Customers Won’t Pay as Much for Digital Goods, Redux
Back before Christmas the Harvard Business Review published an article on recent research that showed that people valued physical objects for the act of possession more than for the use of said object.
Participants valued a physical copy of The Empire Strikes Back more than a digital copy, for instance, only if they considered the Star Wars series to be films with which they strongly identified. Participants who weren’t Star Wars fans valued physical and digital copies similarly.
This is essentially a nonfunctional element of ownership – valuing something just for having it rather than what you can do with it.
Aside from price, that is the only thing keeping people buying print books over ebooks, which makes it all the more amazing when digital copies supplant physical copies in the marketplace as consumers choose to make the switch.
For example, much of non-fiction has been eaten by the web, and several genres (romance, thriller, SF) have gone digital to varying degrees. These are all categories where the use (reading) is valued more than ownership.
The researchers also helped explain why some creators profit off of memorabilia as much as from selling their content; it’s because fans value the physical good more than the digital, while non-fans do not.
This difference in ownership also allows us to identify when people will value digital goods no less than physical goods. Because ownership entails a link between a person and an object, we found the gap in their value increased when that link was easy to form and disappeared when that link was hard to establish. Participants valued a physical copy of The Empire Strikes Back more than a digital copy, for instance, only if they considered the Star Wars series to be films with which they strongly identified. Participants who weren’t Star Wars fans valued physical and digital copies similarly.
This in part explains why the collectibles market has waves where old toys suddenly become desirable and valuable, only to lose much of that value a decade later; it’s because the buyers for any particular wave are all of an age group that wants to recapture a memory from their childhood, so they all suddenly want to buy the same toy.
There’s also something this research doesn’t quite get at but is worth mentioning here, and that is the impact on print book sales versus digital.
All the industry trade press is trying to convince us that ebook sales have plateaued, and that the market is stable. This research, on the other hand. shows that there is little keeping people buying print books other than the artificially inflated price of ebooks from legacy publishers.
The book fetishists are wrong; people don’t value a physical copy more than digital except where they have an emotional connection to the story or creator.
That suggests that the market is less a stable equilibrium than ripe for another wave of disruption. All it will take is one really good reason, and people will switch to digital and not look back.
image by MartialArtsNomad.com