Charlie Stross: Publishers "Cutting their own throats"

[carld]

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?

Yes, as a matter of fact I have, not as extensively as he has, but I also know someone with an axe to grind when I see one.

I don't agree with his analysis of the impact of DRM, and I don't trust his analysis of ebook costs. I also don't think game publishing on a small scale and six of the largest ebook publishers in the world make for valid comparisons.

I can only go by what I've experienced and read over a lot of years. I've seen far too many complaints from publishers about the physical costs of publishing and distributing paper books to ever accept that those costs suddenly don't matter. I don't buy it, and I never will.

[Elfwreck]

Originally Posted by carld

I can only go by what I've experienced and read over a lot of years. I've seen far too many complaints from publishers about the physical costs of publishing and distributing paper books to ever accept that those costs suddenly don't matter. I don't buy it, and I never will.

Stross' own breakdown of how books are made describes the process in 17 steps... four-and-a-bit of which are solidly print-and-ship. It's not a small part; it's a quarter of the production process, regardless of the price of paper per book. A *lot* of time and effort--and therefore money--goes into those steps.

Publishers get veeerrry slippery about breaking down actual costs beyond their vague outlines, and they refuse to break down by *both* cost-per-book and cost-per-batch. They refuse to clarify which costs are per-unit and which are per-title, and therefore get cheaper the more books they sell. (Also, they refuse to acknowledge higher printing costs for smaller print runs; they give estimates based on bestsellers, not their midlist.)

And even with the funny numbers games (they refuse to use paperbacks, which their numbers would say are a dead loss), their accounting shows them making a dollar or two more per ebook sale, over the hardcover, for $12.99 ebooks. So it comes out as "We shaved off $3 in production costs--the printing--and increased our profits by half of that anyway." Hmmm.

[HappyMartin]

Every time this discussion comes up we are told the cost of printing, stroring and distributing a pbook is so small as to be insignificant while the cost of preparing a manuscript for ereaders is much higher than we would think.

Well I dont buy it. I deal with printers and paper is not free, nor is ink, nor is binding and trimming and that is without the other fixed costs of printing such as the presses and so on. The moment we want to print something there are costs but the moment we question the price of ebooks printing becomes free.

Where can I see an exact cost breakdown? No I am not interested in anyones friend who works in the industry and who knows for a fact it costs "nothing" to print and distribute a book. I want to see a factual breakdown.

[Greg Anos]

Also, nobody seems to want to split the cost of new book vesus existing book.

Some one is working on a new book required much more support (and expense) that an existing book. (Editing, layout, ect.)

An existing book requires a ocr, proofing and building the ebook layout(s) and some form of cover (of which there is at least one existing one - the original printing. The scanning and proofing takes me around 24 working hours per 300 page book. I know a e-book builder (for Epub) who does the building for around 100 euros a book (and has been doing it as a contractor for commerical interests over the last year or so.)

So, for existing books, where is the great expense? (If I charged my professional programmer's rate, the scanning and proofing rate would still be soemwhat less than $1000) At $20/HR (x 24 hrs) would be $480. Plus another $150 (100 Euros) and you're talking $630 + plus cover. (And you could use a dummy cover to save expenses). Folks, this isn't rocket science for an existing book. Of, course, if you have a really fancy layout, the e-book building will cost more.

There are no editor's cost, design layout costs, ect for an existing book. And that's where the frustration comes in. Whole publishers, et.al., keep screaming for longer and longer copyrights, and scream about the great losses from piracy, at the same time they won't ever invest $600 to $1000 a title, to be able to sell it for decades. And that's just completetly stupid.

[karunaji]

I fully agree with Ralph. It should not be too expensive to convert existing books to e-books. I don't see a reason to work too hard on very sophisticated layout, e.g., different fonts etc., because current e-readers like Kindle won't support it anyway. E-readers are not yet ready for technical books that require complicated tables and graphics. But for simple text conversion process can be streamlined. It is only a question of will, considering how little investment it requires.

[fjtorres]

Originally Posted by Fbone

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

Because life is complicated?
Because you have a 21st century industry desperately trying to cling to a 19th century model that has been obsolete for over a generation.
Because legacy contracts bind even the most forward-thinking.
Because trying to license digital goods using processes evolved for selling dead tree pulp is a serious mismatch.
Because everybody wants to make/save as much money as possible.
Because simplicity satisfies (almost) nobody.
Because ebooks are disrupting the decades long stasis in the entire industry and forcing everybody to face up to the above.

Just jump into the nearest time machine and fast forward 20 years and you *might* find a clean and coherent publishing industry waiting for you. *If* you can recognize what it has by then become. And even then, you'll still find plenty of angst on all sides.

It is sheer chaos, really.
But as a rather clever movie character once said: "In chaos, there is opportunity."
For everybody.

Just don't expect simplicity.

[Sil_liS]

Originally Posted by taustin

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).

Do you mean ebook or pbook there?

[stonetools]

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.

To be clear, I agree with you that he is wrong on DRM. As to the production costs of ebooks vs pbooks, I think the issue is largely irrelevant to the question of ebook prices. Its LIKELY that it costs about 10-20% less to produce an ebook, but so what? Most ebook enthusiasts want ebooks to cost 50-70% less than pbooks , or say that ebooks should be free. THey're not going to be satisfied with a 10% cut.
In any case, we should always remind ourselves that the chief factor determining the price of a book is when its released. That's how it always will be.

[taustin]

Originally Posted by JeremyR

(and on top, her books are actually well written and readable, unlike Stross)

Given the number of awards he's won, and the sales figures for his books, I find myself a little skeptical about your opinion of his work (I've never tried it myself, mind you; his kind of story isn't my thing). Plus, as I said, he's been professionally involved in the industry as more than just an author.

Plus, he's not my only source of industry info. As I said, I was involved in publishing game books for a while, too, and Charlie's information is consistent with everyone else I've talked to.

[taustin]

Originally Posted by carld

Yes, as a matter of fact I have, not as extensively as he has, but I also know someone with an axe to grind when I see one.

So do I. And yeah, Charlie is quite opinionated. In fact, he's mellowed quite a bit from his days on alt.peeves, and moderates himself beyond that. But he doesn't - usually - shoot his mouth off without knowing what he's talking about, and any axe he has to grind on this subject is quite unlikely to be defending the publishing industry.

Originally Posted by carld

I don't agree with his analysis of the impact of DRM, and I don't trust his analysis of ebook costs. I also don't think game publishing on a small scale and six of the largest ebook publishers in the world make for valid comparisons.

The same basic principle apply in all manufacturing. The exact numbers vary, as I noted before. Typical average for most manufactured goods is that the MSRP is six times the cost to make. Books is more like 10 (game books more like 12), but the basic principle is the same, and the number Charlie has mentioned are entirely consistent with my own 30 years experience in retail.

Originally Posted by carld

I can only go by what I've experienced and read over a lot of years. I've seen far too many complaints from publishers about the physical costs of publishing and distributing paper books to ever accept that those costs suddenly don't matter. I don't buy it, and I never will.

Speaking of axes to grind, have you ever considered that the publishers just might, possibly, on a bad day, have some incentive to slightly exaggerate their financial woes? I mean, really, what could they possibly gain by convincing both the buying public and the writers they buy from that they need to raise prices (which is what's happening on ebooks, make no mistake) and lower royalties? You find the publishers' claims more credible. I find Charlie's (and Charlie) more credible. Simple as that.

[taustin]

Originally Posted by HappyMartin

Every time this discussion comes up we are told the cost of printing, stroring and distributing a pbook is so small as to be insignificant

Who said insignificant? In an industry where net profits are probably less than 5%, 10% isn't insignificant at all. But smaller than many people believe.

Originally Posted by HappyMartin

Well I dont buy it. I deal with printers

Out of curiosity, on what scale? How many tons of paper a month do you buy? Because for major publishers, those are the quantities they're dealing with. And it makes a tremendous difference, as does operating on a scale large enough to justify the automated printing, binding and trimming equipment. Human hands do not touch most books until they are unboxed in the retail store.

Originally Posted by HappyMartin

Where can I see an exact cost breakdown? No I am not interested in anyones friend who works in the industry and who knows for a fact it costs "nothing" to print and distribute a book. I want to see a factual breakdown.

You'd have to take that up with the publishers, who so far seem to feel a great need to keep that information secret, while telling us how high their costs are to justify raising prices and lowering royalties.

[taustin]

Originally Posted by Ralph Sir Edward

Also, nobody seems to want to split the cost of new book vesus existing book.

Some one is working on a new book required much more support (and expense) that an existing book. (Editing, layout, ect.)

An existing book requires a ocr, proofing and building the ebook layout(s) and some form of cover (of which there is at least one existing one - the original printing. The scanning and proofing takes me around 24 working hours per 300 page book. I know a e-book builder (for Epub) who does the building for around 100 euros a book (and has been doing it as a contractor for commerical interests over the last year or so.)

So, for existing books, where is the great expense? (If I charged my professional programmer's rate, the scanning and proofing rate would still be soemwhat less than $1000) At $20/HR (x 24 hrs) would be $480. Plus another $150 (100 Euros) and you're talking $630 + plus cover. (And you could use a dummy cover to save expenses). Folks, this isn't rocket science for an existing book. Of, course, if you have a really fancy layout, the e-book building will cost more.

There are no editor's cost, design layout costs, ect for an existing book. And that's where the frustration comes in. Whole publishers, et.al., keep screaming for longer and longer copyrights, and scream about the great losses from piracy, at the same time they won't ever invest $600 to $1000 a title, to be able to sell it for decades. And that's just completetly stupid.

Sounds like you should be in the business of turning existing books in to ebooks. You'll make a fortune. Seriously, dude, you should go in to that business. If you're right, you'll do well.

[taustin]

Originally Posted by Sil_liS

Do you mean ebook or pbook there?

ebook.

[teh603]

Originally Posted by stonetools

As to the production costs of ebooks vs pbooks, I think the issue is largely irrelevant to the question of ebook prices. Its LIKELY that it costs about 10-20% less to produce an ebook, but so what? Most ebook enthusiasts want ebooks to cost 50-70% less than pbooks , or say that ebooks should be free. THey're not going to be satisfied with a 10% cut.
In any case, we should always remind ourselves that the chief factor determining the price of a book is when its released. That's how it always will be.

Wait, how are the costs of printing and shipping only 10~20% of the cost of a printed book?

Take the raw document, run it through a data processing engine like Smashwords and Bookie Jar have, and then five or ten minutes later you have ebooks in all major formats and probably the minor ones as well. What you're *not* having to pay for is paper, ink, people to run the printing machines, amortization on those printing machines, glue, the guy who runs the binding machine, amortization on the binding machine, the guy who packs the books into shipping cartons, the shipping cartons themselves, each stage of shipping (and believe me, that can add up), customs fees if you print overseas, and a hella lot of other stuff.

Stuff that adds up quickly. Now, where are your numbers?

[Insalata]

Originally Posted by taustin

Ebooks will be, eventually, the death of hard backs (except for bestsellers, perhaps).

You’re probably right, but I’d rather see ebooks replace paperbacks, and publishers offering a hardback version printed on decent paper, and properly bound instead of the current hardbacks that are just as cheaply and badly made as most paperbacks. If a hardback was a beautiful thing, lovely to hold and to look at, people might be less unhappy about paying a higher price.