I am publishing a collection of short stories as an e-book. Continuing a series from last week, I’m trying to work through the relevant pricing issues and set a price for that content.
Coming up on the end of a second week of thinking about how to price an e-book, I feel as if I finally understand the problem. I don’t have a final number yet for my short story collection, but I genuinely feel as if I have the tools to make that decision. (I know this kind of analytical obsessing isn’t as fun to read as gossip or flippant analysis, but if you’ve been reading along I hope you’ve gained some insight into these issues as well.)
Today and tomorrow I’m going to run down two perspectives I haven’t yet talked about. After that I’ll wrestle with the fact that setting a price in one place has an inevitable domino-effect along the pricing pipeline, and why I think that’s an indicator of problems to come. After that, I’ll pick my number and get back to the (relative) sanity of regular posting.
Despite everything I’ve learned about the haphazard nature of pricing in general, and of e-book pricing in particular, I still retain a belief that there is some sort of fair value that can be applied to digital content. I know rationally that the marketplace will eventually come to define fairness as any stabilized price, but absent that stability I still find myself asking: what’s fair?
In the hard-bitten world of business this is obviously a naive view. What’s fair to most people is whatever they can get away with. If selling people into a mortgage or cell phone plan means using legalese to obscure relevant costs and fees, you do not hesitate to screw your customer. (To paraphrase Raymond Chandler, nobody ever made a hundred million dollars being a nice person — and that includes the messianic Mr. Jobs.)
Complicating things further, fairness is always a relative concept. Trying to be fair means trying to balance all factors involved, yet there’s no way to control for or even anticipate all of the variables. If I say a price is fair, who am I being fair to? A kid in Haiti who just lost his whole family? The rich, degenerate housewives on Bravo that are laughing all the way to your bank? Being fair in an absolute sense in any transaction seems a theoretical impossibility. In practice we rely on orderly (and regulated) markets to quantify fairness as a floating point between supply and demand, and that’s probably the best we can hope to do.
In the previous post on consumer expectations I said the traditional book business prices and sells physical objects rather than the content those objects contain. Strip the content from any print book and put it in a digital file and that content is deemed virtually (pun intended) worthless, even as everyone understands that it took time and money to create that content. To the extent that fairness may be impossible to define, I’m going to go out on a limb and say that valuing content at zero is not only unfair, it’s also unsustainable. (I do not dispute that it is the current reality.)
The implicit premise that print-book content is worth nothing mirrors the view put forward by people who believe that copying and distributing information in digital form is not piracy, even if someone else owns the copyright to that material. In effect, because the copyright holder will always have the original file, and because no physical object is being sold — only a bunch of invisible 1’s and 0’s — it is argued that no theft can ever take place in a digital transaction, while at the same time the world becomes richer for all that free content.
My answer in both instances is the same. What’s being sold in an e-book is what’s being sold in a print book (p-book): an experience. If the marketplace for p-books has devalued content to the point at which all content is essentially the same, and represents only a fraction of the total cost of a printed book, that says a great deal about how publishers have manipulated the marketplace to their own (short-term) advantage, and nothing about inherent worth.
I am not willing to assume that all content is the same, or that content itself is valueless simply because the publishing industry has turned books into a commodity. If you produce more of anything than people want or need, the price for that product will fall even if there is a sustainable level of demand, and even if there is a difference in the quality or utility or worth of similar items. It’s even possible, through over-production, to drive prices below the point at which production is sustainable — necessitating what is now euphemistically called a correction. Which used to euphemistically be called downsizing. Which, prior to a myopic focus on quarterly profits, was previously known as a failure of leadership, dereliction of duty, and incompetence.
The internet makes so much content available that prices for new digital content have approached zero for two completely different reasons. First, as just noted, there’s so much content of every type available that all content markets are over-saturated. The bulk of this content is free, and that is never going to change in the future. Meaning: the natural state of the internet is to be an over-saturated market in which prices for content are constantly and perpetually driven down.
Second, some of this ubiquitous content is also professionally-produced but given away free — either in an attempt to capture market share (the free/freemium model) or as a means of driving advertising revenue. This professional content should be, and generally is, qualitatively superior to the great bulk of content on the net, but it acts in the same way, driving prices down for content that is being sold through direct sales, a pay wall, subscription, etc. While it’s not yet clear that free professional-grade content can sustain its own production over the long haul, it’s fairly clear that there will always be people trying to make it work. Meaning: the natural state of the internet is to be an over-saturated market in which prices for professional content are constantly and perpetually driven down
Now consider that there is never going to be a point at which the internet hits peak content, after which the supply of content falls and prices for content skyrocket. It will also never be the case that the quality of content on the internet will become so universally poor as to drive customers to professional retail providers. Though bloggers inevitably come and go, there will always be sharp minds offering compelling and entertaining observations for free — often with no drop-off in quality relative to professional voices.
Promise As Price
Despite this constant downward price pressure, money is changing hands. Consumers are not universally averse to paying for content. If given a choice it’s clear that consumers would like everything to be free, or as cheap as possible, but consumers have shown (think iTunes) and are showing (think e-books) a willingness to pay for digital files if they are asked to pay.
The only way for any individual to know if their content is something that consumers will pay for is to have that conviction and put a price on their content. At that point issues such as quality, marketing, buzz and social trends will determine the number of sales, but it’s up to the content creator/owner to take the initial stand.
In the short story collection I intend to publish, and in any other works I bring to market, my hope and intent is that those works are good. Maybe not great, but certainly average — and hopefully better than average — when compared with similar content in print books. (I want to use the internet to reach readers directly: not as a means of avoiding professional accountability or standards, but as a way to avoid editorial gatekeeping.)
Because I know the internet will always drive prices down, I can’t use that fact as a barometer for gauging the value of my own work. The best I can hope to do is to price my work according the the quality I aspire to, then take my lumps if I fail to live up to my own hype. It’s a considerable risk, but if I’m doing professional-grade work I think it’s fair to all parties.
As noted at the top of this post, that’s really what I’m looking for. A fair price.
— Mark Barrett
Laura Kinsale says
One thing you don’t seem to have discussed, unless I missed it, is that consumers will include the asking price as a part of their value judgment. Free is a devaluing asking price–at the basic level, it says this isn’t worth anything, please take it off my hands. (Or in the case of free content, “I wrote this, please do my the favor of reading it.) There has always been a lot of this sort of competition among people who would like to be published–it’s not new. It’s the reason the gatekeepers exist, really.
A true shopper (I come from a long line of them!) turns up their nose at “free,” and “really really cheap” because we know it’s either truly worthless, or a come-on with a catch. We are like wily trout, sniffing at the obvious lures and turning away.
What a true shopper (and a savvy consumer) is looking for is quality at a sale price. The idea of getting something valuable for less than it’s worth is the strongest incentive to buy. But the value must be placed on it in the first place. It’s like diamonds–it’s not their scarcity, there are diamonds available by the score in jewelery stores, and infinite fake diamonds are available as a substitute. We believe diamonds have value simply because we will pay a lot for them. And we also believe that a “Sale!” sign at a jewelry store is a chance to get something valuable for less than it’s really “worth.”
That’s what Amazon is trying to do. They claim they are making the point that e-books “should” only cost 9.99. But the underlying message is that they are selling something that is worth MORE, and Amz will sell it to you at a “fair” (read “bargain” price.) They are actually doing their part to maintain perceived value for digital content.
As you’ve noted, there is no fair price for something that has no commodity basis, is infinitely reproduceable, and is an emotional/intellectual experience rather than something that sustains basic needs. So take a stand, because that is in fact the only way value is or can be established.
I’ve enjoyed reading your thought process about this.
I’m glad you’ve enjoyed reading along. 🙂
I talk about this a bit in the next post, and I’ve touched on it previous posts —
— but you’re right to shine a brighter light.
The consumer value judgment as a trigger for sales is an important motivator. It’s why, as you rightly point out, stores are always having sales — even if they’re still making a profit on the discouned items. (Jewelry stores are notorious for their markups.)
I also agree that products can be discounted too heavily, almost demanding that consumers to see such goods as junk. It might not be true on a case by case basis, but for the most part this belief that cheap = bad is derived from our life experience. We’re told at a young age that there’s not such thing as a free lunch, and for the most part that’s true.
Amazon is an interesting beast, and not in the least because it handles so much of the industry’s business. As noted in a previous post, the prices on Amazon actually seem to make no logical sense, either on a per-book basis, or between books of a similar type To the extent that Amazon has a price target they like, and the book biz would like a higher target, I’m reluctant to put too much faith in either player.
Then again, I’ve also come to doubt the wisdom of the consumer, as you’ll see in the next post.