N.Y. Times Article: Steal This Book (for $9.99)

[Sonist]

A quick search brought up this summary by Dave Taylor:

---------------
"...You can't just count printing costs, you have to factor in the cost of returns and warehousing. That being said, stand-alone edition costs are in the 15% range, but the biggest problem with trade publishing and the reason it is a single digit net margin business is returns--which can run as high as 40%.
...
$50 list price book
$25 to publisher
-4 for printing
-5 for inventory and obsolence
-2-3 for royalties
-5 for selling and marketing
-5 for overhead and warehousing
-1 for co-op
-2 for editorial and marketing
..."
---------------

Now, with ebooks, a publisher would realize very significant savings, not only on printing, storage and distribution, but also on returns.

The retailer's costs would be significantly lower, as well: no expensive leases on storefronts, no warehousing, less employees and related costs.

So, yeah, it DOES make sense for consumers to expect lower prices for ebooks.

And yes, in real digital life, "piracy" IS part of the "market" equation.

It can be argued, that once ebooks are more widely adopted, a savy publisher would speed up the release of an e-version of a popular title, lest an unofficial version be made available for free, and would keep the price acceptable to optimize ebook sales.

[whitearrow]

Originally Posted by rhadin

I read this repeatedly -- it's just the producer's greed. I'm prepared to face the wrath of MR, but isn't it just as valid a statement to say that it is the consumer's greed to demand lower pricing?

To me, the question is "lower than what?"

I read 30-40 books a year, probably. Before I bought my Kindle, most of my book purchases were paperbacks, $7.99 retail, usually discounted to $6-7 by Amazon or with my B&N discount card. I also bought a good number used books at $2 or less (with trade-in credits). The very occasional hardback I bought was from Costco, maybe $15 or so, or from the SciFi Book Club (usually omnibus editions of 2 or more titles that were less than $20). If I had to guess, I would say the mean price I paid for books was $5 each, with the median probably around $7.

So now I'm being told that I'm unreasonable and a greedy consumer if I want to continue to spend about the same amount of money for the same number of books. Here are some things I can't do with ebooks:

1) Count on consistent good quality in terms of formatting and presentation
2) Trade the books in for credit when I'm done
3) Give them away, loan them, or share them with someone else
4) Have a guarantee that they'll still be readable in 5 or 10 years

Now in turn I get to carry my whole library with me and take a lot of books on vacation without adding 20 lbs. to my luggage. That has value for me, and I don't discount it.

But I don't appreciate being told that I should expect to be spending $15 a book on every book, or that I'm greedy for expecting the same kind of value I got from print books.

[sirbruce]

Originally Posted by Sonist

Now, with ebooks, a publisher would realize very significant savings, not only on printing, storage and distribution, but also on returns.

Again, while that $14 worth of overhead may seem impressive for a $50 hardback, when you're talking paperbacks (which is what people compare ebook prices to) it's a lot less impressive. That's $2.24 on an $8 paperback. And the costs do not necessarily scale linearly; if I sell half my paperbacks as ebooks, my overhead costs on those paperbacks do not necessarily decrease by 50%. So you're still talking about ebooks that are, at best, $2 cheaper than paperbacks in order for the publisher to maintain profits. And since ebooks will probably hurt hardback sales the most (it's the biggest price differential, plus ebooks will have to be available once the hardback comes out -- so no longer do people have to pay higher prices so they can get the book right away), that will hurt publisher margins the most, just as if people bought paperbacks instead of hardbacks.

So like I said before, the original story was wrong to try to compare ebooks to hardbacks rather than paperbacks, but nevertheless it is a problem for publishers if people expect to buy ebooks at much less than paperback prices. It's something they can adjust to somewhat, but retailers are going to have to give up some of their margins as well, or publishers will just stick with Amazon and/or their own online direct distribution.

[Sonist]

Originally Posted by sirbruce

Again, while that $14 worth of overhead may seem impressive for a $50 hardback, when you're talking paperbacks (which is what people compare ebook prices to) it's a lot less impressive. That's $2.24 on an $8 paperback....

Again, the overhead savings are not recognized only at the publisher level, but also at the reseller's.

But, even if we disregard the resellers' cost saving, your example above would still realize close to 30% savings to the consumer, while maintaining the old profit margins for publishers. And the price will be close to that magical $5-$6 range, where it appears publishers can make money, and "piracy" is sufficiently "unattractive" to most consumers.

Now, it will likely affect the profit on hardcovers, as ebooks are published at the same time (if they are delayed, there will be much increased piracy for some popular titles.) But, one can argue that with ebooks there will be more impulse purchase, which together with the cost savings, may result in less drastic business model reshaping, than many currently fear.

[sirbruce]

It's certainly possible, and there are other revenue enhancement opportunities (backlist) with ebooks that make them attractive. I was just saying that the cost-savings for ebooks is not going to translate into dramatically lower ebook prices when compared to paperback.

[Sonist]

Originally Posted by sirbruce

It's certainly possible, and there are other revenue enhancement opportunities (backlist) with ebooks that make them attractive....

Duh, you are right. I forgot this one, and it is a biggie. I suppose backlists are a great thing for authors, too.

[DaleDe]

Originally Posted by kamm

The problem is that this writer assumes that us, readers have to cough up instead of lowering his or, more importantly the publisher's chunk of it.

No paper cost means much lower publisher cost equals lower book price, period.

This is how it must work otherwise they will slowly kill their own market, just super-greedy clueless parasites of the big studios did it with music and doing it with movies.

It is not much less. A paper book costs less that a buck to print.

Dale

[Sonist]

Originally Posted by DaleDe

It is not much less. A paper book costs less that a buck to print.

Dale

It is not just printing cost savings, however. See the breakdown earlier in the thread.

[taosaur]

Originally Posted by Sonist

It is not just printing cost savings, however. See the breakdown earlier in the thread.

That breakdown doesn't really apply to publishing an ebook, particularly a new release, right now. With the present market share for ebooks and the rather chaotic state of the industry, the cost of an electronic edition is pretty much equal to a print copy. For the publishers to make that point is short-sighted; eventually more people will be reading ebooks and savings will be realized. Still, at present electronic editions are something they must produce in addition to print runs, not instead of.

Where I'd like to see more innovation right now is the smaller print houses, the likes of Baen, who are disadvantaged on the old turf but have the light weight and flexibility to excel in the new media.

[Kris777]

Originally Posted by DaleDe

It is not much less. A paper book costs less that a buck to print.

Dale

I like Michael Hart comments about free ebooks:
http://www.pg-news.org/20080212/eboo...or-publishers/

"After all these years of saying free eBooks were anathema to the Olde Boye Networke of the publishing world….

The publishers are finally realizing that when eBooks are given away free of charge actually increase paper sales–not that there weren’t any number of academic studies and articles saying this from the very beginning."


Tor Books is launching a new site and running a campaign in which they are giving away e-books (free as in beer) until the site goes live. To get in on the deal, fill out the form at their site, and each week you will receive a newsletter containing links to download a new book. The first two books are Mistborn by Brandon Sanderson followed by Old Man’s War by John Scalzi. Scalzi’s site says: ‘My understanding is that they don’t have DRM on them. Or at least, mine isn’t supposed to have, and I don’t think they’re planning mine to be special in that regard.

[DaleDe]

that article is from last year and tor's offer is not being done any longer.

Dale

[Kris777]

Originally Posted by DaleDe

that article is from last year and tor's offer is not being done any longer.

Dale

Yes, but I agree with statement that " eBooks are given away free of charge actually increase paper sales." For example Eharlequin offers 16 books for free:
http://eharlequin.com/store.html?cid=1317

[Sonist]

Originally Posted by taosaur

That breakdown doesn't really apply to publishing an ebook, particularly a new release, right now. With the present market share for ebooks and the rather chaotic state of the industry, the cost of an electronic edition is pretty much equal to a print copy. For the publishers to make that point is short-sighted; eventually more people will be reading ebooks and savings will be realized. Still, at present electronic editions are something they must produce in addition to print runs, not instead of.

Where I'd like to see more innovation right now is the smaller print houses, the likes of Baen, who are disadvantaged on the old turf but have the light weight and flexibility to excel in the new media.

You make a good point.

But, with a bunch of larger screens coming to market shortly, publishers could take the basic layout of the book (preferably hardcover :-), and export as PDF. This would eliminate much of the duplicate work to output an ebook. Since the mobile sdk supports reflow, it would work on smaller devices as well.

Problem solved

Now, give us the cheap ebooks

[taosaur]

Originally Posted by Sonist

You make a good point.

But, with a bunch of larger screens coming to market shortly, publishers could take the basic layout of the book (preferably hardcover :-), and export as PDF. This would eliminate much of the duplicate work to output an ebook. Since the mobile sdk supports reflow, it would work on smaller devices as well.

Problem solved

Now, give us the cheap ebooks

That strikes me as the ideal solution, too, both in terms of how I'd like to see books presented on a device and as far as shepherding new users into the market with minimal pain and suffering. I would consider us there today if Adobe made their software more flexible (and just smarter) for Windows and Linux machines. As it is, I need another piece of software (irotate) to align the page with my screen, and having done that, I still can't get true fullscreen or smart one-button page turns. How hard is it to apply fit-height, fit-width or best-fit to each page turn? How could you NOT include fullscreen (if it's in ADE, it's well hidden)?

[DaleDe]

Originally Posted by Kris777

Yes, but I agree with statement that " eBooks are given away free of charge actually increase paper sales." For example Eharlequin offers 16 books for free:
http://eharlequin.com/store.html?cid=1317

This is particularly true when only one of a set is released as an eBook, which was the way Tor did it. Lots of people get upset when only one of a series is released as an eBook. I mentioned the time frame of the tor article as I didn't want people think it was current.

Dale