The Content Licensing Industry Is Broken

Tonight I logged on to Amazon.com to order Chris Guillebeau’s awesome book “The Art of Non-Conformity”, since 3 separate people recommended it to me in the past week. The first choice I was confronted with – Kindle or Paperback?

What is wrong with this picture???

It costs $10.17 to print a new copy of Chris’s book on dead trees, bind it with glue, put it in a box, and drive it across the country to my door in a gas burning mail truck driven by a real human being.

The Kindle Edition delivered instantly over the internet costs $12.99. WHY?!

Because Penguin Publishing says so, that’s why. In fact, if you click on the Kindle price, you’ll see the following note:

This price was set by the publisher. Amazon actually goes out of the way to tell us that Penguin has specifically mandated higher Kindle prices for many of its books. It’s called “agency pricing”, which means the publisher (Penguin) sets the prices for Kindle Editions, not Amazon.com. Paperbacks are not subject to agency pricing, which means their prices are set by the retailer (Amazon) and fluctuate with market supply and demand. We can see the same situation with lots of other popular Penguin books, for example (not affiliate links):

There are plenty more examples you can dig up yourselves. The bottom line is this – the content licensing industry is broken. Consumers want cheap, clean, instantly delivered digital content, and publishers are holding prices artificially high. The days of paper, vinyl, and cellulose are coming to an end. What practical reason is there to make the far less environmentally impactful digital version artificially expensive? Oh right, it’s to protect classical business models and supply chains that don’t work in a digital world.

This is a telling microcosm of how broken the content licensing industry is as a whole (books, music, movies), as well as how much work still has to be done to adapt content creators’ business models to the digital age. I hope it happens quickly.

About the Author

Bill DAlessandroI'm the CEO at Elements Brands - a company I built from scratch that sells branded consumer products online and in national retail stores. I ship thousands of orders each month, and focus on automation, technology, and digital marketing. I write about my experience with e-commerce, product creation, and lifestyle design, with lots of personal bits thrown in. More about me.

Comments

  1. Hi Bill, thanks for getting the book! And yes, sorry about the pricing – as you alluded to, this is out of the hands of authors and is essentially a battle between Amazon and traditional publishers. When I was on book tour, the print price was even lower, creating a further disparity. 

    Fortunately, we can all blog for free…

    • I know Chris – definitely not your fault. I hope they work it out soon. Really looking forward to the book! I’m a big fan of Tim Ferriss and Dave Asprey, which is why a few friends recommended your blog (and book). I’ve got several “muses” (to borrow a term from Tim) and hope to join you in the vagabonding lifestyle shortly. Safe travels!

  2. Bill-to reiterate a few of my points from Facebook as to why I agree with your position:

    If selling books and making money is the goal of the publishers, they should be doing everything in their power to find the sweet spot where MR=MC. Their marginal cost for an ebook is next to nothing and if they were to drop the price, they’d find they could move pretty far to the right and sell a lot more copies.  I would think they’d prefer to move more electronic copies because print books are easy to access in public libraries (ebooks are a pain in the ass) and printed books are passed around, sold in used bookstores, and obviously are expensive to produce.  It’s also really hard to quantify exactly how many times a particular title is read physically, some books lend themselves to sharing more than others so sales numbers may not reflect distribution amongst the population. Conversely, if everyone is paying less for ebooks the publisher has a much more accurate gauge as to what type of books sell best (and can better inform their publishing decisions) and if you assume that average printed book is read by 2 people, an ebook at 2/3 cost is a very compelling buy for people with ereaders and the publishing company still comes out way ahead.

    The convenience factor for a kindle is great, it’s a leap in technology but not one that should be accompanied by price increases per book.  I may have paid $100 for the device, but that also gets me access to hundreds of out of copyright books that you still have to pay real money for in bookstores; I bought an ereader and a library of Classics. 

    It’s frustrating for me to think that anyone can try to justify such a skewed pricing mentality on behalf of publishers (unless of course I’m an aberrant consumer, in which case I’m frustrated with society). Either way, it’s a stupid system and this post does a good job of pointing it out. 

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