Is eBook overpricing akin to an eBook tax?

[Steven Lyle Jordan]

It would be worth mentioning here that the thread on Penguin 2.0 presents a fine example of a good reason to price e-books higher, i.e., providing extras and premium content that are not available in a MMPB, the same strategy used to sell many DVDs. This also has the added advantage of encouraging the consumer to buy legitimate material, as opposed to pirated e-books without the extras.

[rhadin]

Originally Posted by starrigger

But don't fool yourselves into thinking that it's a simple matter to gear up for selling ebooks. It requires setting up new production processes, working out sales and distribution, and in general a lot of things behind the scenes that may not be obvious to the reader.

This is quite true. One of the small publishers I work for has decided to investigate ebooks for his market (a specialty market, not a mass market). After several months of discussion with me about what would be needed and the workflow requirements, he has decided to proceed on a trial basis. But what this means to him is a significant investment of money and time. Production cycle will increase by 4-6 weeks and production costs will increase by approximately 30%. Plus there is the investment in that has to be made in the software, fonts, mode of distribution, and other necessaries.

In the long-term the costs will decline. Some things are one-time investments. But until ebooks and their devices become commonplace among his readers, the per unit cost will remain high. The question becomes how much of that initial high cost can he absorb in order to reduce the price of the ebook? In the end, his margins have to remain at least the same, if not be greater, for ebooks as for pbooks in order for him to remain in business.

I'll grant that I dislike paying $14+ for a crippled ebook, even though I do occasionally pay it. But it isn't the $14+ that bothers me -- it is the crippling. I think this is where the publishers are going offcourse -- not the pricing but the crippling plus the pricing.

[rhadin]

Originally Posted by Steve Jordan

It would be worth mentioning here that the thread on Penguin 2.0 presents a fine example of a good reason to price e-books higher, i.e., providing extras and premium content that are not available in a MMPB, the same strategy used to sell many DVDs. This also has the added advantage of encouraging the consumer to buy legitimate material, as opposed to pirated e-books without the extras.

Steve, it is an attempt to "justify" the pricing but at least for me one that fails. I am not interested in author interviews, sample chapters from other books written by the author, movie trailers, etc. as ebook enhancements. I prefer to pay a more reasonable price for DRM-free material.

Unlike the DVD that gets stored in my movie cabinet on a reusable disk that can be shared with friends, the enhanced ebook is still DRM laden and doesn't come on a disk for storage.

BTW, at least in my area of the country, as DVDs get "older" (i.e., further from their release date), they tend to get cheaper. There are a lot of older DVDs available for less than $7 with all the added features plus a nice case included. Of course, if I don't mind buying used DVDs, i can get the same thing for even less -- often as little as $3-$4. Can't do that with the enhanced ebook.

[BlackVoid]

Good discussion.

I think publishers want the ebook market to stay as an insignificant niche market. That is the main reason for what we see.

BTW, iTunes is not a good a good example, they still sell crippled products at a high price, but at least there is availability. Electronic format for music is mainstream already, while ebooks are quite new. At some point customers may realize that all the songs they bought from iTunes are cripples.

Ebooks have several issues:
- availability problem: incomplete series, new (and many old) releases not available
- high pricing - the overhead for a website cannot be compared with physical distribution, it is CHEAP
- format problems: this is their own doing, they could standardize it if really wanted
- DRM - product is faulty by design

Publishers on all fronts are obsolete dinosaurs and they know it. They use their lobbying power and the state to stay in business. Without it, they would be bankrupt already. Electronic formats do not need publishing. In the music world several artists have recognized it and now they self-publish. They may make less money, but it at leasts stays with them and not spent on the corporate jets and secretaries.

What we can do is to refuse to buy ebooks that are higher priced than the paper. Also refuse to buy anything with DRM.
If you do not stick to the above, then you have no right to complain. You offered your ass...

[HarryT]

Originally Posted by rhadin

Steve, it is an attempt to "justify" the pricing but at least for me one that fails. I am not interested in author interviews, sample chapters from other books written by the author, movie trailers, etc. as ebook enhancements. I prefer to pay a more reasonable price for DRM-free material.

But you do have a choice. In the case of virtually any book in the "Penguin Classics" range, you can download the basic text free of charge, or pay to get the additional material; the choice is entirely yours.

[Steven Lyle Jordan]

Originally Posted by rhadin

Can't do that with the enhanced ebook.

Not today, no.

It does suggest an answer to some of e-publishing's woes, which would be connecting the e-book to physical media, such as an SD card, making it possible to use the same retail models as CDs, DVDs, etc. I'd personally consider this a step backward, but in terms of securing content to one user (not to mention making a used market possible), it is worth considering.

[bbusybookworm]

Originally Posted by rhadin

In the long-term the costs will decline. Some things are one-time investments. But until ebooks and their devices become commonplace among his readers, the per unit cost will remain high. The question becomes how much of that initial high cost can he absorb in order to reduce the price of the ebook? In the end, his margins have to remain at least the same, if not be greater, for ebooks as for pbooks in order for him to remain in business.

The thing with these costs as you mentioned is that many are one time costs.

Also the time and effort that goes into designing a work flow now, will not only benefit the books already published, but will significantly help in the future.

The question I have is why should the publisher expect to need to recover the costs immediately? Trying to do say may as well shoot themselves in the foot as it works to restricts the number of sales.

The benefits of selling eBooks really materialise when you can increase the volume, as once made the MARGINAL cost of selling each additional book is minuscule.

Its kind of like the publisher saying that the cost of the printing press has to be recovered in a the first 200 books. This investment in software and equipment is a capital investment, similar to them putting in another printing press which will pay off over time not an expense.

[Shaggy]

Originally Posted by Steve Jordan

Not today, no.

It does suggest an answer to some of e-publishing's woes, which would be connecting the e-book to physical media, such as an SD card, making it possible to use the same retail models as CDs, DVDs, etc. I'd personally consider this a step backward, but in terms of securing content to one user (not to mention making a used market possible), it is worth considering.

How would selling an ebook on a physical media secure the content to one user?

[Steven Lyle Jordan]

Originally Posted by Shaggy

How would selling an ebook on a physical media secure the content to one user?

In the same way that DVD content can be restricted from duplicating or copying to other media, tying it to the physical media permanently (not foolproof, but in the case of DVDs, good enough that most users do not try to break it).

Yes, we're talking about a DRM system, but if it is tied to the physical media, it is not going to be lost if your PC dies... you can trade them, resell them... and the producer is confident that most of their material is not being pirated. So it does have its advantages.

[ficbot]

I think the problem is that as customers have seized more control over (and input into) the commercial process in other areas, they expect to do so in this one too, and what the publishers want and expect is fundamentally different from what the customers want and expect. To give you an example, I remember when over the summer, the Canadian dollar hit parity with the US dollar, and Canadian readers started complaining about the much higher Canadian sticker price for books in general. The publishers responded not by lowering prices, but by printing editorials in the paper explaining why the costs were higher, and what the reasons were which we did not understand, and why we should pay the higher prices when we could go on-line and get them much cheaper or get our American relatives to send them to us. And did customers respond by saying 'okay, that makes sense' and patriotically Supporting Canada by paying the higher price? Of course not. And why should they?

So we have every blogegr saying 'it is unreasonable to charge hardback prices' and every publisher saying 'no it's not' and it's a big mess because side A has the actual power to buy or not buy no matter what side B says, but they can't buy if side B doesn't choose to sell...

[Ak Mike]

This is a great discussion. I side with those who believe that e-books will gradually build momentum, yielding a bigger catalog and lower prices. The publishers don't want to spend millions to build capacity for ebooks that right now are a tiny market, compared to physical books.

I disagree that publishers are or will become redundant. All the functions they perform will still be needed even when books become digital. Self-publishing has always been available to authors, as to composers, but it is not viable because of the lack of quality control and marketing capital.

Publishing is, contra Steve Jordan, a very risky business. Look at what is happening right now at Houghton Mifflin. It is understandable that the publishers do not want to launch themselves into outer space by committing a lot of assets to electronic publishing, when the country is full of giant stores selling paper books. Keeping the prices high is a way of assuring themselves that, while they may not make a ton of money on e-books, at least they won't be losing money, nor will they be sabotaging paper sales.

[Alisa]

I'm hoping they'll learn from what Amazon's doing with the $9.99 new releases and best sellers. The margin may be low but the volume is high. I would imagine you have a lot more people buying when stuff first comes out rather than waiting for the paperback release, library or used book store.

Still, I wonder if publishers' ebook resistance might also have a lot to do with the executives whose role in the publishing companies are heavily tied to the print operations. I don't know much about publishing but I know in my industry a lot of bad business decisions stem from individual execs protecting their little fiefdoms even when it makes no sense for the larger corporate body.

[starrigger]

Originally Posted by moz

I think many publishers are holding back from ebooks for that reason, but it doesn't explain the ones who have already made that investment pricing their books at silly levels. Likewise the hardback run argument doesn't hold when the ebook price stays high after the paperback hits the discount stores. That just says that insofar as they've thought about it at all, publishers think ebook readers are rich dummies. The supply of which is being chiselled away at every day.

I'm guessing the reason for the high prices staying high has more to do with inattention than anything else. You're making the assumption that publishers' staffs are always on top of their business. I can tell you from experience that that's not true. Most people who work for publishers are overworked, and a lot of this stuff gets done on a "when I can get to it" basis. Also, in-house communication isn't always what it should be.

Originally Posted by moz

I'm quite keen to see someone do an Amazon-style ebookstore, and I don't particularly care if it is Amazon that does it. But the whole one stop shop is attractive to me, partly because I think they'd have the leverage to explain to recalcitrant authors or the estates therof that they will put their ebooks up just the same as everyone else, there will be no special restrictions just because the author is special. I mean that as in "special needs".

What amazes me is science fictyion authors who otherwise seem quite reasonable but who can't understand that the market they sell into is changed and they need to change their behaviour to match it. Sulking and stamping their feet just means not selling as many books.

What authors are you talking about? Aside from a few bestselling writers who are doing quite well in paper and can afford to be opinionated, I don't know any authors who are opposed to their books being in ebook form. Your exasperation is misdirected.

Originally Posted by moz

Which brings me to one strong argument for cheaper pricing: currently it's not legal to sell an ebook second hand. Or pass it on to a friend once I've read it. I have a few friends that I regularly exchange books with, and with certain authors we will split the cost of the latest hardback as soon as it hits the shelves, then a few weeks later donate it to a library (once we've all read it). So we pay about $US7 each for a hot off the press hardback. Or, if we each buy the ebook (assuming it's released at the same time), we pay $US25 or more... because we are idiots, I mean, "law-abiding citizens".

I'm all for lower pricing in ebooks. No argument from me. But it does no good to ascribe malice or greed to authors or publishers who are just not yet as up to speed on ebooks as are the folks here. They're getting there. Be patient and offer encouragement and support to those who are doing it right.

[starrigger]

Originally Posted by Steve Jordan

I will point out that the impression I get from bookstores is that, yes, publishers have that power over them. They certainly seem to have no control over inventories, special orders, etc, that they will admit to.

It's certainly true that, for example, a Borders store will tell you they don't control what books they stock. But that control doesn't rest with the publishers; it rests with the chain buyers, who decide what to order for stores.

The publishers hold sales conferences with these buyers, and they pitch books to them, soliciting orders. They don't dictate. If they did, my Battlestar Galactica novel would have been in all the Borders stores. (It wasn't.)

In the case of a new Rowling or King book, obviously, they may exert more control. But not for the main list.

[Steven Lyle Jordan]

Originally Posted by Ak Mike

Publishing is, contra Steve Jordan, a very risky business.

Well, I didn't mean to imply that publishing has no risk. Just that, between publishers and booksellers, I see publishers as being the ones on top, not the bookstores. I suppose, between Jeffrey's opinion and mine, you can decide which one works for you.