I’m not writing about gadgets here, but about the information that makes the gadgets useful: Software. This video is nominally about web design consulting. But I’ve lived these situations back before the web, as well as with web clients.
One problem is that the buyer of information has no idea what it’s worth until he has it. And once he has it, why should he pay someone for it? Therefore, it isn’t valuable. This dovetails neatly into other copyright issues, but I’m not going there.
I have a few websites, most of which are loaded with free information that I painstakingly collected and developed. The sites are also built from scratch, mostly with a simple text editor. Some people see value in this; I receive donations. Some years as much as the low three figures.
People used to ask me if HTML was easy. I’d say, “Yes, you just need to remember how a few hundred easy commands interact.” Most developers don’t bother to make sure their site even meets official web standards (as published and tested for free by W3C.org). Even WordPress, the engine on which this site is built, shows errors in the validator. Google? Thousands of errors on every page.
I’ve had clients who understand what I do, and were happy to pay. Unfortunately, usually their superiors had to be cajoled. Eventually, these situations melt down and leave me out of work.
The “Just a small change” problem comes up often. After I’ve been reporting and demonstrating every step of the way, and finally a web site is finished, then do they bother to look and notice that it isn’t what they need. They make “little” requests comparable to having a builder simply move a bathroom from the first floor to the second as the keys to a house are handed over.
This video made me cringe.
I wish to make a few observations.
In the US, we have grown accustomed to a business model where the prices are set by the vendor and are not negotiated, yet in most cases they can be. This is not the case in most of the world.
There are, however, substantial differences in the natures of information and material good. But our society is also materialistic, and we (at least the older generation) are of a mind set that associates value with the medium but not in the information it contains.
For example, people are accustomed to paying more for a hardcover book than for a paperback edition of the same text. They are willing to pay more for a CD with one song, or for a DVD than for a digital file containing the same information.
The publishing industry needs to recognize that the internet has forever changed the fundamental business model used in publishing, and the industry should adapt to the internet. However, the industry has repeatedly tried to artificially imbue data files with the restrictions of physical media through numerous DRM and pay for play schemes.
These schemes all suffer from a fatal flaw. The consumers are not as stupid as the publishers believe them to be.
I own three ebook readers. A Frankin eBookman, a Casio Personal Viewer, and an RCA Reb1100. (Actually I had a Sony ebook reader which I really liked but my son took it to school without my permission and lot it).
The eBookman, Personal Viewer and the REB1100 all used incompatible proprietary formats. The problem was that these electronic editions of literature were priced the same as printed editions.
The consumers understood that manufacturing, distributing and warehousing paper books were a source of considerable overhead, and that a digital file which could be replicated on demand and distributed over the net, did not incur such high overhead, and expected the savings to be passed on to the consumer in the form of lower prices.
Gemstar, the parent company of TV Guide and the content provider for the RCA reader, went a step further and charged $15 per digital copy of public domain works. This effectively killed the product.
Sony, on the other made a major departure from this business model with its eReader. The reader is technically superior to the three older devices in most ways, but in addition to supporting a proprietary DRM format, the reader will also handle plain text and pdf files, allowing the user to easily add their own content to the reader, as well as purchase DRMed content at prices much lower than the equivalent paper copy through their eBookstore.
About the video..
If you have ever bought a car, new or used, you will realize the price is negotiable. Generally, when buying a car from the "Note-Tote" lots, their down-payment is actually what they paid for the car at auction, and if they find you are willing to make a deal or go somewhere else, they will rather make a deal.
Several months ago, I saw a news article about a restaurant that, instead of setting prices,allowed the patrons to pay what they thought it was worth. Most diners actually paid more for their meals than the restaurateurs had decided the meals should be priced at..
The problem with information is that the internet have created a glut of information. Much of the information is pure noise, which drowns out the quality information.
This is not a joke. When I worked in retail I had people pull this stuff and it used to flatfoot me.
The gambit in photofinishing worked like this: customer orders prints, comes in, goes through them, declares "Oh, these aren't what I wanted." You say, well, I can make them over if you tell me what you want differently. "No," the customer says, "I just don't think I like them."
"Okay," you say and gather up the prints.
"Uh, what are you going to do with those?"
"Recycle them. I can extract the silver."
"Well, what if I pay you [insert hugely discounted amount]? After all, you're going to throw them out anyway."
See the logic?
Once, I caught myself. I took a print, held it up, and asked "Do you like this?"
"Well, no."
I ripped it in half. Held up another, repeated it.
At the fourth print, the customer said Stop and paid for the rest.
The price is the damn price! One of the things I like about living here, in the West, is that simple fact. Haggling is entrenched in the rest of the world and it would make me crazy!
But people like these are, basically, thieves.
It's not about the haggling. It's about undervaluing the product.
The end of the video is telling: They insist that, if they pay full price for the product, then that entitles them to free training and documentation to let them reproduce it.
I'm happy to teach people what I know. But it takes much more time and effort than to do the project myself. So I charge accordingly.
Dan,
We live our lives in the US immersed in a culture that indoctrinates us, from an early age to believe that value can only be measured in dollars and cents. We are also inundated with messages that lead us to believe that money and those things it can buy are much more important than the people who produce and provide the goods and services.
Back in the late 70s', when I entered college, I fell in with a largely international crowd, and most of my friends were not Americans. My of my friends were from the Middle East and India, and for the most part, they seemed to understand that price does not equate to value.
So the question that must be addressed is: How should we determine the price and value of information in the digital age?
As a programmer of many years, I understand your frustration with the devaluation by consumers, but I also understand where that attitude comes from.
People used to tell me, "My 8-year-old can program his Commodore 64, so you get paid for something a child can do!" I suppose his toddler has a crayon stick-figure drawing hanging in the Louvre as well, because any toddle can draw pictures, and those dead painters became famous by drawing pictures!
The problem is our materialistic, consumption-based society who believe that money means value.
Open source software is mostly free–gratis. By the price=value standard, it should be worthless, and proponents of proprietary software argue the "get what you pay for" rationale to discredit OSS in the market place.
In reality OSS is much more valuable that proprietary software because the legal encumbrances of proprietary software restrict the ability of consumers to adapt the software to their needs. Furthermore, OSS creates a large economic community based on providing custom services to individuals, something giant corporations are really bad at doing.
In the material world, goods and services are discrete. They require some sort of physicality. Most services are somehow bound to some material good. In the information age, however, information is independent of material goods, and the rules of pricings that work for physical goods simply cannot be enforced on information. Information is actually more valuable when it's free.
So how can a person make a living in this economic environment?
That is the fly in the ointment.
I'm a GIMP and OpenOffice sort of guy, when my clients don't demand that I use name brand equivalents.
I used VisiCalc that came before Lotus that came before Excel. I used WordStar before WordPerfect before Word.
I used GEM before Apple shut them down half a decade before Windows copied them.
I make a living because I adapt. But it still irks me when my adaptability and range is under-appreciated; devalued.