coreKnell

Everyone else seems to be weighing in on the future of e-books, so here’s my two-cent licensing fee.

The New York Times recently published this article regarding retail price vs. the overhead of distributing an e-book. Eric from Pimp My Novel weighed in with some useful facts essentially showing that, while it is true that some publishing costs are less for an e-book, the price/profit ratio remains roughly the same as with a traditional print book.

The main problem with all of this back-and-forth price-point justification is that it’s based on a flawed assumption: that we are talking about two versions of the same product. An e-book purchase is in almost no way directly analogous to an ink-and-paper purchase. In fact, it’s closer to the idea of renting or streaming a film from Netflix rather than buying the DVD. When you purchase a book from your local bookseller — or through mail order — you are purchasing outright ownership of your copy of the work. When you make an e-book purchase — especially a DRM-restricted purchase, which is the overwhelming rule both now and in the planned future — you are merely paying for the right to view the work on a limited subset of devices under circumstances dictated by the licensing agreement. You cannot mark it up, take it with you wherever you go (without said device), loan it to your Aunt Martha or sell it used. Your own access to the work can be denied or restricted at any time, either intentionally (renegotiated contracts) or unintentionally (DRM servers go down). At best, you can engage in limited sharing, often after enduring accompanying finger-wagging and legal nags. In short, in many ways an e-book purchase presents far less value than a physical book purchase even when the content is the same in both cases.

How can we apply an existing price/overhead ratio to a new product with an entirely different value? Of course, the value of any product is merely what someone is willing to pay for it. The e-book is essentially a brand new product that must be evaluated on its own merits, not framed using traditional print criteria. I think the main reason that many consumers question existing and proposed pricing structures is that they perceive this difference. Comparing previous revenues from other distribution channels is not the way to win over the public pocketbook. Quite simply, in my opinion, e-books need to remain cheaper than physical books until the purchaser is given an equivalent value. DRM, by virtue of inhibiting a paying customer, devalues that product.

At least that’s how I see it.