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Kali Yuga · 10-29-2009, 01:06 PM

At the moment, it is unclear how much money retailers are actually making off of ebooks. So it's a bit odd to declare them to be the Bad Guy -- primarily because you want to pay less for ebooks.

For example, the wholesale price the publishers are charging for new books that are in hardcover is the same for the ebook, around $10-$12. So Amazon, B&N, Walmart etc treat these books as loss leaders, either in paper or electronic form. Several retailers are selling public domain books for free, which is also a loss given the cost of bandwidth and other overhead.

While margins are thin for publishers, they are not exactly thrilled by the idea that shifting to electronic format will devalue their work. They aren't even really on board with the $10 price point.

There's also the issue of competition. At the moment there are 3 major ebook retailers (Amazon, B&N, Sony) and several secondary competitors (e.g. Scribd). I have no doubt that if any of these thought they could gain a sustainable competitive advantage by reducing prices, they would absolutely do so.

And last but not least, in most cases ebooks are really only cost 10-12% less to make and distribute than paper books; the big sellers, which one might assume would generate a lot of the income, are subject to the biggest price pressures and often end up as loss leaders anyway. So it doesn't make much sense to expect ebook prices to be, say, 50% lower than paper. It just doesn't add up.

By the way, keep in mind that Baen's $6 ebooks a) don't go through a retailer, and b) are basically pulp sci fi, so not as expensive to produce as, say, the latest Dan Brown thriller or a researched book on the financial crisis.

I don't have a problem with the $10 price point... as long as everyone gets their due.

10-29-2009, 01:06 PM	#10
Kali Yuga Professional Contrarian Posts: 2,045 Karma: 3289631 Join Date: Mar 2009 Device: Kindle 4 No Touchie	At the moment, it is unclear how much money retailers are actually making off of ebooks. So it's a bit odd to declare them to be the Bad Guy -- primarily because you want to pay less for ebooks. For example, the wholesale price the publishers are charging for new books that are in hardcover is the same for the ebook, around $10-$12. So Amazon, B&N, Walmart etc treat these books as loss leaders, either in paper or electronic form. Several retailers are selling public domain books for free, which is also a loss given the cost of bandwidth and other overhead. While margins are thin for publishers, they are not exactly thrilled by the idea that shifting to electronic format will devalue their work. They aren't even really on board with the $10 price point. There's also the issue of competition. At the moment there are 3 major ebook retailers (Amazon, B&N, Sony) and several secondary competitors (e.g. Scribd). I have no doubt that if any of these thought they could gain a sustainable competitive advantage by reducing prices, they would absolutely do so. And last but not least, in most cases ebooks are really only cost 10-12% less to make and distribute than paper books; the big sellers, which one might assume would generate a lot of the income, are subject to the biggest price pressures and often end up as loss leaders anyway. So it doesn't make much sense to expect ebook prices to be, say, 50% lower than paper. It just doesn't add up. By the way, keep in mind that Baen's $6 ebooks a) don't go through a retailer, and b) are basically pulp sci fi, so not as expensive to produce as, say, the latest Dan Brown thriller or a researched book on the financial crisis. I don't have a problem with the $10 price point... as long as everyone gets their due.