11-26-2010, 11:44 AM | #1 |
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Interesting article on book pricing and why it might rise
Register hardware has an interesting article on book pricing policy and why it might rise in the near future. Curious that with the cost of paper, printing, warehousing, transporting, displaying, and shop space removed, e-books should still cost as much if not more than the paper version. Doesn't make sense does it?
http://www.reghardware.com/2010/11/2..._book_pricing/ |
11-26-2010, 11:49 AM | #2 | |
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VAT change on eBooks?
I though the most interesting bit was this:
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11-26-2010, 01:38 PM | #3 |
Is that a sandwich?
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11-26-2010, 03:21 PM | #4 | |
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I know that I just read 4 pages of text, but it doesn't really feel like it said anything other than that the prices will increase. I'm not even sure of the point that the author of the article is trying to make? Does he agree with the pricing or not? But I did like the ending: Quote:
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11-26-2010, 04:42 PM | #5 | |
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But to see why, you have to take a step back from the perspective of the consumer who wants stuff cheaper, and look at what goes into making books. eBooks drop the print, bind, warehouse, and distribute steps of publication, but those amount to perhaps 20% of the total cost of a book, if that. The majority of the costs of producing any book happen before it ever reaches the stage of being published, in print or electronic form. Dropping the costs inherent in a print edition doesn't provide anywhere near the saving most folks would like to believe. Folks should follow the link in the article to Charlie Stross's blog outline steps in the publishing process that occur before actual publication: http://www.antipope.org/charlie/blog...-are-made.html Tell me which of those you suggest not be done to save money and allow your ebooks to be priced cheaper? And Charlie is omitting other things that add to costs. For instance, when a book is acquired, a contract is issued to the author. This is a legal document, and requires the attention of the publisher's legal staff. Some titles, like possibly controversial non-fiction or biography titles, may require a full legal review to insure the publisher can successfully defend against a lawsuit over the title. "It's all true and we can prove it." And there are additional costs to producing an ebook. While there is hope on the horizon, ebooks are currently not integrated into the publisher's workflow. Producing ebooks of a print title is an extra set of steps in the process requiring the attention of specialists. Aside from all of the costs in producing a particular title, each book gets an allocated share of corporate overhead, like rental on office space, electricity, phone service, and salaries of employees not directly involved in a specific book's production. And publishers are largely units of larger conglomerates, which may be involved in producing other forms of media. Top management at the conglomerates are essentially custodians of Other People's Money. Their corporations are publicly held, and they have a fiduciary responsibility to preserve and if possible grow the value of their shareholder's investments. If the CEO is perceived as not doing so, he can be removed by the Board of Directors, and Directors seen as not doing their job can be sued by shareholders. So the basic task of such managements is to invest corporate funds where they will yield the greatest returns. This leads to severe demands on publishing subsidiaries, as they will likely be expected to show a 10% return at a minimum. This is extremely difficult for any publisher: publishing has historically had numbers lower than that. And it produces stories like the one a couple of years or so ago about the well-respected publisher at Little, Brown being fired. She was under pressure from the Group President she reported to to produce more bestsellers. She resisted, because Little, Brown had historically been a "literary" imprint, and she saw it as pressure to dumb down her line. I doubt her Group President wanted to fire her, but he was under pressure from his superiors to produce numbers in line with revenue and profit targets. The question that any business must ask isn't "What is the maximum amount I can make?". It's "What is the minimum amount I have to make to survive?" That question has a simple answer: enough to cover the marginal cost of capital. Unfortunately, the answer to the second question is often higher than the best guess the business can make about the answer to the first question, and companies in that position are in trouble. A lot of publishing falls into that category. Prices will rise because costs rise, and the publishers want to stay in business. ______ Dennis |
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11-26-2010, 04:56 PM | #6 |
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Prices will rise because the Big 6 ate the competition. And Wall Street's quest for higher profits quarter-by-quarter will destroy the Big 6.
Bypass will be the future. Authors Agents bypassing the Big Publishing Houses. Agents will contract for editing, art, and promotion services. And I bet some form of Venture Capital will become available. |
11-26-2010, 06:31 PM | #7 |
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This is just going to drive people to pirate their books.
Looking at the list by Mr. Stross, no wonder they can't make money, the industry is really bloated. And much of that list doesn't seem to apply to e-books, even though he claims only 14-16 don't apply. 4) Marketing (buy ads and displays in stores). Not needed for ebooks 5) Scheduling (so they don't flood bookstores). Perhaps needed, you don't want 500 e-books in the same month, then 2 a next. But then again, not as badly. 8) Advance Reader Copies (is this really necessary? And if anything, this can be sold to people like Baen does) 9) Book design, cover design, front and back flap copy, and cover artwork (While it can apply to e-books, it mostly doesn't as many publishers don't even bother with a cover). 10) CEM delivered to Typesetting (as e-books aren't typeset, you don't need this) 11) Marketing copy (okay, sure). But you don't need to print them up. 12) Review page proofs (PDF from hardcopy, this is done to catch the errors that crept in during test runs of printing). Not needed for e-books. 13) Collate advance orders and order the print run. Not needed for e-books 17) Invoicing and accounting. Sure, if you have hundreds of bookstores this could get hairy. But there's what, maybe half a dozen e-book sellers? A dozen? So basically it seems like the publishers are still using the same costs and procedures for e-books as printed books, even though they aren't ncessary. I guess because they don't consider them separate products, but merely an extension of an existing one. But really, most of these costs are solely involved with making a printed book, and all of these costs should only be factored in regarding the physical book. The e-book should be a whole separate entity. Especially as a lot are back catalog titles and thus any costs cost in producing the physical book no longer apply (and have been recouped in the physical print run). |
11-26-2010, 06:42 PM | #8 | ||
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The problems affecting publishing aren't new, and ebooks haven't caused them. For decades, too many books have been chasing too few readers. Houses have been consolidating to achieve economies of scale and reduce costs. And publishers have been acquired by media conglomerates involved in film, TV, and music, who saw supposed synergies in having all forms of content under one roof. Those synergies were more apparent than real, and as the realization sunk in that publishing couldn't generate the sorts of returns that other units made, the acquisitions began to unravel, as when Time Warner sold its Warner Books operation to Hachette. That same consolidation has been occurring in book retailing. Smaller "mom and pop" bookstores are dying out. They can't match the buying power and the prices of the major chains, and buyers shop where they can get the books cheapest. I can think of a few independent bookstores near me, but they aim at niche markets like travel, photography, or children's books. The big chains are under pressure from discount retailers like Target, and "warehouse" stores like CoctCo and Sam's Club. and everybody is under pressure from Amazon. And "higher profits by quarter" isn't just Wall Street. Consider who the largest class of shareholders are: pension funds. If you pay into a pension fund or an IRA, you are complicit in it, as you want your retirement finds to be preserved and grow, and the people running the funds invest where they see the best combination of safety and returns. Quote:
Something may well appear to fill the void if "Big Publishing" disappears. But the big issue is quality. While you can argue that they do it badly, selling books is what publishers do. Publisher want to publish books they can sell, so they have editors to work with authors to improve manuscripts. Every published author I know freely admits that good editors are a critical factor in their own success. And possibly more important, publishers are filters. Even more important overall than what they do publish is the vastly larger amount they reject. The stack of unsolicited manuscripts isn't called the "slush pile" for no reason. The dream of eliminating the middleman and having a direct connection, author to reader, will be a nightmare if it becomes the norm. With the internet, ebooks, and Print On Demand, everybody can get published. That's very nice. Who will read it? The Internet is now the world's largest slush pile. There may be hidden gems, but frankly, I have neither the time, energy, nor desire to go plowing through it looking for them. They books may be cheap, but as with all else, you get what you pay for. There are several houses whose taste I've learned I can trust, and I'll buy books they publish, because I know they'll be worth reading. I want quality and someone else to winnow the wheat from the chaff, and I'll pay for it. And "Agents will contract for editing, art, and promotion services"? Nope. That would mean agents morphing into publishers. It won't happen. It's not what they do, and they wouldn't know where to begin. It would be a great way to go belly up while they learned. You're probably thinking of Robert Wylie (see http://www.nytimes.com/2010/07/22/books/22odyssey.html), who formed Odyssey Editions to publish electronic books. But the books he planned to issue were books by his clients which had already been bought, edited, and put through the print production process. He simply claimed the print publishers did not have the electronic rights, and he was free to bypass them and distribute ebook versions himself through Amazon. After shots back and forth by both sides, a deal was struck with the publishers at rates Wylie wanted, which was the whole point of the exercise. ______ Dennis |
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11-26-2010, 06:55 PM | #9 |
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I have never had a problem paying a fair price. There's no real reason why book prices wouldn't go up, along with everything else. I want my favorite authors to continue to make a living. I want to keep enjoying the products of their imaginations.
I have had - and will continue to have - a problem with paying an unfair price for ebooks. I mostly bought print books as paperbooks (or used). And I can walk into Wal-Mart or wherever and get most paperbacks at about 20-25% off list. So I don't think I should have to pay more than that for ebooks. So when a publisher insists I pay more (especially since I don't get the same value as with a print book), I complain. |
11-26-2010, 07:09 PM | #10 | |
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The article seems to say the total costs for all those steps is about $20,000 (top end of their range), so unless the book sells fewer than 20,000 units, those costs will be less than $1 per book. If the book gets up to 100,000 units, it will be $0.20 per book. Bestsellers with over a million sold? That would be a stunning $0.02 per book. And that's my $0.02 on the topic. Last edited by EricDP; 11-26-2010 at 07:15 PM. |
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11-26-2010, 07:11 PM | #11 | |
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Moreover, they should be of comparable quality to the printed editions, and should be as easily transferred to future hardware devices. If not, then ebooks should be still cheaper. |
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11-26-2010, 07:18 PM | #12 | |
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Too bad the Justice Department is defending war stuff - if some of those lawyers had time to read ebooks, maybe they would investigate price collusion. |
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11-26-2010, 07:33 PM | #13 | ||||||||||||
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On a printed book, the job of the cover is to catch the eye of the browser in the bookstore, and get them to pick the book off the shelf for a closer look, as the first step in making the sale. The cover has the same purpose in a ebook offered on a web site: an arresting image to get you to take a closer look. Quote:
The preset workflow is that publishers get manuscripts as Word documents, and edit them to reach an approved final form for publishing. The final form gets imported to Adobe InDesign for typesetting and markup. Cover art and design, jacket copy and the like are also imported. The output from InDesign is a PDF file which the printer feeds to an imagesetter to create the plates from which the book will be printed. If an electronic edition is produced, it will be an additional step in the process. If the eBook file is a PDF, the same typesetting for the print edition can be used, as the PDF can have the required fonts embedded, and display them as they would appear in the printed book. If the output is a MobiPocket, ePub, or other file, there must still be consideration of how the target device will display the book and what capabilities it has to do so. Quote:
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You seem to be assuming printed books will go away, and ebooks will be the only form. I suggest not holding your breath waiting. There are whole classes of books for which electronic publication is a poor fit, and ebooks are still an emerging format. They are an additional format for books, and not a replacement for print. You may expect this to be the case for the foreseeable future. ______ Dennis Last edited by DMcCunney; 11-26-2010 at 07:57 PM. |
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11-26-2010, 07:54 PM | #14 | |
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If the market for a book is 50,000, and I can sell 50,000 copies priced at $10.00 each, what happens if I cut the price to $7.50 or $5.00? Do I magically conjure new readers out of nothing because of a lower price? Lower prices boost sales, but there's always a "sweet spot" - cut prices too much, and you get less total revenue, because the existing audience is simply paying less for the book. There are limits to how much lower pricing will help sales, because there are only so many readers who want to read any particular title. The trick is pricing at a point that will generate the maximum revenue and profit, not the maximum unit sales. ______ Dennis |
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11-26-2010, 08:21 PM | #15 | ||||
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I know why you think they should be 20% cheaper - you're the reader interested in buying the book. Pretend I'm the publisher issuing the book. I see the chance of selling the ebook at the same price as the paper edition, with the 15%-20% savings of not issuing a print edition flowing to my bottom line. If I believe I can successfully charge the same price as the paper edition and see comparable sales, tell me why I ought to lower it? (The fact that you will then buy it will not sway me. You're one reader. I'm concerned with tens or hundreds of thousands of readers.) You want to get your ebooks cheaper. I want to stay in business. Guess which will trump? (I have encountered folks who think that being in electronic form adds value to the book, and will pay more for an ebook edition than a mass market paperback.) Quote:
And while I agree in theory on "comparable quality", what exactly does that mean? ______ Dennis |
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