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napster-logo On FutureEBook, Alistair Home has an editorial stating that the publishing industry should learn from the mistakes of the music industry when it comes to pricing e-books.

We’ve heard similar statements before from music-exec-turned-author Susan Piver, whose posts I covered here and here, but where Piver focused on big chain stores’ discounting driving mom-and-pop record stores out of business, or the industries’ tendency to look for “hits” at the cost of lesser-selling but more diverse talent, Home looks at suggested retail price, “double-dipping”, and slowness to adapt to change.

When the compact disc was launched, Home says, it offered the music industry two key benefits: it would cost twice as much per album as vinyl LPs, and it would cause consumers to have to buy their music again (possibly even multiple times).

The MSRP of CDs has fallen since then (perhaps helped by an FTC investigation into record label price-fixing), but the “double-dip” scenario has had a lasting legacy—if customers feel that the industry is taking advantage of them, they will in turn take advantage of any opportunity that comes along to get what they want for free.

Napster, the music-sharing service, came along right when record-label behavior had created a ready-made receptive audience—and by being slow to respond to consumer demand for digital music, the labels simply played into peer-to-peer’s hands until iTunes came along several years later.

Home points out that e-books bring with them a similar set of problems for the publishing industry. Not only is digital content easier to pirate, but there is also a widespread perception that digital should be cheaper because it’s not a substantial physical object like a book, and they just paid all that money for an expensive device on which to read them.

The fact that it doesn’t cost much less to produce an ebook than a print book doesn’t really matter; what matters is that the book-buying public doesn’t believe it. And if readers feel that they’re being ripped off, then that same sense of resentment and entitlement that fuelled the growth of piracy in the music industry will have the same effect on publishing.

Home then notes a few suggestions for convincing customers an e-book was worth at least as much as a paperback, including adding the ability to lend e-books, protecting them from obsolescence if a given e-book format falls out of use, or even bundling e-books together with print books for a discounted price.

(He doesn’t suggest, as some have, that publishers should try to become more efficient to the point where they can afford to charge less for e-books. But it’s another possibility.)

But whatever they do, Home points out, publishers need to be thinking about the issue or else they risk creating the same atmosphere of resentment and entitlement that caused the growth of peer-to-peer that plagued the music industry.

 
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