Quote:
Originally Posted by DMcCunney
You are conflating two different business models, and it doesn't work that way.
You have several costs: the cost of acquisition (IE, the advance payed to the author), the cost of preparation (line editing, copy editing, proofreading, and typesetting), the cost of manufacture, the cost of warehousing, and the cost of distribution.
Acquisition and preparation will be there regardless, and creation of an ebook edition in addition to the electronic format sent to a printer will be negligeable.
Cost of manufacture and cost of warehousing essentially don't exist for ebooks. You have a master copy of the electronic book, sitting on a server. the server will have a cost, but the share of that cost born by any individual ebook will be miniscule.
Cost of distribution will be the cost of the server, electronic payment setup, and bandwidth. Tiny for any individual book.
Dennis
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I agree, but would like to note a few additional facts -
1) The acquisition and preparation costs are fixed - they're the same if a book sells 1 copy or 10 million copies. As you note, the variable costs (bandwidth to transmit the book, processing the payment) should be functionally zero.
2) Acquisition costs are sunk costs. Once a book is ready to sell to the public, that money is simply GONE. Then the question is just what to do with it?
3) That mean this is a very simple, classic microeconomics question. What price will result in the highest total income?
Price it there and make the pie as big as possible. Then the author and the publisher can negotiate over how big a piece each party gets.
This model is very, very different from the dead tree world. Printing, binding, shipping, warehousing and retail space are all variable costs.
Until this week, the only E-book I'd ever bought was "Old Man's War" by John Scalzi. He was an established, lower-than-mid-list SF writer, and it was an all-right book. He knew it wouldn't be a best seller, if he shopped it to regular publishers the most he could hope for was about $10k. So he offered it for sale on his website as a word document - IIRC, it was $2. To me, it was WELL worth $2, it wouldn't have been worth $22 for hardback, or $7 for paperback.
He's got a very interesting post on his website about the stupidity of DRM -
http://www.scalzi.com/whatever/004052.html#comments