Why are some e-books more expensive then their physical version?

[Shaggy]

Originally Posted by HarryT

Yes. The major publishers have what's called an "agency agreement" with the bookstores, which means that the stores are acting as their agents, rather than as independent retailers. That means that the publishers dictate the prices.

Except, of course, that this whole phenomenon of the eBooks being more expensive than the paper books existed in many cases before they started using the agency agreement.

I'm sure the agency agreement "aka price fixing" doesn't help, but the problem is more than just that.

[*reg*]

Wake up this morning to lots of replies. Thanks.

I'm thinking it is greed and short-sightedness.

I think there would be a lot of people like me, who upon seeing the ebook is more expensive than the paperback, don't buy either - out of some sort of principle (and wait until the price drops), but rather go to the next book on their 'to buy' list. So the publishers end up with no money at all from me. Or am I odd, and people still do buy them even though they are more expensive?

[fishface]

If you think about it, for a particular book, the publisher holds a complete monopoly of supply. So it's not surprising that the set price is high among all variants of the book: if, e.g., the ebook version was considerably lower, you'd have your own customers moving away from the print version to the ebook version resulting in potentially a net loss of profit. So they just set the price to whatever they think is the monopoly price for the book based their estimated demand curve. I wouldn't be surprised if their estimated demand on the people who buy expensive gadgets is shifted upwards relative to the usual market.

[timezone]

Originally Posted by fishface

If you think about it, for a particular book, the publisher holds a complete monopoly of supply. So it's not surprising that the set price is high among all variants of the book: if, e.g., the ebook version was considerably lower, you'd have your own customers moving away from the print version to the ebook version resulting in potentially a net loss of profit. So they just set the price to whatever they think is the monopoly price for the book based their estimated demand curve. I wouldn't be surprised if their estimated demand on the people who buy expensive gadgets is shifted upwards relative to the usual market.

Except that the majority of the books publish fail and do not sell. I think there is some accountability required on the part of the publishers but I believe people are not taking into account the cost of doing business.

[*reg*]

Originally Posted by timezone

Except that the majority of the books publish fail and do not sell. I think there is some accountability required on the part of the publishers but I believe people are not taking into account the cost of doing business.

I get that there is a cost in doing business. But I do fail to see how an ebook would cost more than the physical version? Some ebooks I have purchased are only around 70cents cheaper than the paperback version, but I can handle that. What I can't handle though is an ebook being $3 more than the paperback.

[Worldwalker]

The "cost of doing business" -- actually, what you're looking at is the cost of goods sold -- is lower for the ebook than for the equivalent pbook.

Both of them start from the same source: a manuscript from an author, either on paper (does anyone still write on paper?) or in electronic form. Once the publisher has the manuscript, it has to be edited, formatted, etc., to prepare it for publication. Once that is done, the following costs exist:

For the pbook:
printing
shipping
warehousing
distribution
returns

For the ebook:
any needed format changes (probably automated via software)

Pbooks can have 50% returns -- that is, half of the books that the publisher has paid to print, store, and ship to bookstores can turn around and come right back, garnering a full refund for the distributor and retailer, and ending up either remaindered or sent to the recyclers. So for every pbook they sell, the publisher may have to pay the full production cost, from press setup to disposal, for two such books.

For an ebook ... a little bandwidth. Zero returns.

Further, there's the distributor and retailer discounts. I'm not sure what they are in the publishing industry. Back when I was involved in the paper-and-pencil game industry, the distributors commonly paid 40% of cover price on a product, selling it to the retailers for 50% or 60% of cover. If something of the kind holds true in book publishing, the publisher is getting 40% of the cover price of a pbook, and (with "agency" pricing) 70% of the cover price of an ebook.

So if the ebook and the pbook both sell for $10.00 each (and the discount level is comparable to the RPG industry), the publisher gets $4 for the pbook (from which they have to cover the expenses of producing and physically shipping about at least one, possibly two, such books ... more if it tanks) while they get $7 for the ebook, with no other expenses.

In short ... the publishers are price-gouging.

[sabredog]

Originally Posted by Worldwalker

In short ... the publishers are price-gouging.

Pretty much sums it up.

Look up all ye publishers! The asteroid is coming

[astra]

Why are some e-books more expensive than their physical version?

Publishers want to prove that ebooks is a bad thing.
They want customers keep on shedding loads of money for printed books. Also, they know that they will loose the battle, so they try to make as much money as possible while they can to save for a couple of yachts after they are out of business.

[BaenSidhe]

See this blog post by Michael Stackpole on the subject. http://www.michaelastackpole.com/?p=1287

There are some editors and publishers who get it. However, if they work for a big conglomerate, sometimes the accountants and lawyers get in the way of rational thought.

On the other hand, in the cost analysis, you're missing the cost of servers, bandwidth, DRM, and handling credit cards. Servers and bandwidth should probably be covered by regular overhead costs since most publishers have a website, but it is a cost of selling ebooks that is not negligible. Yes, DRM is bad, but publishers (or maybe it's their accountants and lawyers) need it and I've read somewhere that it costs a lot.

[Worldwalker]

In my cost analysis, I was assuming an ebook sold through Amazon, so the publisher isn't paying the costs of the sale, just as for the pbook, they're not paying the electric bill for the bookstore.

[amoroso]

Originally Posted by *reg*

I think there would be a lot of people like me, who upon seeing the ebook is more expensive than the paperback, don't buy either - out of some sort of principle (and wait until the price drops), but rather go to the next book on their 'to buy' list. So the publishers end up with no money at all from me.

Exactly what I do. But, besides the principle thing, in many cases I can not buy the printed edition: my eyesight is no longer good enough to comfortably read paperbacks and other small formats.

[HamsterRage]

Originally Posted by *reg*

Wake up this morning to lots of replies. Thanks.

I'm thinking it is greed and short-sightedness.

I think there would be a lot of people like me, who upon seeing the ebook is more expensive than the paperback, don't buy either - out of some sort of principle (and wait until the price drops), but rather go to the next book on their 'to buy' list. So the publishers end up with no money at all from me. Or am I odd, and people still do buy them even though they are more expensive?

It's sad really. None of the big publishers seem to have embraced ebooks and there's no reason to believe that market won't follow exactly the same path as music. Even more so, as consumers have become used to buying their content through iTunes and other websites.

Eventually, someone is going to get the model right. My guess is a service that provides editing, artwork and formatting for authors, and sales to the public via some kind of iTunes-like experience. Think of something like book version of the iTunes Genius, that looks at your library and recommends new material for you. I'd bet that the first company to get that right will win big time.

[Barcey]

Originally Posted by BaenSidhe

See this blog post by Michael Stackpole on the subject. http://www.michaelastackpole.com/?p=1287

There are some editors and publishers who get it. However, if they work for a big conglomerate, sometimes the accountants and lawyers get in the way of rational thought.

On the other hand, in the cost analysis, you're missing the cost of servers, bandwidth, DRM, and handling credit cards. Servers and bandwidth should probably be covered by regular overhead costs since most publishers have a website, but it is a cost of selling ebooks that is not negligible. Yes, DRM is bad, but publishers (or maybe it's their accountants and lawyers) need it and I've read somewhere that it costs a lot.

Actually there's no more cost for Apple to sell a $14.99 ebook versus a $0.99 song.

[some call me tim]

Originally Posted by Barcey

Actually there's no more cost for Apple to sell a $14.99 ebook versus a $0.99 song.

Possibly less? I haven't gotten my Reader yet, but how big are ebooks as a file size? I imagine they can't be too big.

[HamsterRage]

Originally Posted by some call me tim

Possibly less? I haven't gotten my Reader yet, but how big are ebooks as a file size? I imagine they can't be too big.

Bingo! That's why I basically ignore any of the rot that people have been spouting about bandwidth and disk space costs for ebook sales. Even stored in 5 different formats, it's going to be hard to break 1 MB for a typical novel.

And wait until some brain child figures out a "master" format for ebooks, from which any of the other formats (epub, mobi, lit, etc) can be built on the fly and then those costs will shrink even further.