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Old 12-18-2011, 06:14 PM   #18
nogle
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Posts: 373
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Join Date: Aug 2011
Device: Kobo
Quote:
Originally Posted by slex View Post
The publishers are right, of course, to charge for the content. However that's not the point.

For print books you have:
costs for content creation + costs for typesetting and design of the print book + costs for printing (1)

For ebooks you have
costs for content creation + costs for typesetting and design of the ebook (2)

Provided that the third component of the cost is absent for ebooks, the second should be more or less the same as with print books, and the first is completely identical, you should get cheaper ebooks than print books. In fact, for the majority of the books on Amazon the paperback version is sold at a lower price than the ebook (maybe that's the way I see it here in Europe, because Amazon charges VAT).
This all assumes that the price at which the product is offered is a function of its cost to produce. This relationship holds true in the case of commodities; goods that are perfectly substitutable between producers.

If you want to read an eBook, and don't care which eBook, then by all means the price should be a function of the cost to produce the book (per page or per word if you so desire).

But, if you want a particular book, then eBooks are not perfectly substitutable. Now the pricing decision revolves around maximizing profit. And in fact, you are giving the opportunity to price disciminate. Are there consumers that will pay more to be the first to read a book? can you offer it at a high price first then gradually offer discounts, thereby getting consumers to pay the highest price they are willing to pay and maximizing profits? Are there books that are preferred over other books and can you charge a premium for them?

The production costs of a Cadillac are about the same as for a Chevrolet; shouldn't they be priced the same if production cost is the determinant of retail price?
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