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Old 10-08-2010, 06:46 PM   #75
DMcCunney
New York Editor
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Quote:
Originally Posted by Freeshadow View Post
The point I wanted to write is following: what makes me really wonder is that fact that it seems the publishers do not take the complete loss of return risk into consideration when it comes to ebooks. I simply don't get it.
They do. Reserve against returns is a standard element in the book budget.

But don't assume ebooks come along for the ride free, with other costs borne by and allocated to print editions. There won't be "returns" on an ebook, but the ebook will still be expected to make a contribution to revenue and profit. A share of the overall cost will be allocated to the ebook version.

It may seem possible to price an ebook lower because returns aren't a factor, but "possible" and "desirable" are different things.

Pricing in a competitive economy is always "What the market will bear", and it's in the producer's interest to charge a higher price if they can get it. The usual argument is "Yeah, but they could sell a lot more if it were cheaper!"

Well, maybe not.

In the case of ebooks, you might legitimately claim that ebooks overall might sell more if they were cheaper. But the buyer isn't looking at all ebooks. They are looking at specific titles they are interested in buying.

When a publisher buys a manuscript, they will make a guess as to how many copies the book will sell, and the advance they give the author will be based on that guess. Sometimes they guess wrong on the high end, and the book doesn't sell enough copies to "earn out" (sell enough to recover their costs and cover what they paid the author.) Most books fall into this category, and the advance is all the author sees. They don't see additional royalties. Far less often, they guess low, have an unexpected hit on their hands, go back for additional printings, and see an unexpected entry on the best seller lists. Champagne is poured and there is joy all around.

But meanwhile, let's say a particular title has a market of perhaps 50,000 copies. This estimate is made based on the author's previous sales of similar books. Everyone will be happy if it does better, but best guess, about 50,000 readers are fans of that author and will buy her new book. Will pricing it cheaper magically induce thousands of new readers to buy that book? It's possible, but it's not likely enough that any sane publisher will make a bet on it. They'll charge what they've already demonstrated they can get. They may play games with pricing if they think the author is poised for breakout to a wider audience, and they think there are tens of thousands of potential new readers for that author out there, but those cases are few and far between.
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Dennis
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