“Content” producers — journalists and writers, book authors, musicians, film-makers, and similar professions — are becoming digital goods producers. Person thinking about how digital goods producers can make money might ponder two old-fashioned paper goods: books and greeting cards.
According to U.S. Census Bureau surveys, from 2001 to 2007, greeting card publishers received about 50% as much revenue from greeting cards as book publishers received from adult trade books. So don’t write a novel, make two greeting cards!
My neighborhood CVS provides additional evidence of the value of greeting cards. The store has 30 aisle sides (connected sections of display space). Greeting cards (holiday cards, birthday cards, wedding cards, condolence cards, etc.) take up 2.5 aisle sides. Books have only about 1/4 of an aisle side. Magazines have about 1/3 of an aisle side. Small, convenience-oriented stores such as CVS manage display space carefully to maximize profit. The large amount of display space for greeting cards suggests that these cards are highly profitable to sell.
The books on display attract even boring and stolid economists. I noticed Susan Yarina’s Best Man for the Job. The epigram: “They’re up for the same job — love decides who comes out on top.” This story of workplace competition and love features a “fiercely handsome cowboy” and a “sizzling saucy cowgirl.” The back cover explains:
The work is hard, the sexual tension is blazing, and they are desperate for relief from both.
The regular prices is $8.99, but it’s now 1/3 off ($5.99). The book has 348 pages. Hence it costs about 1.7 cents per page. Quite attractive!
Greeting cards have relatively higher value. Prices for many cards, which probably by weight have less than 1/100 of the paper of Yarina’s romance, are from $2 to $3. Poetry is an important component of many greeting cards. A birthday card selling for $2.99 has on the front: “Today we / CELEBRATE / Your birthday, / and in you / we celebrate LIFE / Kahlil Gibran“. Another birthday card, this one selling for $2.49, features another illustrious writer: “Treat / every birthday / as a shining / brand-new / birthday / still wrapped / in glossy / paper / Maya Angelou“. Given that Maya Angelou read a poem at Bill Clinton’s presidential inauguration in 1993, the lower price of the Maya Angelou birthday card relative to the Kahlil Gibran birthday card is somewhat surprising. But this pricing may just be a straight-forward matter of supply and demand. Gibran has been dead since 1931, and hence cannot produce more poems. Angelou is still alive and potentially productive.
Greeting cards are more readily, significantly differentiated than books are and have much lower cost of consumption than books do. Different greeting cards look different, and customers judge cards by their looks. A book, in contrast, is not to be judged by its cover. In addition, reading a book has much higher time cost than receiving an attractive greeting card with a few socially sanctified words on it.
Digital goods producers need to figure out how to make their goods more like greeting cards. Actually, successful digital goods producers seem to have already figured that out.