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How much are you willing to pay for intellectual matter? Or, put another way, which penguin do trends favour? By Aresh Shirali
It's an awful word, 'clash', not to be used without cautionary advice. Alas, as everyone in the business of intellectual matter knows, it sells---making it that much easier to succumb to the temptation of using it to describe a mere divergence of thoughts on pricing. Anyhow, the rift can be dramatised as a story of 'penguin versus penguin'. On one side is Penguin, Pearson's book publishing brand, at least in this market instance. As part of its first ever "strategic" move away from English publishing, as described by Penguin Group's global chief John Makinson, it is all set to test stiff new price points for Hindi books in India. If it's value the customer wants, the customer had better pay up. And Penguin may not be going entirely against Hindi publishing trends; if Delhi-based Rajkamal Prakashan can strike reader interest at Rs 350 for a Hindi book by Virendra Kumar, unknown in English circles, and at Rs 250 for a book by Prem Singh, equally anonymous to people who pay only a hundred or two more for English non-fiction, it's possible to think of print-runs going into several thousands at even higher prices. On the other side is Linux, the man-machine interface created as a Windows alternative by that feisty Finn, Linus Torvalds. With its little penguin logo, Linux has come to symbolise the power and beauty of 'freeware' to millions of fans. In Torvald's view, vital intellectual enablers such as computer operating systems (of which Apple's spunky new Tiger is just the latest instance) deserve to be freely available to all, just as any public good or resource is (air, water and so on). All it needs is programming volunteers---the very people who operate across the world under the Linux banner. So-who's winning? In terms of business analysis, it's impossible to tell, really. Books and software are not the same. Not as markets, not as businesses. They both use intellectual inputs. But books use paper, and thus incur what are called 'marginal costs'. Each extra copy printed runs up a bill. This imposes the decision of what an 'optimum' print run should be. Software, in contrast, costs something to put together, but once that's done, can be replicated at near zero cost. Software can have more and more people using the same product without burning up cash. It is much easier for a software creator to let the stuff zip across the networks free once enough money has been made to cover production costs. But why, then, have any comparison at all? For one, because it's fun in an absurd sort of way. Besides, both Penguin and Linux are worth watching for their performance independent of each other. Penguin is the world's biggest publisher, financially stable and daring enough to pull off such box-busting experiments as Tom Peters' Re-Imagine (a book the conventional world first trashed and now prefers to ignore...). Linux has barely been able to nibble at Microsoft's profits, though it could pat itself on the back for moderating the monopoly's behaviour and winning over such tricky customers as the Chinese government. For another, and this is the main point, it does represent a divergence of market minds on the following question. How much should intellectual matter sell for? Forget the economics for a moment. Assume that human ingenuity will get cool enough to drive business models towards one penguin's path (or is it ice cube) or the other. Which, by the force of human will, would eventually win? Many, especially those schooled in Tagorean poetry of the mind-without-fear and knowledge-is-free sort, would be tempted to go with freeware. If it looks noble, sounds noble and waddles noble... the penguin must be noble, right? Er... maybe it's not that simple. Intellectual matter is no natural resource. It is a product of the human mind. This mind needs to be fed well for it to work well---somehow, by the economic system. The experience of experiments in this domain so far on planet Earth suggests that the bipeds involved are best fed by a system of direct reward. Upfront pricing. Upfront payment. It works. Ah, a feather-head may object, who incentivises the vital breakthroughs that can only be valued by generations to come? Funnily enough, here too, the money logic may be operative. Cash fluidity makes for brainwaves. Though it's often---quite often, come to think of it---the other way round. So the case isn't quite closed yet. And maybe, and maybe, it's this question of vitals, incentives and breakthroughs that will play a big role in putting the 'clash' to rest for good.
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