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Originally Posted by Bombast
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.
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Yes. They pays their money, and they takes their chances. They hope the book sells enough to cover the costs and make a profit.
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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.
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On that note, ebooks have caused some changes in publishing. It used to be that once a book was out of print for a specified period, the author could ask for the rights to be returned, and attempt to resell the title elsewhere. Print on demand and ebooks raise the question "What is meant by 'out of print'?", and current contracts tend to specify paper editions and number of ebook/POD sales to specify when a book is out of print and the publisher's rights lapse.
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This model is very, very different from the dead tree world. Printing, binding, shipping, warehousing and retail space are all variable costs.
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Correct again. And retail space isn't a cost to the publisher. The retailer must estimate the proper mix of titles to yield the required revenue per square foot to cover costs and make money, Not all that long back, we saw publishers who
knew too many books were chasing too few readers, but nobody wanted to be the first to trim their lines. They were all afraid that if they published, say, three SF titles that month instead of four, they would lose the shelf space occupied by the fourth title and not get it back. So we had editors saying "I have four slots this month, but only three filled. What is the
least bad offering in the slush pile to fill out the list?"
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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.
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I have _Old Man's War_ and the follow up _The Ghost Brigades_in hardcover, and a third is out and on my list. Scalzi's career is coming along nicely.
There is also an interesting discussion between Charlie Stross and Cory Doctorow on Charlie's blog on the topic. Charlie has released a few titles (_Accelerando_ and _Scratch Monkey_, among others) in electronic form under a Creative Commons license, and folks would like him to do it with all of his books. Cory Doctorow already does that. But as Charlie points out, he isn't Cory, isn't blessed with publishers who will let him do that, and doesn't have the clout at this stage in his career to force the issue.
Personally, I haven't bought
any ebooks. I have thousands, mostly in Plucker format, on my PDA, but all are freely available from Project Gutenberg or places like the Baen Free Library, or offered under Creative Commons license like Doctorow and Stross's work.
I don't like DRM, and I don't like proprietary formats. I want to download electronic content
once, and read it on whatever device I happen to have. Grabbing HTML and concerting to Plucker for my PDA meets that requirement here. If the epublishing industry ever gets its act together and agrees on a standard format everyone will support, so I don't have to remember what title is in what format read by what reader, and if the insanity of DRM is abolished, I'll revisit the decision. Meanwhile, I have for more in electronic format that I want to read than I have time for now. I'm not missing anything by not buying DRMed electronic editions, since I still buy paper editions, too.
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Dennis