Will the Amazon Kindle cost US$50?

[rlauzon]

Originally Posted by NatCh

I respectfully disagree, rlauzon. For a business, 100% of the revenue comes from the customers, therefore, 100% of the costs have to be paid with money that comes from the customers -- that includes the owner's 'salary.'

It seems that I'm not being clear. Let me try again with a simple example:

We start with a widget. The cost to produce it is $10. It sells for $20.
So, as a customer, I pay $10 (the cost of the item) plus another $10 for profit of the producer.

Now, someone comes out with a new process that will chrome plate the widget. It costs $2 to chrome plate it. As a consumer, a chrome plated widget is only worth $21. I won't pay $22 for a chrome plated widget. So the producer must make a choice.

Option 1: Don't chrome plate the widget (avoiding the extra $2 cost).
Option 2: Chrome plate the widget, eat the extra $1 cost, dropping the profit to $9 - in the hopes that more widgets will be sold now that they are chrome plated.

My point is that as a consumer, the full cost of chrome plating is NOT passed on to me simply because I won't pay for it and I will go get my (better value) widgets someplace else.

Bringing the discussion back to eBooks: The cost of producing an eBook is extremely small. If the author decides to employ a proofreader, that's fine. But in passing the full cost of that on to me, I may decide that his eBooks are no longer a good value and go someplace else. Therefore, he may not be able to pass the full cost on to me and has to make the same decision as above.

I predict that eBooks are going to be very cost sensitive simply because they are so cheap to produce. Extra costs will have a very large impact on sales.

[NatCh]

Oh, I I understood what you were saying, rlauzon, I'm just pointing out that if the producer has to eat enough of those little bits then the remainder gets too small to be worth his while to do the work.

I.e. if he chrome plates 5 different types of widgets and eats $1 of the cost on each of them then his profit drops from $10 to $5. If that $5 isn't enough for him to mess with, then he stops messing with it. That's all I was getting at.

Because he eats that $1 he takes home $1 less per widget. If his 'salary' is $50k and he makes/sells 10k widgets and eats $1 on each of them, then his salary drops to $40k. If he can live on that, and is willing to do so, then fine, if not ... well, nobody gets widgets from him, chrome plated or otherwise.

For widgets, that's not that big a deal, usually someone else is making something comparable. But books are a bit different, usually a given book is only going to be written by a given person, so this would mean it just didn't get written at all. Imagine if Shakespeare had decided that he just couldn't make enough money from writing that "Romeo and Juliet" thing.

As you point out, e-book margins are pretty thin, but I don't know that they'll be that much thinner than p-book margins, from the author's standpoint anyway. So a lot of folks might be dissuaded if we the consumers expect the prices to be too much lower than the paper price. I guess that's my overall point.

[rlauzon]

Originally Posted by NatCh

As you point out, e-book margins are pretty thin, but I don't know that they'll be that much thinner than p-book margins, from the author's standpoint anyway. So a lot of folks might be dissuaded if we the consumers expect the prices to be too much lower than the paper price. I guess that's my overall point.

Since eBooks effectively cut out the middle-men (i.e. publishers and retailers), they can be priced significantly lower than pBooks - with the authors and retailers making the same.

I don't believe that authors believe that they will make more off an eBook sale than a pBook sale. In the short term, that may be the case, but not in the long term. In a capitalistic system, prices tend to drop until they can drop no further. Since the cost to produce a copy of an eBook are effectively $0, we are just paying for the author's and retailer's profits.

[NatCh]

Originally Posted by rlauzon

Since eBooks effectively cut out the middle-men (i.e. publishers and retailers), they can be priced significantly lower than pBooks - with the authors and retailers making the same.

Now that we agree on. And I hope that your estimation of how much cost that cuts is closer to the reality than my own.

Originally Posted by rlauzon

I don't believe that authors believe that they will make more off an eBook sale than a pBook sale.

Nor do I, nor, I imagine do most of the authors themselves. Although, it may be that they end up making more money on e-books from higher sales rather than a higher per unit profit.

Originally Posted by rlauzon

Since the cost to produce a copy of an eBook are effectively $0, we are just paying for the author's and retailer's profits.

Well, their time and effort are worth something, or we wouldn't be buying the books in the first place.

[b_k]

Originally Posted by NatCh

...

Well, their time and effort are worth something, or we wouldn't be buying the books in the first place.

I think this was more about the cost for paper and other print material. The content is worth something, but basically ebooks cut out all the "hardware" cost on the publishers/authors side.
We can now go on and say, they will have to include costs for hosting and such in the price tag. But I'm sure this has to be a small fee for the single ebook, that it couldn't lead to prices like for the paper version.
Especially for those books that are only rented (DRM-books) for a unknown amount of time.

[nekokami]

Originally Posted by rlauzon

We don't need a commercial entity to review books - as a matter of fact, I would not trust such an entity to provide accurate reviews. The only good reviews come from other readers.

Perhaps. Maybe if you distribute the work far enough across multiple volunteers, the slush pile will get read, rated, and reviewed, and the gems will rise to the top. Meanwhile, access to the work has been so broad that there's really no good reason for anyone to pay for a copy of the book by the time the reviews are written. (You might be able to get volunteers to read the slush pile while it's free, but I seriously doubt many readers would be willing to pay for the privilige. And while Baen uses volunteers to help sort the slushpile, ultimately books are read by a paid editor before the author is offered a contract, and the book changes form between the time it is pulled from the slushpile and the time it is published.)

Which means that if the authors who write the books are to be compensated at all for their work, a completely different model would need to be used, e.g. an honor system in which readers pay what they think the book is worth after reading, or an advertising system in which ads are embedded into the book. (These aren't meant as the only two possible models, just two examples.) Perhaps this is where publishing will eventually go, but I don't think it's the next step from where we are now. Nor do I see either of these as a great improvement for either readers or writers from the current system. Your opinion is no doubt different. I think this is an area where we will not agree.

[BooksForABuck]

I'm a true believer in making eBooks affordable. I think we can expand both the eBook share of the market and the total reading market if we set affordable prices. That said, I get a really uncomfortable feeling when I read the idea of Amazon pushing for lower prices. For paper books, at least, Amazon demands a 55% discount. It's virtually impossible for small publishers to make money with that kind of discount--even when we set relatively high prices. Mobipocket sets a 50% commission, which is about the industry standard--and since there are minimal manufacturing costs, it's possible to make money. Still, do I want Amazon telling me what prices to set? Not hardly.

Rob Preece
Publisher, www.BooksForABuck.com

Originally Posted by nojetlag

Amazon should rather focus on pushing the ebook price to 25% of the paperbook price, the rest will happen automatically.

[Jaime_Astorga]

http://news.google.com/news?hl=en&q=...=1&sa=N&tab=wn

It seems the Kindle is going to cost upwards of $400. I am very disappointed.

http://gizmodo.com/gadgets/gadgets/a...res-254048.php
http://www.engadget.com/2007/04/20/a...00-for-spring/

[bowerbird]

don't be disappointed, jaime. it's actually _great_ news for book-readers.

why? the fact that they're charging you a _fair_ price for the _hardware_
means they're not going to try to subsize it on the back of the _content_,
which is the _books_ that you are going to buy. since you're gonna spend
a _lot_ more on books than $400 -- if you're a real book-reader, that is --
you will be spending less money this way in the long-run. and if they are
charging you a _fair_ price for the content (instead of trying to gouge you),
they won't have as strong an aversion to letting you load your own content,
and that will be good for you in the long run too, because it'll pressure them
to keep their prices honest. once they start gouging you, it keeps escalating,
like the price of popcorn in movie theaters, until it's totally unreasonable and
the market collapses entirely, which we _really_ do not want to have happen
with e-books. especially as this was the vicious cycle that doomed p-books.

e-books -- if they're cheap -- let us rediscover the midlist, even the long tail,
and that's the way ideas should be, wild and free. so this is great news, jaime.

sure, it'll be tough to bite the bullet at the start, but that's the (high) price
that early adopters have always had to pay, i'm afraid to say, so that's life.

and yes, you were sold a bill of goods by the constant "news" from places
like teleread, that a $50 machine was "right around the corner", but hey,
-- i hope you'll pardon my french -- that's what you get for being a sucker.
now you know who you can and cannot trust.

-bowerbird

[bowerbird]

oh, by the way, i think it's hilarious that the web echo-chamber
has announced to itself that this thing will debut "this spring"...

by my calendar, spring is 1/3 sprung already, and i haven't heard
one word of this from amazon itself. have you? i didn't think so.

is it really our opinion the p.r. department for the world's biggest
bookstore has been struck deaf-dumb-and-blind? no sir, children.

i can't say for sure, because i am not them, but if i _were_ them,
i'd announce this along about june and have 'em available september
for positive reviews aimed at the year-end holiday gift-giving season,
when conspicuous consumption is the order of the day, doncha know?

-bowerbird

p.s. the atari-beige one is the $400 model. white shiny one goes $500.

[delphidb96]

Well, regarding point 1, no it isn't and yes it is.

In the strictest definition, the one made by Palm when setting up PalmOS, it most definitely is *NOT* an ebook format.

However, both Mobipocket (.prc) and eReader (.pdb) have built their ebook files around the .prc/.pdb resource and data file structures and have released enough (can we say *FLOODED* here?) ebooks that many people who don't have or routinely use PalmOS devices make the assumption that the .prc and .pdb file structures *ARE* ebook formats. Sorry, but that's just the way it goes.

Look at Webscriptions and Fictionwise, they both offer ebooks in, what they term, the 'Mobipocket .prc ebook format'. They don't go around sticking up an explanatory paragraph saying that what they *really* mean is they offer ebooks in either text or html format bundled into a PalmOS .prc resource database file structure. In some ways this is like unto whether one should say Kleenex (R) or kleenex - except that Palm never insisted upon enforcing the original definition (trademark) and there's no going back.

Derek

Originally Posted by rlauzon

1. PRC is not an eBook format. It's a Palm Resource file (and it's probably mis-named since it should be a .pdb).
2. DRM has no value to the consumer. DRM makes content worth less to the consumer. So saying that a device supports DRM is certainly NOT a selling point.

So, why buy a Kindle if you already have a PDA?
Even if you don't have a PDA, why would a Kindle be more vaulable?

[bowerbird]

back in april, i said:
> oh, by the way, i think it's hilarious that the web echo-chamber
> has announced to itself that this thing will debut "this spring"...
>
> by my calendar, spring is 1/3 sprung already, and i haven't heard
> one word of this from amazon itself. have you? i didn't think so.
>
> is it really our opinion the p.r. department for the world's biggest
> bookstore has been struck deaf-dumb-and-blind? no sir, children.
>
> i can't say for sure, because i am not them, but if i _were_ them,
> i'd announce this along about june and have 'em available september
> for positive reviews aimed at the year-end holiday gift-giving season,
> when conspicuous consumption is the order of the day, doncha know?

well, it's june. two weeks until the end of "this spring". any new word?
no? well, um, gee, exactly what i thought. heard any good echoes lately?

and if nothing is announced by the end of july, there will only be a lump of
coal in your christmas stocking, no $50 e-book reader-machine for _you_!

-bowerbird

[mogui]

The late Adam Osborne produced an early portable computer that enjoyed popularity for a while. Then he made a mistake that was fatal to his company. He announced a new improved model. Everyone wanted it, so those that had been planning to purchase his current model waited for the new model to come out. And waited, and waited . . .

When Osborne finally put the "Executive" model on the market, it was too little, too late. Osborne's company failed and Compaq inherited the design.

The Osborne effect causes consumers to delay purchases based on the promise of better, cheaper future technology. Using it, some companies can exert a measure of control over market conditions, to their advantage.

Or should we call it the Kindle effect?

[bowerbird]

the osborne i was my first computer -- one of the great loves of my life.

and your recounting of the debacle around adam's second machine is correct.
(although -- like most people -- you've forgotten to say he had little choice
about pre-announcing his "executive" because he was trying to raise money
to produce the machine by selling stocks to individual investors.)

but notice that that is _not_ what amazon did here. first of all, they didn't
announce this -- and still haven't. second, they have no existing product
that might be accidently cannibalized by a premature pre-announcement.

if you're positing that they deliberately let this rumor slip, so as to sabotage
the sony reader, then that's a different type of strategy, but one that already
_has_ a name -- namely "f.u.d." (for "fear, uncertainty, and doubt"), and it's
the specialty of another seattle-area company called "microsoft", thank you.

but i don't think that's what happened. because remember, it wasn't amazon
that blew this thing out of proportion. it was rothman over at teleblog and
some people here and on some other blogs, people who have been telling us
for _years_ that a cheap machine is right around the corner, who are now
_desperate_ that they've sacrificed so much of their credibility on this, and
are looking for _anything_ that might salvage a bit of it. but sorry, charlie...

cheap machines _will_ come. but it won't be sooner, it will be later.

even the o.l.p.c. -- which is pushing the edge of the envelope, what with
their research and development bringing about _major_ accomplishments --
won't come as soon as we'd like, considering that their may 30th deadline
for ordering has passed without any big announcements, unfortunately...

-bowerbird

[mogui]

I have a vague memory of Osborne's column (Interface Age?) called the Exclusive Oracle. But that far back, memories tend to run together like asphalt in the sun