Charlie Stross: Publishers "Cutting their own throats"

[taustin]

Originally Posted by TheLongshot

Problem with this is that, as far as I know, the production cost between an e-book and a dead tree books is pretty similar. That may be because the publishing world isn't optimised for producing e-books, but that's the way things are.

According to industry indisders (including the very Charlie Stross in the subject line), the publisher invests about as many man-hours in a book as the author does - hundreds or thousands. And the price of putting ink on paper and getting the finished product to the store shelf is about 10% of the total cover price. Add in a production process that isn't, as you note, optomized for ebook production, and the book version may actually cost more to produce and sell than the paper version (though it shoudn't - it should literally be one or two extra mouse clicks).

So the above example of a $5 paper book that sells for $4 as an ebook isn't actually realistic, unless you are willing to accept lower quality. As in, less editing, very little proofreading, and amateurish layout. All of which have suffered greatly in recent decades anyway. $4.50 would be more realistic, perhaps, but for the average book, the difference will be minimal.

Originally Posted by TheLongshot

Personally, I don't have a problem with that. What I do have a problem with is when e-books are priced higher than dead trees, or when they are priced at the same price as hardbacks.

And there, I agree with you. That's just insane (yeah, Penguin, I'm looking at you).

Unfortunately, there is an unrealistic, unworkable expectation that eventually, when things settle out, ebooks will be priced at less than paperback books are now. And it just won't work, unless we accept significantly lower quality. Ebooks will be, eventually, the death of hard backs (except for bestsellers, perhaps). Hard backs sell for quit a bit more, and profits are based on a percentage of the retail price, not a fixed amount. So hard backs are significantly more profitable per book than paperbacks. When publishers eventually realize they won't be able to sustain a business model where the first releast of a book (hard backs) sells for several times as much as the eventual paperbacks, they will have no choice but to raise the mass market price (which will be for the ebook). People will tolerate hard backs being a lot more than paperbacks because they are a different physical products, with obvious advantages. But any difference between the ebook you buy on the day of its release and a year later will be improvements on the later release as typos are fixed and such.

Eventually, it will setting in at a price probably somewhat higher than current paperback prices are, but that will be from the day of release. Alternately, publishers will simply do even less editing, proofreading, etc., and the quality of books will continue to decline even more than it already has.

Personally, I'd rather pay hard cover prices for ebooks than stop reading because books suck so much.

[taustin]

Originally Posted by Ken Maltby

It should be little more than a computer scan, of the files that the author provides, by
a sophisticated AI based program.

The day you can produce that AI based program you will, literally, go down in history as the smartest programmer who has ever lived. Many have tried, billions have been spent working on such technology, and we still end up with "There are eels in my hovercraft."

[fjtorres]

Originally Posted by Fbone

Who wants to look at 2878 different publishers websites for their reading material?

As it is now ebook retailing is too fragmented especially for epub.

1- The topic being the idea that DRM gives Amazon increasing power over publishers, the obvious answer is that DRM or not, there is nothing keeping publishers from getting into retailing to maintain an alternative channel to the walled garden ebookstores from Amazon, B&N, Apple, and Kobo.

2- Note that I didn't say *exclusive* retailing; Harlequin maintains their storefront in parallel to their sales via Kindle, Nook, etc.

3- Also, online retailing allows for aggregation through portals. (Tiger Direct, J&R, and dozens of other online retailers sell direct from *their* websites in parallel to sales thrugh Amazon, Buy.com, eBay, etc). If every single publisher did their own ebook retailing, they could sign up with any portal they chose to serve as a front end. And at that point the Agency Model wouldn't be just price-fixing but a real business model.

One added virtue of this approach is that indie bookstores, the oh-so-beloved dying breed, could set up retail portals to aggregate the publishers' content as they saw fit; an indie shop specializing in SF (like the long-gone Moonstone Bookcellars in Washington, DC) could front for Tor, Orbit, Baen, Smashwords, or whatever.)

The real problem is that, in the face of massive disruption of their business model, instead of looking at the necessary major revamp of their business model, publishers keep looking for simplistic low-effort magic bullets. The least they can do is the most the will do.

That just won't do.

Oh, as to epub fragmentation: that is the *one* thing nobody can blame on Amazon. Who to blame is a whole different topic for the GENERAL DISCUSSION forum, I think.

[stonetools]

Originally Posted by carld

That's what the publisher's claim, but I don't believe it for a second. Rupert Murdoch verified this when he said in an interview about agency pricing "We’re not against electronic books, on the contrary, we like them very much, lower costs to us..."

Well, Charles Stross says that ebooks coist almost as much to produce as pbooks, so if you buy his analysis on DRM , etc, you should be agreeing with him on ebook costs

LINK

[carld]

Originally Posted by stonetools

Well, Charles Stross says that ebooks coist almost as much to produce as pbooks, so if you buy his analysis on DRM , etc, you should be agreeing with him on ebook costs

LINK

If you read my posts you'd see that I actually don't buy his analysis on DRM, and even if I did, that doesn't automatically mean I'd think he had ebook cost estimates right. That's just not logical. As it stands, I think he's wrong on both counts, because he's wrong on both, not because he's wrong on one and therefore automatically wrong on the other.

[Ken Maltby]

I believe there is a history of "Creative" Accounting wherever "Intellectual Property" or
"Talent" is concerned, and it is not a pretty history.

Luck;
Ken

[JSWolf]

Originally Posted by TheLongshot

Problem with this is that, as far as I know, the production cost between an e-book and a dead tree books is pretty similar. That may be because the publishing world isn't optimized for producing e-books, but that's the way things are.

There is another problem that makes the agency publishers greedy b@st@rds. Why is it they allow sales/discounts on pBooks, but eBooks have to be a fixed price. No sales. No discounts. No club membership. You can do all these things with pBooks. But eBooks, heck no. That's a big part of the problem.

[xg4bx]

Originally Posted by carld

I'm not convinced that the general ebook reading public cares that much about DRM. I think they care far more about ebook prices. Agency pricing is really where the Big 6 are setting themselves up for a serious throat cutting.

i think its a combo of both. not only are they paying outrageous prices but what they bought can only be used on the one device. its publishers giving both middle fingers to the consumer.

i could live with one or the other but both is just going too far imo.

[JSWolf]

Originally Posted by stonetools

Well, Charles Stross says that ebooks coist almost as much to produce as pbooks, so if you buy his analysis on DRM , etc, you should be agreeing with him on ebook costs

LINK

pBooks and eBooks do cost the same up to a point. That point is shipping, storage, printing, returns, and anything else I may have left out. So take out all these costs and give us the real price. Allow discounts/sales. Be fair with the customer instead of treating up like thieving pirates. Do away with DRM and lower costs even more.

[Fbone]

Originally Posted by fjtorres

1- The topic being the idea that DRM gives Amazon increasing power over publishers, the obvious answer is that DRM or not, there is nothing keeping publishers from getting into retailing to maintain an alternative channel to the walled garden ebookstores from Amazon, B&N, Apple, and Kobo.

2- Note that I didn't say *exclusive* retailing; Harlequin maintains their storefront in parallel to their sales via Kindle, Nook, etc.

3- Also, online retailing allows for aggregation through portals. (Tiger Direct, J&R, and dozens of other online retailers sell direct from *their* websites in parallel to sales thrugh Amazon, Buy.com, eBay, etc). If every single publisher did their own ebook retailing, they could sign up with any portal they chose to serve as a front end. And at that point the Agency Model wouldn't be just price-fixing but a real business model.

One added virtue of this approach is that indie bookstores, the oh-so-beloved dying breed, could set up retail portals to aggregate the publishers' content as they saw fit; an indie shop specializing in SF (like the long-gone Moonstone Bookcellars in Washington, DC) could front for Tor, Orbit, Baen, Smashwords, or whatever.)

The real problem is that, in the face of massive disruption of their business model, instead of looking at the necessary major revamp of their business model, publishers keep looking for simplistic low-effort magic bullets. The least they can do is the most the will do.

You can already buy ebooks at the Agency 6. Three have their own stores and the others have direct links to the store of your choice. And all 6 have signed up with several portals. It's rather generous of them to give up 30% for customer convenience. What is missing from these aggregate sites are many of the indies. For whatever reason they choose not to participate. This is most notable for epubbers. Why does Amazon have the largest catalog? I like the idea of one site where most everything is available. Similar to the used paper book 3rd party sellers.

Mr Stross doesn't like Amazon but you have to admit they make it easy to find and purchase your ebook. With a few exceptions they have everything.

[Fbone]

Originally Posted by Elfwreck

Not every publisher can follow Harlequin's model, but Harlequin could indeed leave Amazon, take a likely-temporary cut in profits, and just increase their branding efforts to draw customers to their own site instead. Any sharply defined genre publisher with a known demographic of readers could successfully drop Amazon and cater to its core readers instead of competing with the swarm at a larger store.

Yes, a few publishers can be independent of Amazon. However, over 2000 others still remain. Your established customers may follow you but you will need new customers to survive. That will take some in-your-face marketing which can be expensive.

<sigh> Why does the entire industry (retailer/publisher/customer) make things so complicated?

[taustin]

Originally Posted by carld

If you read my posts you'd see that I actually don't buy his analysis on DRM, and even if I did, that doesn't automatically mean I'd think he had ebook cost estimates right. That's just not logical. As it stands, I think he's wrong on both counts, because he's wrong on both, not because he's wrong on one and therefore automatically wrong on the other.

Given that he has been professionally involved in pretty much every level of publishing, I'm inclined to take his word for it on how the industry works. Have you ever worked in the business?

(As a side note, his numbers are also consistent with my own personal experiencce - 30+ years - in retail. The general rule of thumb is that a manufacturer that wants to stay in business needs to figure out what it costs to produce their product, and give it an MSRP - manufacturer's suggested retail price - of six times that. The exact multiplier varies by industry, lower if the goods are quite expensive, higher for cheaper goods. I've been involved in game publishing, and 10:1 is a bit low there, where print runs are so much smaller, so it seems *entirely* reasonable to me.)

[Andrew H.]

Originally Posted by Fbone

Yes, a few publishers can be independent of Amazon. However, over 2000 others still remain. Your established customers may follow you but you will need new customers to survive.

This. Disintermediation just won't work on a large scale because it would be hugely inconvenient to consumers. It works for Harlequin because the have a well developed market presence: when I was a kid in the 70's, even I knew that my grandmother read "Harlequin Romances," not just romances. And it works for Baen, with their focus on military sci-fi. But, yeah, it won't work a company like HC, with 80,000 new titles every year. I think one of the big six recently closed their online e-book sales presence due to lack of consumer interest.

[JeremyR]

Originally Posted by taustin

Given that he has been professionally involved in pretty much every level of publishing, I'm inclined to take his word for it on how the industry works. Have you ever worked in the business?

On the other hand, you have a completely opposite view from Kristine Kathyrn Rusch, who also has done everything in the industry (and on top, her books are actually well written and readable, unlike Stross)

http://kriswrites.com/category/on-writing/

[murraypaul]

Originally Posted by stonetools

Well, Charles Stross says that ebooks coist almost as much to produce as pbooks, so if you buy his analysis on DRM , etc, you should be agreeing with him on ebook costs

LINK

In the comments, he says:

My understanding is that the physical process of buying the paper and printing those book blocks will cost around $2-3 per unit, or around $10-15,000 ... roughly as much as the other production costs, and the author's advance.

So, um, they don't cost the same to produce, and the paper portion is a significant chunk of the costs. That seems to be the exact opposite of what you think he said?

And this analysis ignores, as they all seem to do, that you have to pay to print and ship all the copies, many of which will end up being destroyed rather than sold. So the costs should be apportioned over just the copies that actually sell, to get your per-unit costs.