Only Branding Can Save the ebook Industry
by Jay Garmon
A solid brand is the only way anyone is going to make sustainable money, long term, directly from e-book sales. This is not to say that e-books will sell in the same numbers, or for the same prices, as physical books. This is also not to say that e-book publishing houses are going to look anything like physical book publishing houses. This is simply an argument that the only value that the consumer is going to consistently place on an e-book is its brand value.
To back up this claim, let’s start by defining “brand” and “value.”
In strict economic terms, a brand is simply the premium I’m willing to pay for an item based on the logo attached to the item. Put another way, there are “store brand” items at your local grocery store than contain precisely the same ingredients as the “name brands.” In some cases, these store brands are bottled or packaged by the same local distributor — using exactly the same products — as the name brands. Yet the name brands continue to sell, and profitably so, because consumers are willing to pay a premium price for the name brand packaging on essentially the same product. The difference in price between the name brand and the store brand is the brand value.
Value, separate from a brand, is the monetary worth a consumer places on a product or service. It doesn’t matter how much it costs to create, market, or distribute a product. All that really matters is the value a consumer places on the product. If you want a sale, the price of your product better be lower than the consumer’s value of the product. Not equal. Lower. That way the consumer perceives he is getting a deal, and that he is receiving value for his money.
So what does any of this have to do with e-books?
For starters, e-book pricing is viewed by many consumers as wildly out of step with the perceived value of the product. No matter how you parse the numbers or sketch out production costs or trot out sob stories of how scandalously little money the average writer makes, consumers simply don’t perceive an intangible good as having the same value as a tangible good. Thus, if you want e-books to sell, you simply can’t price them the same as physical books. It doesn’t matter if it’s reasonable. It doesn’t matter if it’s fair. To turn a profit in a competitive market economy, a producer is obligated to deliver a product at a price lower than the perceived consumer value. If Producer A (in this case established publishing houses) can’t do it, Producer B (some new e-book publisher, like maybe Amazon itself ) will do so.
More to the point, e-books aren’t just intangible goods, they’re infinite goods. Once the first e-book is produced, every subsequent copy has a production and distribution cost at or near zero. As such, many consumers’ perceived value of an infinite good is zero. Just ask the music or newspaper industries exactly how much the average consumer is willing to pay for the electronic versions of their products.
Which brings us back to brand. If the value of a brand is how much extra a consumer is willing to pay for a product over a differently branded equivalent item, then the only value an infinite good has is its brand value. All things being equal, the consumer thinks the cost of an e-book should be at or near zero. If you want to charge a price higher than zero, you better have a brand that creates value in the mind of the consumer.
So how does a brand create value separate and above the value of an equivalent product?
Well, as old-school marketers will tell you, a brand is a promise, and a great brand is a promise kept. What does your brand promise, and do you keep that promise?
Apple manages to actually sell digital content by promising ease of use (and a certain amount of Apple-hipster conspicuous consumption). The Wall Street Journal maintains one of the few successful online newspaper paywalls by promising incredibly serious, incredibly respected content (and a certain amount of snobbish rich-investor conspicuous consumption).
In the publishing space, the author’s brand is infinitely more important than the publisher’s brand. I’m going to read Charles Stross novels no matter who publishes them (and in fact Stross has a bibliography that spans multiple publishers). But the author’s brand is usually associated with story content. I buy Charles Stross novels because I like high-concept science fiction with an unflinching density of ideas and an unforgiving expectation from the reader. The Stross brand promises that and, so far, has unswervingly delivered. So what can a publisher’s brand promise?
Off the cuff, a publisher’s brand can promise that the author will be getting a serious cut of the profits from the price of the e-book I’m paying. I care about the author, and I’ll respect a brand that cares about the author, too. A brand can also promise cross-platform compatibility free of annoying DRM, spyware, and the like. A publisher’s brand can promise impeccable editing and typesetting, such that reading is a physically pleasant experience. A publisher’s brand can promise beautifully and meticulously curated backmatter and bonus materials — precisely the sort of stuff e-books can offer that physical books can’t. A publisher’s brand can promise extraordinary original cover art — which was purchased at a fair rate from the cover artist.
There’s also the (not so) novel notion of a brand that is a signpost of a community. John Scalzi is bankable brand, in no small part because he is the arbiter of a not inconsiderable online community from his website, The Whatever. Yes, Scalzi writes good books, but he also has a built-in audience ready to consume what he produces. Brands can have communities, too. (Just ask Apple.) And if you use all the considerable social media tools that help you build a community, you are cultivating a buying audience. Authors certainly should cultivate a community-centric brand, but publishers can, too.
And all of that is before we even mention the publisher’s original — and still most important — role: Content gatekeeper. As the barrier to entry for e-publishing diminishes, and the near-zero-price market for e-books flourishes, publishers have no choice but to become a signifier of quality and type of content. When blogging first emerged, simply having a blog was enough. Now that anyone can have a blog inside of five minutes, brand-name, high-quality blogs are of significant value. The same value-progression is likely in the e-book market.
What sort of content does your brand of e-book promise? Is it near-future hard sci-fi? Is it urban fantasy that unfailing passes the Bechdel test? Is it a (not at all fictionalized) common-man memoir? Is it a salacious celebrity biography with an emphasis on titillating detail? Figure it out (and launch a new brand-explicit imprint, if you have to), then start cultivating a roster of best-possible content that matches your self-described brand.
Whatever your brand promise, it is only by establishing that promise, advertising it, delivering it, and maintaining it that any publisher has any hope of actually charging for e-books.
At least, that’s my take. I’d love to hear a difference of opinion.