I don’t have a dog in this hunt, other than essentially agreeing with Mr. Blodgett that the marginal cost of an ebook (and the fact that I can’t really loan it out) makes pricing tricky. So my kneejerk is to say – go amazon!
But yesterday I read this story in the NYT on the cost of a beef bowl in Japan. The article notes:
The battle has also come to epitomize a destructive pattern repeated across Japan’s economy. By cutting prices hastily and aggressively to attract consumers, critics say, restaurants decimate profits, squeeze workers’ pay and drive the weak out of business — a deflationary cycle that threatens the nation’s economy.
And then:
“These cutthroat price wars could usher in another recessionary hell,” the influential economist Noriko Hama wrote in a magazine article that has won much attention. “If we all got used to spending just 250 yen for every meal, then meals priced respectably will soon become too expensive,” she said. “When you buy something cheap, you lower the value of your own life.”
At least, this made me think. What is the value of a book? And if books just get cheaper, do we value them less?
Discuss. 😉
Glass House 
February 1, 2010 at 4:47 am |
interesting questions. Not sure i have the answers, but it made me think – one of the most pervasive and best-read books in the world – the Bible – is free for the taking in most hotels. Does that mean we value the content less?
and
are price and value always realtive? Is it possible to separate economic value from artistic value in the 21st Century?
February 1, 2010 at 3:17 pm |
We were discussing on FB. It’s a tough time for the industry as these moves are made. I wonder if this is a fundamental shift more important than the physical price wars over best sellers that erupted between Amazon and Wal-Mart, that being a more seasonal or promotional effort.(http://www.nytimes.com/2009/10/17/books/17price.html)
How will these distribution moves will impact the ecosystem? Perhaps as much as Wal-Mart moving into an area and impacting local shops when it comes to physical goods.
February 4, 2010 at 10:35 pm |
So, folks thinking about digital distribution need to take something into account that they often don’t, except in so far as they (misguidedly) try to eliminate it: the used market.
Doesn’t matter if it’s music, or books, or games, or whatever. If it’s a physical good that I can re-sell, that’s a part of the economy. It may be that the only reason I was willing to buy a game at $60 was because I knew I could later re-sell it at $20. Go to pure digital delivery protected by DRM and prohibiting transfer, and market forces don’t arrive at that $60, they arrive at $40.
I’m content with the idea of digital content that I can’t ever re-sell, if it’s priced properly. And the closest indicator we have of what that proper price is happens to be the used market itself.
Drive the price of digitally-delivered music down to or below the price of a used CD, and I’ll buy it gladly. Note that this *has actually happened already*. Why? Because many of us don’t want whole albums, because there’s too much filler. If I pick-and-choose only the portions of the album I *want*, that subset is already priced competitively with used CDs.
Same thing applies to games and books.
You want me to buy a digital-delivery game that I can’t re-sell? Price it like a used game and I very possibly will. You want me to buy a digital-deliver e-book that I can’t re-sell? Price it like a used mass-market paperback and I very possibly will.
This is why I don’t hesitate to buy $5 and even $10 games on XBox Live Arcade, or even the occasional one at $15, but have never paid more than that, and don’t ever expect to. No, no, if I’m paying more, I want physical media that I can lend and re-sell.
But attempt to price it like a first-run hardcover edition… no, just no. Not if I can’t later resell it (untraceably) to recoup part of that cost, no. Which I know I can’t do. So, no, has to be priced lower.
Don’t think of this as “trying to destroy publishing” or “pricing authors out of the market”. Think of this as “the free market making a reasonable adjustment in response to a change in the terms of sales”. Try to keep prices up where they are now and you’re *fighting* free market forces, not protecting them from thieves as some folks try to characterize the issue.
This may require new business models. Okay, maybe so, that doesn’t change anything. This may fundamentally change the types of works being produced (just as most TV is fundamentally different from box-office cinema, and both are different from direct-to-video movies). Sure, it very well could, that doesn’t change any realities. If the right to borrow, lend, and re-sell with *complete* freedom and anonymity as we can with physical property is being taken away… okay, it *can* be taken away, but the market *will* adjust, and content creators have to sleep in the bed they’re making when they insist upon DRM and high prices.