Free! Why $0.00 Is the Future of Business

[tompe]

And from another blog (http://rockscissorsblog.blogspot.com... writes name):

Back in December of 2002, I wrote an email message to the Ebook Community neatly summarizing those problems in response to someone else's inquiry. It went like this:

Oh, god. The Plant. Don't get me started.

Stephen King couldn't have made his project more ridiculous if he'd been intentionally trying to give ebooks a high-profile failure to make up for the success of "Riding the Bullet". The Plant expressly ignored several key ways ebooks differ from treebooks, for no other real reason than King thought they should work that way.

# Download of different formats of the same chapter was counted as separate, different downloads and expected to be compensated as such. What?! A download is not a non-renewable resource...and if someone downloaded one format and just did the conversion himself (as he is entitled to by fair use), he'd have the same result and save his money. King compared the practice of multiple download to saying "Since I have the hardcover, you should give me the paperback free." That was totally missing the point.

# "Success," and thus continuation of the project was based on what percentage of the downloads people paid for. This set an impossibly high goal, and it's not any wonder that sooner or later he failed to meet it. What should have been done was set a specific numerical or monetary goal, not unlike the Street Performer Protocol, and continue once that was met.

# By tying "success" to percentage of download paid for, King also set it up so that anyone with a grudge against him or his readers could ensure that the project was not "successful," simply by writing a script to download the episodes a zillion times without paying for them. That's why on-line polls are so mistrusted—they're so easy to rig. Any script kiddie could have done the same thing with King.

In the end, the percentage of paid downloads fell below King's "success" bar, and he called the project a "failure" and terminated it unfinished—thus putting a black mark on the face of epubbing that may take a while to clean off. But even so, it's worth noting King took in hundreds of thousands of dollars for only writing half a book. Maybe that's not much by the standards of a megasuccess like King, but most other authors would have been dancing in the streets if one of their books made them even one hundred grand.

And so King shelved the book, and it cast a pall over the entire ebook industry. If such a famous author couldn't "successfully" sell a serial ebook, then the market must just not be "ready" yet. ($463,832 profit. I wish I could "fail" like that!) It was not the only reason the Storyteller's Bowl remained empty, but it was probably the biggest one.

Seems to me to be good and convincing points.

[Trenien]

Originally Posted by kilofox

I think you are confused maybe? We are talking two different albums here... Reznor was the producer of the William's album prior to NIN's Ghosts. The whole album was released for download, not just a partial as with NIN's Ghosts Album.

Reznor learned from the William's release that you can not rely on the customer to pay you out of conscience. 18% paid for the Williams album, the other 82% just took it. With Ghosts, Reznor improved the model, by offering some for free and is inciting the customer to pay for more value after sampling the free tracks. I think he and NIN are onto something here.

Here is a interview with CNET about the Williams album.

Oops?

I read the article a bit too quickly and mixed the two.

Fortunately for me, it doesn' contradict my points.

[soilwork]

Maybe it is slightly , but...

I am not very familiar with King's experiment but, judging from what I read from this post, one factor that might have contributed to the failure of King's experiment is that the payment is made separately every time a new chapter comes out.

People find it more painful to pay $1 each 10 times than paying 10$ at once. For example, according to Thaler (1985), one reason why credit card is successful is that it lumps small losses into one big loss. By asking people to pay a chapter separately, it might have caused more disutility to readers than by making them pay the total sum at once.

[Reference]
Richard Thaler (1985) "Mental Accounting and Consumer Choice"
Marketing Science, Vol. 4, No. 3. (Summer, 1985), pp. 199-214.

[Steven Lyle Jordan]

# By tying "success" to percentage of download paid for, King also set it up so that anyone with a grudge against him or his readers could ensure that the project was not "successful," simply by writing a script to download the episodes a zillion times without paying for them. That's why on-line polls are so mistrusted—they're so easy to rig. Any script kiddie could have done the same thing with King.

Granted, this is a possibility. But did it actually happen? You might as well surmise that gremlins sabotaged the program, unless you have evidence that this in fact happened.

# Download of different formats of the same chapter was counted as separate, different downloads and expected to be compensated as such. What?! A download is not a non-renewable resource...and if someone downloaded one format and just did the conversion himself (as he is entitled to by fair use), he'd have the same result and save his money. King compared the practice of multiple download to saying "Since I have the hardcover, you should give me the paperback free." That was totally missing the point.

So... who downloads multiple formats of the same chapter? I think we're back to the "dim bulbs" issue here.

Based on these points, I wouldn't say King set himself up to fail. I would say that King assumed the majority of his audience had a healthy measure of intelligence and honesty... and was sorely disappointed on both fronts.

[Steven Lyle Jordan]

Originally Posted by soilwork

Maybe it is slightly , but...

I am not very familiar with King's experiment but, judging from what I read from this post, one factor that might have contributed to the failure of King's experiment is that the payment is made separately every time a new chapter comes out.

I'd say this is on-topic... we're talking about e-book sales models, after all. I tend to agree, a single payment would have been better: If readers had paid up-front for the entire novel, and automatically received each chapter periodically, much like a subscription, the project would have been better-received.

This would also have given King the opportunity to evaluate how many payments he had up-front, and if he decided it wouldn't pay for the project, he could cancel the project and refund the payments before anything was transacted.

[moz]

I think both Trent Reznor and Stephen King missed the point. Offering something people want at a high price might work, or it might not, but you've definitely reduced the market by setting the price high. The album... making the free one as good or better than most people's mp3's are anyway (better than iTunes, for example), then offering a "perfect" version if you pay... it's a tip jar by another name. In many ways it's actually a good parallel to the hardback/paperback market with books, in that the expensive copy offers no extra content, only a different form factor. Surprise - selling premium priced content rarely outdoes free.

[Trenien]

Ars Technica has an interesting article on the subject here.

One excerpt:

The fundamental lesson is that property rights are not—and never have been—created by Congressional fiat. Property rights emerge spontaneously from the social fabric of a community. The job of the legislature is not to create a property system from scratch, but to formalize the property arrangements that communities have already agreed upon among themselves. A system of property rights will only be effective if it is widely viewed as legitimate.

[Steven Lyle Jordan]

The article suggests that, due to clearly illegal practices established before a law could be enforced (squatting, in this case), the laws had to be reworked to essentially make the illegal people legal.

It says little about the fact that, once the illegal people were made legal, and the law was later capable of being enforced, illegal squatting was no longer tolerated, and the practice largely ended. Today in America, if you want land, wherever you are, you have to buy it from someone. Period.

Following this logic, what we can expect is a period during which past indiscretions (aka, illegally downloading files) will be overlooked, until an enforceable copyright law can be established. By enforceable, I mean a law that is largely accepted by all as being fair, which is crucial to making enforcement practical and effective.