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Old 02-01-2010, 01:32 PM   #1
Randolphlalonde
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Understanding the Cost of eBooks

It's rare that I take the time to write an article about "the industry", I normally reserve my writing time for creative pursuits. After meeting a lot of people who don't understand the costs behind creating an eBook and a few who don't believe an eBook should ever cost anything, I decided to write this article that includes nothing but fact about what it costs to create the content they're enjoying.

I tried to write it in a non-confrontational manner, and hope that this opens the door to healthy discussion as while dispelling some of the misunderstandings that seem common in some groups.

Here's the link: http://randolphlalonde.blogspot.com/...of-ebooks.html
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Old 02-01-2010, 03:05 PM   #2
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I haven't read your article yet, but will shortly. Until then, I wanted to say that my uninformed opinion is that an eBook should cost the same as any other medium right up until the point that it/them/they take on physical form. From there, the digital and physical forms diverge and associated costs would then be tallied differently.

I'll see how that uninformed opinion differs after reading your article and post again later.
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Old 02-01-2010, 04:48 PM   #3
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Because there's so much free information online, I think people get confused and think that everything offered online should be free. Hopefully, your article will help - thanks!
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Old 02-14-2010, 01:09 AM   #4
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Thanks for the read.. very interesting. I am ok with authors wanting to get paid for their work, but when it comes to some of them charging more than the actual book price (for instance Dear John by Nicholas Sparks which I really want is at Borders for 7.19 in paperback which I do NOT buy hard back, but they are selling the ebook for 9.99- makes no sense) If I am going to be paying more for an ebook than the actual printed copy, I should have rights to that book to be able to sell, donate or loan that book when I have finished reading it.

Basically, most ebooks for purchase I have come across have DRM which is basically giving me a loan of the book instead of allowing me to own it. I wont pay more than 3-4$ for a book that I cant do what I want with it when I have finished reading it
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Old 02-14-2010, 09:55 AM   #5
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I think the issue buyers (including myself) have is that ebooks should cost nothing to "produce" in the sense of post-manuscript to being available in a downloadable form, compared to printing a paper book where there is actual perceivable costs.
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Old 02-15-2010, 09:01 PM   #6
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Nice post Randolph.
I think you actually already partly explained the difference in royalty rate Amazon is willing to pay for the 0.99 to 2.98 range and the 2.99 and higher. They have fixed costs and the low income they will get on the low prices might not be enough to compensate at higher royalty rates.
The situation is probably more complicated, if I understand correctly the two contracts Amazon offers are different in other details as well. But it might be a bit premature to blame the publishers for this policy.
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Old 02-15-2010, 10:34 PM   #7
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Quote:
Originally Posted by Randolphlalonde View Post
It's rare that I take the time to write an article about "the industry", I normally reserve my writing time for creative pursuits. After meeting a lot of people who don't understand the costs behind creating an eBook and a few who don't believe an eBook should ever cost anything, I decided to write this article that includes nothing but fact about what it costs to create the content they're enjoying.
I'm very new to the ebook world so my opinion probably doesn't carry much weight. Until I found this forum I thought all ebooks cost about $9.99. I didn't know there were 99¢ and free books. I have no problem paying $10 for a book around the time it is selling full price for the paper edition. I think that is a fair price. But to me even with all of the cost incurred it still seems there should be a lot less cost to provide a digital copy of a book. Therefore the price should reflect that cost. I also didn't know that there were independent authors who only produce ebooks. You explained well all of the cost involved but don't you save a considerable amount considering you do not have to worry about the cost associated with providing a paper book? What do you think would be a reasonable price for your ebook? The price of music CD's have dropped the last few years because they were losing revenue to pirated digital downloads. CD's were overpriced anyway. Back in the days of cassette tapes, CD's were significantly more expensive than cassettes even though they cost less to produce. Could higher prices of ebooks cause all those involved in producing them to lose sales to illegal copying? Thanks for the info. It was very informing for this ebook novice.

~eddie

Last edited by JerseyBiker; 02-15-2010 at 10:46 PM. Reason: removed redundant point
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Old 02-16-2010, 05:27 AM   #8
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Excellent article, Randolph. Thanks. What folks must realise is that when it comes to serious indie authors and small publishers, the cost-savings in print, warehousing, physical distribution and shelf-stacking are only part of the ebook story. Editorial, design, technical, legal and admin costs are constant and must be shared between the treebook and ebook. I won't touch a free ebook or something selling at a dollar or two because the very price suggests that the author has cut corners, there has been no professional editorial input, and the book may very well waste my precious recreational reading time. Neil
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Old 02-16-2010, 10:35 AM   #9
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Everyone is free to do with their money what they like. But allow me to break a spear in favor of, let's say, pricing not influenced by copyright-issues. You, as people more involved with the editorial market, do know how distorting it is. Massive copyright infringements would crush the big business asunder, allowing (ironically) more control of the works by the author, and savage price reductions.
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Old 02-16-2010, 01:17 PM   #10
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Quote:
Originally Posted by TC Beacham View Post
Because there's so much free information online, I think people get confused and think that everything offered online should be free. Hopefully, your article will help - thanks!
Agree completely. I've said this before on another site, but let me reiterate again: I expect to be paid for my work. I believe certainly in offering products at affordable prices, and don't want to gouge anybody. But it bugs me when I tell people about the book being offered on Smashwords, and then say it' 99 cents (Keep in mind that it's a 90,000 word book!) and they'll say "You have to buy it?"

I like to say in response "Do you do your job for free?"

While I have no aspirations of being a millionaire or anything like that, I am a firm capitalist and believe work deserves to be compensated.
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Old 02-16-2010, 02:39 PM   #11
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I'm not a "serious" ebook author. I don't consider writing "work." It is the act that frees me from that tasks that are my true work. I'm mainly interested in perfecting my art, which I would do even if I were isolated in a cave, but the prospect of feedback from readers is what draws me out. I price my novel low because I want to reach people willing to take a chance with an unknown indie author. I want to see how much my writing resonates by harvesting reviews.

But I understand the problem from the perspective of a serious author who is trying to make a living (or supplement their income). They may perceive that they are being undercut by all of us $1.99 or less "hacks." One solution, is for the truly serious writer to go through the vetting process of being selected by an actual publisher. This automatically gives the reader a reason to pay the extra money.

I also don't think that underpricing is harmful. It's not a zero sum game. The more people we engage in reading, no matter what the price, the more every writer benefits. I'll pay full price for a hardcover if it's something that I really want. I'll also ignore an ebook priced at 3.99 if I'm casually browsing. So, I apologize to any serious writer who feels harmed by my pricing, but it's giving me the results I seek - unforced, honest, critical reader reviews at a rate of one per 50 sales. That wouldn't happen if I charged 9.00 per download.
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Old 02-16-2010, 03:00 PM   #12
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I'm curious, Neil, why you frown at $2 ebooks yet your signature is touting them at Bewrite. I think $2 is a perfectly fair price for an ebook, and I've published in mass market. It's important to compare the income stream over a lifetime, with the author controlling all rights, versus giving a long-term license to a publisher but only getting a couple of payments out of it (and then, usually a long dead time before you get your rights back, if ever.)

Major publishers have an entirely different goal from me. So do agents. If anyone's interested, I just blogged about the sad plight of writers at http://hauntedcomputer.blogspot.com

Good opinions on this forum, I am learning a lot.
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Old 02-16-2010, 05:12 PM   #13
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Quote:
Originally Posted by neilmarr View Post
Excellent article, Randolph. Thanks. What folks must realise is that when it comes to serious indie authors and small publishers, the cost-savings in print, warehousing, physical distribution and shelf-stacking are only part of the ebook story. Editorial, design, technical, legal and admin costs are constant and must be shared between the treebook and ebook. I won't touch a free ebook or something selling at a dollar or two because the very price suggests that the author has cut corners, there has been no professional editorial input, and the book may very well waste my precious recreational reading time. Neil
Well, I suppose that's the risk we run. Although "cutting costs" for an indie author I would argue falls more into the realm of, "using general sanity, won't try and justify the extreme cost." It's just not viable unless you can really get yourself established enough.

I'd love to charge 5-10 bucks for my book, but then I wouldn't have any readers. Maybe, someday, I'll have enough of a reputation established to be able to charge a little bit for my work, but, until then...

I think, when it comes to indie books, most people are already going to have a sour initial impression because, fact is, it's a massive crap-shoot of quality. It's doubtful said individuals are going to waste both their precious recreational reading time and their precious hard earned cash, so I just shoot for the former.

At least for now.
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Old 02-16-2010, 09:24 PM   #14
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Originally Posted by neilmarr View Post
I won't touch a free ebook or something selling at a dollar or two because the very price suggests that the author has cut corners, there has been no professional editorial input, and the book may very well waste my precious recreational reading time. Neil
That's a very interesting point you make, Neil. Part of the reason I put my first ebook online free of charge was that I didn't feel comfortable charging for what I saw as a relatively amateur effort. The other part of my reasoning, of course, was that I did think it was good enough to repay most people's time investment, and file my name in their mental 'writers I might pay to read' file.

There are certainly different types of readers, and it's interesting to note that they'll respond to different marketing. Some people are 'give me the first free, and if I like it I'll buy your stuff forever', others 'give me a sample, if it pulls me in I'll buy it', others 'get a buzz going and I'll think about it'.
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Old 02-18-2010, 02:05 AM   #15
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I just read your blog, thanks for sharing that info. I'm fairly new to ebooks so I found it very helpful.
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