The Myth of the 99 Cent Book

I read a great article today by Thomas Baekdal called The Myth of the 99 Cent Book. An excerpt:

Another example is if you write a book for a nice market, totaling 20,000 potential readers. And you predict that for the price of $9.99 you will reach 35% of that audience. 
35% of 20,000 = 7,000 * 9.99 = $69,930 
Then using the same logic, lowering the price to 99 cents will increase sale by a factor of 10 ...or cause you to sell 70,000 books and reach 350% of your total audience.
But that is not possible. You cannot exceed your total audience--you cannot even get a 100% penetration rate (not even if you gave it away for free.) If you lowered the price, you might reach 60% instead of 35% 
60% of 20,000 = 12,000 * 0.99 = $11,880
There is something catastrophically wrong with how people perceive the price of content.

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