Where Is The Money Going?
Now this is where I get curious. Where is all of our money going? Why do I need to pay $15 for my digital album as well as for my physical album? Why, in direct2drive video games, am I still paying such high prices? Why are e-books and paperback books the same price? Why are television providers charging for digital versions of shows that were once free? In a quick, common sense look at the situation, nothing seems to work.
Let’s dive a little deeper then. A lot of the fabrication infrastructure for creating distribution is a one time cost. Right? You only need to buy a printing press once, right? Which means that the continuous costs to publishers is in consumables, such as paper and ink (which if we go by consumer prices, aren’t particularly cheap). But when one begins to think about mass production and whatnot, is it possible to actually make the physical manufacturing costs trivial when it comes to pricing? Is this really the case?
Because if it is the case, then the Old Media guys have a problem. As I stated above, it’s not reality that drives good business decisions, it’s perception of reality. I bet the masses perceive manufacturing as a pretty hefty component to a piece of media’s overall cost. And if this is the case, then when consumers perceive physical distribution as no longer being part of the publishing model, they are going to want prices to go down. I know how much I can download for my fixed-price Internet bandwidth (when I was back in the States), and the answer is: a lot. It was always cheaper for me to download information from the Internet than to drive to the bookstore, or movie shop or whatnot, and spend gas and time getting physical media.