The eBook Cat is Out of the Bag but no one realizes it yet

Here’s a question -

In a world where people download free music, pirate software and games, and complain when an app isn’t free or $1, how are Publishers and Amazon and B&N selling ebooks for $9.99 and $12.99?

You could come up with a lot of answers. Let’s hazard a few -

  1. People who read books are more ethical.
  2. Most people want to pay for things they download. They just are forced in certain cases (music, software, games) into piracy for reasons like DRM, inconvenience, unavailability, etc.
  3. The convenience factor makes people willing to pay $9.99 or $12.99 for books.
  4. People who read books understand that authors need to get paid and that if they stop paying, the quality of books might greatly suffer. So a pragmatic reason to pay for books, rather than anything else.
  5. Publishers and Amazon and B&N have done a good job of making ebooks seem worth the money.
  6. Closed Ecosystems prevent the free culture of the Internet from seeping in.
  7. The New Gatekeepers are preventing the race to zero by doing things like handicapping low price books.
  8. Amazon destroyed the value proposition of free books by encouraging indie authors to make books free and thus associating ‘free’ with low quality.
  9. Most authors willing to offer free books don’t have very polished books.
  10. People value their 4 to 10 hours of time enough to pay for high quality books that are edited well.
  11. The legal threat of breaking DRM etc. keeps people away from ebook piracy.
  12. Publishers and Amazon have done a good job of creating artificial scarcity of high-quality books.

While we can make very strong arguments for each of the following, the only ones that are unique to books and would explain why ebooks haven’t suffered the fate of other digital content are 1 and 4 (strong moral compass and/or amazing longsightedness of book readers).

Those two are hard to believe explanations because we’re talking about people and money. Firstly, there are all types of people – as readers we might subscribe to the fantasy that every person who reads books is morally superior to everyone else, but are they THAT superior. Secondly, people tend not to spend their money for something if they can get it for free. There has to be a very, very good reason for people to pay for something when they can get it for free.

My contention is that the reason ebooks still retain ‘value’ is surprisingly simple.

People don’t realize they can get any eBook they want for free

We have progressed from hardcovers and paperbacks to ‘paid ebooks on devices suited for reading’ without any extended period of time where free pirated ebooks from the top authors were easily available online in excellent quality.

Not in terms of reality – because they were always available if you searched. But in terms of perception and convenience – People who read books just didn’t know or just weren’t willing to do all the hard work.

So we had a strange situation -

  1. You could download any ebook you wanted for free. Although not necessarily easily.
  2. Most People who read books were not aware of this or unwilling to make the effort.

That transitioned to a world where -

  1. You can download lots of paid ebooks with lots of convenience. Amazon deserves a ton of credit for wireless downloads – that is one of the main reasons (along with things like creating a closed ecosystem and creating a reading focused device) that helped make it VERY convenient for readers to PAY for books.
  2. You can get pirated ebooks relatively easily.
  3. Most People are aware of the first but not of the second. In particular, they are not aware that they could choose to NEVER pay for an ebook again.

If you think this is nonsense consider one of the main selling points of the Kindle – No Computer Required.

Consider the type of questions you find on Amazon and B&N forums.

We are talking about people who are not tech-savvy being transitioned from paper books to ‘closed ecosystems with paid ebooks’ who never got touched by the ideavirus of free on the Internet.

There are three major barriers that prevent these users from joining the ‘free music’ and ‘free software’ crowd -

  1. Some of them just don’t know the option exists.
  2. Some of them can’t negotiate the technological hurdle of understanding computers and technology to strip DRM or locate free ebooks.
  3. Some of them can’t negotiate the effort barrier of searching for a reliable site for free ebooks.

These are major hurdles. To someone who is tech-savvy and knows that free ebooks are available online they seem very, very trivial. However, they are huge. The first is insurmountable – How can a reader switch to pirated ebooks if the user doesn’t know they exist? The 2nd and 3rd are nearly as big as the first for lots of people.

That brings us to the next question – How long can this situation last?

For how long will Readers be unaware that Pirated eBooks exist and they never have to pay for Books again?

It might last a long time.

We have the Internet being replaced by closed gardens. Apple and Amazon are creating large ones. B&N and Kobo and Sony and other companies are creating small ones.

In each case, it hurts the Ecosystem owner to create a culture of free (except Android and Facebook because they are just gathering up cattle and sheep) and thus they promote Paid. So users who are in these ecosystems are safe for a very long time.

That means that a relatively large percentage of people who are in ‘Ecosystems of Good Intent’ are SAFE. They are NEVER going to realize they can get everything for free. If my contention is correct, then it would mean that Google Books sells very little and Amazon and Apple and B&N sells a lot. That even with 1 million devices activated a day Android sells less ebooks than B&N with its 10,000 to 30,000 devices and reading apps activated a day. That Google sells far less than Amazon with its 30,000 to 100,000 devices and reading apps activated a day.

This creation of ‘Ecosystems of Good Content’ is critical. People who criticize closed ecosystems don’t realize the things that closed ecosystems enable (saving authors and actors and developers from starvation, for one)

Once Readers realize ‘Free Anything’ is available, will they be willing to pay for books?

That depends on what sort of world we live in, and what the barriers to ‘free everything’ are.

Do we live in a world where -

  1. People always try to ‘do the right thing’ and pay for content they get.
  2. People always try to get content and things for free.
  3. People evaluate the value of content and then pay if they feel the price is fair.
  4. People choose ‘free’ if it isn’t too much work.
  5. People choose ‘free’ if there is no legal risk.
  6. People are a mix of the above types of people.

My contention would be that it’s the last. That we have people who will pay if the price is fair, people who will pay because it’s the right thing to do, people who will pay if it’s too much work to get free, people who will pay if there is a legal risk to piracy, and people who want free everything.

So, for the gradually increasing number of readers who are realizing that ‘free everything’ is a possibility, the New and Old Gatekeepers have to put in barriers -

  1. Make it hard to get ‘free everything’.
  2. Make the value proposition fair. This is the reason Amazon pushed for $9.99. If eBooks are at hardcover prices it makes it ‘morally acceptable’ for readers to pirate. The ‘unfair’ price makes it justified to pirate indiscriminately.
  3. Make it a legal risk to pirate. This is why removing DRM is illegal. This is why Publishers and Gatekeepers still have DRM. Not because they want to kill good users, but because they don’t want to make it too easy for the 25% to 50% of users who are convenience-driven to pirate.
  4. Make it ‘too much work’ to pirate. You see this in how different devices treat sideloaded content. It’s given second class citizenship for a reason.
  5. Make it ‘more convenient’ to use paid ebooks. This is why you see features like cloud syncing and highlight syncing etc. This is why you see 60 second downloads and features like X-Ray.
  6. Make it ‘cost more in terms of time’ to get free books. This is why you see Amazon go after free ebooks with a vengeance. Not by stopping them but by overwhelming readers with low quality ebooks. So searching for ‘good’ free ebooks is too costly in terms of time and effort.

The Gatekeepers are very busy creating barriers that make it easier and more convenient and safer for readers to BUY their ebooks.

It’s ALL about Convenience and Costs

Readers value convenience and cost -

  1. Time. The time needed to find what they want. The time they will invest in reading. The bang for buck they get on their time.
  2. Money. The cost. Is it fair?
  3. Effort. How much mental thinking and effort they will have to do to get a book.
  4. Ease. How easy it is.
  5. Instant Gratification. How ‘quickly’ can they get the satisfaction?
  6. No Big Risks. No viruses. No legal issues. No malware.
  7. A Lack of Friction. No awkward websites. No awkward searches. No formatting and format issues. No conversion and DRM stripping steps.

If someone were to make getting pirated ebooks really, really easy and safe – then a huge chunk of the readers who realize pirated ebooks are available would take that option.

You can be idealistic and pretend that 90% of readers would choose to ‘do the right thing’. However, it’s clear from what we see IN REAL LIFE in movies and music and software and games that this does not happen. If people get the chance to pirate safely and easily, then a very large portion of them do pirate.

Would you rather pay $100 for books every month or buy a present for your kid/spouse/mother/yourself? What if everyone else was pirating? What if it were socially acceptable and cool to pirate?

There are just two things keeping the Books Industry safe right now – a lack of knowledge amongst readers and a lack of convenience in getting pirated ebooks.

The eBook Cat is well and truly out of the bag. We have the Internet. We have eReaders and Tablets in people’s hands. The control is GONE. The Gatekeepers don’t have Gates any more – except those in our minds left over from a past era.

What’s saving the whole industry is that huge portions of readers either don’t know they can get any book they want in pirated form, or they have to put in too much effort and time to get those pirated books.

If one or both of these barriers are removed, then we will find out whether readers have some magical qualities that enable them to resist the charms of piracy. Let’s hope it doesn’t come to that because Reality tends to win all arguments it has with Idealism.

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