[Elfwreck]

Originally Posted by Kali Yuga

Before I answer that, a quick disclaimer: I don't work for a publisher or retailer, so I don't have precise figures.

Blurry figures fine. If someone wants to jump in with verified statistics that such-and-so publisher has a return rate of exactly 27.5%, we can go with that, but otherwise, I'm content to work with the numbers that get bounced around in the news articles & editorials.

In addition, the paper costs of a book are only 15% or so of the total costs. I assume this includes returns, but if it doesn't then with a 50% return rate, paper costs are still around 22% or so.

And there's 7% that could be forwarded to the author without the publisher losing any money on the sale, if the ebook is set to the same price as paper.

Paper costs don't include shipping, storage & inventory costs, all of which take a cut out of the profits and therefore are figured into the price.

Ebook readers presumably loathe the idea of spending more than $10 for any ebook, even a brand-new one.

For fiction and "editorial" books, yes. Because the majority of fiction readers are paperback readers, not hardcover readers, and they expect a book to cost less than $10. One of the communication disconnects is publishers expecting ebooks to substitute for hardcovers, not paperbacks, in buyers' minds. (This may be because of the cost of ebook readers, and before that, the relatively high income expected of computer owners.)

For technical or educational nonfiction, more than $10 may not be a problem... if they make the ebooks usable. (Read-aloud enabled, copying permitted, printing enabled, etc.)

(That may not end up being the case, if the agency model genuinely engages in dynamic pricing, and visibly lowers cost as books age.)

The agency model is likely to wreak havoc on publishers, as they can't react to consumer trends fast enough. They can't drop the price for a weekend sale, or because the movie's soaring at the box office. And contracts may mean they can't drop the price temporarily at all.

If that's the case, then the public want publishers to cut their prices by 50-66% -- though to the consumer this looks more like a 30% cut.

The public wants ebooks at paperback prices. And windowing ebooks would likely not get complaints--if the late-release ebooks were offered at $10 or less. The reason offered for the late release was to keep the prices high enough not to directly compete with hardcover sales.

I'm quite confident that it does not cost 2x or 3x as much to print a hardcover as it does a softcover. This is why the hardcovers are "high margin" sales.

I think it does cost 2-3x as much to print. I've heard costs as low as $1 each for printing paperbacks; I'd be surprised if hardcovers cost less than $2.50 to print. But it doesn't cost that much more to ship, store, and track sales of.

I.e. the actual costs of a book are the elements that people don't consider, are not aware of, and/or do not value: advances, editing, retailing, overhead and so forth.

Paperbacks have all those, and manage to sell at under $10.

And again, in a few years the idea of basing prices relative to paper costs will be largely moot, as paper gets sidelined.

Only if publishers start paying attention to ebook formatting and display options. Novels in paper may shrink drastically over the next decade, but reference works are going to keep a strong paper presence, because ebook readers just can't do a lot of what people use reference books for.

You can't open an ebook to three different sections and zip back-and-forth quickly between them. You can't flip through the pages looking for "that chart with the big red section on the left." Can put bookmarks--but can't put red flags for "supports my theory" and yellow ones for "legal issues" and post-its for "re-read later."

Most of what's do-able with print is do-able with ebooks, but the software hasn't evolved to allow it yet. Those features will have to be a lot more developed before ebooks seriously threaten print for anything other than entertainment reading.