Scribtotum from Matthew Wayne Selznick

My friend, colleague and former boss Chris Miller wrote a compelling post about the nature and meaning of value when many “valuable” things are made of bits and bytes. You should go read it, then come back here. (The post and site have since been taken down — Matt )

In his post, Chris asks several questions. My personal rule is if my response to a blog post is as long or longer than the original, you should write your own post. So, here are my attempts to answer those questions. It’s likely I’ll have a few of my own before I’m done.

Chris asks, “Does the fact that (a work) is digital affect its value? How does time figure into the equation?”

As someone who sells both digital (non-tangible) goods and material (tangible) goods, I believe many factors enter into the worth of a digital work. It’s important to recognize that a particular work is going to have different value to the creator and the consumer.

Generally speaking, many of the costs involved in manufacturing, distributing, stocking, returning and destroying a tangible good are just not a factor with an intangible good. So as a consumer, I expect the intangible good to be considerably less expensive than the tangible. If a hardcover book is $27.99, the e-book should be somewhere around 1/3 the price… or less. I’m not comfortable paying more than $10.00 for a book-length e-book or an album-length collection of MP3s. I’m willing to pay more for a tangible book or a CD because I’m paying for universal compatibility, portability and the fact that I will actually own what I’ve purchased.

Seriously, look at the licensing agreements for most of the digital goods you purchase. The fact that there’s a licensing agreement at all should clue you that you’re not actually buying the item — you’re paying for a license to use the it under a specific set of circumstances. You don’t own that software you just downloaded, no matter what you paid for it.

So as a consumer, usually digital goods have a diminished value to me when compared to the same item in tangible form. If the digital good isn’t shackled by digital rights management restrictions and licensing schemes, its value is higher for me.

As a creator, my idea of the value and worth of my work is dependent on a number of factors determined both by myself and by the consumer.

Chris asks, “How does time figure into the equation?” He could mean the time potentially saved by purchasing a digital good, but I’m going to take it to mean the time it takes to create something, regardless of how that something ends up being consumed. That’s certainly one of the factors I take into account.

The time I put into a creative work is something I hope the consumer will consider when they evaluate whether or not it’s worth paying whatever price is assigned. Example: It takes me, on average, about and hour and a half to write 1,000 words of fiction. That’s just the writing — never mind the planning, editing, brainstorming, backstory creation, and so on. What is that time worth?

I also want the consumer to consider the the actual entertainment value of something I’ve created. Quite simply, if I make something and it creates an emotional response in the consumer, I expect the consumer to compensate me in part based on the degree of emotional response. That’s something the consumer has to decide for themselves. This is why I make some of my creative works freely available — how can I expect someone to assign a value based on experience if the experience can’t be had until they pay?

Another factor is the likelihood of repeated uses. Software, music, non-fiction — these are all things that might be re-used repeatedly. The consumer is likely to get continued value from these things over time. It should be acceptable to pay more for an item you’re likely to use more often.

Do I think people are getting something less valuable or less worthy when they purchase an intangible version of one of my creations? No — because the same amount of time, passion and energy went into creating it, and the emotional impact on the consumer is the same regardless of the medium.

Here’s another thing for a creator to keep in mind when they assign a price (or the expectation of a price) to one of their intangible goods: one can expect to continue earning money on that work as long as one makes it available. At some point in time, a creator will have to conclude that a particular piece of work has earned back whatever it “cost” to create it, and everything from that point forward is profit. That’s the epitome of the Long Tail.

Chris also asks if getting a digital good for free diminishes its worth or value. Well, it doesn’t for me, in part because I recognize the time, effort, energy and passion that went into its initial creation. In fact, if I get something for free and receive a good emotional experience from it, I’m likely to compensate the creator. That’s what I want them to do with me, after all!

I can’t speak for the rest of the world. I know many people simply expect a digital good to be free, and don’t consider the needs of the source. A big part of my creative mission is to educate those people and turn them into patrons.

Chris closes his blog post with this question:

(H)as the advent of digital content fundamentally changed they way we think about purchasing goods, and if so, is that change for the better? Or, has this change made consumption a reflex, a non-thought? In both cases, what does that say about the bond we have with the content, what is it’s relative value to us when compared to a real-world physical product?

Of course, that’s several questions, which makes it a little tricky to respond succinctly. So…

Has the advent of digital content changed how we think about purchasing goods? Yes.

Is that change for the better? Ultimately, what we’re talking about is the acquisition of information getting faster and easier. That’s a good thing.

Has this change made consumption a reflex, a non-thought? Nope. Consumption still takes action, still takes thought. Both of those things are a kind of currency.

What about the bond we have with the content, and how does it compare with our relationship with physical product? Let’s look at it this way. I recently read a wonderful book, “Cursed,” by Jeremy Shipp. I’ll have a review for you soon. I read it as an intangible product — an e-book. It’s lingered in my head, it still makes me smile, it still causes me to marvel at Shipp’s skill a few weeks after the fact. I could see myself reading it again. The emotional reward of that book is in no way diminished by it’s intangibility. The worth is in the work.

On the other hand, I read another book, in paperback, some months ago. It was written by an author who appeared on more than a few podcasts I listen to; it has some great, gushy blurbs on the cover. To me, it was about as deep and resonant as a session playing Contra. I’ll never read it again; I’m not going to read the sequels; the physical presence of the paperback on my bookshelf actually has negative value because it’s taking up space that could be put to better use. If it was an intangible good, I would have deleted it by now. I haven’t given the book away because that would take effort.

The value of content is, for me at least, mostly dependent upon the value of the content, not the form the content takes.

Chris doesn’t take any specific stance one way or another in his post — it’s designed to generate response, like the old Saturday Night Live skit, Coffee Talk: “Intangible media: Tangible value? Discuss.” I’d like to hear what he actually thinks. It’s possible he wrote the post to help him figure that out, which is a perfectly valid technique.

What do you think? Leave a comment!