Posts Tagged ‘mufflers’

I’m Not Going to Pay A Lot For That Content!!!!

Friday, May 22nd, 2009

Steve Shannon
316929914_238392ea55_m.jpgThe headline of this post paraphrases the great boxer and pitchman George Foreman. Before he got into the grilling business, George “wasn’t going to pay a lot for a muffler.”

Apparently, he and countless others don’t want to pay a lot for the electronic editions of books either. Motoko Rich of The New York Times writes, in this article, that customers of Amazon have balked at paying $15 for the electronic edition of David Baldacci’s newest novel “First Family.” Most e-editions for Amazon’s Kindle reader are priced at $9.99, while the average hardcover book has a cover price of $26.

The argument advanced by these consumers: the costs of paper, printing, and distribution are out of the equation and the price of the electronic edition should reflect it. Sounds right to me. But Rich reports that such expenses generally run 12.5 percent of a hardcover’s average retail price. If that is the case, then $3.25 should cover those costs.

Continuing to follow the logic advanced by the consumers, an e-book should then have an average retail price of $22.75, not $15 or even $9.99. What’s going on here? It turns out that Amazon is likely subsidizing the books – paying publishers $13 for each $9.99 book it sells. Thirteen dollars is the same price Amazon also pays publishers for a hardcover version. The subsidy from Amazon probably encourages adoption of its Kindle reader, which then makes the owner beholden to Amazon for their e-book purchases.

Who’s right?  Publishers? Retailers? Consumers?  Who knows, but that’s the beauty of capitalism.

More importantly, for those of us in PR, what does it mean for the news media, which faces a similar conundrum in the pricing, revenues, and profits of the print versus electronic realms? Personally, I think it means that publishers and news consumers will both have to give a bit to continue to create, sell or receive quality news.  For news publishers, it means finding a way to charge for content they’ve so far given away for free on the web. New consumers will have to acknowledge and pay for the quality of that content with their wallets, their demographic info and/or consuming advertising, along with the editorial. Much like the book publishing example above, the market will take a while to find its equilibrium, but find it, it will.

My bet is that we’ll see a plethora of free and paid news (and topic) sites, and perhaps hybrids of both. My other bet: paid audience will be prized by PR professionals and marketers. That is where the ever-desired “influentials” will reside, as quality content for news (or any topic) will likely be monetized rather than free.

One thing you can be sure of, no matter what models news media sites end up with, BurrellesLuce will be there to monitor them.