By Carl HoweScholastic Corporation (NASDAQ:SCHL) has announced that Harry Potter and the Deathly Hallows, the final novel in the Harry Potter series, will go on sale on July 21 for a list price of $34.99. But for some reason, the Wall Street Journal is expressing some concern about the price.
The price is $5 higher than author J.K. Rowling's most recent book, and a sign that Scholastic is intent on maximizing its profits on what is expected to be the last in the Potter series.
Aggressive price discounting by big book retailers such as Amazon.com Inc. and Barnes & Noble Inc. means many consumers will be able to buy the book for $20 or less, however. Amazon.com is now taking preorders for $18.89, as is Barnes & Noble, which will charge $20.99 or $18.89 for members of its book club.
And to see if this concept that the list price is too high is resonating, the Journal has even been running a survey asking its readers whether they think this is too much, a fair price, or that J. K. Rowling should be asking for more.
I find it ironic that this whining about book prices is being run the Friday before the Super Bowl, when attendees will an average of $5,540 per ticket for an afternoon's entertainment. That's just me, though.
More seriously, however, pricing the Harry Potter books is a serious marketing challenge. There are two opposing forces Scholastic has to balance:
- Low prices help maximize reach in the target market.. Since children and teens, the target market for the Harry Potter series, have somewhat lower buying power than adults do, Scholastic has significant incentive to lower prices to saturate that population of readers with the book.
- High prices better communicate the value of the product. This is the last book in the Harry Potter series, a series of books that has sold more than 300 million copies, been translated into 63 languages, and made author J. K. Rowling the most successful writer in literary history. Higher prices would signal the historic value of this final volume in this seven volume series spanning the last decade.
In my view, the first argument won out with Scholastic. This book could have gone on sale at $50 a copy and still sold tens of millions. But the PR backlash from excluding young readers would have been such a negative factor for both Scholastic and Rowling, so I believe they reached a compromise. And as noted in the article, substantial discounts are available.
The lesson here, though, is that pricing is a way of publicly communicating value. Low prices signal low value, high prices, high value. The Deathly Hallows is the Super Bowl climax for the world's most beloved wizard. $35 is a small price to pay for a decade of great stories.