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Old 01-13-2010, 11:46 AM   #1
kirbinster
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Why are e-books so expensive?

Why are e-books so expensive? The publisher does not have the physical cost of the book nor the cost for distribution and transport, yet they still seem to cost are $10 a copy. Why is it I can go and rent a DVD of a movie for $1 or $2, but to get an electronic copy of a book costs me $10. A book can be thought of as the script to a movie, and then they have huge production costs yet I can view a movie for a fraction of what it costs to view the book. Something is wrong with this model.
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Old 01-13-2010, 12:08 PM   #2
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Many ebooks are actually substantially less expensive than their paper counterparts. E.g. a typical hardcover may be $15, whereas the ebook may be $10 or less (i.e. a 50% or higher price cut). Digital distribution is cheaper than printing paper, but it isn't free, as you now have conversion costs, servers, backup, huge and complicated databases, bandwidth, credit card processing, customer service, data management, and IT staff. Nor does digital eliminate the other costs of producing a book -- writer's advances, writer's royalties, editing, marketing, PR, accounting, retailer's cut, taxes, management to name a few.

The physical costs of a book are actually relatively small, around 15% or so. You are also overlooking the fact that you are no longer paying for shipping and handling -- a cost, by the way, that is actually a small revenue source for the retailer.

Most books, by the way, never make a profit; it's the blockbusters that really bring home the bacon, and essentially subsidize the other books.

Comparison an ebook to a digital movie rental is flawed. With a movie rental, you have access to the content for about 24 hours, at which time you lose your access. With the ebook, you are purchasing, not renting.

The model isn't "wrong," unless you mistakenly believe that digital products cost $0.01 to produce, or believe that writers and publishers do not deserve to be compensated and/or earn a profit from their works and the financial risks of their work.
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Old 01-13-2010, 12:23 PM   #3
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Comparing it to a movie rental is not a true comparison for other reasons as well. As Kali mentioned, it is only a rental so you have to give it back. The people renting it to you purchased it, and paid quite a bit more than they are charging you for the rental.

To compare apples to apples, you can "rent" eBooks from your local library for free! Granted the selection is not as great as the local video store but it will improve over time as more people get into readers.
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Old 01-13-2010, 12:30 PM   #4
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I'm with the OP on this...

First thing I found out when I got my e-reader was I was going to be paying far more for books than I did before...

I rarely bought new, hardbound books...I bought most of my books used, from Amazon marketplace sellers...
Most cost a couple of bucks, (some less than a buck), plus $3-4 shipping...

Or I shopped used book stores, or borrowed from family...

I love my reader...but I sure am paying for the convenience...
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Old 01-13-2010, 12:32 PM   #5
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Quote:
Originally Posted by kirbinster View Post
Why are e-books so expensive? The publisher does not have the physical cost of the book nor the cost for distribution and transport, yet they still seem to cost are $10 a copy. Why is it I can go and rent a DVD of a movie for $1 or $2, but to get an electronic copy of a book costs me $10. A book can be thought of as the script to a movie, and then they have huge production costs yet I can view a movie for a fraction of what it costs to view the book. Something is wrong with this model.

Perhaps. But on the other side, look at the many thousands of ebooks you can get for free, that you would have to purchase in "used" or "new" paper book form.

Not talking 'unknowns'. I"m talking about authors whose writings have withstood the test of time, and still are going strong.

Start here for over 14,000 freebies, formatted by our own members, ready to be read.
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Old 01-13-2010, 12:56 PM   #6
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Quote:
Originally Posted by kirbinster View Post
Why are e-books so expensive? The publisher does not have the physical cost of the book nor the cost for distribution and transport, yet they still seem to cost are $10 a copy. Why is it I can go and rent a DVD of a movie for $1 or $2, but to get an electronic copy of a book costs me $10. A book can be thought of as the script to a movie, and then they have huge production costs yet I can view a movie for a fraction of what it costs to view the book. Something is wrong with this model.
Yeh, it happens. The tradeoff for convenience and sometimes availability is that ebooks are going to be more expensive and lower quality in general.
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Old 01-13-2010, 01:02 PM   #7
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Originally Posted by kirbinster View Post
Why are e-books so expensive?
Because publishers are terrified of the possibility that their paper book sales will collapse, without there being sufficient ebook sales to make up the difference.

One other reason is that they're still giving on-line retailers the same sort of discount that they give bookshops for physical books. This is insane.

Eventually, on-line retailers will be taking 15-30% of RRP, instead of the current 50-65%, and publishers will be setting ebook RRPs lower than paper RRPs.

Some publishers & retailers are already working this way - i.e. webscription.net with Baen Books, Night Shade Books, E-Reads and Subterranean Boooks.


However, it's not all doom and gloom. Because online retailers are getting such big margins, they can afford to discount ebooks quite heavily. If you choose your retailer and purchase times well, you should be able to get your average ebook cost well below $4, even with some new releases in the mix.
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Old 01-13-2010, 01:51 PM   #8
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While there have been some good explanations here, I can see them maybe justifying a price of $3 or $4 tops. Most of the infrastructure already exists so the incremental cost is tiny. Further, there is another flaw with an ebook being closer to a movie rental than a hardcover book purchase. When you buy an ebook you for the most part cannot share it like you can with a real book - thus I look at it as closer to a rental than a purchse. I can't give it to my neighbor and then my son when done with it, with a few exceptions. Thus, I still think the price way too high.
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Old 01-13-2010, 02:23 PM   #9
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I can't give it to my neighbor and then my son when done with it, with a few exceptions. Thus, I still think the price way too high.
You can give it to the whole world instead. That's a huge change to the dynamic. (OK, it's not new, but the availability of and accessibility to pirated material has significantly increased in the last few years.)

When the dynamic changes in a market, so does the price point which maximizes profitability. It's usually far from obvious where that optimal price point ends up. There are too many interacting effects to hope to predict with any accuracy.
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Old 01-13-2010, 02:36 PM   #10
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Totally agree with the OP as well. Ebooks prices are ridiculous. For instance, I would like to read Contagious by Steve Stigler. The paper version is $14.99 at Borders, but is almost $18 at Sony's ebookstore. Just one example of which I could give many.
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Old 01-13-2010, 02:54 PM   #11
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Well, I think the reason is that eBooks are for "early adopters". It is still not mass market. After they will be "mass market" product (which will take some time), I guess prices will follow the patter you mention here.
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Old 01-13-2010, 03:12 PM   #12
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With the ebook, you are purchasing, not renting.
That isn't true.

Amazon, Sony, Barnes and Noble and other companies try very, *very* hard to pretend that they are selling the book, but in fact you are paying for license to read the book for limited time.
Let me quote BoinbBoing.net, that is quoting Jef Bezos:
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Whereas a book that you buy comes with all kinds of rights, such as the right to sell or give the book away (Jeff Bezos: "[W]hen someone buys a book, they are also buying the right to resell that book, to loan it out, or to even give it away if they want. Everyone understands this.") a book that you license from Amazon comes with a very small subset of those rights, as defined by a lengthy and difficult-to-grasp "license agreement."
The above quote is from when Mr. Bezos tried to defend Amazon decision to sell second-hand books. At that time publishers were accusing them of piracy (hehehe)
See whole letter here: http://www.oreillynet.com/pub/wlg/1291
It is very entertaining, if you put it in context of e-books that Amazon pretends to sell.

- I can not sell an e-book I have purchased from Amazon or Sony or any of big players.
- I can not even give it away.
- I can not lend it to my friend or even to my wife (unless she has the same type of reader as I do)
- If my reading device dies of old age and the seller decides not to maintain licensing servers anymore(*) I lose the ability to read the book I have "purchased".
- Amazon has shown the ability and inclination to REMOTELY DELETE books that customers naively thought they bought!

(*) this has happened many, many times. Even with "big" players.

Last edited by kacir; 01-13-2010 at 03:15 PM.
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Old 01-13-2010, 03:25 PM   #13
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Originally Posted by kirbinster View Post
Why are e-books so expensive? The publisher does not have the physical cost of the book nor the cost for distribution and transport, yet they still seem to cost are $10 a copy. Why is it I can go and rent a DVD of a movie for $1 or $2, but to get an electronic copy of a book costs me $10. A book can be thought of as the script to a movie, and then they have huge production costs yet I can view a movie for a fraction of what it costs to view the book. Something is wrong with this model.
Y'know? I don't have a problem with as-high-as-paper-book pricing *IF* the author gets a larger share of the sales pie for the ebook sales. I don't think it would be unfair for an author to get 20% royalties on ebook sales. (I'm willing to concede that there are still publisher costs that cannot be ignored, but if the publisher uses it's own marketing site (thus cutting out Amazon or Fictionwise from the retail picture), the reduction in printing and distribution/fulfillment costs warrant at least a 30% author royalty rate on ebooks.

Derek
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Old 01-13-2010, 05:28 PM   #14
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I don't have a problem with as-high-as-paper-book pricing *IF* the author gets a larger share of the sales pie for the ebook sales.
This. That the publishers are getting $15+ for an e-book when the author might get pennies is obscene.

The publishers (for the most part) do not understand technology and are afraid of it. They've gotten rid of midlist books, so they aren't supporting that many books with the blockbusters. They are afraid their cash cow will go away, so they impose DRM on their books and charge outrageous amounts of money for rentals (and they are rentals, as has been pointed out).

E-books are a great opportunity to pay authors more. Yes, the publishers need to do promotion (which they don't do on most books, anyway) and such, but cheating the people who create the things you sell while annoying the people you sell them to is just not a sustainable business model.
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Old 01-13-2010, 05:37 PM   #15
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Why are e-books so expensive? The publisher does not have the physical cost of the book nor the cost for distribution and transport, yet they still seem to cost are $10 a copy.
Greed.
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