Free? Really?

I like to think I'm a pretty easy-going guy. I don't usually get mad at too many things, and try to take a reasoned, fact-based approach to issues. But I have to admit, nothing gets my blood boiling quite like the debate over pricing of digital content.

In all my years in the publishing business, I've never been asked to set the price a customer pays for content, and that's probably a good thing. Having spent most of my career in the "back office" doing production work, the opportunity just never arose. But I do have some thoughts. Oh boy, do I have some thoughts.

Now before I get too far into this, let me admit my bias. I love the publishing industry, and I think what we do has tremendous value. So in the absence of a compelling argument, I am pretty much always going to come down on the side of publishers. Think Dr. Evil saying "one million dollars."

OK, so here is my gripe. How would you feel if someone basically said that what you do for a living has no value? Am I being paranoid, or as someone who has spent the bulk of his career enabling the creation of digital content, isn't that how you would take it when someone says: "Digital content should be free"?

It's the use of the word "free" that really gets me. Actually, it's more *how* the word is used. People really don't mean that digital content is free to produce, they mean that digital copies-meaning copies 2 through infinity-are essentially free. But the reality is that the costs of producing the first digital edition of any content set are roughly equal to the costs of creating a print edition. A subtle difference, to be sure, but an important one.

Again, the focus of this point is on how the concept of free is tossed about. Because there is a misconception out there that digital is free, publishers are accused of all sorts of nefarious things because they have the audacity to try to recoup these costs by charging money for digital content. If you are under the impression that the creation costs for that content are free, I could see why you might have a problem. But those costs are not free. Not even close.

Let's assume for a moment that all publishers were doing it the "right" way and producing multiple derivative products from the same source XML files (calm down, we're not there yet, but we're trying). Even in that scenario, the costs of production of the digital editions are borne somewhere. Today, even though print sales are in decline over nearly every sector of publishing, the print is still held up as the thing that should "pay the bills" while publishers rake in endless amounts of cash from their digital offerings, which cost nothing to produce, right? (There should be a special font for catty sarcasm, don't you think?)

Seriously, even if the above scenario were true, how sustainable is that? Now I get all the talk about "disruption" and all those fancy terms that basically mean the industry is changing. I'm down with that. I truly am. I also get that our industry must evolve, learn lessons from the music industry, and respond to customer pressures. But that's not the same thing as saying: "All digital content is free. Publishers should charge accordingly." As always, facts are important, especially in a debate like this.

And getting those right facts start with the basic understanding of reality, including the realization of the true costs of digital.

I could run down an apples-to-apples comparison of the costs of producing a print product versus the costs for producing a digital product, but I think we can all agree that "manuscript prep," for lack of a better term, is basically the same for both, if you want to produce quality content. Let's assume that you have final content, ready to be published in some format. This is where the argument of "digital is free" rears its ugly head, and where I say: "Digital is not free, at least not the first version."

Obviously, printed books have a fixed cost per unit produced (PP&B) that a digital edition doesn't have. But this assumption that digital is free leaves out a ton of things. Development of electronic product is becoming more savvy along with the usability desires of our audience. Servers cost money. People that wear beepers that keep those servers up and running draw salaries. There are all kinds of costs associated with digital that, true, can be spread out over multiple products that are essentially copies of other products, but the math just doesn't work when you start from the baseline that digital is free.

Are we getting there? Yes. But not fast enough to justify what I think is an irrationality when discussing pricing, and an assumption that publishers are out of line for charging a reasonable price for digital offerings.

But even if publishers were trying to benefit from getting something from nothing, the industry is certainly not unique. Bought any "Off the Shelf" software recently? Did you pay any less to see "Avatar" because the theater was crowded? And how about that gym membership? (And where is that catty sarcastic font when I need it?)

Additionally, don't get me started on the insurance industry, which gets the prize for taking this one step further (aggressively protecting the money they previously collected from you by, some would say, questionable tactics).

So before we indict my peeps in the publishing industry for their pricing tactics, let's get all the facts. And who knows? The job you save with your fact-based argument could be mine.