And before you even say it, no…. we are not talking about the sexy pirates. Tho I do love a good sexy pirate… especially if he is all scruffy and can talk with an accent of some kind….. hmm pirates… *dreamy look*

Anyway, before I get distracted by the idea of sexy pirates, let me say I am very happy to have a special guest posting here at KindleVixen today. The Mighty Buzzard graciously agreed to stop by and talk about ebooks with me. I am sure you are all tired of hearing me rant and rave on twitter about them and the new Agency Pricing Model that is looming over our heads today. The Buzzard brings up some great points, if only the publishers would listen. So thanks to him for being here…. take it away sexy techy dude… (I love a man who can make use of a good formula).

There’s been a lot of chatter lately about REP. It’s gotten me to thinking about ebooks in general and piracy. Now I could go off on a rant but I’ve been coding a lot lately, so I’m going to go for logic this time even though there’s been no evidence that publishers are swayed by things like that.

Publishers, you are competing with piracy. It makes no difference that you have legal right to distribute the material and they don’t, they’re still competition. Further, they’re not going away. If the RIAA and MPAA combined can’t do a damned thing to even slow piracy, you’re certainly not going to with much shallower pockets. You have to offer more value than pirates if you want to make a sale.

Let’s have a go at the math behind this nebulous term “value”. Start off with the value of the content of an ebook to the customer (Its value to you doesn’t matter. At all.), call it $C for content. We also need to value the convenience of the distribution method for the customer, call it $E, because their time and effort is valuable to them. We’ll need to valuate any moral repulsion they have to violating copyright and not contributing anything to the author (Yes, only the author. Customers don’t give two shits about publishers.), call it $M. Of course we need the price of the book, $P. Because you seem to want to use the hell out of it lately, set $F equal to the fear of jail/lawsuits. Conversely, there is the defiance of heavy-handed methods that the user feels, or $D. One last bit, cross-title (hopefully) targeted advertising on the site of purchase, $A. Believe it or not, this last one does have value to the customer as well as to you; they want to be able to find other books they’d like.

So we have for publishers legit distribution chanels:
$C + $E + $A – $P – $D = total value to customer

and from piratical channels:
$C + $E + $A – $M – $F = total value to customer

Recognize that since we have factored in morals and fear, the customer will be going with the choice with higher value every single time. Now $C is the same value in both channels, so we can effectively discount it for this discussion but you should keep in mind that it exists when considering the math of release windows because you set $C to zero if you don’t release what the customer wants before the pirates.

In $A, you should have an incredible advantage over piracy but you seem to not want to invest much into it. So you have only a very small advantage that you could lose at any time.

Using $F as a method of devaluing piratical distribution channels hasn’t worked very well for movies or music. Do you assume that you have some innate attribute that will cause it to work for you? Einstein defined insanity as doing the same thing over and over again and expecting different results. But let’s assume a very small positive value here just for argument’s sake even if it will increase $D for a good chunk of potential customers.

Experience has shown that you can increase $M by getting authors to connect positively with their fans. Negative comments from authors or publishers have no effect on $M and serve only to increase $D. Always. Every. Single. Time.

Increasing $E is the most important place you really should be able kick the hell out of the pirates but you’ve instead chosen to let them have an overwhelmingly commanding lead because of the need to control the material through DRM and exclusive hardware. People want to be able to get a book in a click or two and they’d like to be able to shift format for use on their device of choice. Forget control. It’s an illusion. You never had it and you never will. Worry about your total value to customer. If it’s higher than the pirates’, you will win.

Lastly, there’s $P. Pirates will always have the advantage over you here, what with $P being zero in their case. So, tell me, how does increasing $P, thereby decreasing your total value to customer, help you compete?

I’m not going to bother summarizing. I don’t feel like going back through all that and shortening it to fit in one paragraph. Make yourself some bullet points or an outline or something. Office guys like that kind of crap.

~The Mighty Buzzard

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