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Originally Posted by Dumas
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.
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Any such analysis is going to be "flawed." Costs will vary based on how many copies the book sells; the size of the advance; the type of edition, and so forth. Nor is this intended to be a comprehensive analysis. Instead, the point is that while ebooks do cost less to publish than paper books, the cost savings are far smaller than most people expect.
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Originally Posted by Dumas
My take-aways/translations from the article...
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...looks an awful lot like confirmation bias in action. Or at least unreconstructable cynicism.
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Originally Posted by Dumas
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.
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Yes. And? That doesn't alter the fact that the paper-related costs hover around 15%, you still have significant fixed costs to publish the title, and that consumers overestimate the cost savings of ditching paper.
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Originally Posted by Dumas
....publishers are somehow able to engage in what I understand by definition to be the practice of price fixing. |
Yeah, not really. It's an example of publishers setting prices, and in terms of what price to set, it's no different than groupings around common cover prices. It would elevate to illegal price fixing if there was evidence that all publishers were colluding to set prices, as opposed to competing against one another for selling goods. We also don't know if discounting has been completely eliminated, though it is unlikely that Amazon can declare a 50% discount across the board without the publishers reacting.
And really, it's no different than Apple setting a "$1 per music track purchase," except that it's the publishers rather than the retailer that establishes prices.
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Originally Posted by Dumas
5. "At a glance, it appears the e-book is more profitable. But, ..." means it either is or it isn't.
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No, it means the situation is more complex than it appears at first glance, as explained by subsequent sections of the article.
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Originally Posted by Dumas
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.
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That's because it doesn't.
The percentage of ebook sales has more to do with near-total apathy by the public for ebooks until about a year ago, combined with a lack of compelling (and/or affordable) devices for reading ebooks.
In the meantime, publishers do not have unlimited funds, are in fact cranking out more ebooks (e.g. Amazon now has 450k ebooks, up from 350k last September), signed a huge agreement with Apple to put out ebooks on what is expected to be a popular platform, and delays (which aren't terribly common yet) have been shorter than the hardcover-to-paperback delays.
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Originally Posted by Dumas
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.
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Compete against themselves?
The goal of anyone who is selling a good is to hit an optimal price. Some believe that would be a higher price (fewer sales but better margins), others think lower (more sales, but worse margins). This is normal, ordinary, everyday, morally acceptable behavior.
You also seemed to blip past the part of the article where they pointed out that publishing is not a gold mine, and that no one is getting obscenely rich off of publishing books. Accusing publishers of excessive greed is laughable, especially when you consider the actions of, say, bankers circa 2006 or 2009....