[DMcCunney]

Originally Posted by FF2

"That's what I was going to say, so well said. If 20% of the cost no longer exists than why are the books not 20% cheaper."

Now, wait. First we are told the ebooks are not cheaper because they are really not that much cheaper to produce (not said by you necessarily). Then we are told the price is based on what the market will bear. So, if I get this straight, the publishers just pick a cost and then justify it in any manner whatsoever. They make up their excuses depending on the objection.

Nope.

Anyone producing goods will have costs. If I'm making widgets, I have costs of raw materials, costs of labor, and costs of the equipment my workers use to turn raw materials into widgets, and the costs of the factory in which manufacture is done. I have additional costs for general overhead unrelated to the direct manufacture of the widgets, and the cost of the capital I had to invest to build the plant to make the widgets. There will be a minimum I have to charge, simply to cover costs.

But I want to stay in business, and open my doors to make and sell more widgets tomorrow. This means I have to make a profit on my widgets, so my pricing will reflect the profit I have to make. How much profit I have to make will depend on who I am, what I sell, and the state of my business, but there will be a minimum I have to make to stay in business.

If I come up with ways to cut my costs, like investing in new equipment that will allow me to make the same widgets cheaper with less people, I'll do it in a heartbeat if I can - lower costs means less of the price I charge will be devoted to simply covering my costs, and more of the revenue will flow to my bottom line. Lower costs also allow me to cut prices to gain market share at the expense of my competitors, but I'll think long and hard before doing so. Any industry is littered with the corpses of companies that got into price wars with their competitors and lost, because the competitors had deeper pockets, and could afford to lose money on lowball pricing long enough to drive weaker competitors out of business.

In the case of books, print/bind/warehouse/distribute amounts to perhaps 20% of the budget of a book. Most of the costs are incurred before it ever reaches the stage of being published in any format. (And part of the problem in discussions in places like this is that there's a lot of wishful thinking about what the costs are and how cheap an ebook can be.)

Publishers will price at what they think the market will bear. They will be like me and my widgets - they will have direct costs to cover, and profit they will have to make to remain in business. Pricing will be predicated on those figures, and on what the competition is doing. They won't want to price significantly above the competition, but except in special cases, they won't want to undercut them either. So everyone, for example, is going to charge a comparable price for a mass market PB edition, and prices will rise for those when one of the big outfits decides that costs are rising, and it has to charge more. The others will watch, see that sales are holding for the first outfit, and mop their brows in relief and raise their prices too.

I can accept that trying to get a brand new publication might cost more - the traditional hardback book. But eventually there were the paperback version and that was a reduced price. But ebooks don't go through the devolution from handsome bound book to knuckle-dragging paperback. So we cannot expect a lower price down the line. Some posted about that nut (German/Austrian?) who raped his daughter and the hardbound was like $3 and the ebook $18.00. Yup, that makes sense.

It makes no sense. But everyone is reading the tea leaves trying to understand what does.

For instance, the standard price of a mass market PB is about $8 USD. Amazon has conditioned a generation of Kindle users that $9.99 is the standard price for an ebook. If I'm a publisher selling through Amazon, tell me why I shouldn't price my ebook edition at $9.99, even though my MMPB edition is a couple of bucks cheaper? I'm likely to assume people who buy and read Kindle editions don't wan't the PB edition, and will pay more to get the Kindle edition.
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Dennis