Cheaper e-books will kill us, says publisher

[starrigger]

Originally Posted by ssaxt0

Here is my take on the comments in this interview. He is speaking gibberish in this interview. Do they believe that we are stupid? Converting formats from pdf to other formats is software related and once a program ios developed or purchased, there is no additional cost. How is the infrastructure different, you still need to track sales for paperbacks and hard cover books so what is difference here. The mention of margins nails it because this is the bottom line for the reason, they want to continue recieving those margins and if they are bigger, that much the better. The margins they are recieving for eBooks are huge compared to paperback if you charge the same price.

I just went buy Walmart and saw $7.99 books selling for $5.97 so these are the overflow books from major bookstores that did not seel and Walmart is selling them for a profit. If Walmart does not sell them, it goes back to the publisher to make more pulp for new books at a loss to the company. For eBooks, there is no waste, no shipping charges or returns to the publisher. Have they even considered this? No, it is all about profit.

If you read this entire thread, you may discover that the reality is far more complex than you've indicated above. It's not just a matter of acquiring some software and raking in the money, unfortunately. Tor has been working for the better part of a year to put together an ebook system, and it's still not ready. (Much to my personal displeasure, I might add.) It's just not as easy as many people think it is.

As for Walmart, most likely they're not selling overstock, unless they're marked as remainders. They may have gotten a special discount from the publisher, or they may just be taking a lower profit margin.

[Ervserver]

Utterly insane .... thats all I can say at the moment, my jaw has dropped to the floor

[ssaxt0]

Originally Posted by starrigger

Tor has been working for the better part of a year to put together an ebook system, and it's still not ready. (Much to my personal displeasure, I might add.) It's just not as easy as many people think it is.

I am not familiar with Tor so I will not comment on their difficulties but S&S and some of the other publishers are establishes and they have a system in place already. It is not as if they have to start from scratch which seems to be the case for Tor. I understand that there are some differences between selling paperback versus eBooks but an infrastructure is in place and biggest of all, no expense on paper which I believe they purchase in huge rolls. That should a preety expense that is saved. Hard drive space is not that much since prices for hard drives are dropping. I see devlopment costs for the system to manage and deploy the eBooks. Modification for existing system to accomodate eBooks sales and distribution and if they wish to offer other formats, then software to accomodate these conversion.

No distribution costs.
No postal charges or supplies to package.
No paper.

I know there has to be more saving here but regardless, I still cannot see cost being more than paperback.

[lilac_jive]

Originally Posted by ssaxt0

I am not familiar with Tor so I will not comment on their difficulties but S&S and some of the other publishers are establishes and they have a system in place already. It is not as if they have to start from scratch which seems to be the case for Tor. I understand that there are some differences between selling paperback versus eBooks but an infrastructure is in place and biggest of all, no expense on paper which I believe they purchase in huge rolls. That should a preety expense that is saved. Hard drive space is not that much since prices for hard drives are dropping. I see devlopment costs for the system to manage and deploy the eBooks. Modification for existing system to accomodate eBooks sales and distribution and if they wish to offer other formats, then software to accomodate these conversion.

No distribution costs.
No postal charges or supplies to package.
No paper.

I know there has to be more saving here but regardless, I still cannot see cost being more than paperback.

I agree with this completely. A lot of people expect ebooks to be way cheaper, which I don't agree with (yet, but after a few years they should). At a minimum though I expect the ebook to be the same price as the most recent published edition.

[starrigger]

Originally Posted by ssaxt0

No distribution costs.
No postal charges or supplies to package.
No paper.

I know there has to be more saving here but regardless, I still cannot see cost being more than paperback.

Like Lilac, I agree that ebooks should be no more expensive (and probably somewhat less expensive) than the most recent paper edition. But one point made above is misleading: distribution costs.

Granted, there are no trucks driving books around. But absolutely there are still distribution costs, just like any wholesale/retail operation. In fact, I just opened a (depressingly small) royalty statement on my ebooks, and saw just how big a bite is taken by fictionwise, amazon, whoever else is distributing the books.

I also saw how very far ebooks have to go before they're a significant part of the sales picture. (And yes, that's one reason I, like everyone else here, want the prices to be lower.)

[lilac_jive]

Originally Posted by starrigger

Like Lilac, I agree that ebooks should be no more expensive (and probably somewhat less expensive) than the most recent paper edition. But one point made above is misleading: distribution costs.

Granted, there are no trucks driving books around. But absolutely there are still distribution costs, just like any wholesale/retail operation. In fact, I just opened a (depressingly small) royalty statement on my ebooks, and saw just how big a bite is taken by fictionwise, amazon, whoever else is distributing the books.

I also saw how very far ebooks have to go before they're a significant part of the sales picture. (And yes, that's one reason I, like everyone else here, want the prices to be lower.)

Now do you think the "distribution" costs should go down in a few years once they get a good infrastructure in place? That's what I wonder about.

[starrigger]

Originally Posted by lilac_jive

Now do you think the "distribution" costs should go down in a few years once they get a good infrastructure in place? That's what I wonder about.

I can see production costs going down. (I hope.) But to the extent that distribution involves retailers taking a cut, I don't see that changing.

[lilac_jive]

Originally Posted by starrigger

I can see production costs going down. (I hope.) But to the extent that distribution involves retailers taking a cut, I don't see that changing.

Good point. My main concern is they aren't going to front the overhead in the beginning to accomodate growth. I see them bandaiding the problems.

[starrigger]

Originally Posted by lilac_jive

Good point. My main concern is they aren't going to front the overhead in the beginning to accomodate growth. I see them bandaiding the problems.

A valid concern. Really, though, I think it's just growing pains.

Five years from now, we'll all be wondering why we even had these conversations... or else we'll be wondering where it all went wrong.

[lilac_jive]

Originally Posted by starrigger

A valid concern. Really, though, I think it's just growing pains.

Five years from now, we'll all be wondering why we even had these conversations... or else we'll be wondering where it all went wrong.

Hopefully the former...

[Darqref]

Originally Posted by starrigger

I can see production costs going down. (I hope.) But to the extent that distribution involves retailers taking a cut, I don't see that changing.

What is a fair charge for an electronic retailer?

If a retailer had features that let a customer search for books, note books similar to ones already purchased or searched, notice of new releases, notice of others in series, and notice of intentional sales (price reductions), but then sent the customer directly to your website (the original publisher or author's site, such that the publisher/author determine the price) to complete the sale, how much value is that?

I see several possible useful features of a retailer/middleman (and I did say possible, not necessarily currently available)

1. Help getting the book available - once "typeset" by the publisher, the function might standardize conversion into applicable formats.
2. Sales promotion, including any of the features noted above in addition to any other effective method of drawing attention to the book.
3. Sales fulfillment, allowing download or backup library features, including access to possible updates if the book is corrected for typos, etc.

If done well, these features are worth some fee. How much is reasonable, versus just what was previously done for printed books?

[starrigger]

Originally Posted by Darqref

What is a fair charge for an electronic retailer? ...

If done well, these features are worth some fee. How much is reasonable, versus just what was previously done for printed books?

Dunno. All good questions, though.

[gandor62]

I sort of feel that there is a lot of smoke and mirrors on the publishers side. They are artificially keeping prices higher on Electronic Versions so as to keep control of distribution. If they dropped prices lower that printed version then other companies may think that they can get a slice of the action, selling even cheaper and diluting profit margins of the major publishing companies. Next you would see authors that can not now get published, due to the major publishers not wanting to flood the market with non bankable tested authors going with the cheaper option with some start up publisher of Ebooks and becoming a top ten seller and not under the control of the majors. Where would it end. So by convincing us all of the justifications for why the electronic format is so expensive when compared to print versions they keep a tight hold on the industry.
I personaly used to spend ten percent of my income on novels, now I read electroniclly and while I still buy books, im a little worried about the electronic format purchases. With a printed book I have it in my library at home and can read it again and again until it falls apart. With electronic versions I never actually own it like I do with the paper version due to DRM problems and restrictions. I see this as another way for the Major publishers keeping control.

[saoir]

Originally Posted by starrigger

If you read this entire thread, you may discover that the reality is far more complex than you've indicated above. It's not just a matter of acquiring some software and raking in the money, unfortunately. Tor has been working for the better part of a year to put together an ebook system, and it's still not ready. (Much to my personal displeasure, I might add.) It's just not as easy as many people think it is.

As for Walmart, most likely they're not selling overstock, unless they're marked as remainders. They may have gotten a special discount from the publisher, or they may just be taking a lower profit margin.

I regret to say, after several years in the web site business, I cannot buy into this analysis. Tor's problems could be caused by many reasons such as inadequate investment, inadequate motivation, inadequate knowledge etc. at any rate imho it is self evident to anyone with any commercial knowledge that the costs of distribution and retail margins of ebooks will be far far less than p-books.

I sense a huge amount of fear in the publishing business. They have seen the chaotic response of the music industry, and despite the logical expectation that they would react to this by being proactive and far seeing - it seems that fear, instead, is paralyzing their actions.

In a way I sympathise with them.

The business model for the publishing industry in 10 years time will be massively different from the model as it stands today. The cosy nature of the book distribution and local bookstore model will be disintegrating. The ability by those motivated to do so, to copy and distribute illegal copies of books will be rife. The potential ability of authors to bypass publishers altogether will be real.
The publishing industry will, in my opinion, have to completely reorganise and restructure their business model over the next decade to become smaller and leaner in order to remain functional on thinner margins and remain relevant.

Saoir

[thibaulthalpern]

Originally Posted by RWood

This sounds a lot like the reasons given many, many years ago for why paperback books will kill the publishing industry. Later it was the rise of chain bookstores that would kill publishing and more recently it was Internet bookstores that were to kill publishing. Any change is bad for them from their point-of-view.

To be fair, internet bookstores and chain bookstores have put out of business a lot of independent bookstores that cannot afford to put themselves on the internet. So, while the book industry on the whole has not died off, what is dying is a lot of these independent bookstores.

An example of this is the famous (regionally famous) bookstore called Cody's in Berkeley, California, USA which has shuttered for the last time. It was locally owned for much of its life until the last few years when a Japanese firm bought it. It's now all gone.

See the article here:
http://www.sfgate.com/cgi-bin/articl...MNH711DDT0.DTL