[DMcCunney]

Originally Posted by Fbone

Thanks, Dennis, for your comments. I realize it takes a lot of time to think them through and type out here.

Part of it is making sure I've thought them through properly, and have clearly explained my reasoning.

I try to look at these things from the publisher's perspective as regards pricing.

I do as well, in regards to how prices come to be what they are.

And they are more concerned (or at least the shareholders and owners are) with overall profit. We are seeing reduced HC sales. We are unable to know why precisely but all possible reasons negatively affect publishers.

Yep. The Big 6 are all publicly held corporations with shareholders that expect returns, in capital gains (the stock price went up), dividends, or both.

And some are parts of media conglomerates also active in films, TV, and music. Management of such organizations are custodians of Other People's Money, with a responsibility to preserve and grow the shareholder investment. Resources will be allocated where management thinks they will yield the highest returns. This puts enormous pressure on the book divisions, because they can't achieve the sort of returns possible in other forms of media.

We're seeing some of these acquisitions coming apart in consequence, like when TimeWarner sold the Warner Books division to Hachette, who relaunched it as Grand Central. The imagined synergies of having all forms of media under one roof were elusive, and the underlying business models were too different.

The publishers don't receive the full $28 HC retail price nor the $7.99 MMPB or the $9.99 ebook. When we subtract out the retailer's cut, royalties and printing/shipping costs there isnt much left for the publishers. Probably only about $3-4 for the MMPB. Can the publishers survive on that?

Yes, if they sell enough of them. At a 50% discount rate, the publisher gets about $4 on a PB with an $8 MSRP. All of their costs, including royalties, and print/bind/warehouse/distribute, plus any money they may make come from that amount.

Each book is a bet made by the publisher, that it will sell well enough to cover its costs and make money. Most times, they lose the bet, but are making a larger bet that they'll make enough money on the ones that do sell to cover the losses on the ones that don't.

Also, I noticed this week that the latest bestseller MM paperbacks were starting to come in at $9.99. Patterson as an example. And it is possible that a year from now this may be the standard price for most paperbacks. The current $9.99+ ebook price may already reflect future MMPB prices.

Okay, that's not a surprise. Prices have been rising steadily in any case, and there's a limit to how long the MMPB could have stayed at the $8 rate. A $2 rise makes sense: $10 will be a psychological barrier they really won't want to cross, but up to that point, might as well raise the price there now on titles they think are popular enough, to gain the benefit of the added revenue.

My feeling all along has been that when the dust settles, we'll see ebooks available when the MMPB is, at prices roughly those of the MMPB. The bigger question is what the price of ebooks issued at the same time as a corresponding HC edition will be. It won't be at the MMPB price. Want it cheap? Wait for it, the way you wait for the MMPB. Want it now? Expect to pay a premium.

Customers waiting and hoping for the cheaper MMPB may be disappointed.

Customers waiting and hoping for cheaper MMPBs will be disappointed. Prices on printed books do not go down, unless they hit the remaindered table.

The bigger issue is people waiting for cheaper ebooks. I don't see those appearing from the major publishers at the rates people would like to see, because I don't believe they can publish them that cheaply.
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Dennis