Quote:
Originally Posted by DawnFalcon
A per-sale model really doesn't display the realities. It's a mixture of fixed and per-sale costs..a large percentage of fixed cost is for printing books that get returned. Also, the cost for ebook "design, typesetting, copysetting" is far too high even on their model.
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While I'm not sure we can know if figures shown are too low or too high, we can certainly know that their model incorrectly mixes fixed and variable costs and is therefore fundamentally flawed.
My take-aways/translations from the article:
1. "consumers ... have developed unrealistic expectations about how low the prices of e-books can go"
means we (the publishers) must change this expectation and Matoko Rich has tried to help us with this article.
2. "printing costs may vanish"
means the marginal costs of eBook production is zero.
3. "a raft of expenses that apply to all books, like overhead, marketing and royalties, are still in effect"
means there are fixed costs (except for royalties, a variable cost) which would be incurred whether or not an eBook is offered/sold.
4. "Under the agreements with Apple, the publishers will set the consumer price and the retailer will act as an agent"
means that publishers are somehow able to engage in what I understand by definition to be the practice of
price fixing.
5. "At a glance, it appears the e-book is more profitable. But, ..."
means it either is or it isn't. Since it is and e-books are bad for the status quo, the profitability of e-books must be shown to be a bad thing. Should "out of print" even be part of our lexicon in this day and age?
hence,
6. "e-books still represent a small sliver of total sales, from 3 to 5 percent."
means they are not selling enough which would have nothing to do with publishers making e-books available or delaying their release in conjunction with the publication of new titles.
7. "publishers want to avoid lower e-book prices (because) print booksellers would be unable to compete
means we (publishers) intend to push the price of a product as high as possible, leading to profits for all sellers, another component of price fixing.
In summary, e-books = change for the publishing industry and that is bad, bad, bad.
Shatzkin said, "The simplest way to slow down e-books is not to make them too cheap." I think he really wanted to say, "The simplest way to slow down e-books is not to make them."