I recently stumbled into a conversation with the lovely @Virginia from Booki.sh, on twitter. I’d waded into some discussion about the excessive price of ebooks in Australia vs Amazon’s pricing (for non-Agency pricing, obviously).
Twitter is a great medium for forcing you to refine your point, but subtlety is often lost. What I meant is that, purely from a reader/consumer perspective and disregarding any production costs of an ebook, $15 is a ridiculous price to pay for a digital file. Virginia challenged me with:
@Cacotopos But as a reader, you’re used to paying $30 for books! And most of the enjoyment is derived from the words, is it not?
To which I eventually responded with:
@virginia enjoyment comes from the words, sure, but I don’t think of it like that, maybe b/c the $ is separated from the experience? Dunno.
@virginia Worse, a digital file has no value; the money I’m paying to acquire it is purely an ‘ease of acquisition’ fee. Much like e-music.
Her appropriate response was:
@Cacotopos So you really don’t value the content at all? Or place its value below the medium in which it’s delivered?
This stopped me in my tracks. She was right, in a way. Did I not value the content of the digital files I bought, the stories, the experience? The art?
Valuing digital files
For the record, I never ever never forever buy DRM-crippled files. In digital music stores, time has proven my point: I can now buy pretty much any music I want online and use it anywhere I like. My attitude when applied to the modern e-book world (which is about 10 years behind the music industry for digital media, in my opinion) means I can only buy a very narrow selection of content, but in compensation that content tends to be priced from $0-$4. Here in Australia, e-books are usually around the $15-$20 mark. And yes, the Australian dollar is worth more than the US dollar. This means we are paying slightly more than that in US figures.
It made me think deeply about pricing models, containers, and my attitude towards art.
An electronic file is the enemy of the scarcity model of retail/business. The scarcity model relies on a controllable flow of individual units of ‘stuff’. A digital file is defined by a (practically) infinite ability to be copied.
Immovable rock (scarcity model of book selling), meet irresistible force (infinitely copiable book containers). How d’ya do?
By definition therefore, a digital file by itself has no value. You could argue at best that its value is the cost of storing it, which at present is roughly 5 cents per gigabyte ($100 for a 2TB drive). This makes an ebook’s digital container at 1MB size worth approximately 0.005 cents. I think you’ll find most ebooks don’t get nearly that big.
So what are we paying for? I told Virginia that we pay for the convenience of access, that it was “purely an ‘ease of acquisition’ fee”, a diversionary channel carved into the free flowing river of digital content, easing my passage through the download process and charging a nominal fee for the service.
Can you value digital books like digital music?
I had arrived at this position through my experience with iTunes. iTunes makes the process of acquiring music super easy, and so I frequently pay my hyper-inflated Australian $1.69 to buy tracks through it. Note that I never buy albums, because $17 for a digital album is ridiculous in my opinion; luckily I can go elsewhere online and buy the same albums for $10 without much hassle AND THEY WORK EVERYWHERE (because the music industry abandoned DRM for obvious reasons).
But a book…a book is more than a 5 minute background ditty, surely? Books are hours worth of entertainment, regardless of how they are delivered. Virginia made me consider that perhaps I was still willing to pay for the content, separate from the value of the container; not all of the money I was spending on e-books was for the service of delivering my digital book to me.
Taken in that context, the total cost of the electronic entertainment (be it book, song or video) was actually broken into the service fee and an inherent content value that I had determined subjectively.
Breaking it all down
Applying this kind of value-breakdown to books in my head gave me a new perspective on buying digital media. The bad news is that it hasn’t changed how much I’m willing to pay for it; the good news is that my previously arbitrary valuations (why was I comfortable paying $5 for an ebook, but only $1.50 or so for a song?) now have some point of reference.
So, it roughly breaks down to this:
|DRM:||-$10 (yes, that’s a negative)|
|Short Fiction content:||$1-$2||Book/Novella content:||$3-$8|
|Digital container:||$0||Paperback container:||$5|
|Hardcover container:||$15-$20||Limited Edition tinsel:||$15-$20|
|Convenient online shopping:||$1||Instant access:||$1-$2|
Using these components we can see that I’m comfortable paying:
$5-$10 (content + convenience + instant access) for an e-book.
$8-$13 for a paperback book (add various dollars for easy buying/shipping sites like BookDepository and Amazon)
$18-$28 for a hardcover (adjust for ease of purchase)
$33-$48 for a hardcover + Limited Edition tinsel (eg. signed, special cover, whatever)
Just out of interest, let’s calculate what it would take to get me to buy a DRM ebook from you, using all my upper ranges:
|Convenient instant shopping||+$3|
|optional Limited Edition tinsel
(how you would do this digitally I do not know)
So without Limited Edition tinsel the most I’d pay is apparently $1. Sounds about right. Not looking good there.
It’s possible to construct all sorts of offerings (eg. paperback book with instant digital edition download) and come up with a rough price that I would be comfortable paying.
Where to from here?
Obviously this is a purely personal assessment, but breaking down how I value the various components of a book that I’m buying, including the process of finding a shop, acquiring my purchase, etc, gives me a little bit of guidance and confidence when I make wild proclamations online about book prices.
I don’t know how useful this kind of breakdown is to people interested in pricing their books competitively, but it was an interesting journey for me, and it might help someone out there construct their own little matrix.
I would love to hear your comments below (they’re not moderated so please don’t hesitate to disagree with me).