Yesterday on Twitter, I flippantly suggested that (‘literary’) ebooks that cost less than $4 will eventually come to dominate the market. Any higher, I think, and you begin losing potential readers to piracy, free content, and other media. $4 roughly correlates to the price of a good cup of coffee, and I think a lot of us hold to a subconscious belief that anything cheaper than a cup of coffee is pocket change.
In explaining the iTunes Store pricing structure in 2005, Steve Jobs’ explained that, ”We’re trying to compete with piracy — we’re trying to pull people away from piracy and say, ‘You can buy these songs legally for a fair price.’” The notion that it’s possible to compete with piracy appears absurd, but the success of iTunes suggests that the key is to offer a superior user experience, at a negligible cost. For most of us, being able to download a high quality track quickly and easily is worth the $1 we might save were we to navigate over to The Pirate Bay.
For ebooks, I think the price falls closer to $4. That might seem strange to publishers accustomed to selling paperbacks for $20 and hardbacks for $40. The difference is that, in the print environment, publishers are competing against other publishers for sales. Online, publishers are competing against pirated copies of their own works. I don’t think book piracy is as big a deal as music piracy (largely because, demographically, readers skew a little older than music fans), but I still think the emergence of book piracy as a phenomenon is going to influence how ebooks are valued, even by those who don’t pirate works themselves.
Now, my gut tells me that $4 is the point at which most reasonable people would prefer to pay for an ebook title than spend the time skulking around shady websites searching for the torrented file. At an average wage, $4 represents somewhere between five and fifteen minutes of work. The tradeoff in this case is between time and money, and I think $4 tips the scales in favour of going legit. It’s important to remember that a lot of people don’t want to pirate, and will happily pay for work if they believe the experience is great and the price is reasonable. Whether or not $4 is reasonable for the author, publisher, and distributor is another matter.
I decided to comb through the top 100 books on Amazon.com in the print and digital (Kindle) categories to see whether my hunch is already shaking out in the marketplace. The graph below represents the number of books in the top 100 falling between certain price ranges:
It’s worth noting that the bestselling books in the digital/electronic/Kindle category are not the same as the bestselling works in print. Many of the extremely cheap electronic titles are works of genre fiction that have been “published” by Amazon Digital Services, which essentially means the author has self-published. The fact that production costs are virtually non-existent and the author doesn’t need to split profits with his or her publisher means that it makes sense for some of these electronic-only writers to set the price of their work extremely low and “gun for volume”. It would be interesting to see whether these writers are, in fact, making a decent living off these 99 cent ebooks. Does the “App Store Principle” (that extremely low prices can be countered by increased sales) hold true in the realm of ebooks?
What’s also interesting to me, however, is the swift drop-off in electronic sales as soon as the price range shifts to $10 and above. A similar drop-off point is reached as soon as print works hit the $20 mark (and begin rising around the $35 mark, as we dip into luxury editions and box sets territory).
All things considered, my gut tells me that you’re selling yourself short if you price your electronic edition below $3 (unless you’re able to rapidly crank out works of genre fiction for your hungry audience), but if you decide to price your work above $8, you’ll probably have a hard time fighting against piracy and other free stuff. If that $4-$8 range seems low, maybe that’s just tough. I don’t think the market necessarily stabilises around what’s fair for all parties involved.
Update: Kevin Nguyen, who knows much better than me about these things, has suggested the sweet spot for ebook pricing on Amazon.com may lie somewhere between $10-$15. I think it’s likely that, were I to dive in a bit deeper and perform the same analysis on the top 10,000 selling ebooks, most would fall somewhere in the $5-9.99 range. I’m still skeptical that most consumers would be willing to pay above $10 for ebooks. At that point, you’re competing not only against the pirated version of your own product, but also against the paperback edition. Even if the consumer isn’t interested in print, if the ebook is priced close to the same level as the paperback, the consumer will make the mental calculation that you (the publisher) are ripping them off. The consumer recognises that an ebooks costs less to produce, and they expect to see those savings reflected in the retail price.
If you’re interested in kicking around some thoughts about ebook pricing, hashtag #ebooksweetspot on Twitter.
In a piece over at Overland, John Weldon looks at the idea that the iPad is a device geared toward consumption.
Let’s concede, for the sake of argument, that the iPad is indeed a consumption-centric device (I don’t think that’s true, but let’s just run with it). What’s wrong with that?
The term “consumption” is a loaded one. To most, I think, it suggests the passive intake, and subsequent expulsion, of unnourishing cultural gristle. Consumption is then contrasted with “creation”, an act that is understood as active and wholesome. Consumption = Bad. Creation = Good.
The problem, of course, is that not all “consumption” is passive, and not all “creativity” is nourishing. If the iPad promotes “consumption”, couldn’t we also say it promotes a state of receptivity? The iPad is a great place to read long-form articles and books, to view works of visual art, to watch important films, and to listen to the pieces of music that have served as cultural touchstones. Instead of feeling compelled to jump in and respond, the iPad enables us to engage with the work of others without feeling distracted.
It’s baffling that artists, writers, and creative-types are so predisposed to look down on “consumers”. After all, within that amorphous group we might call “consumers” are art-appreciators, serious readers, critics, music geeks, and, in fact, everybody who enjoys any part of our culture. Without “consumers”, creators would have no audience. If we were all creators, all of the time, we would simply be throwing our work out into a void. Creators need consumers, and consumers need creators.
So, let’s concede that the iPad is a device that promotes “consumption”. From the perspective of a creator, isn’t that glorious? The iPad is a device on which people can appreciate your work, simply and conveniently. Even better, the iPad is a device on which you can distribute your work, and likely make some money doing so.
Privileging creation over consumption is akin to privileging speaking over listening. If our culture is a conversation, you can’t have one without the other.
(As an aside, I’d also suggest that holding any device or object responsible for restricting creativity is ludicrous. If a human being wants to create, they’ll find a way to do so. Give a kid a box and they’ll create a castle.)
I’m still here, just so y’know. What have I been working on?
Last month I launched The Bright Young, a brand spanking new journal about web culture. I believe in good writing, I believe in good design, and I believe in the web. The Bright Young is where I pull all those strings together. Articles will pop up sporadically, but the idea is to, over time, build up a small archive of eloquent prose from a bunch of intelligent and switched-on people.
In early June, I wrote a piece for the Emerging Writers’ Festival arguing for writers to experiment with digital self-publishing. It built on ‘Step one: Learn how to write. Step two … ?‘, a piece published over at the Kill Your Darlings blog, in which I argued that whether or not a writer will succeed depends as much on their artistic ability as on their ability to develop an audience. The comments left on that piece are fantastic, and I’d love to see more frank discussions about the writing industry taking place. I think it’s important for emerging writers to know what they’re getting into.
I’m also keeping track of great new bookish objects over at The Thousands. Last month, I reviewed A Graphic Cosmogony and Lucky Peach. You should probably buy both of them, because they’re pretty great.
Marco Arment thinks Apple won’t make a stand-alone television, because TVs are a commoditized, slim-margin market. Neven Mrgan isn’t sure Apple will get into the TV business (at least, as anything more than a ‘hobby’) because Apple are in the computer business, and people don’t seem to want a living-room computer. Kyle Baxter doesn’t think Apple will make a TV because there’s no advantage to building a TV over a set-top box, as Apple have already done.
The more I think about it, though, the more I’m convinced Apple will create a stand-alone television set. Apple tends to enter markets in which the established players compete on specifications and place overall experience a distant second. Apple also likes to enter markets in which a paradox of choice makes it difficult for the average consumer to select the ‘superior’ product. Finally, Apple will enter a market only when they can offer a product different enough to that which exists as to be initially controversial.
It’s fairly clear that the television market is where Apple want to go next. The market has recently stablilised as HDTVs reach a saturation point, and television makers are clueless as to how to improve their product so as to push consumers to upgrade. 3DTVs are a ‘bag of hurt’ and Google’s ‘internet TV’ experiments have failed to resonate with consumers. There are growing numbers of potential consumers happy with their current five year-old television sets, but willing to upgrade if something compelling comes along.
It’s worth taking the time to consider Apple’s recent successes. Apple aren’t in the business of creating “phones” or “media players” or “tablet computers”: they are in the business of creating convergence devices. A convergence device is one which can replace several devices at once, either by offering a digital representation of a previously analogue tool (iOS devices can ‘become’ books, notepads, rulers, photo albums, board games, calendars, and so on), or by bundling several physical devices in a single hardware package (the iPhone is a video and stills camera, telephone, recording device, touchscreen, compass, and more).
A good way to understand what an Apple television might entail would be to see the device less as a television than as a large-form convergence device. How might this device function and what devices and tools could it replace?
To begin, it seems a no-brainer that the Apple television would eliminate virtually every device that currently feeds into the average television set. You want Blu-Ray? Sorry, not gonna happen. TiVo? Nintendo? What these devices have in common is that they offer hardware solutions to problems that could better be solved in software. After all, it makes little sense to hook up a gaming unit to a television if that television has the hardware to run games on its own. Similarly, it makes no sense whatsoever to hook a disk-based media device to a television that can wirelessly access almost every movie or television show ever made. My gut feeling is that an Apple television will eliminate all AV inputs in favor of a couple of Thunderbolt ports, and WiFi and Bluetooth antennas. That’s controversial, but it’s in Apple’s spirit to junk ‘legacy’ compatibility in order to focus directly on ‘skating toward where the puck is going to be’.
For the Apple television platform to be successful, it’s necessary to provide a single means by which to access all the content you might wish to consume on the unit. There’s no such thing as ‘lock in’ in the television market because content (the valuable stuff) is piped into the television, and does not presently reside ‘within’ it. That’s not Apple’s style. Apple’s convergence devices do not (broadly speaking) require add-on devices to add value. In order to derive more value from your iDevice, you either upgrade to the latest model or visit the App Store. If Apple lock out consoles and ‘dedicated content devices’, they’ll provide consumers with the ability to purchase a wide selection of games and associated content from the television’s App Store.
If Apple are in the market of producing convergence devices, what else could this ‘television’ be? I’d almost certainly bet on a touchscreen, not as the primary means by which to interact with the device, but as an add-on (like the iPad’s gyroscope) to be harnessed by developers. Imagine, for example, this ‘television’ becoming a whiteboard, a wall calendar, a place for scribbling notes to family or colleagues, a canvas for painting, a presentation tool, or a control panel. Imagine the television functioning as a photo frame in which the next image is accessible with a single swipe. To hypothesise further, would it be too much to imagine this device flipping to a horizontal mode and taking on functionality similar to the Microsoft Surface? There’s evidence that there’s space for a Surface-like device in our everyday lives, but a more elegant solution would be to combine a large-screen horizontal touch device with a large-screen television, and allow the consumer to alternate between the two modes at will. Can this be done simply and beautifully?
Why are we pondering about the possibility of an Apple television set now? I’d suggest it’s not because we want to see how Apple can redefine the television experience, but because we’re wondering where the iOS platform can go from here. iOS isn’t about touch or portability – at least, not necessarily. iOS is about expanding the scope of digital devices to provide unique experiences directly tailored for a specific form factor. Change the form factor, and you change the possibilities.