From Chris Meadows via TeleRead:
[A]t the moment, e-books (and, for that matter, other digital media) are a sort of predecessor of the post-scarcity society. With digital media, there is no need for scarcity—and when you have goods that are unencumbered, such as public-domain media, you can see that in operation. Anyone who wants a copy of Jane Eyre or A Tale of Two Cities or Barchester Towers need only click a link and boom: there they are.
As I originally wrote the above paragraph, I said “goods that are free,” but that just points out the way that our current way of thinking has trouble adapting to abundance. With digital media, every copy is “free.” But many works are encumbered by copyright. Even if they can be copied freely, doing so doesn’t pay the work’s creator (or at least owner) anything for the extra copy—so they end up retrofitted with digital rights management to impose artificial scarcity.
And with that artificial scarcity in place, the publishers impose high prices on those digital books, to enforce that scarcity further and possibly divert would-be buyers into buying physical goods that are legitimately scarce.
. . . .
We’ve mentioned publishers’ problems with abundance a few times before. More recently, Joe Wilkert also discussed the issue:
Most publishers desperately want to preserve yesterday’s scarcity-based business model but what they really need to do is acknowledge and embrace abundance, be willing to cannibalize yesterday’s revenue stream and focus on what really defines their brand for both authors and consumers. If you haven’t done so already, it’s time to read The Innovator’s Dilemma and think about how it applies to your business and the discovery challenge.
The abundance question is also why many consumers complain about publishers overpricing e-books—even publishers like Baen who price as low as $8 in new release. They know there aren’t any printing and distribution costs to encumber the e-book with extra expense, and want to see the lower costs reflected in a lower retail price. And many self-publishing authors do price their e-books just that way, at $5 to $6 or even less.
Publishers insist that the fixed costs of creating a book have to be shared out across the e-book version, too—but consumers often find that rationale hard to swallow when the e-book price of a new-release book usually costs more than the hardcover version on Amazon. The wholesale sales terms for physical goods permit Amazon to mark them down, but the agency arrangement for digital sales does not—and a big part of the reason the publishers felt justified in imposing agency pricing for digital was that there were no actual physical goods to change hands at wholesale rates. So, ironically, digital goods’ very abundance actually makes them cost more than the equivalent physical good. What kind of sense does that make?
That’s the situation we have when one specific type of good gains an abundant version: friction all over the place as everyone tries to reconcile the existence of abundant and scarce versions of the same good. Publishers continually express their contempt for Amazon as the chief purveyor of that digital abundance, while they’re still trying to prop up the old form of wood-pulp scarcity—even as Amazon is also one of the prime movers in selling those scarce goods, too.
Link to the rest at TeleRead