Stars fall in Amazon protest about ebook prices

[murraypaul]

Originally Posted by leebase

So just continue on using your library, buying books at yard sales, and borrowing your friends books.

Oh, and:
c) We wont be able to continue to do any of those things with eBooks, as publishers have removed all of those options which currently exist with pBooks.
For the aim of supporting the art of writing, no doubt.

[leebase]

Originally Posted by murraypaul

Oh, and:
c) We wont be able to continue to do any of those things with eBooks, as publishers have removed all of those options which currently exist with pBooks.
For the aim of supporting the art of writing, no doubt.

Right, so don't use ebooks. You don't want to pay for them, so do what you have always done. Or read the millions of public domain books. Or wait long enough for the ebook you want to read to be so unpopular that the publisher drops the price to pick up the few remaining pennies of value from it.

Just as you've always done before.

Lee

[Kali Yuga]

Originally Posted by murraypaul

How do you figure $3 for the publisher from a $10 book? Under agency agreements retailers take a flat 30%, and handle all dsitribution costs. So the publisher receives $7. Are you saying the author would get $4, leaving only $3 for the publisher?

So you wanna get specific, huh?

$10 cover price
$2.50 royalty
$3.30 retailer's cut
$4.20 is publisher's cut

If we ignore taxes, and conversion costs $10k, that's 2300 copies to break even. If conversion costs $7500, that's 1700 copies.


$5 cover price
$1.25 royalty
$1.50 retailer's cut
$2.25 is publisher's cut

$10k conversion is 4,444 to break even. It may be plausible that the book will sell twice as much at half the price, but it's hardly guaranteed.

Or, to look at it another way: Let's say you run Penguin, and you get your conversion costs down to $2000 per title. If you convert 200 titles, that's still going to cost you $400,000. (Or, let's say you hire a staff of 8 at $50k a year each, and each staffer converts 25 books per year). At the $5 price point, Penguin will need to sell 175,000 copies of those 200 titles just to break even.

I'm not saying that these kinds of sales figures are impossible (or terribly accurate), only that the conversion isn't free, and you have to sell a fair number of copies to break even.

[Kali Yuga]

Originally Posted by Sil_liS

If converison would cost 10k we wouldn't have pirates.

I assume you mean it doesn't cost someone $10k to convert an ebook on their own time.

If so, then keep in mind that pirates don't have to pay a legal department to go through the contracts and clear the rights; they don't pay their employees, they don't pay for health benefits and 401k's, and they don't pay for overhead. They don't have to keep track of sales figures or royalties, they don't pay taxes for this work, they don't have to convert large numbers of books.

So yes, I agree that your costs are quite low when you don't actually have to pay people for their work.

[AHMavrick]

Originally Posted by Kali Yuga

Are you talking about new or backlist?

If it's backlist, perhaps the book broke even back in the day. Releasing it as an ebook incurs its own costs, including conversion, formatting and proofreading; it's not necessarily a huge sum, but it does have to be earned back. Plus the retailers and authors get their cut. So if you spend $10k on the conversion, price it at $10, and make $3 profit per ebook sold, you still need to move over 3300 units just to break even -- actually more, once you start figuring in taxes..

Are you trying to tell me that the books that have been or are being printed are not already stored in digital format by the publisher? Are you really telling me that the publisher is still using a plate style press to print books now instead of using a digital format to print operation??? If so I could "buy" the idea that the cost to "convert" the book to e-reader format would be that high. Frankly I have a real hard time believing that. Conversion of one digital format to another is a software operation, not a scan every paper page situation. Of course copy proofing is going to be required to make sure that all of the book got transferred properly to the new format, but that is done once for each format. I certainly do expect the publisher will earn back their costs. I do not see where they figure to earn back print costs more than once for a product they are not selling in print at that sale.

Originally Posted by Kali Yuga

If it's new, and you release the ebook at the same time as the initial printing, then the ebook -- in addition to incurring its own costs -- is cannibalizing paper sales. Nor is there any sort of guarantee that a specific paper book is going to break even.

Plus, the reality is that the printing part is currently a small part of the costs of the book -- ballpark is 10-15%. The rest is the author's advance, royalties, editing, proofreading, marketing, taxes, overhead, retailer's cut, etc etc

Here you just made my point. Nothing in business is guaranteed to make a profit, books included. You either cater to the customer or fail. The customer does not owe you a living unless you provide what they want, at the desired price.

Regarding "editing, proofreading" operations, that is required once per format, assuming you "publish" the e-book in multiple formats. Other than doing it one time it is not necessary to "reprint" an e-book, you just have it available for download, the file stays the same. With the print version and format to digital reader, the publisher has already paid the costs of everything other than royalties and taxes. Overhead is minimal considering there is no real "warehousing" of a digital file unlike printed books, paper and related shipping equipment / costs. Since the publisher is already going to keep the book in digital storage format for printings, original and subsequent releases, unless there will be a redesign of the cover overhead stays the same. Two digital files take little more "warehousing" room than does one file.

Assuming digital sales are less than 10% of all retail sales for books (and I think I am really over estimating the digital sales there) there is going to be little fratricide in sales. E-book folks want the e-book and paper book readers want the paper version. Given a good price for the digital version there is little reason to "rip" the book just to convert it to an e-reader format by a user. Should publication dates be different, say 6 months later for the e-book I figure the print sales would not suffer very much at all for the first release certainly.

Originally Posted by Kali Yuga

Sorry, that's not going to happen. New ebooks are almost certainly going to stay in the $10-$20 range. Backlist will likely stick to $7-10.

The cost savings are nowhere near significant enough to slash book prices by 50-75%.

I disagree with you. Once the book has been set to the desired e-reader format there are no printing costs. There are no shipping costs. There are no losses of non-sales at the store where the cover is ripped and the printed book discarded. There is only the cost to do the sale at the website. At that point the sale of each book should be practically pure profit for the publisher once their royalties and taxes for income are factored. Other than the bandwidth used at the time of sale and credit card fees from the bank there are no real costs to make the sale. Heck it should even count as a "green" concept since the only real consumption of resources at the point of sale is the depreciation of internet equipment and use of electricity. No trees or fuel were used to get that "book" to the customer.

Don't forget that the cover price has already factored the profit for the retailer as well. Given that there is really no retailer for an e-book purchased from the publisher a reduction in price there would be reasonable as well. Why should the publisher not sell the e-book at wholesale on a direct to the customer transaction? The publishers costs and profit have already been met at the wholesale price.

[tompe]

Originally Posted by AHMavrick

Are you trying to tell me that the books that have been or are being printed are not already stored in digital format by the publisher?

It is well known that a clean electronic copy usually do not exist at the publisher and that is especially true for older books. The publishers are actually re-typing or scanning a lot of books to convert them to ebooks.

For some discussions about this see (including the comments):


http://www.antipope.org/charlie/blog...k-edition.html

[Elfwreck]

Originally Posted by leebase

Most all of the folks who post here have never been first run, hard back, book buyers. So just continue on using your library, buying books at yard sales, and borrowing your friends books. Pick up the occasional paper back as, gasp, they aren't $5 any more either.

Yep, that's the category I'm in. The Oakland Museum's annual White Elephant Sale tends to send me home with 2-3 bags full of books at $5/bag. I have boxes full of used paperbacks. Favorite authors who've never seen a dime of royalties from me. I've had the luxury of growing up in a place & time when quality literature was cheap and plentiful, and I'm very grateful for that.

Publishers don't care about you and your expectations about the price of a book now -- nor did they ever. You have never supported the art of writing before, and you aren't going to now.

"Never supported the art?" That's a bit much, I think. I've bought signed first edition books from several companies, because I want the company to succeed and the authors to continue writing. That the majority of my purchases are used books doesn't mean I've never supported writing as an art and profession.

I have, in the past, convinced others to buy new books, hardcover and paperback. Bought them myself occasionally, but more often reference works & nonfic; I've paid very little for leisure reading materials. Less than 10 books a year, and most of that paperbacks.

Now I have a format I like for reading, and something like disposable income, and a willingness to buy books. But most publishers don't want to sell to me on my terms.

Shrug. I buy from Smashwords; I buy multiformat from Fictionwise; I buy from indie publishers. I don't buy much, but I've spent a lot more money at RPGNow, Smashwords & Samhain in the last year than I have on Macmillan books.

My kids don't buy Macmillan books either. My kids split their reading time about equally between screen and paper. They're learning that paper is bulky and easily damaged while pixels are portable. In ten years, they won't buy anything on paper that they don't intend to use as a reference or re-read on special occasions. (Hardcover Poe or Shakespeare? Maybe. Hardcover King? Not a chance.) They're not growing up with a library of physical books to look at that says "THESE ARE THE GOOD AUTHORS." They're growing up with the internet, which says "HERE ARE 10,000 THINGS YOU COULD READ TODAY."

Mainstream publishers will need to fight hard to catch their attention; they don't have several decades of prejudice that leads them to think that "released in hardcover = literary quality." They're growing up convinced that "released in hardcover = publisher probably thinks I'm a thief."

I'm sure the Big 6 don't care if I never buy another book from them. But I'm raising a pair of voracious readers who will, regardless of their income levels, likely never look at the New York Times bestseller lists to decide what to buy.

The next generation of readers in technophile homes are going to be the downfall of the big publishing houses if those publishers don't figure out what they're doing wrong.

[leebase]

Originally Posted by Elfwreck

Yep, that's the category I'm in. The Oakland Museum's annual White Elephant Sale tends to send me home with 2-3 bags full of books at $5/bag. I have boxes full of used paperbacks. Favorite authors who've never seen a dime of royalties from me. I've had the luxury of growing up in a place & time when quality literature was cheap and plentiful, and I'm very grateful for that.

Me too, btw. For most of my reading life, for sure. I got to read on the coat tails of other who actually paid the freight. But as I wasn't putting any money (or not much) into the system, I really didn't matter to the publishers.

Why should I have? Should tobacco companies care about what I think of the price of cigarettes since I don't smoke?

Lee

[Sil_liS]

Originally Posted by Kali Yuga

I assume you mean it doesn't cost someone $10k to convert an ebook on their own time.

If so, then keep in mind that pirates don't have to pay a legal department to go through the contracts and clear the rights; they don't pay their employees, they don't pay for health benefits and 401k's, and they don't pay for overhead. They don't have to keep track of sales figures or royalties, they don't pay taxes for this work, they don't have to convert large numbers of books.

So yes, I agree that your costs are quite low when you don't actually have to pay people for their work.

So let me get this straight: when you said "if you spend $10k on the conversion" you meant money spent on everything but the actual conversion. Interesting.

I don't remember anyone putting in the cost of the legal department in the cost of books, so it can't be significant.
Converting a pbook to ebook takes one person with a computer. Publishers have interns, right? That would take care of paying the emploies, healthcare and 401k.
The beauty of ebooks is that they dont have to keep track of sales figures or royalties. There would be a computer program to do that automaticaly.
So that means that all the profit goes in the publisher's pocket. Except, of course the taxes; but then again, if they would stop overcharging, the taxes would be lower.

Oh, and the part about doing this for a large number of books, it lowers the costs, it doesn't increase them.

[Kali Yuga]

Originally Posted by Sil_liS

So let me get this straight: when you said "if you spend $10k on the conversion" you meant money spent on everything but the actual conversion.

No, dude. Just, no.

My point is that you have to pay people to do this kind of work, and there are all sorts of costs that people don't even think about.

Originally Posted by Sil_liS

I don't remember anyone putting in the cost of the legal department in the cost of books, so it can't be significant.

That's your argument? Seriously? No one on the web has mentioned it, therefore those costs don't exist?

You're going to need lawyers to revise the highly individualized contracts and to help in the negotiations. And no, lawyers are not cheap, even when they're on staff.

Originally Posted by Sil_liS

Converting a pbook to ebook takes one person with a computer. Publishers have interns, right? That would take care of paying the emploies, healthcare and 401k.

Uh, no.

Enslaving interns is not a viable business model. You either need to hire people or contract it out. Publishing is a for-profit enterprise, and people do not line up outside the door to offer to do grunt work for free.

Originally Posted by Sil_liS

The beauty of ebooks is that they dont have to keep track of sales figures or royalties. There would be a computer program to do that automaticaly.

Uh, no.

There is no "automatic" here. You need servers, database software, DB admins, programmers and backups. You need to integrate the sales data from numerous retailers. You have to train people how to use it -- including your accountants, upper management, marketing and pretty much everyone in the company who needs to see sales data.

Originally Posted by Sil_liS

if they would stop overcharging, the taxes would be lower.

Originally Posted by Sil_liS

Oh, and the part about doing this for a large number of books, it lowers the costs, it doesn't increase them.

Not really. This is not a manufacturing process where you can leverage economies of scale. This is all human labor, and it isn't cheaper to hire 2 people than it is to hire 1.

And to be clear, I'm not saying that the costs are so insufferably great and offer an insurmountable obstacle. I'm simply pointing out that it is not free, that the costs are higher than the average person presumes, and that converting a backlist title into an ebook incurs costs that need to be earned back.

[NVash]

Heres a question. Would it be okay if people gave the Kindle one star reviews because their favorite book isnt on it?

[FF2]

Originally Posted by NVash

Heres a question. Would it be okay if people gave the Kindle one star reviews because their favorite book isnt on it?

Yes, especially if the book were epub. Obviously, that limitation makes the device less serviceable. Folks can rate any of this stuff anyway they like in any event.

[murraypaul]

Originally Posted by Kali Yuga

If we ignore taxes, and conversion costs $10k, that's 2300 copies to break even.

Ok, well that's a 1000 less to break even than the last post, if we keep going a while we'll be able to do it ourselves and make money
(For the avoidance of any doubt, that is purely in fun, and not a dig at you or the figures, which are always going to be rough approximations)

Another thing that struck me is that if I'm an author and I'm getting a straight 25% off the top, before the retailer's cut or any overheads/taxes, I think I'm pretty happy with the concept of eBooks, and would be looking to push them as much as possible.

Or, to look at it another way: Let's say you run Penguin, and you get your conversion costs down to $2000 per title. If you convert 200 titles, that's still going to cost you $400,000. (Or, let's say you hire a staff of 8 at $50k a year each, and each staffer converts 25 books per year). At the $5 price point, Penguin will need to sell 175,000 copies of those 200 titles just to break even.

I'm not saying that these kinds of sales figures are impossible (or terribly accurate), only that the conversion isn't free, and you have to sell a fair number of copies to break even.

But they don't have to deal with limited shelf life any more, each book is available for ever. On that basis, if they took their top 200 backlist titles that were either out of print or had limited print availability, is selling an average of 1000 copies of each book going to be that difficult? Even just correcting the really stupid situation that seems to occur so often where books 3 and 4 of a series are available in eBook, but books 1 and 2 aren't.

[Kali Yuga]

Originally Posted by murraypaul

Another thing that struck me is that if I'm an author and I'm getting a straight 25% off the top, before the retailer's cut or any overheads/taxes, I think I'm pretty happy with the concept of eBooks, and would be looking to push them as much as possible.

Well, here's the thing.

Normally, the author gets 20-25% of the cover price, no matter how much the retailer charges for it. So let's say the Author puts out a new book, the hardcover list price is $25, royalty is 25%. The retailer normally pays the publisher $12.50 as the wholesale price. It's a popular book, so maybe the retailer decides to sell it at $10 as a loss-leader.

So in that scenario, the author gets $6.25 per sale, no matter how much the consumer paid. But if it's a new ebook, and the cover price is $15, the author's royalty slides to $3.75 per copy. If the ebook price goes to $5, then the royalty is $1.25. Some authors may say "I'll sell more and get more royalties anyway," others will be very unhappy with the cut in royalties. It really depends on the author's attitude, and how the change actually affects sales.

Originally Posted by murraypaul

But they don't have to deal with limited shelf life any more, each book is available for ever. On that basis, if they took their top 200 backlist titles that were either out of print or had limited print availability, is selling an average of 1000 copies of each book going to be that difficult?

I agree that these are largely one-time expenses. I have no idea how long it would take a book to earn back those costs, there are just so many variables involved.

Also, publishers do not have infinite resources. I don't know if they have enough capital laying around to put $500k or $1m into converting their backlists; they might also prefer not to use that kind of capital or increase their own staff, so they might contract it out and finance it.

So again, it's far from an insurmountable obstacle. It's just that there are up-front costs that need to be repaid, and the lower the price, the harder it is to recoup those costs, which in turn will delay more conversions or otherwise affect the company's profitability.

[NVash]

Originally Posted by FF2

Yes, especially if the book were epub. Obviously, that limitation makes the device less serviceable. Folks can rate any of this stuff anyway they like in any event.

You realize, of course, that if people did that the Kindle wouldnt have any good ratings at all right? Im sure if you ask any random person with a Kindle if there is any book out there that they wish was on it most would be able to name books right there. Myself, I could name at least three right now and I havent bought one yet.