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Old 05-05-2010, 11:42 AM   #31
queentess
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From the article:
Quote:
Younger generations expect music and now video to be free—and when it isn’t, they feel entitled to take it anyway.
I disagree with this. I do think there's a certain age group for whom this is true, but younger people (that is, people younger than me) have no issues paying for a bunch of electrons because they've been conditioned to it.

My brother-in-law, who is 10 years younger than me, regularly purchases PDC (premium downloadable content) for his xbox360 games, buys farmville/mafia wars stuff from facebook, and has never known cds so has no problem purchasing mp3s.

My husband works in the e-card business of a major greeting card company, and we were just debating this the other day. E-cards became hugely popular in the mid-90s, but they were mostly free and e-card divisions of companies tended to fail because they couldn't turn a profit. But now there's a trend where people are starting to PAY for e-cards. The demographics most likely to pay for e-cards? Women aged 55+ and people aged 16-22.
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Old 05-05-2010, 01:16 PM   #32
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Originally Posted by riemann42 View Post
One of the largest costs of any publish house is the advances they give authors.
That is just a loan, based on how much they expect to make on sales. They could get the same service from a bank.


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Make the legal ramifications for piracy severe. Enforce the criminal code. Through some torrent users in prison and that will shape up the college kids.
In the UK, the entertainment industry have lobbied for, and got, a new law that presumes guilt until the accused can prove they are innocent (after paying a fee before you can attempt to do so). I suspect this is because they know that the evidence they are capable of providing against an alleged copyright infringer would not stand up in a court of law.

Also, all our prisons are full so you would need to release a lot of prisoners to make room for all these copyright infringers ...
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Old 05-05-2010, 02:08 PM   #33
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One of the largest costs of any publish house is the advances they give authors.

Take away these advances, and you take away quality, and hurt authors, whose art you are appreciating when you read (even a trashy) a novel or whose work and research you are getting the benefit of when you read non-fiction.

So in short, the stuff still has to cost at least 60% of what it costs today, if not more, just to cover this.
There was a good article (I think it was in Slate) linked from here a while back which broke down the cost of various stages of the publishing process, and showed how much net profit the publisher cleared from a hardcover novel selling for the typical price of $26. If I recall correctly, it came out to 90 cents, and the author's royalties (at a fairly high 15%) came to $3.90. What happened to the rest? Well, out of the $13 wholesale price, the other $8.20 was eaten by overhead, printing costs, warehousing, distribution, and returns -- especially returns.

The million-dollar advances that make the news (or did in the 90's, at least) are the very rare exception, not the norm. Your average author gets an advance which is a tiny fraction of that, and hopes the book will earn out that advance so as to keep the publisher happy, and will keep on selling long enough to get his kids through college. I certainly have nothing against the concept of advances (seeing as I'm an aspiring writer and all!) but I don't think they're essential to the quality of books. Consider how many excellent books were written back in the days before the advance was invented, when authors had to wait for the royalties to trickle in before they saw a penny.

That "keep on selling" part is what's so difficult today, and what is hurting those authors the most. While online sales (Amazon, etc.) are increasingly significant, if a book isn't on store shelves, the author has lost their major route to the customer, and lost sales they may never regain elsewhere. People who want something to read want to pick it up, take it home, and read it, not wait for Amazon to ship the thing, UPS to leave it out in the rain, etc. For a wide variety of reasons, particularly tax-related, new books aren't kept on the shelves as long as they used to be. This is particularly true of genre fiction, but it affects all categories. So a book that would have been bringing in royalties for years, back in the day, now never even earns out its advance (how can it, when people can't see it, let alone buy it?) and the author becomes "unmarketable" -- and therefore unpublishable.

Let's look specifically at mass-market genre fiction right now, since that seems to be a major part of the reading interest of a lot of MobileRead members, myself included. A very large percentage of genre fiction is never published in hardcover. The fact that a book can be published on dead trees, with all the expense that entails, retail for $8, and turn a significant profit, demonstrates that a publisher can get a book out the door for $4 (the wholesale price) even with the physical production costs, returns, and the whole nine yards. When you take out the cost of printing the books, warehousing them, shipping them all over the place, and providing full refunds for unsold copies, there isn't a lot left of that $4. But there's enough left for the publisher to make a profit, and in fact for mass-market paperback sales to be the bread and butter of many publishers for decades.

So if a publisher can make a profit off of something they're grossing $4 on with all those expenses, they should be able to make a profit on something they're grossing less than $4 on when you take those expenses out of it. Ebooks don't have to be printed, or loaded onto trucks, or stored (and taxed) in warehouses, and especially not returned (which, by the way, through the "reserve against returns", is another way in which authors get screwed by the current system). On that $8 MM paperback, the author will probably get 6% of cover, less than 50 cents, so it would take around 10k copies sold for it to earn out a typical $5k advance. But what if it sold for $5 as an ebook? If the author is still getting 50 cents a copy, and overhead amounts to a dollar a book, even if the publisher isn't selling directly, but selling to a retailer at a 50% discount, that publisher is still clearing a dollar per copy -- and more people are going to buy a $5 book than a $25 book. And I'm being very generous to the publisher in my assumptions about overhead.

In short, if publishers can (as they do) make a profit on $8 MM paperbacks, they can make an equal or greater profit on even cheaper ebooks. Make the ebooks cheaper and not only will they sell more, but cheap ebooks will drive the sales of ebook readers, which will in turn expand the market for ebooks and increase sales (and profits). That's where the money is: the ultimate mass market.

Further, to the author's benefit, as ebooks become the new mass market, a book can keep on earning long after it has vanished from brick-and-mortar bookstore shelves. No more buyers will pass up a series because only books 5 and 6 are still in print. No more reserves against returns. No more "unpublishable" authors because the publisher's one-time investment in getting the book into print will keep paying them (and the author) for years, perhaps decades. For authors, it's pure win.

Last edited by Worldwalker; 05-05-2010 at 02:16 PM.
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Old 05-05-2010, 04:10 PM   #34
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Originally Posted by Worldwalker View Post
There was a good article (I think it was in Slate) linked from here a while back which broke down the cost of various stages of the publishing process, and showed how much net profit the publisher cleared from a hardcover novel selling for the typical price of $26. If I recall correctly, it came out to 90 cents, and the author's royalties (at a fairly high 15%) came to $3.90. What happened to the rest? Well, out of the $13 wholesale price, the other $8.20 was eaten by overhead, printing costs, warehousing, distribution, and returns -- especially returns.
The article was flawed--if it were accurate, *no* publisher would ever print directly to paperback.

Since there is, in fact, a rather active business in paperback books, many of which (in genre presses, at least) have never seen hardcover, the cost of production must be a lot lower than the online articles are willing to admit.

Publishers have a vested interest in keeping people from comparing ebooks to paperbacks; they want them compared to hardcovers. Even if they have to admit that 30% of the cost of a hardcover doesn't apply to ebooks (no print, inventory, distribution & returns costs), they're ahead. If customers start seriously asking, "why isn't this priced a bit less than a paperback?" they're sunk.

The first mainstream, non-genre publisher that takes on Baen's business model is going to *rake* in money while everyone else flounders and screeches about "piracy."

Harlequin's doing well with ebooks--and all they're doing that's anything like Baen is pricing. They sell DRM'd books; they don't keep their back catalog active; they aren't known for good interactive customer service. But the price is $5 per book, so people can skip having a latte at lunch to buy one.
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Old 05-05-2010, 07:55 PM   #35
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Dear Book Industry:

We, the readers, are trying to SAVE you. We love books. We want to read lots of them. And we are willing to pay for them. But please listen to us:

Fair prices. Open formats. No DRM.

And in return, we will give you lots and lots of money.

Let me give you an example:

On Stranger Tides by Tim Powers.

This book has been optioned to be the basis for the fourth Pirates of the Caribbean movie. Perhaps you've heard of that series...you know, Johnny Depp, pointy hats, zombies and sea monsters. Made about a billion dollars.

Now, when it was announced that the new Pirates movie would be based on this book, it is a good bet that even a tiny percentage of the billion or so Pirates fans might be interested in reading the book. I sure know I was.

So off to Amazon I go. Hm. Used paperback, $14.35 plus shipping. No new version available.

So, I can pay nearly 20 dollars for a second-hand paperback, of which you, the author and publisher get nothing.

Too bad there isn't, say, a $5 ebook for me to latch onto. Why, if that were available, I would buy it. Today. Right this minute.

You, author and publisher, would get to split $3.50 (based on the 70% Amazon revenue split) while nicely avoiding printing two copies for every copy sold (since most sell-throughs are below 50%), as well as shipping, warehousing and returns costs.

But instead, you get nothing.

And after buying the book, if I thought it was as cool as it sounds, I would tell a lot of my friends and you know what? A lot of them might go out and buy it right away, too.

But no, you sit and fret about the future, wondering what to do, while ignoring the piles of money your customers would like to push into your hands if only you'd listen to them.

You see, that's the difference between printed books and ebooks:

Printed books have a very limited shelf life. The majority of books get a couple of months to make it before they disappear off shelves. If a reader misses out during the month when it is actually available on store shelves, odds are they will never hear about this great book they missed and never buy it. And even if they somehow hear about the book later and decide to buy it later, the publisher gets nothing because they've let the book go out of print...because it was a failure in the initial month of its release.

But ebooks can be an eternal revenue stream. Ebooks never need to go out of print. They can be sold directly by publishers and authors to readers for not just months, but years or decades. And because any reader can instantly get a copy affordably, if they find a book they like, they'll tell their friends: Word of mouth can spread so that lots of other people go out and buy that same book directly from you instead of hunting in second-hand book stores and yard sales.

Don't forget that the film version of The Wizard of Oz was considered a failure when it was released. It was only after 50 years of being rebroadcast every year on network television did it come to be recognized as the beloved and very profitable classic that it is today.
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Old 05-05-2010, 09:51 PM   #36
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Dear Book Industry:


On Stranger Tides by Tim Powers.

[SNIP]

Why, if that were available, I would buy it. Today. Right this minute.
It is available in MOBI format.


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Old 05-06-2010, 06:58 AM   #37
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Will someone tell my why I should pay $20 for a cd of an album that came out 20 years ago that only has 9 or 10 songs on it?
I'm continually puzzled why CDs, an old technology that has long since paid for itself, and cost maybe $1 a piece to produce, continue to (at least) stay as expensive as they've always been, or if anything are just getting more and more expensive. DVDs, and even Blu-ray BDs, have as a group dropped in price -- why not CDs?

Is it something to do with licensing contracts that were signed back in the day when these things were all new and shiny?
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Old 05-06-2010, 06:58 AM   #38
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Crossposting

Here
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Old 05-06-2010, 07:01 AM   #39
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Oh wow. Chaffin's Law!

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Old 05-06-2010, 07:12 AM   #40
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BillSmith, keep on nailing em where they live brother!

Those are powerful body blows your sending their way, keep right on hammering them in there.

Totally agree with both your posts btw. Karma headed your way sir. Salute

Kenny, you want to talk about piracy, lets talk about stolen art.
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Old 05-06-2010, 07:42 AM   #41
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Oh wow. Chaffin's Law!

Do you think it will catch on?
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Old 05-06-2010, 07:52 AM   #42
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Do you think it will catch on?

I'm not sure I even understand it. It is your proposal.
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Old 05-06-2010, 07:58 AM   #43
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I'm not sure I even understand it. It is your proposal.
Naw, and I thought you'd be honoured to have such an immutable law named after you.

Do you mean you don't understand it because it's my proposal, or it's my proposal and you don't understand it?
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Old 05-06-2010, 09:52 AM   #44
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Naw, and I thought you'd be honoured to have such an immutable law named after you.

Do you mean you don't understand it because it's my proposal, or it's my proposal and you don't understand it?

I'm just a simple man with simple needs.

I don't understand your proposed law.
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Old 05-06-2010, 03:25 PM   #45
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So this general discussion one more. The way I see it is that those who want free writing can easily find it. There is more free crap out there than anyone one person could ever hope to even just glance at. The trouble is that it is mostly that—crap. Looking for imaginative and well written stuff? That almost always requires significant effort by talented people. Therein arises the disconnect with it being free; a dilemma that will have to be sorted out.

I, to some extent, really don't have 'a dog in this fight.' For any realistic horizon—

“Before your Father passed away, and later died . . .” Great quote from a great movie (My Favorite Year)

—I could be quite happy if there was never another book written. I could fill my remaining hours of reading from quality stuff available for free this site alone as a source. It will never the less be interesting to watch the evolution of the written word as the tweeter generation gains ascendancy.
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