Quote:
Originally Posted by Polyglot27
Register hardware has an interesting article on book pricing policy and why it might rise in the near future. Curious that with the cost of paper, printing, warehousing, transporting, displaying, and shop space removed, e-books should still cost as much if not more than the paper version. Doesn't make sense does it?
http://www.reghardware.com/2010/11/2..._book_pricing/ |
It makes perfect sense.
But to see why, you have to take a step back from the perspective of the consumer who wants stuff cheaper, and look at what goes into making books.
eBooks drop the print, bind, warehouse, and distribute steps of publication, but those amount to perhaps 20% of the total cost of a book, if that. The majority of the costs of producing any book happen before it ever reaches the stage of being published, in print
or electronic form. Dropping the costs inherent in a print edition doesn't provide anywhere near the saving most folks would like to believe.
Folks should follow the link in the article to Charlie Stross's blog outline steps in the publishing process that occur
before actual publication:
http://www.antipope.org/charlie/blog...-are-made.html
Tell me which of those you suggest
not be done to save money and allow your ebooks to be priced cheaper?
And Charlie is omitting other things that add to costs. For instance, when a book is acquired, a contract is issued to the author. This is a legal document, and requires the attention of the publisher's legal staff. Some titles, like possibly controversial non-fiction or biography titles, may require a full legal review to insure the publisher can successfully defend against a lawsuit over the title. "It's all true and we can prove it."
And there are additional costs to producing an ebook. While there is hope on the horizon, ebooks are currently not integrated into the publisher's workflow. Producing ebooks of a print title is an extra set of steps in the process requiring the attention of specialists.
Aside from all of the costs in producing a particular title, each book gets an allocated share of corporate overhead, like rental on office space, electricity, phone service, and salaries of employees not directly involved in a specific book's production.
And publishers are largely units of larger conglomerates, which may be involved in producing other forms of media. Top management at the conglomerates are essentially custodians of Other People's Money. Their corporations are publicly held, and they have a fiduciary responsibility to preserve and if possible grow the value of their shareholder's investments. If the CEO is perceived as not doing so, he can be removed by the Board of Directors, and Directors seen as not doing their job can be sued by shareholders.
So the basic task of such managements is to invest corporate funds where they will yield the greatest returns. This leads to severe demands on publishing subsidiaries, as they will likely be expected to show a 10% return at a
minimum. This is extremely difficult for
any publisher: publishing has historically had numbers lower than that. And it produces stories like the one a couple of years or so ago about the well-respected publisher at Little, Brown being fired. She was under pressure from the Group President she reported to to produce more bestsellers. She resisted, because Little, Brown had historically been a "literary" imprint, and she saw it as pressure to dumb down her line. I doubt her Group President wanted to fire her, but
he was under pressure from his superiors to produce numbers in line with revenue and profit targets.
The question that any business must ask isn't "What is the maximum amount I can make?". It's "What is the
minimum amount I
have to make to survive?" That question has a simple answer: enough to cover the marginal cost of capital. Unfortunately, the answer to the second question is often
higher than the best guess the business can make about the answer to the first question, and companies in that position are in trouble. A lot of publishing falls into that category.
Prices will rise because costs rise, and the publishers want to stay in business.
______
Dennis