The Conference Purchase Program is described here:
In terms of whether this is a gamble:
Yes and no, but not in the way you mean :)
The real reason Leanpub launched the Conference Purchase Program is simple:
If we did not have it, then what a conference organizer would have to do would be to hand out individual download tokens. (Leanpub also has a way for people to buy multiple individual copies of a book, which is described here and here.)
This approach makes sense for a department at a company or a university bookstore, but it would be an absolute nightmare for a conference organizer.
We expect that the Conference Purchase Program will result in a lot less support burden for Leanpub, and a lot less hassle for the conference organizers and their attendees.
If you're a conference organizer, you can just print one coupon for each book, and hand that out to everyone, include it in the printed material, post it on a slide at the beginning of the conference, etc. (All we'd ask is the obvious request you don't post the coupon on the internet, since we want your attendees to be able to redeem it!)
Now, in terms of the "is this a gamble" question, here's the really long answer to it:
For Leanpub, we are selling things which cost us essentially nothing (on a unit basis), so it's not a gamble: it's pure profit for us, regardless of how many coupons are redeemed :) (Frankly, we actually want all the coupons to be redeemed, not a small number of them, since we want more new customers on our site!)
Specifically, since we pay authors 80% royalties, if we do a transaction where we sell 3 books to a conference with 400 planned attendees, then we're doing 3 * 400 * $1.25 = $1500 USD in sales. We pay our authors 80% royalties, so we are earning $300 USD minus PayPal costs on this transaction.
Since we have turned this into a general program which does not require high-touch interaction to sell, this is fine for us. If we needed to do hours of work for each sale, then obviously this would not be fine for us.
Now, there's still a bit of a gamble here:
After the purchase is made, the conference organizers will be giving away 3 Leanpub books to their attendees. There is a small chance that doing this kind of conference giveaway on a regular basis will lower the idea of what a Leanpub book should cost in people's minds, making them less likely to pay $10, $20 or $30 on the Leanpub website. But I don't think this is a real issue: we have weekly and monthly sales for books which have opted in to our discount program, and these sales haven't ruined or cheapened our brand. In fact, many authors are happy that we do this hustle work to sell their books. And for the authors who don't want their books to be discounted, they just don't opt in to our discount program. Since this is opt-in on a per author basis, many authors have not opted in.
For authors, it is a gamble, but in a different way: The bet is on whether the increased exposure from having their book given away to a conference full of people will lead to increased exposure and increased sales after the conference, or whether it will lead to a post-conference decrease (from people who in future may have bought the book for the minimum or suggested price) but now got the book as part of a conference
giveaway. There's also a potential risk of increased piracy, since Leanpub books have no DRM.
Now, in this bet, the smart money is on the increased exposure being a good thing, in our opinion: the world is a big place, and the main risk is that people won't hear about your book, not that they will have already gotten it for free either as part of a conference giveaway or because of piracy. But technically it's impossible to measure this, so theoretically it's a gamble.
In our opinion, the question of whether an author opts into the Conference Purchase Program will be a decision based on whether they think it is fair and whether they think they will make more money.
The money question will get answered over time; the fairness question is
as much about metaphors as anything. Some authors will be able to justify steeper discounts based on volume, and others will be able to justify them based on breakage.
The volume analogy is Costco. I shop at Costco, which sells things in bulk for very low prices. Sometimes things expire before I can use them fully, but on the whole, I am happy with the purchase: even if I got more than I needed, what I did get was so cheap (at a unit price) that even with a bit of waste it is still a great deal!
The same thing is true for a manufacturer: Costco buys things from them at a bigger discount than a small retailer can get, but they're buying so many copies that it makes business sense for the manufacturer to earn less per unit, since they can sell so many units.
Also, the things which Costco buys are often packaged in larger sizes, so that customers don't feel totally ripped off when buying the product elsewhere. (This is why I'm fine with the book being a giveaway. I would not be fine with people being able to buy books for $1.25 on the Leanpub website, since that would hurt our brand.)
The breakage analogy is with health clubs or mail-in rebates. If every member of a health club went at least 3 times per week, they'd need more space and more machines.
Now, a Leanpub ebook isn't Costco or a health club, of course -- this is just an analogy! But the metaphor kind of works: normally an author doesn't sell 400 copies of a given book on a given day, so if they have the opportunity to do so to a
conference, then many authors will (hopefully) think this is a good thing to do. (This is the metaphor of a manufacturer giving Costco a lower price.)
Also, some percentage of conference attendees won't bother to use the coupon for the book, so the cost per actual usage will be higher (this is the health club metaphor).
So if an author cares about unit price (I don't, but some do), they can justify it to themselves. For an author with a $10 book, to earn $500 of sales (and $400 of royalties, since we pay 80% royalties) they only need to sell 50 copies. So, selling 400 copies for $500 is a huge discount: each copy is being sold for $1.25, which is 1/8 of the price. However, if only 100 copies are redeemed, then each copy is being sold for $5, which is still a big discount, but it's only half price. Again, I don't think the unit price matters nearly as much as the total revenue, but Leanpub authors are free to use their own judgment here... :)