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Old 09-05-2008, 06:59 PM   #1
pdurrant
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Price of eBooks vs pBooks

A message in another thread made me wonder about the price of eBooks vs pBooks.

I live in the UK, and buy most of my eBooks from US based eBook stores (fictionwise.com, webscription.net)

The books at webscription.net are considerably cheaper than the pBook equivalents. This is because they are priced sensibly, and both consumer, publish and author benefit from the reduced per-unit cost of eBooks.

The books at fictionwise aren't the great bargains that webscription books can be, but they are, from a UK point of view, a lot better than buying pBooks from (say) Amazon.co.uk.

I went so far as to add up a recent (big) order from fitionwise, and compare it with the same books from amazon.

The fictionwise order was $300. The Amazon order would have come to £300, which at current exchange rates is $530.

Quite a saving over the printed book equivalent.

I suspect that the savings available to US buyers is less, because printed books are generally cheaper.

Paul
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Old 09-05-2008, 10:07 PM   #2
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pdurrant, one of the advantages of the ebook model compared to the p-model is that authors and publishers can price their books dramatically cheaper yet still make greater per unit profits on ebooks than print books. This creates a virtuous cycle where the reader gets greater value and the publisher/author gets greater profit. And by making ebooks more affordable than p-books, a book's readership can increase. Now all we need to do is educate more people about the joys of ebooks.
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Old 09-06-2008, 02:05 AM   #3
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Quote:
Originally Posted by pdurrant View Post
A message in another thread made me wonder about the price of eBooks vs pBooks.

I live in the UK, and buy most of my eBooks from US based eBook stores (fictionwise.com, webscription.net)

The books at webscription.net are considerably cheaper than the pBook equivalents. This is because they are priced sensibly, and both consumer, publish and author benefit from the reduced per-unit cost of eBooks.

The books at fictionwise aren't the great bargains that webscription books can be, but they are, from a UK point of view, a lot better than buying pBooks from (say) Amazon.co.uk.

I went so far as to add up a recent (big) order from fitionwise, and compare it with the same books from amazon.

The fictionwise order was $300. The Amazon order would have come to £300, which at current exchange rates is $530.

Quite a saving over the printed book equivalent.

I suspect that the savings available to US buyers is less, because printed books are generally cheaper.

Paul
ebook prices, (I buy mostly from Amazon), are considerably cheaper than pbooks in the US as well, if you're talking purchasing new books. Even from Costco, a pbook costs $4-5 higher than the same ebook from Amazon.

We do have lots of smaller used book outlets, however where you can purchase pbooks very reasonably. Of course for many of us in the U.S., the best deal in town are ebooks available for checkout (free) from our public libraries.

cheers
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Old 09-06-2008, 03:24 AM   #4
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Quote:
Originally Posted by Smashwords View Post
pdurrant, one of the advantages of the ebook model compared to the p-model is that authors and publishers can price their books dramatically cheaper yet still make greater per unit profits on ebooks than print books.
Or so the conventional wisdom goes, anyway.

It kind of depends on how much of the total price of the print book comes from the overhead of printing, shipping, and storage (remember, e-books still have to be edited just like any other book, and the employees and fixed overhead costs of the publisher still have to be paid—not to mention the author himself)—and how much of that savings is eaten up by the costs of getting the book formatted electronically and sold, and paying for on-line storage and bandwidth.

The idea that publishers automagically Save Great Gobs Of Money by selling e-books over selling p-books has always seemed a little suspiciously simplistic to me, because most of the people saying it do not tend to have publishing industry experience, and publishers tend to be reluctant to provide exact cost figures for their books. (And honestly, why should they?)

Baen is making money selling e-books at slightly below paperback cost (or at least they say they are), but they don't really think of themselves as an "e-book vendor." They see the e-books as mainly promotional materials, and seem to think that even the people who buy the e-books will just turn around and buy the printed books after reading the first couple of chapters—so they might not be trying quite as hard to make a profit as those who view e-books as desirable in and of themselves.

My gut feeling (which is at least as scientific as most of the Save Great Gobs Of Money peoples' outlook) is that e-books cost a bit less to produce than a paperback (and they become more so the longer the book has been in print, as the per-copy cost of smaller additional printing runs will be higher), but not as much less as everybody seems to think. I think Baen's pricing is probably just about right.

But for publishers who price e-books commensurate with hardcovers—feh. They should be, but I expect the publishers are afraid that the e-book sales might cannibalize the p-book sales, and at least this way they still get that same hardcover price out of an e-buyer—or else they turn him off of the e-book and he buys the paper one instead. They need to figure out that the paper and e-book market segments are not going to have that much overlap, and lower their e-book price to reach an optimal equilibrium point to bring in as much additional money as they can from the e-book segment, while still selling to the p-book segment at p-book prices.

Maybe someday that will actually happen.
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Old 09-06-2008, 03:24 AM   #5
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I've bought four ebooks over the last week. Two were fairly minor titles from Webscriptions for $4 each (A total bargain) and two from Fictionwise. Fictionwise was interesting. I preordered Anathem by Neal Stephenson (I really don't have the room for more 900 page books) and got a full micropay rebate with it and then used part of that rebate to by Cryptonomicon buy the same author. I have the pbook version of that but want to read it on my 505. I could have downloaded a YARRR'd version but I had the micropay money spare and it's nice to have a copy with chapters

Anathem was $19.95 (+ $19.95 rebate) and Cryptonomicon was $7.99

I'd normally buy my books from Amazon UK. Here are the prices
Anathem is currently up for preorder at a shocking £23.45 (I was actually surprised when I just read that. It's insulting) and Crytonomicon will set me back £6.99 (I actually bought my copy in Waterstones for £8.99)

So in this case I've saved a considerable amount of money. The two Webscriptions books are drm free. Cryptonomicon was drm free a minute after I'd finished downloading it and Anathem will be the same.

You can get some real bargains if you shop around. However for the newest books it seems we're fairly reliant on certain DRM methods being hackable (As a 505 owner anyway). I have no shame in removing the drm on something I paid for. Despite it being illegal in the UK. Nuts to them. If I hadn't been able to remove it I wouldn't have been able to read it. No sale.

Last edited by Flub; 09-06-2008 at 03:32 AM.
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Old 09-06-2008, 05:47 AM   #6
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Hi All,

Interesting comments. I really must work out what DRM means!

As to publishers profits, I used to be involved in the publishing industry, but it was a long time ago. As a sales manager selling the then new desk top publishing computer an Apple Mac! We really took over the industry with that revolution!

The key thing that the publisher used to do is calculate how many books they would need to sell to break even. They would then work out how much money they wanted/expected to make and then print a run based on this. This is the reason you get the low price shops selling £24 books for £2. Simply because they sold what they wanted then the sales ran out of steam.

About 30 plus years ago I bought approx 20,000 books based on this principle that the publisher was just not selling them. They cost a few pennies each and I sold them on markets for about 25 - 50% of the marked value. Great bit of of business!

Whilst the publisher does have overheads, the main one being payment to the author, there is a considerable difference between ebooks and printed books. However, as mentioned briefly by others I really do think they are missing a trick. There are a lot of people who would buy ebooks but not the printed version, ie a different market segment. There are also a lot of people, me included who would buy both.

I mentioned elsewhere that I own both pdf copies of photography books and the printed versions. For me they both have a place. If I could now get a proper ebook version I would be over the moon.

Regards

Chris
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Old 09-06-2008, 06:15 AM   #7
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DRM means Digital Rights Management. It's the bit that stops you doing anything you want with the file. I like to call it "Do not Read Me"
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Old 09-06-2008, 06:39 PM   #8
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Quote:
Originally Posted by Robotech_Master View Post
Or so the conventional wisdom goes, anyway.

It kind of depends on how much of the total price of the print book comes from the overhead of printing, shipping, and storage (remember, e-books still have to be edited just like any other book, and the employees and fixed overhead costs of the publisher still have to be paid—not to mention the author himself)—and how much of that savings is eaten up by the costs of getting the book formatted electronically and sold, and paying for on-line storage and bandwidth.

The idea that publishers automagically Save Great Gobs Of Money by selling e-books over selling p-books has always seemed a little suspiciously simplistic to me, because most of the people saying it do not tend to have publishing industry experience, and publishers tend to be reluctant to provide exact cost figures for their books. (And honestly, why should they?)

Baen is making money selling e-books at slightly below paperback cost (or at least they say they are), but they don't really think of themselves as an "e-book vendor." They see the e-books as mainly promotional materials, and seem to think that even the people who buy the e-books will just turn around and buy the printed books after reading the first couple of chapters—so they might not be trying quite as hard to make a profit as those who view e-books as desirable in and of themselves.

!SNIP!
Actually, they are well aware that there's a core group of us who would rather have the eBooks. According to various comments made by Baen insiders (I am emphatically NOT a Baen insider!) the single largest savings is cutting out both the distributor's and the retailer's cut of the price. They do save somewhat by not having to print the book, but not nearly as much as some poster here seem to think. They also say that eBooks cover their pro rata share of the various fixed costs. And that eBooks bring in more money than all foreign sales combined (which includes Canadian sales). They're nowhere near enough to run the company, but they do make a significant contribution to the bottom line.

The other major effect they cite is that eBooks are not subject to inventory taxes (or warehousing costs), so they need never go out of print. Which I think is a dandy side benefit.

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Old 09-06-2008, 06:48 PM   #9
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Originally Posted by Flub View Post
DRM means Digital Rights Management. It's the bit that stops you doing anything you want with the file. I like to call it "Do not Read Me"
Or maybe Don't read me to keep the number of words the same as the number of letters. Interesting interpretation none the less. There is an article on DRM in the wiki.

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Old 09-06-2008, 07:22 PM   #10
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Actually, they are well aware that there's a core group of us who would rather have the eBooks. According to various comments made by Baen insiders (I am emphatically NOT a Baen insider!) the single largest savings is cutting out both the distributor's and the retailer's cut of the price. They do save somewhat by not having to print the book, but not nearly as much as some poster here seem to think.
Correct. Publishers sell books to wholesalers and big chains at a considerable discount off the cover price. How much of a discount may vary, and the last I heard, publishers were experimenting with offering higher discounts in exchange for a "no returns" policy.

Historically, publishing had operated on a 100% returns basis: wholesalers and retailers could return any unsold books for full credit. Hardcovers actually got returned, with attendant shipping and warehousing costs. Paperbacks had the covers stripped off and returned, and the rest of the book became trash. Lots of small vendors incurred publisher's ire by turning around and selling the stripped copies for a fraction of the cover price instead of actually throwing them out.

Publishers long knew 100% returns was potentially deadly, but like many other practices, no one wanted to be the first to change it, fearing it would put them at a disadvantage.

It the publisher sells ebooks directly, they can charge the wholesale price rather than the retail price, offer the books much cheaper, and still make out as well as they would have on the paper edition, with the mentioned added values of no shipping and warehousing costs, and no costs from returns.

Quote:
They also say that eBooks cover their pro rata share of the various fixed costs. And that eBooks bring in more money than all foreign sales combined (which includes Canadian sales). They're nowhere near enough to run the company, but they do make a significant contribution to the bottom line.
I had an email exchange with Jim Baen years back where he stated the Free Library was intended to promote the dead tree editions, and he didn't see profit in pure electronic books at the time. Webscriptions has demonstrated he was wrong, and I'm sure he was happy about it.

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The other major effect they cite is that eBooks are not subject to inventory taxes (or warehousing costs), so they need never go out of print. Which I think is a dandy side benefit.
In actual fact, ebooks can go out of print.

In standard publishing contracts, when a paper book goes out of print, the author (or author's agent) can request that the rights revert, and attempt to resell the book elsewhere. I asked an editor I know how ebooks and Print on Demand affected that. She said that current contracts tend to specify sales levels for ebooks and POD editions in determining whether a book was considered out of print. Sales below the negotiated level were considered evidence the publisher was no longer actively trying to sell the book, and the rights should revert.
______
Dennis
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