Calling ebooks not a prodcut but a reader service, Luby lays out an argument that ebooks should cost more. "eBooks should be more expensive than they are, more than print books — a lot more," said Luby. He thinks that ebooks are both under-priced and under-sold because publishers and retailers aren't properly explaining their benefits, namely, convenience.
When I first read about this on DBW, it sounded like a crazy idea which I knew would go over like a lead balloon among indie authors. But rather than just write Luby off as a nut, I went looking and I found a video of his talk (link).
I've embedded the video below, and I think it's well worth watching. Luby's arguments are much less crazy when you consider them from a marketing standpoint and not as economics. Luby isn't saying that the ebook market as a whole should be more expensive; he's suggesting that individual publishers convince readers that their ebooks are worth more.
I still think it's a crazy idea, though. Luby is arguing that publishers can convince readers that their works are worth more digitally than in paper, even though those same publishers are competing with free digital content, a lot of which is quite good. Also, there are any number of authors and publishers who cannot make the convenience argument given that they are digital only.
He does try to support the idea by pointing to Netflix and how that company raised prices in 2011. According to Luby that only cost the company a small number of subscribers (quarterly statements reveal that Netflix lost 800,000 subscribers while revenue increased by 6.7%), but what he leaves out is that few publishers or retailers have a product which even vaguely resembles the Netflix DVD+streaming subscription bundle at the time, thus limiting the possibility that Netlfix's move can be repeated.
In fact, the closest publishers have gotten to Netflix is by bundling ebooks and paper books, and that is still uncommon. In short, O'Reilly and a handful of other publishers can repeat the Netflix trick, but it's not applicable to the rest of the industry.
If nothing else, this video is going to be thought provoking.