The Problem

Digital works, completely divorced from a physical medium and transferable between devices, now lack one of the key ways we’ve given value to these cultural products in the past: their physical size.

Another problem: in a hypothetical future where all music and books are available solely as digital downloads (and I hope that day never comes), and when all these files are available for free through the Pirate Bay’s successors (inevitable, I think), then how are artists to make money?

Factors of Price

We’re willing to pay more for a bigger house, a bigger car, a bigger book – maybe a hardback. But when the difference between two editions of a novel is that one is a 300 page paperback and other other is a 128kb download, shall we just price them the same?

After all, they’re worth the same in terms of cultural value and reading length, but consumers have often voiced their opinion that this just wouldn’t make sense to them. There is almost the feeling that ebook pricing is arbitrary, and that the cheaper you make them, the more you’ll sell – and why not sell for the cheapest rate to maximise sales and therefore profit? But of course it’s not that simple.

We’re going to have to come up with new ways of assigning value to creative products, and at the same time new business models for authors and artists.

So what factors can we use to differentiate products? Here are a few for starters:

• Length of product (in minutes or words);
• Popularity of author;
• Quality of product (justified by how well it was reviewed?);
• Personal preferences (judged through previous purchases and insidious ad-ware data?);
• Special features (1^st edition, extra video, notes, interviews attached);
• Price of similar products from competitors.

If you can think of any others do share them in the comments.

Part of the problem is that all of these are subjective – they define the value of the product to you, and you alone.

In this scenario, no one would pay more than they think something is worth to them, because Pirate Bay and its successors would offer it for free. These two factors – subjective value and free availability – mean we are looking at people volunteering their own prices. Humble Indie Bundle are two well-known attempts at this.

Counter-argument

But you might say: “if everyone else is getting it for free, why should I pay?”. Two reasons: it will still be illegal to infringe copyright, and it will always be in your interest to keep your favourite artists in business. Arguably, the amount you are willing to pay is directly proportional to the current and expected future value you will get out of it. Those people getting it for free remain criminals, and almost certainly won’t be getting the same value as you do from buying stuff by your favourite band/author/artist.

Another factor which divorces payment from the physical object is the inability to re-sell digital works. No one will pay me for my ‘second-hand’ digital copy of a Dan Brown novel, because it makes no sense. And Brown’s fans will surely want to be paying him directly, rather than me, for their copy of the ebook.

So in a digital world, with the death of the second hand market, all legal purchases will come directly from the artist (or gatekeeper like Amazon). Consumers will pay according to the value they get, not the cost of the physical object, and those who continue to pirate will remain illegal. Any fans who pirate from those artists they truly care about will risk not only biting the hand that feeds them, but devouring the arm, torso and whole body of those who create the art which brings them joy.

This is only an initial exploration of a possible business model in an all-digital world, but it’s a start in a world we’ll all have to deal with.