Digital Ownership is Changing How We Approach Value

The growth of the digitally based economy has had some major effects on how we approach value.  We have seen how digital streaming and access to endless song libraries has changed how we value music.  With the onset of digital streaming sites like Pandora and Spotify, it is conceivable that the concept of purchasing a song or an album for a fixed price will be obsolete in a couple years.  A comparable trend for TV and movie content is being spearheaded by Netflix and Hulu.

However, as much change as we’ve seen in music and movies, books (and e-books) have largely remained untouched by this trend towards purchasing unlimited access.  In fact, prices for e-books have trended upwards.  This is interesting considering that digitalizing books takes the bulk of variable costs out of the equation for publishers.  Yet, due to a consolidated publisher marketplace, e-books have remained expensive.  In his article on Wired.com, “The Abomination of e-books: They Price People Out of Reading”, Art Brodsky discusses in greater detail this phenomena of pricing for e-books.

This situation makes one wonder if it is only a matter of time before consumer preferences force big publishers towards a Spotify/Pandora model.  At a certain point, consumers will make the connection between music, movies, and books, and demand that they be able to access books without the pay per product model.

Further comparing this opportunity with Spotify and Pandora, one has to think there will be a place for digital advertising if this new marketplace arises.  Perhaps, digital advertising will be able to replace the revenue lost in a more competitive pricing model.