It's IMPOSSIBLE to price ebooks too high

[jkeene]

Originally Posted by MovieBird

Without the assumption of a rational being and quick decision making, i.e. your own characterization of publishers, you CANNOT apply 101 series economic theory. Therefor, you CAN price an item "too high".

for the above. Or as some of my more enlightened finance buddies say, a market is almost never completely rational. And you can make a fair amount of money off the irrational actors.

[OtterBooks]

it's impossible to price them faster than the speed of light, that's for sure.

[leebase]

Originally Posted by jkeene

for the above. Or as some of my more enlightened finance buddies say, a market is almost never completely rational. And you can make a fair amount of money off the irrational actors.

But can you sell something non-essential at a price higher than someone is willing to pay?

Must we denigrate math, reason as well as economics in order to avoid answering that simple question?

"This ebook is priced higher than I think it should be, what can I do except pay this unreasonable price".

Well, you could buy the hard back.

"But the hard back costs even more."

Wait a bit and buy a used copy of the hard back.

"But even that is more than I want to pay".

Don't buy the book at all, treat yourself to the movies instead.

"But I just simply HAVE to read this book".

Check it out at the library.

"My village doesn't have a library".

Wait for the paper back to come out.

"Even the paper back costs more than I think it should".

Read a different book while waiting for someone to sell the used copy of the paper back.

"You don't understand. I want to read the eBook, I want to read it NOW, not later".

Then buy it. Or don't buy it. It's your CHOICE.

---------------------

Wouldn't appear to me that one need even to go to college or take an economics course to understand this. The publisher has now power whatsoever to compel folks to pay more for an ebook than they are willing to pay.

Lee

[Worldwalker]

Originally Posted by leebase

When did I say there was no difference between paper books and ebooks

In your very first post.

You can say that a publisher "can't set too high a price" because you, and you alone, are claiming the right to decide what constitutes "too high". So of course you will always win, in your eyes, because you set the rules and you declare the winner ... and it's always you.

And maybe you're even fooling yourself. You have to be fooling someone.

[moyeen]

That I agree with. There are still the same old options; not just for a book, but any given book. I will not choose a title itself based on price. I'll choose the format or seller, but I'm not gonna read a book I'm less interested in because it's cheaper. My brain is not the bargain bin at a flea market, though occasionally it feels like it.

[leebase]

Originally Posted by Worldwalker

You can say that a publisher "can't set too high a price" because you, and you alone, are claiming the right to decide what constitutes "too high".

On the contrary, it does not matter what "too high a price" equals.

Let's say the publisher sets your basic ebook price at $100. You and I and everyone on this board would think "that's too high". So would everyone and the publisher would sell no copies of that ebook. Merely setting a price is not the same thing as being able to sell at the price.

Now, let's say you are super frugal and YOU think $2 is the most any ebook should be priced. And there are folks on this board who would agree with you.

So, Amazon sets a price at $9.99 for the typical best seller and folks are VERY happy with that price -- except for you. You are adamant that $2 is the most any ebook is worth, and yet, Amazon can be wildly successful at selling ebooks at 5x the price you think is right. With wildly successful sales, even the $2 person has to concede that the price must not have been "too high".

So along come the publishers who aren't happy with the $9.99 price and they change their relationship with Amazon, and put the price of new ebooks between $12.99 and $14.99

For some folks that's "way too high". But it does not matter because either of those other two scenarios will be true. Either too few people buy the high priced ebooks -- or enough will.

Either way, either people will buy at the price set, or they will not. It does not matter if it's Amazon that sets the price. It does not matter if it's the publishers who set the price. It does not matter how much publishers pay for ebooks to be made and it does not matter how much savings ebooks bring.

All that matter is how many people are willing to PAY the price. Setting a price is not enough. A publisher has to actually sell books not merely put prices on them.

Lee

[GreenMonkey]

Originally Posted by Maggie Leung

I wonder how many of those who complain about e-book prices were people who used to spend very little on print books -- maybe they used to borrow or buy them used or remaindered. Maybe those people are more sensitive about e-book pricing, because though e-books in general are a bargain compared with new books, they cannot compete against used-book prices, remainder-book prices or free books from the library.

I have no qualms about $17 or $18 for a hardcover from an author I love and trust to write a good book. I prefer hardcovers.

That said, funds are limited these days for me to spend on books.

To me, a hardcover has a value. It will be readable and usable 20 or 30 years from now. I have no faith that an e-book format will be usable in a couple of decades. Try bringing up a computer file from a computer from 15 years ago. Good luck.

Digital files lack that kind of durability, to me. Plus, with nasty DRM on them, that sucks about 80% of the value from it. I do my best to not support DRM by not purchasing products with it.

[jbjb]

Originally Posted by Worldwalker

In your very first post.

You can say that a publisher "can't set too high a price" because you, and you alone, are claiming the right to decide what constitutes "too high". So of course you will always win, in your eyes, because you set the rules and you declare the winner ... and it's always you.

And maybe you're even fooling yourself. You have to be fooling someone.

Why the nastiness? Lee has made a perfectly reasonable point and has explained it perfectly clearly.

Just because it's simple economics doesn't mean it's not valid - he's made it very clear what he means by "too high", it's a perfectly reasonable definition, and his argument makes sense given that definition.

/JB

[Maggie Leung]

Originally Posted by GreenMonkey

I have no qualms about $17 or $18 for a hardcover from an author I love and trust to write a good book. I prefer hardcovers.

That said, funds are limited these days for me to spend on books.

To me, a hardcover has a value. It will be readable and usable 20 or 30 years from now. I have no faith that an e-book format will be usable in a couple of decades. Try bringing up a computer file from a computer from 15 years ago. Good luck.

Digital files lack that kind of durability, to me. Plus, with nasty DRM on them, that sucks about 80% of the value from it. I do my best to not support DRM by not purchasing products with it.

That's the beauty of the marketplace: If you value a print book more than an e-book, for whatever reasons, you have the choice of voting with your money.

No matter what version you (or I) prefer, we decide individually what we're willing to pay for a given product. That doesn't mean the seller must meet our demand at that price, of course.

[Ken Maltby]

Originally Posted by jbjb

Why the nastiness? Lee has made a perfectly reasonable point and has explained it perfectly clearly.

Just because it's simple economics doesn't mean it's not valid - he's made it very clear what he means by "too high", it's a perfectly reasonable definition, and his argument makes sense given that definition.

/JB

You can often gage the value of an argument by how much effort is applied
to present a civil logical unemotional presentation of the situation. When
one side turns nasty, it is most often because they are unable to approach
the issue under discussion with calm rational arguments based on observable
factors.

You can't claim that an argument is based on a "simple" understanding of the
issue, implying that you speak from a much greater understanding of the
subject, then just use emotional arguments to support your position. Where
is the evidence that the basic principles of economics that Leebase is
presenting are overcome by some other, more sophisticated factors?

(I could just say that there are "Haters" out there, who are arguing in
opposition, without regard to any actual knowledge or information that would
enlighten the issue, but I think the term has been hijacked to apply in only
one direction.)

Luck;
Ken

[jbjb]

Originally Posted by Ken Maltby

You can often gage the value of an argument by how much effort is applied
to present a civil logical unemotional presentation of the situation. When
one side turns nasty, it is most often because they are unable to approach
the issue under discussion with calm rational arguments based on observable
factors.

You can't claim that an argument is based on a "simple" understanding of the
issue, implying that you speak from a much greater understanding of the
subject, then just use emotional arguments to support your position. Where
is the evidence that the basic principles of economics that Leebase is
presenting are overcome by some other, more sophisticated factors?

(I could just say that there are "Haters" out there, who are arguing in
opposition, without regard to any actual knowledge or information that would
enlighten the issue, but I think the term has been hijacked to apply in only
one direction.)

Luck;
Ken

Well said, Ken. I 100% agree.

/JB

[leebase]

Originally Posted by Ken Maltby

Where
is the evidence that the basic principles of economics that Leebase is
presenting are overcome by some other, more sophisticated factors?

Yep. Other than not LIKING the conclusion, we've yet to year a good case for: "the public can indeed be forced into paying more for an ebook than they are willing to pay".

Or even a simple: "while it's true that a market can support a 'high price' it's also true that the public can be unaware of issues that would change their perception of just how much they are willing to pay.

Lee

[abookreader]

Originally Posted by Ken Maltby View Post
Where
is the evidence that the basic principles of economics that Leebase is
presenting are overcome by some other, more sophisticated factors?

The economics that Leebase is citing is a model which discusses profit maximization for a product. It is the belief that there is a "sweet spot" of pricing where at a certain price, a certain number of people are willing to buy the product and Revenue - Fixed Cost - Marginal Costs equals the maximum profit the company can make from that product.

The model is dependent upon the idea where when a product is priced anywhere other than that "sweet spot" it will naturally fall back to that level as the producers attempt to obtain the goal of profit maximization.

Totally ignored in Leebase's analysis is that in order for this to happen, the producers of the product must RECOGNIZE the fact that their product is not priced at the optimum level and be WILLING to change their price.

Keep in mind that companies quite often do not achieve maximum profit. Very often they only hit acceptable profit and they chug happily along at their non-optimized levels for quite some time. Or even worse, they have poor or non-existent profit and they give a product up as non-profitable altogether.

Thus - that is why Leebase is wrong in his statement that it is "IMPOSSIBLE" for eBooks to be priced incorrectly. It not only is possible, it happens quite frequently.

[leebase]

Actually, Abookreader, I've said NONE of those things. I've not talked about "profit maximizing" at all. Only that a price cannot be set higher than someone is willing to pay for it. Enough someone's such that the publisher can stay in business. Whether said publisher is making the most he can or the least he can and still be in business, is an orthogonal issue.

Heavily criticized on this board is the actions of the Agency 5 for wresting pricing control away from Amazon. I have clearly shown that even with the ability to SET the price, publishers have VAST competition that prevents them from setting "too high" a price. So even though the price for a specific ebook will be the same at Amazon, B&N, Apple, Borders, etc. -- the ebook is STILL in compeition with a vast array of alternatives, INCLUDING the paper version of the same book, the USE paper version of the same book, and the library.

It is this very competition that prevents publishers, who now have the power to set retail prices for their ebooks, from being able to actually charge more than the market feels the ebooks are worth.

Lee

[abookreader]

It is this very competition that prevents publishers, who now have the power to set retail prices for their ebooks, from being able to actually charge more than the market feels the ebooks are worth.

And that is the cusp of where we disagree. It certainly is possible for a publisher to price a product at more than the market feels the eBook is worth. Repeating over and over that it isn't possible doesn't make it true. Companies can price too high for market sentiment and still manage to survive.

It happens all the time - especially in an environment such as Agency Publishing where the major market controllers attempt to impede competition by price co-operation between the major players.