Sunday, March 2, 2008

Piece of cake

It's been a few moons since I purchased a cake, probably an ice-cream variety for a kid's fiesta. And, it has been even more moons since I frequented a dessert diner. My last visit -- probably somewhere in the City -- was mostly immemorable ... can't recall where we went or what I had, but I do remember my Charlie in the Chocolate Factory wide-mouthed amazement at the selection. And, most memorably, the by-the-slice ability to please (tease) your palette without having to buy a whole cake. It's a mouth-watering business proposition.

Of course, selling and buying a piece of cake is not new nor novel. Selling and buying pieces of information (or entertainment) is an increasingly contemporary pleasure.

Think back five years ago. What is commonplace today -- buying music by the song -- was embryonic. The music industry was in the dumps, an archaic institution that lost track of the value they provided (what consumers desired). Music labels thought they were in the music business (correct), selling CDs (incorrect). Consumers thirsted music by the piece (track). iTunes and file-sharing services changed the game -- consumers got what they wanted, and the music biz extended its stay in the ICU.

Music is an obvious by-the-slice (versus whole cake) choice. Television shows too; why buy an entire season on DVD when you can instantly whet your appetite with a downloadable episode? Software: Why purchase an entire application when you can taste (rent) the modules you want (software as a service)?

The by-the-slice model has hit book publishing. Random House is selling individual chapters ($2.99 a pop) of books, commencing with (ironically, my current read; the whole cake is really tasty!) Made to Stick. From a WSJ story of a few weeks ago:

Customers will receive a digital link via email enabling them to download the chapter onto their computers. Random House expects that eventually users will be able to download chapters onto other devices, such as BlackBerries.

"We want to get our content out there in new and different ways," says Matt Shatz, vice president of digital at Bertelsmann AG's Random House Inc.

In theory, a broad variety of topics could appeal to readers on a chapter-by-chapter basis, including travel, cooking, technology and health.

The incremental cost to deliver morsels of information is minimal, and you can argue (as Random House has probably rationalized) that by-the-piece sales will not cannibalize whole cake purchases. With time others will follow, including businesses outside entertainment and content. Wanna ski for an hour or two (versus buying a half-day or full-day lift ticket)? Need a rental car for a few hours (instead of buying the whole cake/whole day)? Only have time to play a few holes of golf? In instances where people have a desire to pay for and experience a slice of something, the dim-summing products and services to fit consumer needs will continue to proliferate.

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