|02-02-2009, 07:42 AM||#1|
Join Date: Oct 2002
Device: Sony PRS-650 / Nexus 7 / Kindle PW
Cheaper e-books will kill us, says publisher
Many of us ponder this burning question why e-books are typically priced the same or just insignificantly less than their paper counterparts. Doesn't common reason dictate that the cost for producing and distributing e-books is considerably lower and that henceforth part of the lower cost should be reflected in a lower price? Well, many of us believe so, including yours truly. Still, it's worth taking a look at how publishers are trying to defend their current pricing policy. Mr. Michael Justus, CEO of a German publisher, gave an interview in a Sunday newspaper yesterday and summed it up like this:
Wow. This interview is not for the faint of heart. Anybody care to bite at this?
Related discussions: Why is the price of eBooks still so high?, Outrageously Priced Ebooks- Does anyone actually by them?, Ebooks high prices - the reasons beyond
|02-02-2009, 08:06 AM||#2|
Opinionated [but right]
Join Date: Apr 2008
Device: Cybook Gen3, PRS 505, Kindle International, HTC Desire
"Comparable... costs". Snort. Giggle. Guffaw. Oh no, the pain is starting again!
|02-02-2009, 08:19 AM||#3|
Join Date: May 2006
Device: PocketBook 360, before it was Sony Reader, cassiopeia A-20
Dear Mr. Justus
Thank you for a valuable insight.
Please have a look at www.Baen.com
They have managed to sell DRM free books for very atractive prices for years.
Also please consider several reasons why we (the readers, the potential customers, the e-book enthusiasts) clamour for cheaper prices for e-books.
1. We feel that there are significant costs - like handling, warehousing, transporting physical objects (books), pulping unsold paper books that shops return to the publisher that are not present in an e-book bussiness model.
2. We feel that with an e-book we receive less value when we ... aehm ... "purchase"(**) an e-book. When I purchase a physical book I own it. Period. I can sell it to a second hand shop. I can lend it to a friend. My grandchildren will be able to read it. I have certain fair-use rights that are taken from me when get an e-book instead.
(**) understand: pay for a licence to read a DRM crippled file on a limited number of approved reading devices, for a limited time.
Last edited by kacir; 02-02-2009 at 08:25 AM.
|02-02-2009, 08:23 AM||#4|
Join Date: Jan 2008
Location: Spaniard in Sweden
Device: Cybook Orizon
|02-02-2009, 08:24 AM||#5|
Join Date: May 2006
Device: PocketBook 360, before it was Sony Reader, cassiopeia A-20
$1 < $10 000
I was just able to actually compare one dollar to ten thousand dollars. Those sums clearly ARE comparable. And i personally do not believe that the difference between the two distribution models is greater than 1/10000
|02-02-2009, 08:30 AM||#6|
Recovering Gadget Addict
Join Date: May 2004
Location: Pittsburgh, PA
Device: Droid Charge, MacBook Air, Nook HD+
You could say similar things for just about any transformation of an industry, couldn't you?
But the winners are not going to be those that won't transform their business and infrastructure. The winners are those that can adapt and find a revenue model that works. Markets are tough - you have to continually reinvent yourself to survive. That's one of the signs that markets are efficient.
If Mr. Justus doesn't feel that he can find a way to succeed in a digital age, I'm sure someone else will be happy to do it in his place.
|02-02-2009, 08:35 AM||#7|
zeldinha zippy zeldissima
Join Date: Dec 2007
Location: Paris, France
Device: eb1150 & is that a nook in her pocket, or she just happy to see you?
that is a very long list and a substantial article, which i don't have time to respond to in depth, however something which strikes me is that many of the costs he mentions are setup / creation / upgrade costs ; that is, one-time initial costs to develop systems and infrastructure to handle ebooks. every business has these and there are always operating costs involved in running a business, particularly if you try to evolve along with a changing industry, technology, or situation. but Mr. Justus seems to think that these costs should be able to be recovered immediately by charging high prices for ebooks from the start, rather than conceiving these costs as typical costs to be amortized by a long-term strategy.
here is an analogy to show why this is unreasonable : recently, i had to replace my computer, which i use to do my job as a webdesigner. this cost me about 650€. to follow Mr. Justus' reasoning, i should have told the client whose project i was working on at that time, "sorry, i've had to buy a new computer to finish your website, so i'll have to charge you 650€ extra to pay for that cost. you can understand why, right ? i need this computer to do your project, so you should support the full cost." this sounds ridiculous, i'm sure even Mr. Justus would agree. but for some reason he thinks that in publishing, this is a reasonable way to operate.
if i tried to recoup every cost involved in running my business instantly, on the back of whatever client i had at that time, instead of saying that i am investing in my business and over time i will recover the costs of the new computer / upgrade to a new version of a graphics program / time spent training myself in new techniques or keeping abreast of the evolution of the industry / whatever by doing many projects with it, then whatever project i was doing at the time i incurred the costs would likely not look very profitable to me, and i would think "well, there is clearly no way to make a living as a webdesigner !! the cost of my new computer / time spent learning this new technique / etc. is eating up all the money i'm making on this project !" and i would be very shortsighted indeed.
perhaps because publishing has not substantially changed in a very long time, publishers seem completely disconnected from any realistic vision of what is involved in keeping a business relevant in a changing professional landscape. if they don't change their perspective, then yes, they will probably not survive the next few years and the emergence of ebooks. but it will be their own fault for not having a reasonable business strategy, not the fault of ebooks.
|02-02-2009, 09:09 AM||#8|
Join Date: Jul 2006
Location: Atlanta, GA
Device: Sony 950, Kindle Graphite DX, iRex iLiad
He also doesn't seem to realize that although there are start up costs with switching to "e", his other costs related to physical books will decrease as "e" increases. They're will obviously be a delay factor, but it will incur. He also seems to be under the mistaken impression that he will be able to maintain the same business margins as he did previously. This is not always the case when industries transform. Sometimes margins stay the same, sometimes they increase and sometimes they decrease. Good leaders get ahead of the curve.
If anyone owns stock in this company I would suggest selling now! Obviously not a very forward looking and thinking leader.
|02-02-2009, 09:45 AM||#9|
Join Date: Nov 2006
Location: Virginia, USA
Device: Sony PRS-500
This sounds a lot like the reasons given many, many years ago for why paperback books will kill the publishing industry. Later it was the rise of chain bookstores that would kill publishing and more recently it was Internet bookstores that were to kill publishing. Any change is bad for them from their point-of-view.
|02-02-2009, 09:58 AM||#10|
Join Date: Oct 2008
Location: Miami FL
Device: PRS-505, Jetbook, Jetbook Mini, Jetbook Color, Astak Ez Reader Pro
I think I agree with about anyone above here.
I haven't read the article in full neither;though great topic to get our frustrations out!
How much do they say it differs in cost to set up an office with 5 employees and a server (director, IT data, 2 Book design and formatters, and someone to handle the finances),compared to hiring a Library sized warehouse, packaging and handling, still buy an office for 3 employees, ...
Don't you think most books of writers are digitally created in the first place?
It takes more time to format a book into a paper design, then it does to format it to fit the ebook reader screens!
1- So one gets rid of the electricity and property costs of a large building,in exchange for a slightly larger office equipped with a server (if not,one can order server space and a domain name quite cheap)
2- One gets rid of shipping and handling
3- Every book sold does not need to be re-ordered, but can be uploaded as many customers there are that want this book once it's on the server, so one gets also rid of re-ordering or resupplying stock
4- The employee that normally works in the warehouse sorting out the books,is being replaced by an IT technician that keeps track of updates.
5- The company consists of less people with less strenuous work,and less ability to have 'accidents',so insurance costs go down as well.
6- The statistics are Bull SH##O.o ,, since they all happen automatically. No longer is there anyone needed to input the data in SAP, since the end user does practically all the administrative work by ordering the book online..
7- I'm sorry but I couldn't read the post any further, since I'm in a bad mood already...
Then my question would be, where the F@?# does he thinks all these costs went to? Comparable? Don't make me laugh!
Posts (/Lying comments) like this just make me more pissed!
Not to the original poster of this thread, but the sales guy who's going to teach us that ebooks should cost more than pbooks....
Last edited by ProDigit; 02-02-2009 at 10:02 AM.
|02-02-2009, 10:03 AM||#11|
Join Date: Dec 2008
Device: Sony Reader PRS-505
That actually kinda urked me about how they assume people are buying ebooks instead of regular books.
I don't know about most people here but the ebooks I have so far since I got my reader are exactly the same books I own... and to even finish my collection of ebooks I'd need about 400$... not exactly fair when you already OWN the books.
Maybe there should be some thing where each books has a serial code and when you go to download an ebook you either pay the normal price or you get a really cheap price for offering the serial code of the book you already own.
|02-02-2009, 10:11 AM||#12|
Join Date: Aug 2008
Location: Ottawa, Ontario, Canada
There was an interesting article on Ars Technica today which talks about it from the other side of the fence. The article was written by a former employee of Palm Digital Media/Peanut Press, and talks about their attempts to get content from publishers. Page 4 is particularly relevant to this discussion:
|02-02-2009, 10:31 AM||#13|
Join Date: Sep 2006
Location: Zagreb, Croatia
Device: Kindle Paperwhite
...the publishers like Mr. Justus will face extinction. While he is talking about all the costs of e-book publishing, guys who know next to nothing about paper book publishing will start publishing e-books like crazy - in a garage for a start.
I will not cry for the old publishers as I believe the publishers who adapt to the New Publishing World will be giving a bigger pie slice to the authors (instead of some leftover crumbs like today).
<naive mode> Let's face it. Author could e-mail me a copy of his/her book and I would gladly pay him through Paypal double the amount Justuses would pay him. It would be so cheap that piracy would be waste of time. </naive mode>
Btw, I am a bit under influence of reading the following article: The once and future e-book: on reading in the digital age:
Last edited by Mycropht; 02-02-2009 at 02:17 PM.
|02-02-2009, 10:47 AM||#14|
Join Date: Jan 2007
Location: Tampa, FL USA
Device: Kindle Touch
wow just wow. This only demonstrates to me how clueless this guy (industry?) is about technology.
It is "comparable" cost to set up a physical warehouse as it is to set up a digital infrastructure? Did he mean "equivalent"? Because if he did there is no way you can tell me building (or renting) a 10,000SqFt warehouse (for example) and staffing and maintenance costs the same as renting a Virtual Server at GoDaddy.
As far as setting up the "infrastructure" this can be bought of the shelf from Adoboe and I assume from eReader too. Or you could plug into the Kindle Publishing System and I assume Sony has a similar one. The commerce systems are allready well established. Digital delivery of software is pretty much the norm these days. Once again, this is off the shelf software. Most likley there are open source systems. If they go DRM free this can be done more quickly and less expensivly also.
Also, the first company that creates a system to source all documents in ePub and from them create pbooks and ebooks will be able to sell/lease that system to other publishers. Heck the software I work on the same doc source is used to create the help file and the printed manuals. It is called single sourceing and it is done all the time in the software industry.
Imagine if Ford said that it will take money to modernize our line from using people to using robots. So, for the next 5 years cars built on the automated line will be 30% more in order to pay for this. Well, no one would buy those cars. Then they would say, see no one wnats cars built by robots.
|02-02-2009, 10:50 AM||#15|
Join Date: Jan 2008
Device: Kobo Touch, Kindle DXG, iPad 3
Number two makes sense if you really feel, after weighing all pros and cons, an ebook is less valuable than a paper book. Personally for many books I'd much rather have the ebook than a paper copy which to means it's more valuable. The only thing ruining the party for me are ebooks that are tied to just one platform that I may or may not have in the future. Those ebooks are relatively less valuable to me. In fact I avoid them.
Now of course as a consumer I wish every product were as cheap as possible but I don't think the cheapest possible price is always the "correct" price.
Last edited by TheJohnNewton; 02-02-2009 at 10:52 AM.
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