May 29, 2012

Pricing digital products

I love books and music, and every now and then I watch movie. These three types of products belong to markets being disrupted right now, which means there’s a lot of moaning and whining and fear mongering going on, as well as a lot of problems when it comes to adapting.

Pricing is one of these problems.

  • I buy most of my books from Amazon and almost all of them are Kindle ebooks.
  • I buy music on vinyl and from iTunes, as well as use Spotify for streaming music on a daily basis.
  • I never ever buy movies and you won’t catch me in a cinema if I can help it, but I have been known to rent movies from Headweb.

The system works then? Nope, because the pricing is way off.

  • Ebooks cost more or less the same as their physical counterpart, sometimes more.
  • Music is slightly less overpriced, but where I can get a two year old CD for almost nothing, it will still be full price on iTunes.
  • You can rent movies and TV shows, but it is expensive, ridiculously so if you compare it to buying a physical copy.

The digital version of a product should be cheaper than the physical version.

This is what I believe, and I’m not chalking it down to distribution och production costs (although they are valid if small points that can be made). No, the digital version should cost less because you get less of a product. Even if we forget about the fact that you won’t get a decent album jacket for your latest purchase, nor the extra status points for having a nice looking hardcover in your bookshelf, we’re still missing the truly big point. The one true reason why digital should be cheaper than physical:

You can’t lend out or sell your digital copy.

I can sell (or give away) the printed books, vinyls and blu-rays I don’t want. That gives them additional value, money back at best, or just the good feeling of knowing that someone got something out of them at worst.

  • I can’t sell my Kindle ebooks.
  • I can’t sell my digital albums bought from iTunes.
  • I can’t sell downloaded movies.

And yet I’m supposed to pay at least as much for my digital copy, as for a physical one. Despite the fact that the publisher of the product takes less risks with digital copies, than with physical ones.

That’s not right.

Thoughts? Let @tdh know on Twitter, or find me elsewhere. There is also a newsletter.