Nielsen just published a research on the behavior of consumers concerning paid content on the net. Although it doesn’t tackle directly the e-books market, it provides some very useful insights on the distribution of content online, and may spark some ideas on possible business models. Any result is, of course, not the final word on it, as the landscape is changing any minute. Still, let’s sum up a few topics.

Contents for which people are more likely to pay are those for which they already pay offline. More specifically, music and games are the two segments where the majority of people already paid for content. They are also two of the most established segments, that have been selling paid content for longer, but are also (I’m guessing here, but it should be a safe bet) the two segments that appeals the most to younger people.
And – see page 3 – younger people are the ones that are more willing to pay for content. Counterintuitive, as the research itself  states, but also quite interesting.
As an aside, the fact that younger people are willing to pay seems to me to confirm that there is the possibility to reach a new audience, probably younger than the usual reader.

This research doesn’t tell anything about pricing, although a few info may be inferred from various sources. For the Italian speaking reader, I’d like to point to Baionette librarie, whose latest posts recently summed up with convincing details that 9.99$ is already perceived as the price over which the consumer would think twice before paying (Il duca’s argument is far more complex than this, and he openly suggests a lower price, but for this post we can keep 9.99$ as the rough limit). Similar conclusions are reached by Antonio Tombolini in the post I also published here on Inchiostro Elettrico.

Anyway, what’s important is that people pay, and would pay, for content – and especially they pay for access to content (look at this article by James McQuivey, and think about the last paragraph…). It’s essential to understand how to give to the consumer a reason valuable enough to pay for content and the access to it because, as Nielsen’s research clearly states, “over time [consumers] will decide for themselves the value of content online”.
Once again, it’s the value to the consumer the most important asset, because the quality of the content is the key driver to a purchase, and the perceived quality must be high in order to convince a consumer to buy something. Not only, a free content is not necessarily perceived as worse than one for which there’s a price to pay.
Now, think about the quality of a typical e-book right now, and about the attempts by the industry to set a price based on the hardcover price and (in a… uhm… not really convincing way) production costs. Something must be wrong, you decide where.

On a similar topic: even if apparently it has nothing to do with books, it is interesting to see that “Should the majority of news sources put most, if not all, of their online content behind pay walls, 79% of the respondents say they would no longer go to their websites, taking it for granted they can find the same information elsewhere at no cost”.  This behavior reminds that “if the news is that important, it will find me” (source: New York Times)

Sidenote: the NYT article, but also this single piece of information from Nielsen's research, stresses the importance reached by digital word of mouth, and the way in which it works. It is true that this is valid especially for the younger generations, more keen to use social media - but they are also the ones more likely to spend money online for content. Food for thought.
Or, better still, thought for food.

The most interesting part is the general consensus among all age groups, throughout the world, that if one buys something online, he should have the right to copy it and share it with others. It’s a no-brainer, apparently, as more than 60% of the people, everywhere, answer in this manner.
This is, implicitly, a big NO WAY! to DRM. Hardly surprising, as DRM systems – especially cumbersome DRM systems that limits the possibilities of the consumer – have been rejected everywhere.

So: no DRM, quality content, low price – and a potential younger audience willing to pay.
Connecting these factors in the best possible way will be the key to success.