Will the Amazon Kindle cost US$50?

[astra]

Originally Posted by silvania

The advantage might amount to perhaps $1 on a $7 mass market book, at most.

Even though, how do they manage to price ebook in the following fashion:

connect $20

vs.

amazon $16.5 - HARDBACK not mass market book

[silvania]

Originally Posted by RWood

Does Amazon want to be in the ebook market?
Will Sony Connect Store go away? Even the #2 position behind Amazon will be far more profitable than the #1 position today.

Well, first of all, Sony is at best right now #3 in the english language ebook market, and Amazon is at best #4, so not sure where you're getting all that. Neither of them has prospects of reaching #1 within the next 12 months.

Second of all, even being #1 is meaningless to a company like Sony if that means paltry revenues. And Sony (or Amazon) defines "paltry" as "Less than $50 million per year." Remember that Sony was extremely dissappointed because the latest playstation didn't hit $200 million in sales fast enough.

Large corporations live quarter to quarter. The first time Sony (or Amazon) has 2 bad quarters in a row, they ditch every project that isn't clearly profitable and large enough to matter. Ebooks will NOT be in either of those categories for the forseeable future in either one of those companies.

I predict Sony exits the ebook market by late 2009. For exactly the same reason, Amazon exits at least in terms of hardware about one year later, 2010. It tends to take 2 to 4 years before things like this are shut down, the accountants run out of patience after that, and it is the accountants who rule the corporations. Examples: Gemstar, B&N ebooks, Sony Connect Music. All in that magic 2 to 4 year range.

[silvania]

Originally Posted by astra_lestat

Even though, how do they manage to price ebook in the following fashion:

connect $20

vs.

amazon $16.5 - HARDBACK not mass market book

1. Um, "at most" means "at most".

2. My specific example was of a paperback, not a hardcover. The economics of ebooks gets WORSE for hardcover, not better. For hardcovers, there are many cases where the ebook costs the retailer several dollars more than the pbook would, and that's before you consider economies of scale or support costs.

3. But in any case, what of it? I can find pbook retailers who have a higher price than amazon on this title as well. So how does that prove anything about the underlying costs of ebooks vs. pbooks? It only tells you something about each retailer's efficiency of operations and pricing strategy.

[nekokami]

@silvania,

Your arguments are very compelling, but can you give us some idea of how you know so much about the costs of publishing?

[rlauzon]

Originally Posted by silvania

and you're vastly overestimating the physical costs of pbooks.

I don't think so.

Paper costs more than recycled electrons. Ink costs more than recycled electrons. I can send 100K of data over the internet far cheaper than I can send 100 books via UPS.

Originally Posted by silvania

DRM fees consume 10 to 15% on an ebook. That's comparable to the printing costs of a pbook. A mass market paperback, that may list for $5 to $7, costs about 50 cents to print. The same ebook will cost about 50 to 75 cents to DRM.

Yet another reason why DRM is stupid.

Originally Posted by silvania

I realize the customers don't want DRM, and by the way neither do the retailers, but the publishers require it, and they require the retailers to eat the entire cost.

That's a problem with the retailers. They should be telling the publishers to eat the cost if they demand it.

Originally Posted by silvania

Thus they do not enjoy all kinds of economies of scale that pbooks have and overhead becomes a much larger, not smaller, percentage of the business.

Once the eBook is created, the cost of reproducing it is $0. So "economies of scale" don't even factor in. If the publisher is living in the 21th century, they should be doing everything electronically anyway - so creating that first eBook should be nearly free in the first place.

Originally Posted by silvania

And customer support is much, much higher for ebooks than pbooks. Nobody buys a print book and then sends in a trouble ticket asking how to open the book. But that happens commonly with ebooks where there is software to install, file transfers that must take place, interactions with firewalls, new software releases that contain bugs, etc.

That's due to proprietary formats and DRM. Remove those and the support calls will disappear.

[yvanleterrible]

@ Sylvania ( I like your moniker, it means something like 'from the woods')

Your views are pretty interesting.

I'd like to add something to them. If Sony were to remove their proprietary formats and DRM or at least offer more format choices, they might be very close to top.

[silvania]

Originally Posted by rlauzon

Paper costs more than recycled electrons. Ink costs more than recycled electrons. I can send 100K of data over the internet far cheaper than I can send 100 books via UPS.

Again, you're simply ignoring my points. Paper costs 50 cents for a mass market paperback, and DRM costs 50 to 75 cents, which is more. Warehousing and shipping costs are offset by higher royalties to authors. Electrons never figured into my post, you're just making stuff up.

Yet another reason why DRM is stupid.

Well, I agree with you there. But right now, no major publisher will allow their books to be sold as ebooks without it.

That's a problem with the retailers. They should be telling the publishers to eat the cost if they demand it.

Retailers can say that all day long, but then the publishers simply say, "so don't sell my books as ebooks." The publishers dictate the terms and it is quite difficult to get them to budge even a little. So the choice for a retailer is, either sell all small publisher books that don't require encryption, or pay for the DRM.

Once the eBook is created, the cost of reproducing it is $0. So "economies of scale" don't even factor in. If the publisher is living in the 21th century, they should be doing everything electronically anyway - so creating that first eBook should be nearly free in the first place.

Clearly you have never run a business yourself. Overhead is things like: the rent on the office where the workers are. The pay for the software developers and maintence people who keep the web server running, the phone bill, electricity. The publishers create the ebook files, not the retailers. Until you are covering those costs it's hard to cut prices.

That's due to proprietary formats and DRM. Remove those and the support calls will disappear.

And so will the customers, because the publishers will not let the latest stephen king novel to be published as an ebook, and the big name authors are primarily what brings in the consumers.

Look, if you contend it's so easy for retailers to come online with ebooks and make a killing at these prices, then you should just start your own ebook retail operation and reap the huge profits you assume are being made. Should be simple!

[Ravenflight]

There is an excellent Salon article detailing why books cost so much titled "Why do books cost so much?"
My favorite quote:

"When you're buying a book, you're not only paying for that book, but you're also paying for the book that will be returned and destroyed," explains Jason Epstein, former editorial director at Random House and the author of "Book Business: Publishing Past, Present, Future." "That means you're actually paying for a book-and-a-half, or a book-and-a-quarter."

So explain to me again why I'm paying 'book-and-a-half' prices for ebooks? Not to mention all the other costs mentioned in the article that simply do not exist for ebooks.

[silvania]

Originally Posted by yvanleterrible

@ Sylvania ( I like your moniker, it means something like 'from the woods')

Your views are pretty interesting.

I'd like to add something to them. If Sony were to remove their proprietary formats and DRM or at least offer more format choices, they might be very close to top.

Well, I agree that would be great for them, but look at the history of sony and you'll see that's very unlikely.

Yes they would sell more hardware if they opened up formats, or at least allowed other retailers to sell DRM titles onto their device. But that's not the way they think. The way they think is, they want to make all the money on the ebook content as well as the hardware.

They can't get rid of DRM, the publishers will not allow it. At least the big publishers won't. Besides, being a content provider themselves on the DVD side, they love DRM and see nothing wrong with it.

[NatCh]

Originally Posted by silvania

Retailers can say that all day long, but then the publishers simply say, "so don't sell my books as ebooks." The publishers dictate the terms and it is quite difficult to get them to budge even a little. So the choice for a retailer is, either sell all small publisher books that don't require encryption, or pay for the DRM.

Even if the pubs "payed" for the DRM themselves, the Retailers would just find that the book cost them 12 to 17% more (to cover the pubs' time in actually applying the DRM, you see, as well as the cost of the DRM itself), and the end result would be that end prices would rise about 2% -- in other words, there ain't no DRM fairy (just like there ain't no tax fairy) and the costs get passed to the consumer, regardless of their source.

[rlauzon]

Originally Posted by silvania

Again, you're simply ignoring my points. Paper costs 50 cents for a mass market paperback, and DRM costs 50 to 75 cents, which is more. Warehousing and shipping costs are offset by higher royalties to authors. Electrons never figured into my post, you're just making stuff up.

No, I'm not ignoring your points. But you are greatly overestimating how much profit comes out of a pBook.

DRM is a publisher CHOICE and not something that brings value to the customer. So the cost of DRM is irrelevant to me, the reader. If the publisher wants it, that's not a reason why I should pay more.

Originally Posted by silvania

Retailers can say that all day long, but then the publishers simply say, "so don't sell my books as ebooks." The publishers dictate the terms and it is quite difficult to get them to budge even a little. So the choice for a retailer is, either sell all small publisher books that don't require encryption, or pay for the DRM.

Then publishers lose the right to complain about eBook piracy.

Originally Posted by silvania

Clearly you have never run a business yourself. Overhead is things like: the rent on the office where the workers are. The pay for the software developers and maintence people who keep the web server running, the phone bill, electricity. The publishers create the ebook files, not the retailers. Until you are covering those costs it's hard to cut prices.

And if you go through an existing service, you don't need to set that all up yourself.

So if you CHOOSE to create your own eBookstore, those are costs you have CHOSEN to incur and are not a reason to overprice your eBooks.

Originally Posted by silvania

Look, if you contend it's so easy for retailers to come online with ebooks and make a killing at these prices, then you should just start your own ebook retail operation and reap the huge profits you assume are being made. Should be simple!

Why? Places like Fictionwise already exist.

[Liviu_5]

I love these threads about e-book cost vs p-book, about why drm is necessary, why e-books are expensive.

Get real; there is a reason commercial ebooks are the butt of jokes right now, and justifications are irrelevant. People DO NOT pay high prices for e-content as a group, people detest drm as a group, so as long as those 2 factors remain dominant, commercial e-books will still be the butt of jokes; if somehow a book reader (maybe Kindle, maybe Sony, maybe eink ETI) captures the imagination of the public and sells in millions, commercial e-books will still go nowhere at high prices and drm.

The bottom line is the current e-book publishing model does not work, is not going to work and we will have the same status quo until something better comes along. The music studios tried the same justifications and so what; the mp3 wave is still crushing them as Mr. Ringo put it so well...

[Ravenflight]

No it's all an elaborate conspiracy between publishers and bookstores to increase readership and sell more print books. Publishers know that letting people read books for free actually increases demand and thereby sales of print books. Except most of them (with the exception of Baen) would never admit it. Why do you not see them going after public libraries?

So long as ebook prices remain insanely high then ebook remain a niche. And the majority of that niche read the 'pirated' version, while also building the buzz (and thereby sales) of the print version. Meanwhile a large percentage of the ones who read the book for free, if they really liked the author, will go on to buy a copy of either that book or another of that authors books. This is building an authors following, and arguably the best method to do that is by letting people read for free. If you instill just the right dose of guilt along with it you ensure a loyal fanbase!

[JSWolf]

Originally Posted by astra_lestat

Even though, how do they manage to price ebook in the following fashion:

connect $20

vs.

amazon $16.5 - HARDBACK not mass market book

The publisher sets the price. BooksOnBoard has it for the very same $19.96 in all the other various formats they sell. Plus remember that unless you spend at least $25 at Amazon, you pay SHIPPING at about $3.50 for ground. So that makes the ebook and the hardcover from Amazon about the same price. Plus you have to wait for Amazon to send it to you whereas the ebook you can download right away and start reading when you want.

[JSWolf]

Originally Posted by silvania

Well, I agree with you there. But right now, no major publisher will allow their books to be sold as ebooks without it.

Baen is sells ebooks with no DRM.

And so will the customers, because the publishers will not let the latest Stephen King novel to be published as an ebook, and the big name authors are primarily what brings in the consumers.

Stephen King's latest Blaze IS available as an ebook at Sony Connect and other ebook online shops.