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Originally Posted by stonetools
Mike Shatzkin says the following:
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Almost certainly, books will get cheaper and cheaper. But writers will also make less money when there is less to divide, not more.
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They only make less money if the number of sales doesn't substantially increase. If they're making $.50 per book, and sell 50,000 copies, they wind up with a lot more than if they're making $2 per book but only sell 8,000 copies.
Publishers are oblivious to a *huge* section of the market: the people who
never bought new books. The entire used bookstore economy is invisible to them; they've got no idea what those people are willing to pay for ebooks, no idea how many potential customers have never been on their pie charts.
A lot of those people are willing to buy ebooks--at the prices they'd pay for used pbooks. Those aren't losses; they're customers who otherwise don't exist. And whether those people stick to paper, or ebook freebies, or download from the darknet (and potentially become "criminals") isn't relevant to publishers--they are people who aren't buying now, who would be if someone were selling on their terms.
Of course, the Agency 6 don't need to shift their practices for those customers. They can limit themselves to the pool of customers they understand, at the price range they're comfortable offering. Hundreds of other publishers and millions of individual authors are *leaping* for the chance to sell to them at a price they're happy to pay.
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I think it comes down to just that. For the average consumer, the current price model (14.99 for the e-book version of a new release, 12.99 for a new release that becomes a bestseller) is a great deal.
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I think "average buyer of hardcover books" and "average consumer" are not at all the same groups. With ebooks, publishers have the opportunity to reach markets that were previously closed to them, because book prices couldn't drop below a certain production-etc cost level, and that market segment couldn't afford that.
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But the price for ebooks will be what the market can bear, not what techies THINK the "right price" should be.
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"What the market can bear" and "what the market we had 10 years ago could bear" are two different categories.
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Eventually, the prices of books will drift down over time as the print book infrastructure goes away.But that will be in 5/10 years. For right now, it is what it is.
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You're thinking of 5-10 years as a vague "eventually?" In the legacy publishing world, that's tomorrow. There are books being contracted for right now with intent to publish in 3-5 years.
I don't even think the current agency-pricing system & price range is unprofitable. I think it's unsustainable in the face of competition, because publishers who use it won't be content with the meager, slow profits it brings compared to more flexible strategies.