Are you selling Green Eggs and Ham?

I’m sitting on the subway today tired of carrying around a book and a dozen printed out white papers and realized I need a Kindle or an iPad.   Then it hit me. I would pay for eBooks Sam I Am.  But why is that? Why would I pay for an eBook, but not so much for music or movies?  Why is my perceived value of a book so much greater than that of music or a movie?

As long as I can remember, price is driven by 2 things.  The cost plus profit margin along with supply and demand. Because supply is essentially unlimited online, you set price based on demand.  The higher your price, the lower the demand.  As for the cost equation, the internet eliminates a significant amount of logistical costs, so it comes down to how much more money you can charge.  But now, media organizations are trying to maintain the same margin equation with a new distribution model. But this post isn’t about price.  It’s about value.

Let’s look at a magazine. Cost equals printing, paper, shipping, and overhead to name a few.  The perception of a consumer is that I’m paying for all those things. But now online, those costs disappear, so as a consumer, I’m left to decide if the content is worth the price.  The perceived value of the content must now stand on it’s own.  For whatever reason, I feel the value of a book can stand on it’s own with out the paper.

Looking at your own product, are you able to convey to your customers the real value your product offers, or are you selling a bunch of fluff? If you had to strip down your product to it’s core, do your customers still see the value? Are they willing to pay for what you’re selling without all the add-on and fluff? Look at it this way, if a competitor enters the market, and copy’s all your fluff (which by definition should be easy to copy), can you still defend your market position?