Quote:
Originally Posted by Pinecone
The books that were mentioned early were IN PRINT, IN COPYRIGHT books. Just older books.
If a new paperback costs $9.99. And a ebook of the same books is $9.99.
And an new printing of an old book is $9.99. Why would anyone expect the ebook version to be substantially less?
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I expect them to cost less because they have a lower perceived (and actual) value to to buyer, and because they can cost less and still generate the same income for author, retailer and publisher.
They
can cost less because of the significantly lower overheads and retail margin on ebooks. For paperbacks, publishers offer retailers a 55% (or more) discount on the RRP, accept returns, and have to pay for printing, storage and distribution.
For ebooks they offer a 30% discount, and have no printing, storage or distribution costs. Any DRM costs are met by the retailers from their 30%.
Here's an example of a major publisher getting it more or less right: The Agatha Christie books from Harper Collins.
Paperback RRP: £6.99 (Amazon Price £4.36)
eBook Agency Pricing: £3.99
Note that Amazon can offer a 37.5% discount on the RRP on the paperback and still make a profit.
We can even use our knowledge of things to look at the publisher revenue from these two editions.
Paperback: £6.99
55% to retailer: £3.85 (Amazon actually sells at £4.36, so income £0.51)
Printing, storage shipping (guess): £0.70
Royalty (8%?): £0.56
Publisher income: £1.88
eBook: £3.99
VAT: £0.67
30% (of ex-VAT) to retailer: £1.00 (Amazon income £0.51)
Royalty (25% of remainder): £0.58
Publisher income: £1.74
It looks about right to me. This is why ebooks
can cost less than the paperback edition.
They
should cost less than the paperback edition because, as mentioned, ebooks have no resale value at all, and have significant restrictions on their use.
It's interesting to note that in the income from paperback vs income from ebook, only Amazon are making significantly more from the ebooks than from the paperbacks.
I think that publishers are giving Amazon far too large a cut of the ebook income at 30%. 20% or even 15% would be more reasonable. (That would be £0.66 or £0.50 in the above example.)