Future Ebook Price Point

[Rob Lister]

Originally Posted by HarryT

It's a question of whether it's commercially viable to produce a book at $1 per copy. If your costs are $2 a copy, it clearly isn't.

If you're talking e-books (and we are) then the costs per copy is zero. You spread the cost of creating the book (writing, editing, promoting, etc) over as many copies as your business model dictates.

So, unless the owner of the copy or distribution rights dictates that $2 per copy cost, the argument falls flat. That's not to suggest that such dictates don't exist but even when they do, it doesn't make them optimum.

[kennyc]

Originally Posted by Rob Lister

If you're talking e-books (and we are) then the costs per copy is zero. You spread the cost of creating the book (writing, editing, promoting, etc) over as many copies as your business model dictates.
...

Not exactly, there are production, storage, and maintenance costs.

[HarryT]

Originally Posted by kennyc

Not exactly, there are production, storage, and maintenance costs.

Of which production costs dominate. Pretty much all the costs of producing a book (with the exception of printing) apply to eBooks just as they do to pBooks.

[Rob Lister]

Originally Posted by kennyc

Not exactly, there are production, storage, and maintenance costs.

The per-copy costs are trivial and, more to the point, already sunk. But it doesn't matter. Even if the circumstances exist that make it $2 per copy (royalty agreements, for example) that doesn't mean people will buy it for $2 a copy.

I remember years ago reading an interview with the CEO of Osborn Computers. The reporter was asking him about corporate loses. The CEO explained that even though they were selling the Osborn machines at below cost, they intended to make up for it with volume. They filed bankruptcy soon thereafter.

[kennyc]

If you have only one product and sell at a loss, you are going to lose. If you have a loss leader that results in additional sales of profitable products you can win.

[HarryT]

Originally Posted by Rob Lister

The per-copy costs are trivial and, more to the point, already sunk. But it doesn't matter. Even if the circumstances exist that make it $2 per copy (royalty agreements, for example) that doesn't mean people will buy it for $2 a copy.

But you'd be a fool to try to sell it at under $2 per copy if your up-front costs exceed that.

I remember years ago reading an interview with the CEO of Osborn Computers. The reporter was asking him about corporate loses. The CEO explained that even though they were selling the Osborn machines at below cost, they intended to make up for it with volume. They filed bankruptcy soon thereafter.

Apocryphal story alert!

[j.p.s]

Originally Posted by Rob Lister

I remember years ago reading an interview with the CEO of Osborn Computers. The reporter was asking him about corporate loses. The CEO explained that even though they were selling the Osborn machines at below cost, they intended to make up for it with volume. They filed bankruptcy soon thereafter.

Osborne Computers killed itself by announcing a new model that would be available soon enough for potential customers to wait, but too far in the future for the company to survive on zero sales.

[stonetools]

I think one thing people are missing is that books aren't widgets. The #1 thing that makes a good book is a good writer. The supply of GOOD writers is limited. ( The supply of crap writers seems to be near infinite, as any trawl of Smashwords makes clear).
Good writers don't HAVE to write novels. They can go into journalism, write theater plays, write screen plays, games-hell, they can write advertising copy.

If we don't make it worth their while to write novels, i.e. pay them and protect their IP rights, you may find GOOD writers drifting on to other fields .

I sure as hell don't want to end up with a world of cheap, crap novels and superbly written commercial jingles, but I fear that we may be headed there...

[HarryT]

Originally Posted by j.p.s

Osborne Computers killed itself by announcing a new model that would be available soon enough for potential customers to wait, but too far in the future for the company to survive on zero sales.

The truth of that is debated; the more likely explanation for Osborne's failure was the release of a better and cheaper computer by their rival, Kaypro. See:

http://en.wikipedia.org/wiki/Osborne...e_Osborne_Myth

[kennyc]

Originally Posted by stonetools

I think one thing people are missing is that books aren't widgets. The #1 thing that makes a good book is a good writer. The supply of GOOD writers is limited. ( The supply of crap writers seems to be near infinite, as any trawl of Smashwords makes clear).
Good writers don't HAVE to write novels. They can go into journalism, write theater plays, write screen plays, games-hell, they can write advertising copy.
......

This is at least one thing we agree completely on!

[elcreative]

Originally Posted by Rob Lister

If you're talking e-books (and we are) then the costs per copy is zero. You spread the cost of creating the book (writing, editing, promoting, etc) over as many copies as your business model dictates.

So, unless the owner of the copy or distribution rights dictates that $2 per copy cost, the argument falls flat. That's not to suggest that such dictates don't exist but even when they do, it doesn't make them optimum.

So the time and effort of the author is rated at zero, nice valuation... it may not have occurred to you that not all books sell a million copies and, even paying the author a living wage, can be a significant cost on small sale items... not to mention the costs of actually running a business selling books or (if selling direct) the costs and time involved...

Say an author writes a book in a year (£20k for a year) and the book sells 5K copies then a fair wage alone puts the book at £4 per unit just to cover that...

[HarryT]

Originally Posted by elcreative

Say an author writes a book in a year (£20k for a year) and the book sells 5K copies then a fair wage alone puts the book at £4 per unit just to cover that...

But perhaps the book would have sold 3x more copies had it been priced at £2 a copy. That, unfortunately is one of the great "unknowables". Setting the "right" price for a book to maximise your revenue is a black art indeed.

[elcreative]

Originally Posted by HarryT

But perhaps the book would have sold 3x more copies had it been priced at £2 a copy. That, unfortunately is one of the great "unknowables". Setting the "right" price for a book to maximise your revenue is a black art indeed.

Harry, you missed the point... I was commenting on Rob Listers fallacy that ebooks cost nothing because you spread the cost over all the ebooks and so it shrinks to nothing...

[HarryT]

Originally Posted by elcreative

Harry, you missed the point... I was commenting on Rob Listers fallacy that ebooks cost nothing because you spread the cost over all the ebooks and so it shrinks to nothing...

No, I understood what you were saying, and I entirely agree with it.

My point was that you can't know in advance how many copies you're going to sell, and if you do in fact sell 5000 copies at £4, you don't know (and can't know) how many copies you might have sold had you decided to price it at £2 instead. It may have still been 5000, but it might have been 15000. You'll never know.

[HomeInMyShoes]

It seems that people are arguing the same point from opposite vantage points. I'll guess that we want as readers is good books and an author to be paid a fair wage. The question is what price should the e-book be in order to maximize revenue and allow the publisher to pay the author handsomely for good work and still make a profit as well.

To be fair to Lister, as sales approach 100,000 copies, the 20,000 up front shrinks to a pretty small amount per book and the actual printing of the book costs more. But not many books even sell 10,000 copies so Lister's argument does little to convince me of anything on the values of scale in e-publishing. In the end we are paying someone to write a book.