How do you handle unrealistic expectations about ebook prices and features?

The Kindle and the Nook provide some features that are pretty cool -

  1. A store that is open all the time.
  2. Family members can read the same book at the same time – off of just 1 book purchase. You can read a book across your devices. 
  3. You can carry lots of books in your eReader.
  4. You can search through books quickly.
  5. Kindle and Nook remember your place in a book.

They also miss out on some features of physical books -

  1. You can’t resell books. 
  2. There’s nothing physical to hold, and to take ownership of. 
  3. There are some limitations around how you can read your books i.e. you can only read them on the eReader and reading apps of the company you bought your books from. 
  4. Lending is super limited.
  5. You can’t decorate shelves with books.
  6. Lots of other things like not being able to impress people with what you’re reading.

All in all it’s not a bad trade-off. A few of the negatives of ebooks have to do with them not being physical – there isn’t really anything that can be done about that.

Things get better with eBooks

Of course, an even exchange wouldn’t work. So you start getting some advantages that are hard for physical books to match -

  1. Free public domain books.
  2. Significantly lower book prices for a subset of books.
  3. Changeable font sizes.
  4. Text to Speech.
  5. 60 second book downloads.

At that point, for reasonable customers, the argument is won. eBooks provide more value for money, and are worth the switch.

In a perfect world we’d have a smooth transition and everyone would be happy.

An imperfect world where everyone wants to have their cake and eat it too

As opposed to a perfect publishing world, where -

  1. Publishers would optimize and start making more from $5 to $10 ebooks than from $15 hardcovers.
  2. Publishers would recognize that lower prices and increased convenience would increase sales.
  3. Readers would appreciate getting $5 to $10 ebooks.
  4. Readers would realize that the disadvantages are balanced by advantages.
  5. Readers would accept that they can’t have their cake (cheaper ebooks) and also eat it (re-sell and lend books).

We live in an imperfect world.

Because we don’t have set precedents, you could take whatever prices and rules you think benefit you the most, and claim those are the appropriate ones. We all know what Publishers have been doing. However, it’s time to turn the spotlight on ourselves.

No one wants to admit that readers, or to be more precise a large portion of readers, are being just as greedy and selfish as Publishers.

Readers being greedy

There are a lot of aspects to this -

  1. Readers want all the benefits of ebooks, especially low prices, while also asking for all the benefits of physical books, especially lending and reselling. This is just economically unfeasible.
  2. Readers are assuming completely unreasonable things about book pricing. In particular, readers who think ebooks should be $1 or $2 are just as unreasonable as Publishers who think ebooks should be $15 or $20.
  3. Readers are using irrational justifications for behavior that’s questionable – it’s OK to strip DRM, it’s OK to extend library loans, it’s OK to exploit the Kindle’s family sharing feature. Basically, anything that benefits readers always has some ‘justification’.
  4. Readers aren’t being thankful for some pretty cool features – No one ever mentions how getting FREE text to speech on a lot of books is a really, really cool feature. Or that getting the equivalent of large font books for free is an amazing feature. Yet, you don’t add lending and they’re screaming bloody murder.
  5. Readers aren’t taking the long-term view. Should readers be supporting companies that are in it for the short-term? Should readers be fighting DRM when there is a subset of users who will stop paying without DRM? Should readers ask for lending and reselling rights when they are already getting incredible value for money?

Of course, you’re never allowed to point this out. These are the inconvenient truths you’re supposed to ignore because every single user is pure and always right.

Are we supposed to deny human nature?

First, consider the arguments from people who want reselling and lending for books -

We could sell and lend physical books. Why can’t we do the same for ebooks?

90% of the cost is printing. Books should be $1 and $2.

What’s going on here? Do readers honestly believe that printing and shipping accounts for 80% to 90% of the costs?

This is a subset of readers that is rationalizing things to get what they want.

If they are given what they want, two things will happen -

  1.  $1 and $2 books will become the norm and it’ll become almost impossible for authors to make a living.
  2.  These people will further rationalize, and will start demanding $0 books. This is the part that we’re ignoring.

Customers who think books should be $1 and $2 are just bad, bad customers. Note that we’re only talking about it from a business perspective – they might very well be the best thing since sliced bread from some other perspective. However, from the perspective of a company selling books, they are customers to avoid.

Second, think of the removal of DRM as just a precursor to the scenario above.

If you remove DRM, you get all these $1 and $2 people saying -

We think books should be $1 and $2.

Books are $10 – that’s just wrong. We’ll set things right by getting these books for free from people who’ve bought them.

We thinks books should be re-sellable and lendable. We’ll set things right by sharing freely.

DRM is the only thing saving authors and publishers and retailers from the self-interest of customers of bad intent.

The percentage of bad customers is higher than what people assume

It’s easy to rationalize that just 5% of customers are bad – That 95% won’t misuse their power.

If DRM is removed, or other loopholes are put into the system, you can be sure that at least 25% of Kindle and Nook owners will start mis-using the system. We’re seeing it already with 10 different start-ups turning the Kindle’s lend-once feature into a sort of global exchange. Can you imagine what would happen at these sites if DRM were removed?

Let’s say 25% of people stop paying for their purchases. Add on the people who currently pirate. Add on people who do things like loan out library ebooks, strip off the DRM, and extend the loan period indefinitely.

These are all lost sales. These lost sales result in a higher burden on the 75% of customers who are actually paying for ebooks. It also means there’s a huge divide and a lot of temptation. Should the good Kindle owners pay MORE than they used to, just so they can make up for the freeloaders? Why don’t they just join the side of the freeloaders?

Amusingly, the freeloaders don’t just get free books – they get moral superiority. They get to chant about the evils of DRM, and about how they are fighting a holy war. It’s one heck of a beautiful argument to hide the stealing they are doing.

The Solution is Very Contrarian

The only solution to unrealistic expectations is to cut out bad customers. There is no place for customers of bad intent.

Removing DRM is not a solution. Competition might result in books without DRM, but that would just kill authors. The truth is that ebooks are currently offering pretty good value for money. An ebook in the $5 to $10 range is actually impressive value for money.

90% of the customers who have unrealistic expectations, who think $5 or $10 isn’t a low enough price for an ebook, are ALWAYS going to have unrealistic expectations. If you give them an inch, they will take a yard – they will end up paying you nothing.

There’s no point in making it convenient for them to take advantage of authors and customers of good intent.

You can’t change customer attitudes

Consider the lists at the top of the post.

  • Physical book advantages – reselling, lending, something physical, decorating, signalling, sturdiness, etc.
  • Electronic book advantages – family reading, portability, free public domain books, search, text to speech, lower prices, changeable font sizes, etc.

That’s a list that balances out – even without lower prices, it balances out.

So when you get someone complaining, you can tell their attitude from the nature of their complaint -

  1. This $15 physical book is $20 in ebook format – Very justified.
  2. This $15 physical book is $15 in ebook format – Justified. 
  3. This $15 physical book is $10 in ebook format, and that’s $5 too much – Unjustified.
  4. This $15 physical book is $5 in ebook format, and that’s $4 too much – Very Unjustified.

People who are complaining despite saving money with the ebook format are just customers of bad intent. Conversely, people who are content as long as ebooks are cheaper or the same price as the print format are customers of good intent.

The former (3. and 4.) will NEVER be happy. They will keep coming up with arguments because they want something that is tilted in their favor, rather than a win-win situation. They will not be happy until they get books for free, and even then they will want authors and publishers to thank them for buying those $0 books.

Those are the people who make DRM necessary.

Does DRM inconvenience customers of good intent?

Yes. However, a far bigger inconvenience would be book prices going up 25% to 50% because customers of bad intent use the absence of DRM to stop paying for books completely.

What about people who believe DRM is evil?

They’re just being unrealistic.

There’s nothing evil or good about a system meant to police an ecosystem. It is just a way to ensure that creators and customers of good intent aren’t taken advantage of.

Evil and Good are mostly terms used to fool people. When there are no rational arguments, people turn to vague concepts like good or evil.

Consider a customer of bad intent who wants to pay for books only after reading them, and thinks he should pay only for books he likes. For him, DRM is evil. Well, what about the author whose work is protected because of DRM?

Power Corrupts, and if readers take over we’ll see it first hand

If readers get ultimate power, and at the moment it looks like they will, we’ll see that readers can be even crueller than Publishers.

Consider this hypothetical scenario -

  1. Readers get DRM revoked.
  2. The 30% of customers of bad intent stop paying for books.
  3. Authors can’t sustain themselves on the 70% of remaining customers.
  4. The 70% figure keeps going down as customers of bad intent aren’t just content to steal – They also want to seem like the good guys. Which means they spend a bunch of effort trying to convince customers of good intent that stealing is the right thing to do.
  5. Some customers of good intent buy the elaborate arguments. Suddenly, authors are left with 50% of the market they had.

DRM is Evil. We remove it and make the world a better place. Except for authors – who now have only half the paying customers they used to.

This argument won’t make sense to people who assume everyone is honest like they are, and it won’t make sense to people who hate DRM for what it is, as opposed to for what it makes possible.

If DRM goes, customers with unrealistic expectations will destroy the book market

You would literally be letting readers set ebook prices.

If you do that, customers of bad intent pay zero. Customers of good intent pay less – It’s always easy to rationalize that $1 less isn’t going to make a difference. Before you know it, there is no book market because people are paying either $0 or $1 for books. Everyone is assuming that the 1 million other people getting the book must be paying a more reasonable amount like $7, and that their stealing won’t really matter in the grand scheme of things.

B&N and Amazon are shooting themselves in the foot with their lending feature. eBooks were perfect without lending and without reselling. Then one stupid decision and B&N adds the feature – then Amazon has to match it. It’s given customers of bad intent just the opening they wanted.

It’s hard to imagine any company would be stupid enough to remove DRM from books. If it does happen, we will, rather unfortunately, find out just how ruthless the unrestrained crowd of customers can be.

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