 100 percent of their payment to the authors.)
Assuming that Chen’s correct that the average payment for a bundle is around $5, authors will receive low payments for their work. Let’s say a buyer decides she’ll pay $5 for a bundle of four books and designates that $1 of that to go to charity or the site. That leaves $4,
and StoryBundle takes $2, leaving $2 to be split among the four authors. Correction: Chen told me that the authors split the $4. They each receive $1. That is more than an individual author receives selling an e-book for $0.99 on Amazon (NSDQ: AMZN) (books priced under $2.99 get a 35 percent royalty, so an author selling an e-book for $0.99 makes $0.35) but on Amazon the $0.99 price is guaranteed, whereas at StoryBundle readers can pay what they want so authors don’t know how much they’ll make.
Since StoryBundle doesn’t require exclusivity, though* — authors can sell their individual e-books in other places too — authors may view it as an additional revenue stream. “It’s the philosophy of a whole being bigger and better than the sum of its parts,” Chen said. “Because these titles are bundled together, you’re getting added exposure, and all the aspects intrinsic to the bundle — lower price, higher promo value, more eyes on your work — makes it much better than going alone.” (It is unclear why a lower price is better for authors unless the assumption is that a lower price leads to higher total sales.)
What if someone wants to pay just a few cents for a bundle of e-books? “Existing game bundles allow people to pay barely anything, as in a few cents to ten cents,” Chen acknowledges. “I want to find a way to avoid this without compromising the ‘pay what you want’ too much, but I don’t know if there’s a way. That’s something I’m still looking into.”
For readers, Chen says, “the main service is that we pick quality books, and we offer them at a lower price than they would be paying if they purchased these titles separately. As someone who loves e-books, I’d love to know someone already vouched for the goodness of titles and that I can get them all at a deal. If you’re buying books separately from Kindle or other e-book stores, you’re relying on reviews — which are fine, but the discovery process is more difficult. Also, you’d end up paying more in the end.” Chen will also have “neat people” — more on that to be announced soon — help choose the books for the bundles.
A final note: It’s unclear how the Terms and Conditions of other etailers would handle bundles like this. Both sites reserve the right to drop the price of an e-book sold on their site to match its price on other sites. If a book is included in a promotion or given away for free at Barnes & Noble (NYSE: BKS), for example, Amazon can (and will!) drop the price of that book to $0 in the Kindle Store. But Barnes & Noble and Amazon‘s TOS don’t say what they’ll do if an e-book is included in a bundle at another site and the price of that bundle varies based on what the buyer wants to pay. I’ve asked the companies for clarification.