Quote:
Originally Posted by Ralph Sir Edward
Just like old home week...or my first post here.
Here's the problem in a nutshell. Mass production is based on taking a design (in this case an edited book) and amortizing the cost of the design over a long production run. The longer the run the more profitable. Too short of a run, it's a loss. You incur the design cost no matter whether or not you produce the product at all. The cost of production (not design) has to be the major cost of the product, or else somebody else will make it significantly cheaper and undercut you.
This works as long as there are significant costs to produce the product. When the cost approach zero, the whole paradigm fails. And that's what is happening now with digital products.
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Agree, one thing on the costs approaching zero is are they really. I think the main problem is that they are not separating the costs of creating paper books from ebooks. You might not have the manufacturing costs but you still have all the other costs in between (promotions, salaries, advertising, book signings, etc). I would guess and I don't know the publishing industry inside out but I would
guess that the actual printing of the books onto paper is one of the smallest costs per book (there are big outlays of cash for building factories but do these publishing companies still own their factories or is this all outsourced to third parties? If its not then they should start thinking of spinning-off their manufacturing divisions to optimize their cost structures). The main problem will be getting these executives to take smaller pay based on lower revenues in eBooks, that is the push back. The manufacturing aspects can be solved relatively easily by outsourcing production to China or somewhere else to get rid of that risk. They aren't creating prescription drugs so they don't have huge quality control issues and even pharmaceuticals outsource a lot of their production.