Publishers still missing the point on e-book prices

[spindlegirl]

Originally Posted by raac

It's not "no space at all" but the space they consume is, effectively, insignificant. The average epub must be about 500kb. 5000 of them should take up under 3 gigs. Even on a small laptop hard-drive that's negligible and it easily fits on a USB stick. In comparison, 5000 physical books would present storage challenge.

Also, Unlimited stock contained within one file. If I take a physical book off the shelf, I am subtracting stock. An e-book gives birth to itself upon payment received.

[Steven Lyle Jordan]

Originally Posted by ProfCrash

I am not willing to troll through the thousands of independent authors books to take a guess and hope that the book is good and that it was proof read.

Funny... I have that problem with big publisher's books...

At any rate, it's always good to know how unwelcome my efforts are.

[Andrew H.]

Originally Posted by transmitthis

"Added Value"?

Can you resell an ebook... like you can a physical, no so their value is greatly diminished.

Strictly speaking, they are selling you licences to read.

Greatly diminished to whom? If you don't resell books (and most people don't), there's not much diminishment.

And this may be a local issue, but I've always found reselling books was never very lucrative...Half Price Books may pay 5-10% of a books value for a newer book in demand. For other books, it's more like a recycling center that gives you a tip to cover gas expenses.

[stonetools]

Originally Posted by John F

This sounds very interesting. Could you provide a link to the economist's analysis?

You might want to consult
THIS ECONOMIST>
After 235 years, his master work holds up surprising well. You might want to review his discussion of "market price."

OK, let me simplify it for you. If a product is overpriced, demand for the product will decline and sales of the product will go down. Precisely the opposite has happened with ebooks.
The burden of proof is therefore on those who thinks the publishers have "got it wrong".

[JoeD]

Originally Posted by stonetools

You might want to consult
THIS ECONOMIST>
After 235 years, his master work holds up surprising well. You might want to review his discussion of "market price."

OK, let me simplify it for you. If a product is overpriced, demand for the product will decline and sales of the product will go down. Precisely the opposite has happened with ebooks.
The burden of proof is therefore on those who thinks the publishers have "got it wrong".

Wouldn't that assume a stable and established market? ebooks are still a relatively new market and one that is still growing. Rather than a drop in sales, agency pricing is more likely to cause a reduction in rate of growth, perhaps stabalising in years to come with a smaller market than it might otherwise attain (assuming pricing policies remain the same)

[Kevin8or]

Originally Posted by transmitthis

"Added Value"?

Can you resell an ebook... like you can a physical, no so their value is greatly diminished.

Strictly speaking, they are selling you licences to read.

Originally Posted by Andrew H.

Greatly diminished to whom? If you don't resell books (and most people don't), there's not much diminishment.

The market value of your e-book, once you've purchased it, is zero. Even if your used paper books aren't worth a lot, at least they can be resold or simply re-used by others. This is a grievous aspect of e-books which some people here prefer to ignore or deny or become defensive over.

The inability to re-sell (or give away) your e-books will have an effect on new book prices, too. The re-sale market exerts downward pressure on book prices. As fewer paper books are purchased and as the secondary market continues to shrink, the prices of new books (incl. e-books) will increase further than they would have with a more robust secondary market.

A different claim of "added value" is that e-books "don't degrade" like physical books, implying that e-books have greater longevity. A hardcover book can last a hundred years or more, sitting on a shelf in a home. I fully expect that the e-books I buy today will be unusable 50 years from now because of changing devices and e-book formats. 100 years? Fuhgettaboutit. (Oh dear, I forgot about DRM. Who can read my e-books when I die?)

I've yet to see a persuasive argument that e-books "add value" beyond that of paper books. I like e-books. I chiefly read e-books. But I'm not blind to their downsides.

[carld]

Ebooks do add some value. I value the ease of transport, the ability to adjust font sizes and the relative ease of sharing books between devices, however they also lose some value in comparison to paper books as you noted.

It's not all pluses or minuses, and what some people value is going to be different than what other people value.

[elcreative]

Originally Posted by Steven Lyle Jordan

Point One: Not all paper comes from tree "farms." Worldwide, entire virgin forests are being clearcut, and many of them left that way, for paper production. (The cleared land is very popular with cattle ranchers, raising more beef for your dinner table and fast-food franchises.)

Point Two: You can chop down a tree in five minutes. Growing one to completely replace it, and to recover the loss to environment and animal habitats, takes decades.

Point Three: The amount of chemicals, bleaches, oils, energy and clean water used by the average pulp mill is staggering, and those wastes are dumped back into the environment when used up; so the paper-making process is very ecologically damaging.

Point Four: The only reason tropical hardwoods are not used for paper production is that tree harvesters make a higher profit when used as furniture. They are being chopped down all the same.

Point One: Name one... and be consistent, it's either clearcut for paper production by replanting or used for cattle, they don't raise cattle in forests...

Point two: So... if you don't need the paper then you don't need the tree to be replanted anyway...

Point three: And so is the crap fro recycling paper but because it's "recycling" that's OK...

Point four: True as far as it goes but ignores basic point... hardwoods are not only difficult to make into paper, they make lousy paper... it's no coincidence that finer quality papers are made with fabrics - linen based and rag based.

Point five: I added one... you still ignore the fact that reducing paper reduces reasons for planting trees for pulp and is more likely to lead to the land being used for other (non-tree) purposes...

[tompe]

Originally Posted by Kevin8or

I've yet to see a persuasive argument that e-books "add value" beyond that of paper books. I like e-books. I chiefly read e-books. But I'm not blind to their downsides.

A lot of added value. You can choose the size of the letters. You can annotate, look up word easily in a dictionary or on the web, share your notes on the book with friends and so on.

[stonetools]

Originally Posted by JoeD

Wouldn't that assume a stable and established market? ebooks are still a relatively new market and one that is still growing. Rather than a drop in sales, agency pricing is more likely to cause a reduction in rate of growth, perhaps stabalising in years to come with a smaller market than it might otherwise attain (assuming pricing policies remain the same)

The burden of proof would still be on those who are claiming that agency pricing is causing a reduction in the rate of growth. There is no evidence of anything but a rapid rise in e-book sales, despite agency pricing.

[Elfwreck]

Originally Posted by stonetools

From the point of view of an economist, there is simply zero evidence that agency pricing is hurting Ebook sales,

From the point of view of authors who have ebooks available both through agency pricing and their own releases, agency pricing is costing them a lot of money. The fact that *all* kinds of ebooks are selling more than they used to doesn't mean that agency pricing is good.

Do you really think Konrath's self-published titles are of tremendously higher quality than the ones still locked into agency publishers? That the mainstream publishers who have the rights to some of Rusch's novels somehow just picked the worst of her writing to keep in print, to such an extent that an unadvertised novella with a bad cover can sell ten times as well as an agency book?

Authors who have books available in both price systems: agency, and self-chosen, keep saying that agency pricing is horrible, and they make more money on $3 self-releases than $12 publishers' novels.

If agency pricing is better *for publishers* but worse for authors, that's not a mark in its favor.

Allegations that publishers colluded to fix prices are just that- allegations. Allegations aren't evidence.

They're allegations backed with some evidence, like Jobs' public statement that books won't be cheaper at Amazon than the iBookstore -- and that they'll be in the $12-15 range.

The Justice Dep't doesn't investigate without evidence. Allegations may be all the general public has, but there's already noteworthy amounts of facts that support the accusation of illegal price-fixing, or it wouldn't be getting any official attention.

[John F]

Originally Posted by stonetools

You might want to consult
THIS ECONOMIST>
After 235 years, his master work holds up surprising well. You might want to review his discussion of "market price."

Thank you for clarifying your position.

[HansTWN]

Originally Posted by stonetools

The burden of proof would still be on those who are claiming that agency pricing is causing a reduction in the rate of growth. There is no evidence of anything but a rapid rise in e-book sales, despite agency pricing.

That will be coming in a year or two, after everybody and his dog has a new ereading device and Joe average has figured out what is happening with ebook prices. The publishers can now bask in their current unsuspected windfall and ignore the future or they can plan for the future. How can you feel so safe on the uphill portion of a roller coaster?

[JoeD]

Originally Posted by stonetools

The burden of proof would still be on those who are claiming that agency pricing is causing a reduction in the rate of growth. There is no evidence of anything but a rapid rise in e-book sales, despite agency pricing.

Had a quick google to see if I could find anything to backup the claim and turned up this post by amazon.

Unsurprisingly, when prices went up on agency-priced books, sales immediately shifted away from agency publishers and towards the rest of our store. In fact, since agency prices went into effect on some e-books in the US, unit sales of books priced under the agency model have slowed to nearly half the rate of growth of the rest of Kindle book sales. This is a significant difference, as the growth of the total Kindle business has been substantial - up to the end of September, we've sold more than three times as many Kindle books in 2010 as we did up to the end of September in 2009. And in the US, Kindle editions now outsell hardcover editions, even while our hardcover business is growing.

You may be skeptical about what Amazon state, however, if what Amazon says is false, it would be a trivial matter for the affected publishers to show otherwise.

Also, just noticed Elfwreck's post, that's additional evidence of agency pricing impacting sales from the people who perhaps care the most about it and have the most to lose.

[stonetools]

From the point of view of authors who have ebooks available both through agency pricing and their own releases, agency pricing is costing them a lot of money. The fact that *all* kinds of ebooks are selling more than they used to doesn't mean that agency pricing is good.

Doesn't mean its bad either. Its up to agency pricing's detractors to prove it unduly depressed sales. There is no evidence of that.

Do you really think Konrath's self-published titles are of tremendously higher quality than the ones still locked into agency publishers? That the mainstream publishers who have the rights to some of Rusch's novels somehow just picked the worst of her writing to keep in print, to such an extent that an unadvertised novella with a bad cover can sell ten times as well as an agency book?

(Shrug) I'll leave judgments of quality to the market. There are agency priced mystery/thriller authors who are selling a lot more copies than Mr. Konrath.

Authors who have books available in both price systems: agency, and self-chosen, keep saying that agency pricing is horrible, and they make more money on $3 self-releases than $12 publishers' novels.

If agency pricing is better *for publishers* but worse for authors, that's not a mark in its favor.

There are plenty of authors who seem perfectly happy with agency pricing and accept the publisher's argument that Amazon was underpricing ebooks

They're allegations backed with some evidence, like Jobs' public statement that books won't be cheaper at Amazon than the iBookstore -- and that they'll be in the $12-15 range.

The Justice Dep't doesn't investigate without evidence. Allegations may be all the general public has, but there's already noteworthy amounts of facts that support the accusation of illegal price-fixing, or it wouldn't be getting any official attention.

We will just have to wait and see how the investigation pans out. Right now there is just enough evidence to warrant a look-see by the DOJ- not enough for a conclusion , either way. Be advised that the courts have concluded that manufacturers have every right to set prices.

LINK

Reading court's rationale is instructive:

The Justice wrote, "A single manufacturer's use of vertical price restraints tends to eliminate intrabrand price competition; this in turn encourages retailers to invest in tangible or intangible services or promotional efforts that aid the manufacturer's position as against rival manufacturers. Resale price maintenance also has the potential to give consumers more options so that they can choose among low-price, low-service brands; high-price, high-service brands; and brands that fall in between. Absent vertical price restraints, the retail services that enhance interbrand competition might be underprovided. This is because discounting retailers can free ride on retailers who furnish services and then capture some of the increased demand those services generate."

By not adhering to minimum prices, the Court maintained, discounters were able to essentially let competitors do much of the heavy lifting required to make a sale.

"Consumers might learn, for example, about the benefits of a manufacturer's product from a retailer that invests in fine showrooms, offers product demonstrations, or hires and trains knowledgeable employees. Or consumers might decide to buy the product because they see it in a retail establishment that has a reputation for selling high-quality merchandise. If the consumer can then buy the product from a retailer that discounts because it has not spent capital providing services or developing a quality reputation, the high-service retailer will lose sales to the discounter, forcing it to cut back its services to a level lower than consumers would otherwise prefer. Minimum resale price maintenance alleviates the problem because it prevents the discounter from undercutting the service provider. With price competition decreased, the manufacturer's retailers compete among themselves over services."

Substitute " Amazon" for "discounter", and you pretty much have the publisher's and independent bookseller's argument for agency pricing.