Why are ebooks so expensive?

[anamardoll]

Originally Posted by MikeB1972

Of course the main problem with publishers pricing back list books to match used paperbacks is that it's commercial suicide, before you start frothing at the mouth please read on and feel free to point out the error in my reasoning.

I won't flame you, honest.

I can agree that publishing the back list to compete with used prices would be, well, tricky. (I don't think its "commercial suicide", but let's agree to disagree on that for a moment.) But in the Faulkner example I keep banging on about, the ebook version is priced $2 more than the NEW paperback.

This is particularly amusing on the B&N site because they now show all versions and prices, with the cheap paperback version on top.

The ebook -- correct my math if I'm wrong -- costs 25% more than the paperback that is going to eventually get shipped to Half Price and the like at a discounted rate because -- let's face it -- Faulkner isn't exactly flying off the shelves at the "new paperback" prices.

If the ebook were priced the same as the paperback book, I'd see it as one book, two formats, one price for the classic. As it is, I'm right chuffed.

[DiapDealer]

The fact that I can buy 100s of books for next to nothing is irrelevant if the books I really want to read are very expensive.

Very true. I agree completely. And when it comes to reading habits, I'm of course only speaking about myself, but the number of books being released every year ("expensive" books) that I r e a l l y want to read are quite few. So I don't think I'm getting hit particularly hard. Other's mileage will certainly vary.

[tompe]

Originally Posted by anamardoll

I won't flame you, honest.

I can agree that publishing the back list to compete with used prices would be, well, tricky. (I don't think its "commercial suicide", but let's agree to disagree on that for a moment.) But in the Faulkner example I keep banging on about, the ebook version is priced $2 more than the NEW paperback.

This is particularly amusing on the B&N site because they now show all versions and prices, with the cheap paperback version on top.

The ebook -- correct my math if I'm wrong -- costs 25% more than the paperback that is going to eventually get shipped to Half Price and the like at a discounted rate because -- let's face it -- Faulkner isn't exactly flying off the shelves at the "new paperback" prices.

And that is an argument for the price. The market for most backlist books are not so big so then it is rational with a higher price since the people that are going to buy the book most probably are not price sensitive.

If ebooks was sold without DRM I would have no problem buying them for slightly higher price than the corresponding paper version since in ebooks I get dictionary lookup and search. Now I do not buy any ebooks at all since I do not buy books with DRM.

[MikeB1972]

Originally Posted by anamardoll

The ebook -- correct my math if I'm wrong -- costs 25% more than the paperback that is going to eventually get shipped to Half Price and the like at a discounted rate because -- let's face it -- Faulkner isn't exactly flying off the shelves at the "new paperback" prices.

If the ebook were priced the same as the paperback book, I'd see it as one book, two formats, one price for the classic. As it is, I'm right chuffed.

I'd agree with you on this one, I think that in some cases the publishers don't seem to get the difference between list price and selling price (they have knocked 25% off the list price for the ebook) - even more complicated here in the UK as eBooks have 20% VAT as well.

So, as long as they are setting the eBook price and the bookseller is setting the pBook price, these are always going to happen.

Of course you can always find exceptions either way.
Jim Butcher as an example (first agency author I could think of from the top of my head)
Latest books availble only in hardback
http://www.barnesandnoble.com/w/ghos...her/1030442261
Hardback 46% off $15.02, eBook $14.99
http://www.barnesandnoble.com/w/side...=jim%2bbutcher
Hardback 39% off $15.82, eBook $12.99
first in series as paperback
http://www.barnesandnoble.com/w/stor...=jim%2bbutcher
Paperback $9.99, eBook $9.99
Although, strangely, the collection of the first 6 eBooks books costs slightly more than getting them seperately.

Rather than specific examples does anyone have a bot that can compare eBook to pBook prices for, say, the top 1000 sellers on B&N so we can see if the eBooks are generally cheaper or more expensive that pBooks?

I agree that the price should be less than the lowest new pBook, but then you have the problem of loss leaders etc.

Anyway, my point was that they should not price at used paperback prices ($1.99 for the book you listed).

[anamardoll]

Anyway, my point was that they should not price at used paperback prices ($1.99 for the book you listed).

Well, that remains to be seen, really. If NO ONE buys the new Faulkner books at $10, they've made nothing. If 20 people buy the new Faulkner at $2, they've made $40 net profit.

Now, that's net, not gross. So I don't know if they've made a gross profit at the $2 pricing. But I do know they didn't make gross profit at the $10 price. (In my example where no one bought it, of course.)

Pricing is tricky. But I think there's a difference between a price literally not providing gross profit and a price that just isn't as high a gross profit as Knopf would like. Pricing all ebooks at $9.99 regardless of circumstances because $9.99 is what an ebook is "worth" is -- imho -- a terrible business strategy.

[MikeB1972]

Originally Posted by anamardoll

Pricing is tricky. But I think there's a difference between a price literally not providing gross profit and a price that just isn't as high a gross profit as Knopf would like. Pricing all ebooks at $9.99 regardless of circumstances because $9.99 is what an ebook is "worth" is -- imho -- a terrible business strategy.

Agreed, however pricing all ebooks at $1.99 is a worse business strategy, I agree that backlist books should be cheaper but looking at it from the publishers perspective if someone buys a book from them at $1.99 instead of a book at $9.99 thats cutting into their own profits rather badly.

Also - bear in mind that I am not talking about any specific title here - I am talking about a general policy. So, for the publisher, to cannibalise it's own sales with cheaper backlist books is a bit detrimental to them.

I understand that some (possibly many) will buy a different book from a cheaper source. But if all the publishers start with a race to the lowest price to try to catch all sales they will very quickly be out of business.

There are many backlist books I haven't read and though I would be happy if the prices dropped to £2 per eBook for the backlist I would no longer buy any new(ish) releases if that happened (bearing in mind that I don't buy at hardback prices to start with). You could probably get away with this on pop culture books as they would no longer be as relevant when they hit backlist status but with SF, Fantasy, Urban Fantasy etc you would be hard pressed to explain why anyone should pay more for newer (paperback price) titles than for backlist (I doubt many people will think an urban fantasy book is incredibly dated because no one uses a smartphone for example).

For the purpose of my argument here I'm classing anything more than about 4 years old as backlist.

You might be able to make a case that books more than 25 years old (number randomly pulled out of my hat) should be cheaper, although if the publisher thinks there are not enough people to buy at paperback equivalent prices I doubt they will go the the trouble of digitising the book.

[anamardoll]

Originally Posted by MikeB1972

Agreed, however pricing all ebooks at $1.99 is a worse business strategy, I agree that backlist books should be cheaper but looking at it from the publishers perspective if someone buys a book from them at $1.99 instead of a book at $9.99 thats cutting into their own profits rather badly.

Well, but first off, I'm not arguing for a set price for all ebooks. That's my point, that doesn't make sense. Imagine if there were some "set price" for all hardcovers, or all paperbacks. There's a set range, usually, but to say that ALL X format should be Y price is ridiculous.

And a $1.99 price only "cuts into profits" if comparable numbers of people would have bought at the $9.99 price. Assuming that is assuming facts very much not in evidence. I have no doubt that your reasoning matches the publishers' reasoning, but I think it's based on wrong starting assumptions.

Originally Posted by MikeB1972

Also - bear in mind that I am not talking about any specific title here - I am talking about a general policy. So, for the publisher, to cannibalise it's own sales with cheaper backlist books is a bit detrimental to them.

And this is a classic case of not understanding the market. The idea that I won't buy Galenorn's new Sisters of the Moon book for $9.99 because I spent all my money on Faulkner's "Sound and the Fury" at $2.99 and now I'm good, thanks, totally misunderstands book buying habits. The idea that the backlist cannibalizes the current market is, in my personal opinion, silly.

Furthermore, that backlist already exists. If I want to buy Faulkner at $2.99, I can do that VERY easily. But the money will go to Half Price Books instead of straight into the Knopf coffers. Not the best outcome for Knopf, no?

Originally Posted by MikeB1972

I understand that some (possibly many) will buy a different book from a cheaper source. But if all the publishers start with a race to the lowest price to try to catch all sales they will very quickly be out of business.

The slippery slope argument is also silly. Again, it's predicated on some kind of notion that if the publishers don't stand together, then the world will end because people only buy based on price. If Scholastic prices Bob Butler's "MURDER WITH A SIDE OF CHEESE" at $8.50, then how can Knopf's price of Jim Johnson's "A MONKEY TO REMEMBER" at $9.99 possibly compete?!

It will compete because readers have different preferences and different shopping habits. It will compete because it's a different author, a different genre, and a different book altogether. It will compete because -- again -- readers aren't just wallets flying towards the smallest price point.

I'm not buying up Harlequin romance novels at $4 a pop and neglecting new fantasy lit at $6 because, HEY BARGAIN, because I don't like romance novels. If the slippery slope argument were true, all our base would already belong to Harlequin and Knopf and Scholastic wouldn't even exist.

Originally Posted by MikeB1972

There are many backlist books I haven't read and though I would be happy if the prices dropped to £2 per eBook for the backlist I would no longer buy any new(ish) releases if that happened (bearing in mind that I don't buy at hardback prices to start with). You could probably get away with this on pop culture books as they would no longer be as relevant when they hit backlist status but with SF, Fantasy, Urban Fantasy etc you would be hard pressed to explain why anyone should pay more for newer (paperback price) titles than for backlist (I doubt many people will think an urban fantasy book is incredibly dated because no one uses a smartphone for example).

For the purpose of my argument here I'm classing anything more than about 4 years old as backlist.

You might be able to make a case that books more than 25 years old (number randomly pulled out of my hat) should be cheaper, although if the publisher thinks there are not enough people to buy at paperback equivalent prices I doubt they will go the the trouble of digitising the book.

No, no, no. I'm not saying that we should introduce a pricing scheme based on some kind of age-of-book algorithm. I'm saying that the market needs to be MORE flexible than that. This "what should we price this book at, Bob?" "well, let's pull out the PRICE-O-METER chart and check" mentality is part of the problem.

[Greg Anos]

Stop thinking e-books for a minute.

There is a maximum profit price for any monopoly. It is determined by number of buyers at any price point (which drops as prices rise) versus the percent of price as profit (which rises as price increases). There is a sweet spot for maximum cash flow price along the curve. Every monopoly tries to find that point and maintain it.

Note - it has nothing to do with production cost, just market behavior.

Publisher are in a odd sort of business. They are in a competitive market for individual monopolies. (That's what I.P. is, a monopoly.) They know as long as they collude on the overall market, they can attempt to find (and exploit) the monopoly maximum cash flow pricing points. So they sell at the same price points for similar merchandise, hopefully at the combined (all publishers) maximum overall max cash flow point.

Anything that erodes the ability to maintain this point is considered a threat to their business, and so it is. That's why they went after used books back in 1910. (shot down by the US Supreme Court). That's why the disdain for the backlist, there isn't enough market at the monopoly protecting maximum cash flow price point to make it worthwhile for them. The outliers, (Harlequin, Baen, O'Reilly, et. al.) are brushed off as irrelevant (don't look at the man behind the curtain!), because the publishers don't want the buying public to understand their cash flow maximizing behavior.

And their ultimate horror is "piracy", because it cuts out their entire cash flow.

That's what all the hollering is about. Once you understand the game, all the prices and behaviors make sense. Even copyright extension. (Think of them as price support mechanisms, like soil banking for farmers.)

RSE

[Fbone]

Originally Posted by anamardoll

I can agree that publishing the back list to compete with used prices would be, well, tricky. (I don't think its "commercial suicide", but let's agree to disagree on that for a moment.) But in the Faulkner example I keep banging on about, the ebook version is priced $2 more than the NEW paperback.

This is particularly amusing on the B&N site because they now show all versions and prices, with the cheap paperback version on top.

I see Sound and the Fury at $13.00 for paperback and $9.99 for ebook.

[anamardoll]

Originally Posted by Fbone

I see Sound and the Fury at $13.00 for paperback and $9.99 for ebook.

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If you mean the $13 list price, I consider B&N/Amazon's permanent discounts to be the actual price. (In the same way that Kohl's constant "sales" aren't fooling anyone. )

[Fbone]

Originally Posted by anamardoll

If you mean the $13 list price, I consider B&N/Amazon's permanent discounts to be the actual price. (In the same way that Kohl's constant "sales" aren't fooling anyone. )

But the publisher considers $13.00 to be the actual price. They have no control on what B&N/Amazon will charge for the book.

B&N could sell the book for $3.12. Would you expect Knopf to lower the ebook price?

[anamardoll]

Originally Posted by Fbone

But the publisher considers $13.00 to be the actual price. They have no control on what B&N/Amazon will charge for the book.

B&N could sell the book for $3.12. Would you expect Knopf to lower the ebook price?

Well, since you're asking me what I would like Knopf to do, I would like them to let B&N set the price of the ebook in the same way that B&N sets the price of the paperbook, and then B&N can be in charge of price matching their listing of the paperbook to their listing of the ebook.

Duh.

[MikeB1972]

Originally Posted by anamardoll

And a $1.99 price only "cuts into profits" if comparable numbers of people would have bought at the $9.99 price. Assuming that is assuming facts very much not in evidence. I have no doubt that your reasoning matches the publishers' reasoning, but I think it's based on wrong starting assumptions.

And this is a classic case of not understanding the market. The idea that I won't buy Galenorn's new Sisters of the Moon book for $9.99 because I spent all my money on Faulkner's "Sound and the Fury" at $2.99 and now I'm good, thanks, totally misunderstands book buying habits. The idea that the backlist cannibalizes the current market is, in my personal opinion, silly.

This is where we have a difference of opinion, the backlist does cannibalise the current market - How many people have said, here on mobileread, that they only read PD books now (and you can't get more backlist than someone who has been dead for more than 70 years).

Originally Posted by anamardoll

It will compete because readers have different preferences and different shopping habits. It will compete because it's a different author, a different genre, and a different book altogether. It will compete because -- again -- readers aren't just wallets flying towards the smallest price point.

I'm not buying up Harlequin romance novels at $4 a pop and neglecting new fantasy lit at $6 because, HEY BARGAIN, because I don't like romance novels. If the slippery slope argument were true, all our base would already belong to Harlequin and Knopf and Scholastic wouldn't even exist.

It's not about buying a harlequin romance instead of a SF book (sorry switched to SF, never sure what people class as fantasy nowadays).
Its about buying Robery Sawyers's Hominids instead of Peter F Hamilton's Evolutionary Void, both good books, both worth reading, but with Sawyer's published back in 2003.

If your into vampires there is a ton of backlist stuff that can directly compete with anything produced now (Tanya Huff, Nancy Collins etc).

And if your competing with the backlist for historical fiction your in big trouble.

Like horror? Then try James Herbert, Steven King, Dean Koontz etc - hundreds of backlist books just as good as anything new.

The problem is that, whatever your genre, there is a huge backlist that you havn't read (and lots of it published by the publisher trying to sell you that new book)

I agree that you may buy the shiny new book from your favourite author, but if your looking for a new book in <insert genre here>, why buy one for $10 when you can buy one for $2? Just as good, from the same publisher - in fact you can probably read better ones from the back list, just start going through the <insert favourite award here> winners and nominees.

Hell, I've still not read all of the Nebula award winners, price all of them at $2 and I'll buy them tomorrow - of course I wont need to buy anything for the next 2 years. so some publisher somewhere is losing a ton of money from me.

[anamardoll]

Originally Posted by MikeB1972

This is where we have a difference of opinion, the backlist does cannibalise the current market - How many people have said, here on mobileread, that they only read PD books now (and you can't get more backlist than someone who has been dead for more than 70 years).

I haven't seen a single person say that they ONLY read public domain. I've seen quite a few people say that they read free books (PD and otherwise) while they save up to buy the crucial titles they can't pass up. This data point would seem to prove MY point: if Bob REALLY wants to read "A Dance With Dragons", he's going to buy it no matter how many copies of "Little Women" and "Pride and Prejudice" he has for free on his eReader.

If your argument is that someone, somewhere, is ONLY reading free books and that that somehow magically cannibalizes the backlist on a large scale, I don't know what to say to that. You do realize there will always be free books, right? No matter how much price-fixing Knopf and the rest of the big publishers do. So those "I only read free books" customers -- wherever they are -- are already lost. Knopf bringing down the price of Faulkner to suit ME isn't going to affect those "free only" customers one way or the other.

Originally Posted by MikeB1972

It's not about buying a harlequin romance instead of a SF book (sorry switched to SF, never sure what people class as fantasy nowadays).

Its about buying Robery Sawyers's Hominids instead of Peter F Hamilton's Evolutionary Void, both good books, both worth reading, but with Sawyer's published back in 2003.

If your into vampires there is a ton of backlist stuff that can directly compete with anything produced now (Tanya Huff, Nancy Collins etc).

And if your competing with the backlist for historical fiction your in big trouble.

Like horror? Then try James Herbert, Steven King, Dean Koontz etc - hundreds of backlist books just as good as anything new.

The problem is that, whatever your genre, there is a huge backlist that you havn't read (and lots of it published by the publisher trying to sell you that new book)

I agree that you may buy the shiny new book from your favourite author, but if your looking for a new book in <insert genre here>, why buy one for $10 when you can buy one for $2? Just as good, from the same publisher - in fact you can probably read better ones from the back list, just start going through the <insert favourite award here> winners and nominees.

Hell, I've still not read all of the Nebula award winners, price all of them at $2 and I'll buy them tomorrow - of course I wont need to buy anything for the next 2 years. so some publisher somewhere is losing a ton of money from me.

You're assuming that all authors in a genre are interchangeable to readers and the only difference is the price point. This is ludicrous. If Galenorn's next Sisters of the Moon book is under $20, I WILL buy it. If Butcher's next Dresden book is given away with a $30 check, I still won't accept it. This is a matter of personal taste.

[outlander78]

It seems that I have been shopping at the wrong sites. Where do I find the heavily discounted backlist titles that are going for $2 and up?