And MacMillan shores up…

Meanwhile, MacMillan CEO has a widely cited blog post explaining his companies ebook pricing model. Basically it boils down to modelling the new on the old, trying to protect the approach, and margins of the old hardback/paperback windowed release model:

We will price our e-books at a wide variety of prices. In the ink-on-paper world we publish new books in different formats (hardcover, trade paperback, and mass market paperback) at prices that generally range from $35.00 to $5.99. In the digital world we will price each book individually as we do today.

Which lead to commenters asking:

So how much more expensive is hardcover e-ink over paperback e-ink?

And Matthew Ingram on GigaOm stating:

In effect, Macmillan is trying to do exactly the same thing that many other media companies are desperate to do — from newspapers to music labels to movie companies — which is to replicate the pricing model of an analog, real-world business in digital form. In other words, it is trying to artificially reproduce the kind of scarcity (and thus pricing power) it used to have in one medium in a medium that doesn’t even know what scarcity is.

Which is true. But it’s also the obvious thing for those companies to do, because their entire business history is based on creating and managing scarcity – something easy to do in a physical world, and much more difficult in a virtual realm. But it’s an easy point to make. In reality, we shouldn’t be surprised when a company like MacMillan tries to sustain its existing modus operandi – it’s incredibly difficult to change a business culture which goes way way back. Don’t forget, we’re on the outside, applauding the exciting possibilities of the new. They’re on the inside, looking at all the institutional infrastructure that’s been built around managing scarcity and not knowing what to do with it.

That’s not to say that old media companies deserve to survive by propagating the old business models. Only to suggest that it takes incredible imagination to reconfigure your business into something entirely different; which is why, so often, it’s someone outside of the traditional business who is the real agent of change…


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