Ebooks high prices - the reasons beyond

[nelsonescorcio]

Originally Posted by xianfox

This will be the last time I weigh in on this discussion. I'm going to give a couple of real-world examples from the company I work for.

Keep in mind, we are a very small publishing house serving a very select niche market.

The last book we printed was a 324 page, trade paperback book that we put a list price of $9.99 on. We printed only 5,000 copies of this book; a ridiculously small number. Our final cost per printed book is $0.89.

The last time we did a run of a similarly sized book of 20,000 copies, our cost was $0.48 per book.

If we were a large publishing house, printing books in the 100,000 copy range, on a daily basis, buying paper directly from the manufacturer, months in advance, our costs would be far lower per copy.

I get the impression some may think that a $10 book has $3 worth of paper in it. I hope this is helpful.

Thanks for your insight. I am quite surprised for those numbers.

Still, as already said, there are other costs related exclusively to printed editons.

Regards
Nelson

[nelsonescorcio]

Originally Posted by pilotbob

Well that's great.. but are you saying there are NO other costs involved in that? What about shipping, warehousing, returns, pulping... If you print 20,000 books and 10,000 get pulped that doubles the cost of each book you've sold. If you do a run of 20,000 and 50,000 people want to buy it you have lost out on 30,000 sales because of your poor projections. Most of those people won't come back after you've printed another run. That is opportunity cost.

Also, now consider what would the cost be of NOT printing that book. Putting it on a server somewhere that you perhaps rent for $20 a month, or pay storage/transfer fees to a service like Amazon S3. You make those files available to ebook sellers. They can sell 1 or 1000 of that book and your costs are the same.

I think to say it costs 48¢ per book is simplistic and not looking at the full business cycle.

That said, lets assume printing a book is 48¢ per unit. Lets assume doing digital only costs you 10¢. Also, lets say that you sell that book directly so your revenue is $9.99 per book rather than whatever you get wholesale for each book. Isn't that a better business model?

But, I think that the basis for alot of the complaints and miff is the fact that ebooks are selling for MORE than the price of a TBP or MMP. That certainly makes ZERO sense to any of us.

Thanks for you comments.

BOb

100% with you.

Regards
Nelson

[jj2me]

Originally Posted by rhadin

The day I receive an author's manuscript in ASCII will be the first day in the 25 years I have been in publishing that such an event will have occurred. Authors usually submit their manuscripts in a MS Word document that is riddled with styles and formatting -- usually haphazardly done. At least for the books on which I work, cleanup takes a lot of time. Then the manuscript has to be edited and recoded to conform to the codes needed to produce the final version of the book.

I'll admit I do not work on novels and there may be less involved -- or not -- with that genre, but the nonfiction books I work on take several weeks worth of work to prepare a manuscript for publication. The process is not as cut and dried as some would make it to be.

I appreciate the pros weighing in.

Ah, thanks. I was continually looking at the delta costs being minimal. But right, the cleanup work has to be charged to all editions evenly.

But once the fork is done (real pulp to typesetting, eBook directly to eStore?), except for marketing, it seems the costs shouldn't be shared. I fully expected very low eBook prices, since I imagined that that the majority of the costs of the physical book were for after-printing sales and distribution. Shelf space and shipping and retail sales *require* a high retail markup for physical books. Though again, I may be missing something or over-exaggerating the physical distribution and retail costs (Software stores take a ridiculous cut, but who knows why?). Just one uninformed person's expectations.

[rhadin]

Originally Posted by kazbates

Do people really buy reader devices to save money on ebooks? I agree that the prices are too high considering the publishers aren't paying for printing and distributing, but I would buy the books anyway for the sheer convenience of buying books at home, receiving them instantly on my computer and then reading them wherever I go. . . .

I didn't buy (ask for as a Christmas gift to be technically correct ) my Sony Reader to save money on ebooks. Truthfully, at the time I was unaware of the DRM problems, which might well have made me rethink asking for such an expensive gift.

I asked for the Reader because I liked the portability and because for me there are two categories of books: (1) books that I want to add to my library, my permanent collection, and (2) those that I want to read but do not want to add to my library. Naively, I assumed that ebooks would be less expensive than pbooks, when the truth is that because of DRM ebooks are signifcantly more expensive than pbooks.

However, I do buy ebooks but with caution. That is, I will not buy a fiction ebook unless I am already familiar with the author and like the author; or the description is intriguing and the ebook, even with DRM, costs less than $6; or the ebook is free.

Today is a good example. I had never read anything by Fiona McIntosh but HarperCollins gave away Odalisque and yesterday I finally got around to reading it. I found it so good, that I finished it in 1 day and this morning bought from the Sony store volumes 2 and 3 of the series, which I will start shortly. I would never have bought any of McIntosh's books absent that free one because of DRM and pricing.

So there is some connection between buying a reading device and expecting to spend less on ebooks -- at least for me -- but only because of DRM. Absent DRM, knowing that I own the ebook like I own a pbook, then equivalent pricing would be less a problem, althoug I would expect the pricing to be equivalent to the paperback version, not the hardcover version.

[Elfwreck]

Originally Posted by starrigger

Turning a book manuscript file--even a clean one--into an ebook is a time-intensive process, far more than most people on this forum seem to realize. It's definitely not "a few seconds" as someone earlier said.

The belief is that it's "a few seconds" more than required for paper production, not that it's only a few seconds, total. That whatever process a publisher uses to format its books for print, could be adapted with relatively little effort to create two output forms: one print-ready, one ebook. Or three ebooks in different formats.

Conversion of raw text to ebook takes substantial time and effort for individuals because they're working with, well, raw text. Publishers aren't--they're working, at some point, with print-ready text, with whatever style & formatting arrangements work for them. They have a steady flow of books formatted with the same processes. If nothing else, I have trouble believing that making PDFs of all their books would take any substantial time per book.

However, even if an ebook requires starting from scratch, from the same base manuscript sent to the publisher, it doesn't take more effort than making a pbook.

As someone said before, the costs of editorial, art, marketing, sales and promotion, and a lot more are costs that will apply to any book, tree or e.

I'd like to see less expensive ebooks, too, but the notion that ebooks are a trivial expense to produce and sell is very much a myth.

Production costs are the same, or roughly equivalent--right up to the point where the pbook is printed. At which point, the pbook gains a whole cluster of costs that ebooks ignore entirely: paper for pages, special paper for covers, binding, inventory tracking, packing, shipping, storage, sales packaging, possible return costs.

Charging the same for both implies that those costs are negligible or non-existent. Charging *more* for ebooks than paperbacks implies that either paper costs less than creating hyperlinks, or that publishers want to discourage ebook sales.

[starrigger]

Originally Posted by Elfwreck

The belief is that it's "a few seconds" more than required for paper production, not that it's only a few seconds, total. That whatever process a publisher uses to format its books for print, could be adapted with relatively little effort to create two output forms: one print-ready, one ebook. Or three ebooks in different formats.

Conversion of raw text to ebook takes substantial time and effort for individuals because they're working with, well, raw text. Publishers aren't--they're working, at some point, with print-ready text, with whatever style & formatting arrangements work for them. They have a steady flow of books formatted with the same processes. If nothing else, I have trouble believing that making PDFs of all their books would take any substantial time per book.

We're both talking about the same thing. Yes, once systems have been developed to seamlessly translate, for example, a typesetter's file into an ebook format, it should be a simple process. But it is not a seamless process right now. The typesetter's files are just too different. I worked with one for my own production of Sunborn, and it was a nightmare. The people at Tor are taking a slightly different avenue, but it's still a laborious process. Yes, it should be automatable, but I suspect part of the problem right now is that someone has to invest the money to develop the software. I'm sure they're working on it. Maybe some publishers have already solved that.

Tor just in the last couple of years started keeping PDF archive files of their books. That, in fact, is what I put up for free for my Sunborn download. But it's a poor starting point for an ebook. Actually a terrible starting point. I tried to use it and gave up.

However, even if an ebook requires starting from scratch, from the same base manuscript sent to the publisher, it doesn't take more effort than making a pbook.

No. But with ebooks being only a small fraction of sales, most publishers aren't going to want to spend that same effort twice, with a low payoff for the ebooks.

Production costs are the same, or roughly equivalent--right up to the point where the pbook is printed. At which point, the pbook gains a whole cluster of costs that ebooks ignore entirely: paper for pages, special paper for covers, binding, inventory tracking, packing, shipping, storage, sales packaging, possible return costs.

Charging the same for both implies that those costs are negligible or non-existent. Charging *more* for ebooks than paperbacks implies that either paper costs less than creating hyperlinks, or that publishers want to discourage ebook sales.

There are distribution costs for ebooks that you're leaving out. As an example, my titles that are available on ereads.com get sold through fictionwise, among other places. Half the take goes to fictionwise. So that's similar to paper books. If they set up their own online store, that costs money. I'm not saying it's more than paper, but I'm not sure it's as much less as is commonly assumed. And remember, right now it's not making all that much money, by comparison.

Having said that, I agree completely that ebooks should not cost more than treebooks. I have argued in favor of lower prices on my own ebooks. I'm hoping some of them will be up on Baen soon, so they'll be available for a lower price. I am completely in favor of lower costs for ebooks. I'd rather sell 1000 copies for a low profit than 100 for a high profit.

I'm just saying it's not as simple as many folk seem to believe.

Side note: One area where I might agree with the cynical view is in textbooks. Clearly an area where ebooks could be of enormous benefit to the user, the student. But my brother is a textbook author, and he says his publisher simply doesn't know what to do about it, and they are, indeed, running scared.

[Steven Lyle Jordan]

Originally Posted by starrigger

Side note: One area where I might agree with the cynical view is in textbooks. Clearly an area where ebooks could be of enormous benefit to the user, the student. But my brother is a textbook author, and he says his publisher simply doesn't know what to do about it, and they are, indeed, running scared.

That's truly a shame... they're going to leave it for someone else to figure out, then try to decide whether they can emulate it, or shut down. The scary part is, what kind of textbooks are we likely to get out of such an industry sea-change?

[DaleDe]

Originally Posted by Phogg

I will irrefutably point out at this point, that putting a function into existing word processors to format what is being written directly into whatever ebook format is desired is not only doable - it would be something that authors would not likely balk at. It is a feature I myself might pay for

The whole cost of formatting thing still is a cost that can be cut out.
And done that way it would take little time.

You are sitting here reading this forum in front of a computer people.
How hard is it to remember just what it is that computers do.

Actually many word processors already have this feature for certain formats. Framemaker can produce eBooks in a variety of formats. Word has a free add on to produce eBooks in LIT format and can of course produce PDF eBooks. And with macros word processors can build eBooks behind the scenes as demonstrated in Open Office.

Dale

[DaleDe]

Originally Posted by Boston

Yes, but assuming the cost to produce is the same. Ebooks cannot be shared.

Major publishing houses acknowledge that its the growing resale market that is hurting them. So if they encourage eBooks which cannot be shared and price them to encourage e over p, it could be a win-win.

eBooks without DRM can be shared all the time although it may not be legal. This is one of the fears of publishers.

Dale

[kazbates]

Originally Posted by rhadin

However, I do buy ebooks but with caution. That is, I will not buy a fiction ebook unless I am already familiar with the author and like the author; or the description is intriguing and the ebook, even with DRM, costs less than $6; or the ebook is free.

I know what you mean. I have tried a few of the multiformat books from some of the online publishers but have only made additional purchases by a particular author a couple of times. For the most part, I've been a little disappointed in the quality of the writing and editing. I prefer to buy ebooks from authors I know and like so as not to waste my precious "book allowance"! Of course, there are plenty of classics out there that I haven't read yet. . .
kaz

[kacir]

Originally Posted by starrigger

It's definitely not "a few seconds" as someone earlier said.

Preparing manuscript for a publishing as an e-book can be *very* quick ...

... once you have done all that intensive work needed to prepare manuscript for your in-house format for p-book publishing.

And this is what people are referring to. We have been talking about selling an e-book for higher price than paperback or, in some cases, even a fancy hardback. The work for preparation the manuscript to a publishable format is the same, yet with hardback you have many significant additional costs:
- paper,
- printing,
- transport,
- warehousing,
- costs for running a brick and mortar store (rent, salaries, heating, ...)
- buying back unsold books from brick and mortar stores
and many others.

With e-book the additional costs are:
- rent for a server somewhere in your ISP server room (you would be surprised how cheap you can get that)
- price of some e-commerce software (you only need to pay this once and than you can sell virtually unlimited number of books. Here again you can get the basic functionality *very* cheap (**))
- salary of an administrator[s]
and OPTIONALLY
- license fees for whatever non-in-house DRM you might want to use
- maintenance fees for DRM authorization server after you stop selling the books. Here you can, of course, do what the vast majority of sellers of DRM hobbled content do when they stop selling. You can switch off the server immediately, leaving your sucker^H^H^H^H^H^Hcustomers with unusable content.

(**) do not get me started about the Sony book store and their basic functionality - like searching for a book

[ProfJulie]

Most of the books I'd like to read were released some time ago (not considered classics through) and they have run on best seller lists for weeks on end when people were purchasing the paper books at stores and online. My belief about those books is that the costs have been incurred and paid for by the bestseller prices long before they are converted to eBooks.

Most of the time after a book has run its course on the best seller lists, the price of the paper book goes way down. At that point, I expect the eBook price to be reasonably below the paper price, since I think any dollars that come in from the sale of eBooks for those kinds of books is gravy (well, after the publisher or distributor pays the DRM costs). For those kinds of books, my belief is that the primary cost for eBooks is DRM costs.

Now if a publishing company's business is purely focused on eBooks, then I'd expect to pay more for those books because there are still the usual formatting, layout, etc costs of creating a book, but for a publishing company who is primarily focused on paper books, I don't think the costs for eBooks should be the same as for paper books, especially when I consider the constraints associated with eBooks (DRM, not able to share books or donate books, etc.).

[jbjb]

Originally Posted by starrigger

It's definitely not "a few seconds" as someone earlier said.

I'm sure it's not, yet several members of this forum (you know who you are!) are able to produce utterly gorgeous ebooks from various unformatted texts at a spectacular rate. Why is it so much harder for the trade to do this?

/JB

[Liviu_5]

Originally Posted by starrigger

I'm just saying it's not as simple as many folk seem to believe.

To me it's pretty simple - the fact that publishers are able to release original mmpb's at 8$ and make a profit on the titles that catch, shows that whatever costs are there - including edit, store discount and so on - are included in that price and while a premium hardcover, price 3x of a mmpb, has some extra costs, the high premium price is simply due to the better, more solid format.

So it comes to utility/value of format and I think that e-books are much more disposable than mmpb's.

Regarding utility, it's trickier since for example I'd rather have an ebook than a print book for many books, so I place some utility on having e, but then you need differential pricing to include the utility preference of each person.

So overall, if e-books move toward a uniform pricing system, format based the way mmpb/tpb/hdc tiers function now there is no question that e-books should go somewhat lower than mmpb's, maybe with the same restrictions, like second editions if hc is released...

Personally though I think that digital allows much more flexible pricing and a reverse auction kind of system is doable - the way the used book market acts today in practice. Hard to say if it's socially practical though since the market kind of ingrained us with "new - fixed price with possible discounts", "used - variable pricing"...

Let's see how Apple will do with their differential pricing...

[ficbot]

"I don’t mind one bit paying a FAIR price. But I am not a complete fool and willing to pay 20 dollars for a book that is available on the high street for 10 dollars."

This, to me, is the bottom line. The publishers are *crazy* if they think people will want to pay more money when they don't have to. If the costs to produce an ebook are really that much higher, then they need to economize and find cheaper ways (e.g. cutting out the middleman, requesting authors to submit manuscripts in plain text, whatever). They need to develop methods which will allow them to price their product in a competitive way.