Quote:
Originally Posted by kamm
The problem is that this writer assumes that us, readers have to cough up instead of lowering his or, more importantly the publisher's chunk of it.
No paper cost means much lower publisher cost equals lower book price, period.
This is how it must work otherwise they will slowly kill their own market, just super-greedy clueless parasites of the big studios did it with music and doing it with movies.
|
Kamm:
On the one hand, you are correct that producers cannot charge more than the market will bear for very long without going out of business. That's capitalism-101/business-101.
On the other hand, you seem to be assuming that ditching the cost of printing makes a significant difference in the price of books. Sadly, on that front you are misinformed.
The numbers that follow are wrong in detail, but correct in spirit -- I'm writing from memory without performing a careful search first. That said, we've discussed this issue many times here at Mobileread complete with data from authors and trustworthy publishers, so the general thrust of what follows is correct although any particular number may be somewhat off.
The two largest sources of cost (sinks for your money?) between
the author's keyboard and your eyes are retailers and distributors. Typical retail markup on most goods is around 100% -- that is, they charge you double what they pay. I seem to recall that this markup is somewhat smaller in the book world; markups are rumored to be in the 50% to 75% range. Distributors such as Ingram charge an additional markup. I recall numbers in the 30% to 50% range.
What this means to the price of paper books is that out of each dollar you pay for a book, the publisher gets something in the vicinity of 30-40 cents. Note that the very large book-sellers (Amazon, B&N, Borders etc.) provide some savings to you by purchasing popular books directly from the publishers (thus getting rid of the distributor and his %age). They appear to pass on about half the savings to the customer (based on my very unscientific "study" of pricing on a good solid half-dozen books).
The above applies to pretty much all non-textbook publishing. What follows is specific to fiction -- I don't know enough about the non-fiction market and standard practices there to comment.
Authors royalties vary wildly, but even on the lousy end they represent something around a quarter of what the publisher grosses on a book (ballpark 5%-10% of retail list price). Further, the publisher assumes the market risk by paying the author a non-refundable advance against royalties. The advance is usually paid long before the publisher sees any income from the book.
So all remaining expenses of publication are funded out of the remaining 20-25 cents from your original dollar of retail expense.
This tells us that at the limit, an insane publisher who took no profit and whose employees worked for free and whose suppliers donated their products and services could charge you... 20-25% less than you pay now for a paper book. Another way of saying that:
If all the publisher's costs went away, the price of ebooks would only go down about 20%!!!!!
So yeah, no paper cost means lower publisher cost which means savings to you the buyer. Really. But we've established here that all the publisher cost savings that there are --
ALL THE COSTS -- would only save you 20% at retail.
Unless, of course, we change the business model instead.
Baen's done that by cutting the retailer and the distributor out of the eBook value chain. They offer their books through Webscriptions (with whom they have a financial deal whose details are not known to me) only*. No distributors, no retailers, only there. They price the books reasonably, they don't impose DRM, they treat their customers with respect.
And the books sell like hotcakes! And sell, and sell, and sell, and...
Meanwhile Amazon wants 70% (I think) of list price for your eBook. I don't know what the terms are at Fictionwise, but I suspect that they are similar. And that percentage makes it really hard to cut the prices enough for a publisher to offer the kind of savings that you're looking for. So if you want to push sane eBook pricing, you need to poke Amazon and Fictionwise to discount more while also poking the publishers to sell directly at more reasonable prices.
But you're not going to get any leverage by repeating the mantra "no paper makes it cheaper" because paper alone is not where the money goes.
Xenophon
* When you see Baen books elsewhere electronically, they are probably being offered by a retailer who has negotiated directly with the author or their agent. Baen takes a non-exclusive universal license for eSales; their authors are free to cut their own deals with other retailers. Jim Baen made this choice because he believed that he'd found a good business model for selling eBooks and was prepared to out-compete the rest of the market. But note that Jim died before Amazon entered the eBook business...