Quote:
Originally Posted by murraypaul
We keep going round this circle.
You are talking about the cost prior to printing. These are fixed costs.
That excludes printing, warehousing, distribution and retail. These are variable costs.
The variable costs can be dramatically reduced. That means that there is now no downside to increasing volume. That means greater profit can be made by selling greater volume at a lower cost.
To suggest that you cannot significantly reduce costs in an industry that currently physically destroys about half of the product it produces beggars belief.
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What part of "
80% of the costs of producing the book are incurred before the book reaches the point of publication in printed
or electronic format" is not clear to you?
And the costs incurred before print/bind/warehouse/distribute are also variable.
Part of our disagreement is that I think you see far greater cost savings by eliminating the print edition than I do, and have an unrealistic idea of how much ebook prices
can be lowered if they are removed from the equation.
You also have an unrealistic idea of how much producers
will lower prices, even if those costs don't exist.
If I'm a publisher, I need to make money on sales of my books. I
have to make a profit. And the question I ask if I'm smart (and all too many in publishing or any other industry aren't) is
not "What is the maximum profit I can make?" It's "What is the
minimum amount of profit I
have to make to
survive?" One of the problems facing publishing (and other industries) is that the answer to my question is often
higher than the best answer they can determine to the "maximum profit they
can make" question. They're in trouble.
It depends upon the game and the platform, but the gaming industry is a lot closer to the movie industry in business model than publishing.
And the quotes in the article aren't as meaningful as you might wish. Without knowing underlying numbers, percentages aren't very informative. "Sales went up 3000%!" Super. From how many units to how many units? What was the original price you reduced? What does this mean in terms of actual revenue and profit?
The sort of games that drive the development of high end video cards by people like nVidia and AMD/ATI are enormously expensive. They need script writers, artists, musicians, programmers, QA personnel... They can take years and cost millions to develop, and if the house that develops them doesn't have a hit, it might go belly up, just as movie studios have when too many pictures they released bombed.
If that happens, you can't really argue that high prices were to blame. If the games generates the buzz, and gets rave reviews from early adopters, it will sell. If it doesn't, a cheaper price won't save it.
Games are not so much competing for the player's money as for their
time. You're only going to play one game at any particular moment, and if the game is a really good one from your perspective, it may be the
only game you'll play for some time after acquiring it. It doesn't
matter how cheap another game is, if you'll never play it.
Books are in an analogous position: they compete for time more than money. You can be reading a book,
or watching TV/going to a movie/going to a club to see a band/going to a sports event/playing a game...
My scarce resource isn't money to buy books - it's time to read them once I have.
______
Dennis