Quote:
Originally Posted by Nitrousoxide
Ebooks have a higher profit margin than paperbacks. I fail to see how selling them over a paperback will hurt your bottom line. If a publisher is concerned that 9.99 best sellers are hurting their profit margins for their hardbacks they can just refuse to sell through retailers that only offer 9.99 best sellers, or they can delay their release in ebook format like S&S is going to do.
If the market pressures from producers are large because the price elasticity of supply is high and the price elasticity for consumers is low then the situation we will end up with in due time is a world where only ebook retailers who offer variable pricing will get the deals to sell the best sellers.
On the other hand, if the market pressures from consumers is high because the price elasticity of demand is high then we'll find that consumers will just refuse to buy from stores that offer variable pricing for best sellers, and publishers will loose out on both the ebook and hardback sale from more and more people as ebook readers increase in popularity like MP3 players did.
I'm personally betting that the price elasticity of demand is fairly high and that trying to charge more to "save books" will only result in publishers charging well over the price equilibrium, and thus LOOSING sales and profit.
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And a low retail price only hurts publishers' profits if they lower the wholesale price accordingly. If (as reported) Amazon is taking a loss on its $9.99 books, then that price is hurting Amazon's profits-not the publishers'.
Somebody mentioned that they'd only accept the publishers' claims if the publishers opened their books, and I think that's a great idea, but I don't expect that to happen. Mostly their arguments make sense to me, so I accept their claims-but always with some doubt because they don't open their books.
And in any case, the real question is how this affects consumers/readers-I really don't care about the publishers' profits (nor about the authors') except that I believe that denying them profits will result in fewer books being available in the future.
Assuming the reports are correct that Amazon is losing money on its $9.99 books, that can only be explained as an attempt to corner the market in ebooks (i.e. become a monopoly, if totally successful) and if so then that price will only continue until they're successful. Once successful they'll either raise prices (hurting consumers) or lower expenses.
If Amazon is the publisher, then those expenses will be the editing & proofing-and I don't see how they can reduce those very much. The only expense I can see being reduced is what Amazon pays authors-and that will result in fewer books being available in the future, again hurting consumers.
If Amazon is simply the distributor, then the expenses they'll lower is what they pay to publishers-and if Amazon is the only major vendor for ebooks, that will result in the death of ebooks, again hurting the consumer.
Overall, I think the problem is that the publishers are trying to simplify the issues, making it appear that their only concern is for their profits. Which it probably is as, if Amazon corners the ebook market (which it appears to be attempting) they will lose whatever profit is to be made from ebook publishing.
So, either come up with a different business model (which still allows profit to the author, hopefully based on the 'quality' of their work-and as I stated elsewhere, I consider quality best judged by popularity) or agree with the publishers' opinions that the $9.99 pricing is too low.
One possible new business model is self-publishing, but that currently requires significant technical work on the part of the author(s), most of whom (as far as I can tell) are not technically competent. At least in publishing technology. Can they learn? Probably, if given the incentive. Most of them strike me as at least fairly intelligent, but like anybody else faced with learning something new, they need incentive-so far I don't think that'll be offered until after Amazon does corner the ebook market.