How much cost difference is there really?

[Alfy]

Originally Posted by Morlac

PDFs are not the most attractive platform, but converting my books to anything else will be more expensive since they are already designed with PDFs in mind as what we deliver to the printer.

That is one bit I do not understand: I assume that, when you receive the original from the author, it is formatted in Word format or equivalent. I further assume any edits made by the publishing house are made on this original file. Only as a final step is the PDF for publishing produced. Could you not simply produce mobi or epub files from this Word document? That would be easy enough.

It is my understanding that the biggest problem facing publishers to produce ebooks for old editions is that they do not have the original Word document, and have to extract the text from the PDF. But that does not hold true for newer books.

And by the way, yes, it is great to have a publisher posting on this forum. Still waiting for Hachette to turn up, though...

[AnemicOak]

Originally Posted by Alfy

That is one bit I do not understand: I assume that, when you receive the original from the author, it is formatted in Word format or equivalent. I further assume any edits made by the publishing house are made on this original file. Only as a final step is the PDF for publishing produced. Could you not simply produce mobi or epub files from this Word document? That would be easy enough.

The source the PDF is made from would usually be an InDesign or Quark document/layout. Although a wordprocessing doc is in the loop someplace along the line I'm not sure if final copy edits are made in a word processor or the layout software. I would guess each publisher has a slightly different workflow. I do know a lot of edits are still done on paper for the most part and then applied to the electronic file.

InDesign will produce ePubs directly which Adobe recommends be converted to Mobi/Kindle using Calibre. Have had a chance to give InDesign's ePub output a good check yet to see if it's any good or not though.

It is my understanding that the biggest problem facing publishers to produce ebooks for old editions is that they do not have the original Word document, and have to extract the text from the PDF. But that does not hold true for newer books.

For older books they have to scan and ocr for the most part.

[Morlac]

Originally Posted by AnemicOak

The source the PDF is made from would usually be an InDesign or Quark document/layout. Although a wordprocessing doc is in the loop someplace along the line I'm not sure if final copy edits are made in a word processor or the layout software. I would guess each publisher has a slightly different workflow. I do know a lot of edits are still done on paper for the most part and then applied to the electronic file.

InDesign will produce ePubs directly which Adobe recommends be converted to Mobi/Kindle using Calibre. Have had a chance to give InDesign's ePub output a good check yet to see if it's any good or not though.


For older books they have to scan and ocr for the most part.

We use InDesign. Our editors have some leeway on whether or how much they want to edit the original manuscript file (usually in Word). For some books where there's not going to be a lot of restructuring in layout (multiple columns, graphics, etc) a manuscript edit makes more sense. Since, however, a big part of preparing a book for us is getting the various elements to layout and fit properly, it's unavoidable that most of the editing has to be done in layout after the book has been poured into InDesign. (And yes, a lot of our editing is still done on hard copy and then applied electronically.)

Anyway, I do know that InDesign can export files as epubs, but like you, I haven't really had the time to explore how well that works and whether or not our files will export properly. When I tried a sample file the other day, for example, InDesign choked up about halfway through the conversion and couldn't go any further.

I'm still trying to educate myself on the various formats and their pros and cons and how easy they will be for us to work with!

[wodin]

I understand the editors and layout people are not geeks, but it's a simple matter to hire geeks. The point is that whatever electronic format you have, the conversion process from text in a file to any e-book format can be made to be largely automatic. That's what comuters are REALLY good at.

[AnemicOak]

Originally Posted by Morlac

I'm still trying to educate myself on the various formats and their pros and cons and how easy they will be for us to work with!

If you are going through a big distributor like OverDrive I know some, if not all, of the big pubs are now only producing an ePub (and a Mobi for Kindle IIRC) and sending that. The distros are doing the conversion to other formats, at least that's what someone at Orbit (Hachette) told me they do.

[AnemicOak]

Originally Posted by wodin

I understand the editors and layout people are not geeks, but it's a simple matter to hire geeks. The point is that whatever electronic format you have, the conversion process from text in a file to any e-book format can be made to be largely automatic. That's what comuters are REALLY good at.

A lot of that automatic stuff only gets you so far. Sometimes it works perfectly, sometimes not so much.

Most of the design/layout/production types I know are at least kinda geeky

[DaleDe]

Originally Posted by Alfy

That is one bit I do not understand: I assume that, when you receive the original from the author, it is formatted in Word format or equivalent. I further assume any edits made by the publishing house are made on this original file. Only as a final step is the PDF for publishing produced. Could you not simply produce mobi or epub files from this Word document? That would be easy enough.

It is my understanding that the biggest problem facing publishers to produce ebooks for old editions is that they do not have the original Word document, and have to extract the text from the PDF. But that does not hold true for newer books.

And by the way, yes, it is great to have a publisher posting on this forum. Still waiting for Hachette to turn up, though...

Lets suppose you get a word file. It does not translate easily to ePUB. Word likes to fix the font size, fix the margins, etc. etc. Some writers may use word but others may use Indesign or Framemaker or any number of other authoring tools. They are typically converted to PDF early in the game and the publisher sends out proofs to the author. Markups happen but seldom to the original document since they are just page changes. Often they make the changes directly to the PDF and then it is the PDF that gets sent to the printer.

Many publishers do not understand source code control or any of the software tools or methodologies. At some point eBooks may be easy to produce but not today for most publishers I am afraid. Authors are doing their own thing so it is not as easy as you seem to think.

Dale

[Elfwreck]

Originally Posted by AnemicOak

Except of course printed books don't stop it. Many (most?) pirated books are scan/ocr's of pbooks.

That was true five years ago; these days, many pirated books are commercial ebooks with the DRM stripped.

Note that originally non-DRM'd books are somewhat harder to find pirate versions of than most popular DRM'd ebooks. It's like removing the DRM is work, and they don't want that effort to be "wasted" by only doing it for one reader, so they share the "liberated" file. However, non-DRM'd books, especially those that cost less than paperbacks, are apparently thought of as "buy it yourself" books.

Not always; plenty of Baen's books are bouncing around the torrent networks. (Erm. Some of which aren't pirated; Baen encourages booksharing.) But the more expensive and restricted a popular book is, the more likely it is to show up on the darknets.

[AnemicOak]

Originally Posted by Elfwreck

That was true five years ago; these days, many pirated books are commercial ebooks with the DRM stripped.

While true to some extent (certainly some of the most popular books) there have been a number of books this past year that have not had, or had a delayed, ebook release but they were still out there from a scanned source a few days to a week after the pbook came out and there are still tons of older books being scanned and 'released'.

[Hellmark]

Every single pirated ebook I've seen has been OCR'ed. You can always tell by the way some words or letters are just out of place. Just kinda kills the reading experience, when you have to figure out what is being said all the time.

[doreenjoy]

Originally Posted by wallcraft

What is known is that big publishers typically get 50% of the list price from retailers. This is for paper books and ebooks.

Not quite.

The discount rate on paper books is between 40 and 60%. Big publishers offer 60%. That means the retailer pays 40% of the cover price to the distributor, who then pays a fraction of that to the publisher, and the publisher then pays a fraction to the author.

Smaller publishers have trouble getting books into retail outlets because the small publishers can't afford to take such a steep discount on a book.

And like Harry T said, no publisher is going to be willing to share their numbers.

[pdurrant]

In the particular instance you quote, Mercedes Lackey would have received absolutely nothing from the sale of that hardback. It is what's known as "remaindered" - that is, the remainder of the stock of the hardback print run was sold off by the publisher to the discount book chain at 'cost' price.

Many ebooks cost more than paperbacks at the moment for a variety of reasons including:

* publishers not wanting to sell ebooks instead of paper books. They've paid for the printing of the paper books, and would rather sell them first
* publishers wanting to recoup the early investment costs in setting up ebook production
* publishers having to pay for the cost of DRM
* (in the EU) normal rate VAT on ebooks but low (or zero) on paper books

As for how much authors receive from ebooks - it obviously varies. Baen have stated that their authors receive a royalty per ebook that between the royalty received for a hardback and a paperback.

One reason baen can offer such good prices is that they have a very short supply chain - from them to webscriptions.net. None of the 'cover' price goes to distributors/wholesalers.

I have seen other figures suggesting that a 25% royalty of per-book net receipts is the 'standard' royalty, but that doesn't tell you how much discount publishers have to give the distributor/wholesaler/retailer chain. If you guess 50% I don't think you'd be far wrong. If so, eBook royalties to authors would be 12.5% of retail price from most publishers.

Originally Posted by Mare of Earth

I am very curious about this, as recently I wanted to pick up an ebook copy of Foundation by Mercedes Lackey. An ebook copy costs about $19.00, vs. the local Books a Million had the hardcover marked down to $6. Often, the ebook copy costs more than the paperback copy - with the exception of Baen ebooks. I want to know why the ebook costs so much more, and I want to know how much of the purchase price gets back to the author.

[emellaich]

Great comments from all here. In particular, I've added a bit of Karma to Morlac because of his/her specialized insights to the market.

First, I'd like to note that the $1 per paperback book price difference is not necessarily trivial. For a book that sells for $10, that could mean a new selling price of $9. Actually, based on the magic of percentages, the price of $9 could actually result in better margins for the publisher.

Let me illustrate with an example -- I'm sure the numbers are wrong, but the example should still work with the correct numbers. Let's say that a p-book sells for $10 (9.99). Someone mentioned that big publishers typically get 60% or $6. Let's assume that the profit to the publisher is $1 of that.

Now, consider an ebook priced at $9. The publisher gets 60% or $5.40. However, the publisher's costs plus the original profits should only be $5 (the original amount to the publisher minus the $1 savings in printing). This means that the publisher now earns the same original profit ($1) plus an additional $0.40 in profit. This gives the publisher a new profit of $1.40 on the same book instead of $1.

Of course the trick with the math above is that the publisher pushes some of the $1 price cut back on the distributor and retailer. As a result the publisher sees $1 in savings, but take less than that in price reduction.

Instead we can consider a 'fair' publisher who absorbs the entire $1 price cut themselves. Instead of earning $6 they earn $5. In this case, the profit is still $1 per book. However, originally, the profit margin is 1/6 or 17%, and now the profit margin is 1/5 or 20%. Yes, the dollars are the same, but the margin as a percentage actually improved because it took less revenue to achieve the same profit. And, in fact if we believe in the economic laws of supply and demand, the publisher should expect some increased sales because of the lower price thus resulting in increased real profits as well as higher profit margins.

Meanwhile the retailer and distributor should also see higher margins. Yes, the servers do cost something, but do they cost as much as a physical book store? As much as the book shelves that are used to hold the books? How about the physical labor to unpack, sort and shelve books? And, of course there is no capital tied up in inventory.

MLH

[emellaich]

Continuing with my previous post. We always see the argument that the savings are only the $1 in printing costs. And, of course we must remember the server costs involved in ebooks.

However, the focus here should be on the entire supply chain. The publisher saves $1 in printing, but what about the retailer and distributor? Cut out the transportation costs. The physical warehouse space. The bookstore rent or mortgage. The physical shelves. I can't believe that the server costs more than a physical book store costs.

Then there are the labor costs. At the current U.S. minimum wage of $7.25 plus the employers share of social security plus a smidgen for unemployment tax the average worker costs about $0.13 per minute. Now add in the manpower costs of moving the boxes and pallets through the warehouse; loading and unloading the trucks; sorting the books and shelving them in the local store; time spent on the reference desk and checkout time by cashiers. Every minute of personnel time added to getting that book through the system increases the cost by 13 cents.

[Morlac]

Thanks for the karma, emellaich!

You make excellent points. I do think that previously it was stated that the discount big pubs offer to the retailers/distributors is 60%, so the pub is only keeping 40% at that point. (Not being my area, I can't say for sure which is correct.)

The warehousing cost of physical books varies, but it will vary quite a bit depending on the setup and how it's accounted for.

One of my previous employers owned their own warehouses outright. So long as they weren't full, the additional cost to store more books was close to zero. You might argue that the places cost money to purchase initially, plus ongoing utilities and taxes, of course. But certainly, someone who's directly paying by the pallet-load stored is going to feel the pinch of excess inventory more acutely. And even there, assuming that your books have a decent value compared to their size and that you're not renting space in the middle of New York City to store them, it's manageable.

The bigger issue to me at least is waste. It's been discussed in the thread that publishers may remainder to get rid of wildly excess inventory. They may also have to take back large quantities of slow moving stock from the retailers. In my own niche, individual state standards and curricula and even test formats change periodically. While they usually try to do so in an orderly way, budgets and politics often force changes off-cycle. That can get expensive for any publisher, but particularly so for a small one like me. That's one of the big attractions of e-publishing to me -- I *hate* having to shred "obsolete" books. Both because it's a financial hit and an environmental one.

Putting some wildly guesstimated numbers on those statements:

Assume that a publisher can fit something like 1,500 softcover books into a pallet, give or take several hundred. Assuming that he's using a third-party warehouse that charges in the neighborhood of $10 to $15 per pallet per month. Use the high end of that to make the numbers easier -- that makes it 1 cent per book per month in storage fees on average. (Of course, you don't get billed by the book, you get billed by the pallet, so if you have one book left on the pallet, you still have to pay the full pallet charge of $15/month!)

Assume that the publisher prints a very short run -- only 3,000 books. He stores those books for a ridiculously long time. Say that he sells half his books in the first year and then doesn't get rid of the rest until the end of year 4. So in year 1, he pays $360 in storage fees (two pallets per month at $15/month). In years 2 - 4 he pays $540 total in storage fees (one pallet per month x $15/month x 36 months). That's a total of $900 storage.

But now let's say instead that the publisher has to destroy the unsold inventory at the end of year 2 because it's not moving fast enough or because the books are obsolete. He's paid $540 in storage fees and -- assuming he sold 500 books in year 2, he has 1,000 books left. So he's out the $1,000 it cost to print those books as well.

That's why personally I would rather keep books in inventory so long as they are not actually made obsolete by changing markets.

Personally also, I think the cost of actually fulfilling a physical order is usually greater than the cost of warehousing. (But on the other hand, you don't have to pay that fulfillment cost until you've actually got an order that should more than pay for it!) In any case -- that's certainly another advantage of properly set up e-book distribution. The cost of shipping and handling to fulfill a physical order is pretty high. But on the (what is it now, fourth or fifth other hand), unless you're offering free shipping, you usually get most or all of that covered by the customer. My impression is that some outfits even come out ahead on the shipping and handling charges! Whereas customers (rightly) don't want to pay a shipping and handling charge for a downloaded ebook!