A few days ago I posted this on the Facebook fan page:

Why are people willing to spend a fortune on a device (ipod, kindle, etc.) but refuse to spend anything on content (music, ebooks, etc.)?

There are many potential answers.

  1. Gadgets are marketed more effectively.
  2. Intellectual property can be shared more easily. You could copy a song for a friend but you couldn’t copy a computer.
  3. A gadget is reusable until it breaks but a book, or even a song, has a much more limited life.
  4. Content is (sometimes) improperly priced so it becomes more convenient to download than to purchase.

These are just the top four answers that come to mind after thinking about it after I posed the question on Thursday night. What lessons can content producers and content providers learn from those answers? The music industry and the movie industry has already gone through a lot of what the publishing industry is facing and I think the experience of the music industry is especially relevant to books so I will focus my attention on the lessons learned from the mp3 revolution.

Let’s look at each answer respectively and see how it relates to ebooks.

  1. Gadgets are marketed more effectively.
    1. For two reasons I believe this will always be the case. First of all there are fewer platforms (gadgets) than there will be content. Second of all, gadgets cost a lot more so there is a lot more capital available for advertising. Consider the average cost of an ipod right now. You could pay as little as $62.99 for an ipod shuffle or as much as $395.99 for an ipod touch, putting the average cost at $229.49. What is the average cost of a book? ~$15.00? Now I know what you are thinking, what are the margins for an ipod compared with a book. I thought about going into a long, drawn out discussion about the margins of a book, but suffice it to say; margins are measured in percentages and are likely ~40% for both the book and the ipod (for the sake of argument, though book margins are far from universal and Apple generally achieves higher than average margins on their products.) When you consider that Apple has sold approximately 250 million ipods and 40 million iphones, you can imagine a substantial marketing budget. So for those two reasons, gadgets will always be marketed more effectively than the content they deliver. But keep in mind, when evading a bear you don’t have to outrun the beast, only the person beside you.
  2. Intellectual property can be shared more easily. You could copy a song for a friend but you couldn’t copy a computer.
  3. A gadget is reusable until it breaks but a book, or even a song, has a much more limited life.
    1. I think the answer for number 2 and for number 3 is the same, so I will address them both simultaneously. There isn’t much anyone can do about this, you can go down the DRM path, but Orwellian DRM protection will result in a backlash. Instead of fighting with your potential customers, authors and publishers need to produce the highest quality story, as well as story-telling, editing, formatting, and marketing of their content. If you can’t convince people to buy your product (and you’ve priced it properly–that is an important caveat) then that’s your fault, not theirs.
  4. Content is (sometimes) improperly priced so it becomes more convenient to download than to purchase.
    1. This is a job for publishers, and I think we have two choices: change our prices or change how the public view our prices. When someone goes to Amazon.ca and purchases an ebook for $10.00–actually, I just tried to do that right now. You can’t buy an ebook from amazon.ca, you have to visit amazon.com for the “Kindle Books” section. In any event, if someone goes to amazon.com and buys an ebook for $10.00 many of them believe that all of it goes directly into the publisher’s pocket. Whose fault is that? If a publisher can’t explain their prices…I think you know where I am going with this. If a publisher can’t convey why they charge what they charge then the prices need to reflect that inability. Another problem with convenience and prices: there isn’t an itunes for ebooks…yet.

In conclusion, I think the lessons we publishers need to learn from the lessons of digital music and digital movies are:

  1. Quality. Start with the best product possible.
  2. Transparency. Today customers can interact with companies much more easily than they ever have before, and if you choose not to join in these discussion, your customers will think you are hiding something.
  3. Marketing. Market your quality product. This is a whole discussion in and of itself, especially for a small press in Canada.
  4. Availability. Make your product available to as many people as possible.

Please, join in the discussion, we welcome your comments. Thanks for reading.