Quote:
Originally Posted by murraypaul
Here we differ.
There is essentially no unit production cost for an eBook, and almost no floor at which an eBook could not be profitable if you sold enough of them.
There seems to be a mindset that we know how many of this book we want to sell, and as long as we hit that number we have succeeded, so we'll set the price that we think will let us hit that sales number. That is almost dismissing the possibility of any real success, just being happy enough to trundle along with your current customer base.
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Nope.
There
is a unit cost for ebooks.
As mentioned previously, 80% or more of the costs of producing a book are incurred before it ever reaches the stage of actual publication. For a printed book, the other 20% of the costs are in printing, binding, warehousing, and distribution. You drop those costs with an ebook, but you don't drop all the other costs that are incurred up to that point.
And for printed books, the unit cost varies. The biggest costs in printing/binding are setting up to do it in the first place. The incremental cost of printing/binding more copies is far less, so higher press runs equate to lower unit costs.
Ebooks don't tag along free when there is a print version and an electronic version, with an assumption that the print version absorbs the costs and the ebook is gravy. The accounting doesn't work that way. The ebook will be expected to make a contribution to revenue, and be allocated a share of the cost.
And what happens if the ebook version is the
only version?
So there will be a unit cost, in the form of an allocated share of the costs of producing the book, that will decline as more copies are sold but won't simply go away.
And any particular book will have a maximum number it
can sell.
No book will be bought by
all readers. How many it will sell will depend upon the book and the author. We can assume a new book by an internationally best selling author will be another best seller, (and the publisher will offer a far higher advance) to get it. We
cannot make that assumption for a first book by a new author or another title from a midlist author. The publisher will make their best guess based on prior history on the total market for a particular title, and offer and advance and allocate production costs accordingly. There will be a limit to how much a lower price will spur sales. For most folks, the scarce resource is time to read the book, not money to buy it, and while a lower price might gain some additional sales, there will be a limit on how many.
Yes, a title may be a surprise breakout success and go on to become a best seller. That's what the publisher and the author hope for, and if it happens the champagne is broken out and there are smiles all around, but nobody normally makes any bets it
will happen. (Publishers do decide a title has best seller potential and make that bet, but it's the exception, not the rule, and there's a hefty downside if they lose the bet.)
______
Dennis