Quote:
Originally Posted by pietvo
The car analogy just doesn't hold. It costs to produce each car. But once you have the ebook, producing additional copies is virtually free. So if a $5 ebook would sell 4 times as much copies as the same ebook for $10, the publisher would make more money. I don't say the it will be 4 times as much but at least it could be worth the experiment. It did work for some iPhone apps at least. People might be willing to take the risk of buying it at $5 that they will not take at $10.
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No, you're missing the point. The cost of the physical materials isn't really an issue here. Remember, the cost of printing and binding a physical book isn't nearly the expense people think it is. Most of the expense in producing a physical book is editorial, marketing, overhead, etc. Printing and binding accounts for roughly 1/8 of the cost, so if simply making a book $5 would create sales that resulted in huge sales that covered all the other costs, publishers would already be doing that.
Believe me, I'd love to sell ebooks for $5, but the sales would simply not be there. The market isn't as big as you think -- the number of ereaders out there is not big enough, and you can't reach all of those ereader owners with your marketing. We're talking about a fraction of the ereader market, which itself is a small fraction of the book-buying market as a whole.
You could sell ebooks for $1 and you still wouldn't sell as many ebooks as you do physical books.
To do some math ...
If the list price for an ebook is $5, that doesn't mean the publisher gets $5. The publisher only gets part of that. I'll be generous and say the publisher gets half -- $2.50. From that, the publisher has to pay the author. The author's royalty on ebooks varies -- a lot of agreements give authors as much as half of the publisher's earnings (that's just ebooks, mind you). But let's assume a standard royalty of 10% of list price. I'll even be kind (and simplify things) by not including escalations. That's 50 cents per book, bringing the publisher's take down to $2.
If the publisher is to cover all the costs, they likely have to sell at least 20,000 copies of that book. (It would vary from company to company, of course.) And that's just not going to happen very often ... even with the price incentive. A bestseller in Canada is 5,000 copies of a book -- and while that seems like a low number, only a handful of books sell that many copies. Ebooks aren't going to boost that number a heck of a lot.
The market will certainly buy more books if the cost is lower ... but it's not an issue of how many books the market will buy. It's a matter of how big the market is, and ebook readers aren't creating more book readers, at least not in significant numbers. For the sales you're talking about to occur, the book market itself -- ebook or otherwise -- has to grow exponentially.
Long term? Who knows ... But for now, publishers simply cannot have such low prices. They can't take a loss for years on end in the hope that the market will get bigger. The market has to get bigger first, because at the moment there's no real evidence that the book market is growing.