Dynamically Priced Content
Hello, friend. I feel a bit embarrassed – you’ve walked into the middle of a conversation here. No, please don’t go. It would mean a lot to me if you stayed and participated. I’m eager to hear what you think.
However, before you do that, there’s a lot of backstory that you should probably wade through. I’m not trying to give you homework or anything – all I’m suggesting is that you’ll understand this post a little better if you read this, this, and this first. If you don’t want to, that’s okay. But don’t say I didn’t warm you.
And now, without further ado, I need to reply to Levi Montgomery:
Okay, let’s narrow this back down to novels and digital fiction again, since that’s where this whole debate started before we escalated it away from the point.
I don’t know that I’ve done the best job I can to describe how digital text pricing should be levied, so I’m going to take another crack at it.
To start, let’s assemble a ballpark cost involved with being a writer. We can take as a given that to survive as a professional writer, one must have an income from that writing. This number varies depending on where you live and what other help you have, but let’s take 40,000 dollars a year as a target number. That seems like a pretty fair income for one person who gets to do what they love for a living. I don’t mean to suggest that this is what all writers should make, and I don’t want to get too caught up debating that number, but it gives us a ballpark figure to start working with the math.
Now, let’s talk workload and resources. Take a writer that writes 2,000 words a day, which is what Stephen King does (according to his writing memoir).Levi, I’ve seen your twitter reports about your daily writing – sometimes you write more, sometimes less, but I feel like 2,000 words a day is a reachable goal if writing is a full-time job. At 2,000 words a day, I’ll finish the first draft of a 100,000 word novel in 50 days. Now, that’s pretty fast, and it doesn’t allow for any rewrites, cover design, digital posting, breaks, or anything like that, so let’s double that figure and say that an industrious writer working every day can finish a novel and get it out there every 100 days. Since there are 365 days in the year, that puts a good writer’s output at about three novels a year, with some time in there for vacations and extra editing, if needed.
If I know that I can publish to the internet, in digital form, three novels a year if I’m working full time at being a writer, that gives me some data to start thinking about pricing. I know that in order to write full time I need to make 40,000 dollars a year. I have 3 novels with which to make that money. Since we’re talking about digital releases, the only costs involved for me are time. Writing, layout, design, editing, and distribution are all time costs, not resource costs.
In order to make my living, I have to sell:
at least 4 units for 10,000 USD or
at least 40 units for 1,000 USD or
at least 400 units for 100 USD or
at least 4,000 units for 10 USD or
at least 40,000 units for 1 USD
Keep in mind, this is total copies, so if I have repeat readers who might buy all 3 releases in a year, or any back releases, hitting those figures gets easier.
Now, just to give us some data, let’s pretend that the combined downloads of my current work through all online sources (that I can track) in the last year were actually sales. 2000 on scribed, 2000 via bit torrent, 100 from my site, 1200 on feedbooks. Let’s pretend that it was 5300 sales that I made in the last year.
Dividing that out, I would have needed to price my books at about 7.5 USD per unit to have made my target income for last year and support myself as a writer. Of course, my downloads weren’t actually sales. I’m using those numbers as what I have to start doing some math, not to say that I could really push that many units a year. My stuff isn’t good enough for that, and the resources I need (storefront and so on) aren’t available yet. Not to mention all the hassle of getting a bigger audience, piracy losses, and all that stuff. Those issues relate, and I know people will be upset if I just dismiss them without addressing them, but I’m going to do that, at least for now. We’re just talking here, after all. I’m trying not to get sidetracked.
So, anyway, my numbers are 7.5 USD for 5300 units so I can make my 40,000 USD and continue to write. I can afford to price them at whatever I can afford to make my living, since there is no physical production cost floor. As long as I can hit my 40,000 dollars a year, I can price them at whatever I want.
Now, say that next year is even better than this one – say that I’ve got some great content coming out and I’ve been building my name – I expect 10,000 downloads in the next year. If that’s the case, in order to maintain my target income, I only need to price my books at 4 USD per copy. Now I can offer the same thing for cheaper while still maintaining my lifestyle. Everyone wins. (It seems like there is a “devaluing” fiction conversation a lot of people are having lately that would fit in here, if I was going to try to fit it in.)
If for some reason I had a banner month, a crazy month where I got all 10,000 sales in one month at the beginning of the year, then I can now afford to price my stuff for free for the rest of the year.
I understand some planning is needed for something like this – projections, that sort of thing, but it’s worthwhile for me to do it if I feel like I can get more work to more people. As long as I can feel somewhat comfortable with the numbers, it would be great to be able to plan a little, too.
I’m sure that if I was a Google-level engineer I could figure out some pricing system and website module that dynamically priced content on my website based on how many sales I’d made and how many I needed to make to hit my goals of remaining a professional writer. Some awesome and wonky math that priced different novels at different prices to maintain their sales rank, all while lowering or raising prices as I needed to maintain my income, yet still offering my work as close to free as possible. Even not being a Google-level engineer, I’ve taken a crack at it to see if I could figure it out.
But the real point of the thing is that I’m not trying to steal work from people. I don’t advocate that. I just advocate only taking what you need. I have a copy of your novella on my hard drive right now, Levi, a copy you gave me for free so I could review it. I wouldn’t dream of releasing that work without your consent, no matter what I think you should do with it. It’s not my place to decide what you should do with your work. I can judge you or not judge you, but my judgment is not allowed to turn into action you don’t condone.
I don’t see pirates as Robin Hoods on some moral high-ground quest. The group is too diverse to lump all together. You’ve got your competitors who do it for the name, the people who just want stuff for free, your revolution folks, and people who just can’t afford content otherwise. They don’t all go together, even through their actions are all the same. And they aren’t Robin Hood.
But I also don’t see corporations pricing their content to only take what they need, either. So, I’ll happily condemn them both. I believe in working things out from the bottom and trying to come up with numbers to support it. If corporations need to price their books at 10 bucks a pop to stay in business and pay their employees and writers an acceptable wage, then fine. But right now I don’t believe it and until I see some numbers, I’ll continue to not believe it.
But I don’t think that I have the right to take from people what they aren’t willing to give away, either. However, I see that it is a moral obligation for people to price things fairly, based on maintaining the ability to release more. That’s a personal choice, I get that, so I will happily call out the guy who has the cure for cancer and is selling it for 10,000 bucks a pop, even though his costs are only 5 bucks a pop. That guy is a jackass, and deserves to be lampooned and made a public spectacle. But beyond that, I wouldn’t steal it from him. I’d try to shame him into doing the right thing. Failing that, I’d try to get some laws changed, since laws are supposed to be there to aid the common good, even if they routinely fail short of that lofty goal.
For me, right now, that means I can release what I can for free, even though I have to spend the majority of my time at a day job. That day job severely limits the amount of time I have to produce content and release it. However, that job also provides me with an income, so I can afford to release my content for free. It’s a trade off that I’m willing to make right now. Maybe later, when I’m ready to try writing full time, I’ll have to charge. But I know that I’ll do my best to keep my prices as low as I can afford and still be professional.
I hope that makes sense.
Tags: digital content, due compensation, dynamically priced content, ebooks, fiction, google, levi montgomery, piracy, stealing, writing for a living
February 4th, 2010 at 10:43 pm
Several things trouble me about your take on this debate. The first is your total lack of understanding with regard to capitalism and market forces. During this extended discourse several others have tried to briefly explain the basics to you but you still don’t seem to get it. The short version is that market forces tend to drive prices down to affordable levels. Your objections don’t really fit into this discussion because your objection to pricing is more about Marxism than it is about intellectual property. You don’t think people should be allowed to make more money than you deem appropriate. Fortunately in this country I get to decide for myself how much money I want to make, and I don’t need to get your approval.
The second (which relates to the first) is your failure to respect personal freedom in this equation. By your own words:
“For me, right now, that means I can release what I can for free, even though I have to spend the majority of my time at a day job. That day job severely limits the amount of time I have to produce content and release it. However, that job also provides me with an income, so I can afford to release my content for free.”
Exactly; for you! You get to make these decisions about your writing and the value it has to you. I’m with you on this one; if someone wants to read the crap I write then I am more than happy to share it with them. I have a job that pays me quite well, I write because I have to write to stay sane. If one or two people enjoy my work, that is a bonus. The thing is, that is what you and I choose. We do not get to choose for Levi or anyone else for that matter.
To frame this in a completely different way I offer this:
There is a guy named Luke and works some bullshit job for minimum wage. Now Luke is a smart guy and he works hard at his job. One day Luke figures out a way that the company he works for can save a shit load of money and reduce the company’s carbon footprint. Luke is so excited that he tells his co-worker, Levi, all about this great idea one day at lunch. Luke goes home that weekend and writes the whole thing down in a nice memo to the boss. Monday morning as Luke is waiting for the morning meeting to be over so he can submit his memo; the boss announces a great new program the company is launching. This program will save the company a shit lad of money and is environmentally friendly to boot. The boss goes on to say that Levi will be promoted and get a fat ass raise because the whole thing was his idea. Fortunately for Levi, Luke is the kind of guy who just wanted to be efficient and help stop global warming.
Ideas have value and depriving another person of their value is theft. You might be okay with people stealing from you but I have a problem with it. Since we do not live in a fascist dictatorship or a Marxist utopia; I get to choose what value of my ideas and creations. The market may or may not validate my assessment but the initial determination is mine.
February 5th, 2010 at 7:17 am
Hey, Steven, how come I have to be the bad guy? No fair!
Seriously, though, I have no problem with any scheme for the dynamic pricing of content, or with the creator giving it away for free, or whatever. The only problem I saw, and the only thing I was responding to, was the attack on property rights inherent in the statement that profits must be fair or reasonable.
It may seem unfair to hijack these various threads and try to turn them into political venues, but the concept of property rights is crucial to the existence of civilization. I believe we probably invented language to settle property disputes.
“Grok, that MY bone-crushing-to-get-marrow-out rock!”
“Not! You put down!”
“Me not care! Still MY rock!”
It is true, of course, that poverty is inextricably bound up in the concept of property rights, and that any society which allows its citizens to own property is a society with poverty. If “The Gods Must be Crazy” teaches us anything, it is that property is a grave responsibility.
But rule number one, life’s Standing Order Number One, is “Always identify the problem.” The problem here is not that some people have something (in this case, writers have intellectual properties), while others do not. As long as two people are still alive and breathing, there will be disparities in property. The problem arises whenever anyone, ANYONE, anywhere, attempts to tell another person what he can or cannot do with his property. This is an attack on property rights, and that makes it an attack on the most basic foundation of civilization.
You DO have the right to give your work away free. You DO have the right to set up any kind of sliding scale or dynamic pricing you see fit. You DO have the right to make one, hand-made copy and sell it for ten billion dollars. You DO have the right to write as much as you see fit, or as little, or to not write at all. Do you really want to live in a society that denies you any or all of these rights?
Whether any of these things (or any other things that you have the right to do) is moral or ethical is not an issue, you have the right. You have the right to let your neighbor’s dog starve to death in his own back yard because the neighbor went to Grandma’s house and got snowed in. Is it moral? Of course not. Let the dog starve, and every single person you know will condemn you for it, but you do have the right to do it.
If I wrote a novel, and then deleted it unpublished, undistributed, unread by any eyes except mine, no one would say I had no right to do that. They might say it was unfair, or that I was crazy, or any one of a number of other more-or-less irrelevant responses, but I don’t think anyone would seriously assert that I had no right.
If I sell the one and only copy of the same novel to you for ten billion dollars, I have the right to do that, even if it seems unfair to the other six billion people on Earth.
I hate go back in the direction of Marxism vs capitalism again, but at its root, that’s what this discussion is about. A society that says writers can’t make “unreasonable” profits from the distribution of their property is one short, muddy slope away from a society that says no one can profit “unreasonably” from the distribution of any kind of property at all.
February 5th, 2010 at 11:29 am
Steven,
I want address several of the points you raise.
First, you mention that there is an overzealous emphasis in my responses on and from my personal perspective. You’d be correct about that and you’re not the first to mention it to me. However, I submit, by way of explanation, that we all see the world through our own eyes. There’s no other way to do it until I can download myself into your head. I can’t do that right now. Surely, I can imagine the perspective from your shoes, but I can’t be in your shoes. I can only interpret through the only lens I have, which is my own – apply the things I’ve read and the things I’ve seen. So if there is a personal bent that I am less than adept at covering in my prose, that’s unfortunate, if only because it undermines my voice. I should probably look into my writing style to figure out how to fix that.
Second, you mention that I have no understanding of capitalism and market forces. You are correct there, also. I have no formal education about these things. I’ve only read, watched, and responded to my environment. I only know what I see. I know that it sucks hard to want something and not be able to afford it, especially when that’s something like information. I know that my education cost me more money than I could afford, which went against the message of my education: knowledge should be freely available because it is essential to human endeavor. I have a hard time reconciling that disconnect, the fact that I had to pay thousands of dollars to be told I shouldn’t have to pay thousands of dollars. I know that my parents work for a living, and work too hard. I know that my sister is a waitress who can’t afford to go to school because tuition costs so much that she can’t pay it. I know that keeping people stupid has benefits to smart people trying to sell things to stupid people. I know that it doesn’t cost anything to distribute digital work on the internet. I know that as long as the cost of education is so high (and it’s getting higher every day), that there will be many people who cannot afford it and won’t know how to reach for something better. That’s what I know. What I know is separate from what I believe.
What I believe is that information should be free, or as free as possible, because people will not improve themselves or improve things for others if they don’t have the skills and knowledge to do that. I believe that withholding information from people that might improve their lives is wrong, because it keeps them too stupid to know how to help themselves. I don’t believe that information is property.
However, at the end of the day, my voice isn’t the only one that matters. I don’t think that people have to listen to me like I’m some guru. I want people to think for themselves, and learn as much as they can in order to do that. I’m not trying to steal other people’s ideas or content. I’m trying to influence them to think about another way.
But that’s tit for tat. So, you say that I don’t understand anything about market forces or how capitalism really works. You say that people have tried to give me a basic understanding and that I haven’t listened. I don’t know what you’re talking about. All people have done is tell me I don’t know about capitalism and called me a communist, which doesn’t help anybody. If anything, pointing out perceived flaws without offering solutions will only cement me in my position.
So, Steven, if you know about capitalism and how the market works: teach me. I’m willing to learn. Give me a list of books to read and I’ll trot down to the local library and read them. Write a post explaining the basic concepts on your site or guest post on mine. I’ll host it. I’m happy to do that, because if I truly don’t know anything, then I want to correct that.
Educate me, Steven. I’ll listen. If my lack of knowledge is the problem here, then help me fix it.