Why are e-books so expensive?

[Shaggy]

Originally Posted by kacir

That isn't true.

Amazon, Sony, Barnes and Noble and other companies try very, *very* hard to pretend that they are selling the book, but in fact you are paying for license to read the book for limited time.

US courts have already ruled on this. They can not "pretend" that they are selling it, but really only renting/licensing it. If they say it's a sale, then it's a sale.

[calvin-c]

Originally Posted by kirbinster

Most of the infrastructure already exists so the incremental cost is tiny.

What infrastructure are you talking about? The editing, proofreading, advertising, etc? If the book has already been published in pbook, then the incremental cost is, as you state, tiny-but why should you pay just the incremental cost? The real issue is that *all* the infrastructure costs should be spread over *all* the distribution channels that benefit from that infrastructure.

If a publisher makes a practice, for example, of pricing the hardback issue high, to recover those infrastructure costs, and the ebook issue low, because the incremental costs are low, that publisher will find the hardback issue running at a loss that won't be made up by the ebook issue. Eventually, that publisher will go out of business.

(There's a way around that, of course. As has been mentioned by others, some publishers delay release of the ebook until sales of their hardbacks decline 'naturally'. I have no data on this, but I suspect these are the ones who price their ebooks closer to their paperbacks. Others, who bring out the ebook version at the same time as the hardback, also price them similarly because they share the same infrastructure costs.)

Originally Posted by kirbinster

Further, there is another flaw with an ebook being closer to a movie rental than a hardcover book purchase. When you buy an ebook you for the most part cannot share it like you can with a real book - thus I look at it as closer to a rental than a purchse. I can't give it to my neighbor and then my son when done with it, with a few exceptions. Thus, I still think the price way too high.

Agreed-but there's a significant difference in the period of the rental. And some sellers (both publishers & distributors) allow re-downloading a purchased book for a new device. No, you still can't loan it out, but now the rental period is indefinite. (Not infinite-the best policy that I know of will only keep them available, assuming no problems crop up like a company going out of business, for the life of the original purchaser. Technically it might be possible to will my entire account to somebody, who would then use my login, etc. but legally I'm not sure that would be allowed.)

So, the proper comparison might be 'buying' an ebook vs renting a movie for a period of at least several years. How much would the movie cost then?

[Elfwreck]

Originally Posted by Shaggy

US courts have already ruled on this. They can not "pretend" that they are selling it, but really only renting/licensing it. If they say it's a sale, then it's a sale.

If they treat it like a sale, it's a sale, regardless of what they call it. They can call it a "license," but if there's no return date/conditions, it's a sale. (I expect you know this, but other people might not.)

Licenses are limited-time contracts, either for a set period of time, or until a set condition occurs. ("When the Boston store opens, the trucks must be returned to us" or "you may use our software until our website starts taking subscriptions, at which point you'll need a reg code to continue.")

If there's no return condition, it's a sale, not a license. And that means the purchaser is free to resell it or give it away; sales can't include restrictions on use or ownership transfers.

[Dumas]

Originally Posted by JirkaS

Well, I think the reason is that eBooks are for "early adopters". It is still not mass market. After they will be "mass market" product (which will take some time), I guess prices will follow the patter you mention here.

Are you suggesting that the price for eBooks will decrease as the market size for same increases?

I seem to remember that when music CDs were first introduced, their high price was justified by the market size and promises that their price would eventually fall as well. Did that happen?

Oh, wait. Didn't the music companies pay fines totalling $143.1 million for price fixing CDs while admitting absolutely no wrong doing? Right.

[Dark123]

Originally Posted by calvin-c

What infrastructure are you talking about? The editing, proofreading, advertising, etc? If the book has already been published in pbook, then the incremental cost is, as you state, tiny-but why should you pay just the incremental cost? The real issue is that *all* the infrastructure costs should be spread over *all* the distribution channels that benefit from that infrastructure.

Do you mean a website like Amazon? Which already has the infrastructure. There datafarm was underused that they came out with the Amazon Cloud Computing. The size of an eBook is no more than 1MB.

Originally Posted by Dumas

Oh, wait. Didn't the music companies pay fines totalling $143.1 million for price fixing CDs while admitting absolutely no wrong doing? Right.

This is a worry of mine as well, where the publishers get together and artificially increase the price of eBooks. Please do not say this doesn't happen, as I know for a fact it happens in the USA with text messages. Those texts are piggybacked onto the signal the mobile phone uses to find out the nearest towers.

[HarryT]

Originally Posted by Dumas

I seem to remember that when music CDs were first introduced, their high price was justified by the market size and promises that their price would eventually fall as well. Did that happen?

Yes, it did. The price of CDs today is way, way lower, in real terms, than it was 20 years ago. In the UK, at least, CDs typically cost about 30% of the price that they did then, taking inflation into account; ie, they've fallen in price by about a factor of 3.

[K-Thom]

They are? Funny ... in Germany music CDs were very cheap in the beginning to attract customers buying CDs and CD player. I could build up my collection with just a fraction of the price the vinyl discs would have cost me.
After some years the music industry tried to implement a new price model with a steep price increase and argumented that they couldn't maintain their low price and had to "adjust" to inflation and the development of the market (the very one they themselves created ...).

This was totally rebuffed by the customers. Now we have a pricing model which is (Euro conversion and inflation included) about the same level or slightly more expensive than, say 20 years ago.

Germany has a fixed books price for eBooks, so this scenario isn't going to happen again here. But do expect higher prices in the US and UK in the next years, at least as soon as eBooks become established as a mainstream media. Simply because there isn't a reason to sell them at such a low price as nowadays.

Yup, low. "Under the dome" by Stephen King has a price of US$ 20.00 at Fictionwise. The official (remember: fixed!) price for the German ePub version is 24.99 EUR, or US$ 36.21 ...

[Sweetpea]

Originally Posted by K-Thom

Germany has a fixed books price for eBooks, so this scenario isn't going to happen again here. But do expect higher prices in the US and UK in the next years, at least as soon as eBooks become established as a mainstream media. Simply because there isn't a reason to sell them at such a low price as nowadays.

We don't have a fixed bookprice for ebooks (but we do have one for books), but still publishers keep the price high.

Bol.com (the largest online bookseller in the Netherlands) is also very frustrated with this, they want the ebook prices at least 20% below the pbook price. (that 20% is costs saved due to no shipping and storing and paper, and such). But publishers rather stick that money in their own pockets...

[Direct Ebooks]

Another point to bear in mind is that in Europe, VAT tax is applied on eBooks at up to 21% which is significant.
This adds greatly to the retail price of eBooks.
Even now, because of this, many of us retailers are down to to about 20/25% of the rrp.
Thats before discounts.
Retailers are also charged a fulfillment fee by adobe etc to deliver the eBook to the customer.

I'm not complaining - just pointing out some hidden factors and costs.

[neilmarr]

I'm no UK tax expert, DE; but I read somewhere recently that that 21% VAT is applied to sales of purchased 'goods'. If an ebook is merely licenced, it should be taxed as a 'service' at 6%. This right? Cheers. Neil

[GhostHawk]

Everyone keeps trying to compare Ebooks to hardcover Pbooks.
I'm sorry I don't see the connection.

Personally I think publishers should price Ebooks based on time.
Buy it the same week the Hardcover Pbook comes out and you should pay "close" to the same price.

Want it for 1-2$ then you'd likely have to wait 6 months or more for it.

So how much an Ebook "should" cost should in my opinion be directly tied to when it is being sold compared to the paper books. But it should never cost more than a paper bound version. Idealisticly it should be 1/2 - 2/3's of the paper version currently being sold. Be it hard cover for 25$ or mass market paperback for 8$. Again idealisiticly on a sliding scale. So just before the paperback comes out the Ebook would be (Drum roll) paperback price. So if you want it "now" when it first comes out, you pay for that.

If you want to wait, your savings can be significant.
And after a few years it should be virtually free.

The greedier publishers get the more people they are going to tick off, and the fewer books they are going to sell. The sooner they get that message the quicker they can start sorting their way out of this minefield they are in.

There are books I wouldn't mind paying a minor fee for if I knew the Author was going to get half of it. But I don't see why my money should go to support a big publishing company that is just money hungry.

[CyGuy]

When you purchase an eBook you most certainly own that copy of it. That is one reason why DRM should be illegal in any form.

The price that some retailers are charging for eBooks is simply way too high.

It comes down to this: You can pay the insane price and let them steal from you, or you download the darknet version and steal from them.

There has to be a middle ground somewhere.

[Sweetpea]

Originally Posted by Direct Ebooks

Another point to bear in mind is that in Europe, VAT tax is applied on eBooks at up to 21% which is significant.
This adds greatly to the retail price of eBooks.
Even now, because of this, many of us retailers are down to to about 20/25% of the rrp.
Thats before discounts.
Retailers are also charged a fulfillment fee by adobe etc to deliver the eBook to the customer.

I'm not complaining - just pointing out some hidden factors and costs.

ebooks are in the high VAT rate, yes.

Originally Posted by neilmarr

I'm no UK tax expert, DE; but I read somewhere recently that that 21% VAT is applied to sales of purchased 'goods'. If an ebook is merely licenced, it should be taxed as a 'service' at 6%. This right? Cheers. Neil

It's the other way around actually. Books have the low VAT rate (which is 0% I believe in the UK), while ebooks are actually "services" and thus have the high VAT rate.

Strange situation:

I go to a store, buy an audiobook on CD.
Price: 10 + 6% VAT = 10,60 euro.

I go to a webstore and buy exactly the same audiobook on MP3 (aka, download it)
Price: 10 + 19% VAT = 11,90 euro.

[Kali Yuga]

Originally Posted by kacir

Amazon, Sony, Barnes and Noble and other companies try very, *very* hard to pretend that they are selling the book, but in fact you are paying for license to read the book for limited time.

Incorrect.

While we might be able to characterize the situation as a license, there is no time limit. The only way your books will "expire" is if the company goes bankrupt, or otherwise completely abandons the format without offering readers any form of upgrade option.

If you buy a VCR tape today, and tomorrow it becomes nearly impossible to buy a VCR player that is compatible with your home entertainment system, that does not indicate that you only "licensed" the tape with a "limited" duration.

Originally Posted by kacir

Let me quote BoinbBoing.net, that is quoting Jef Bezos....

Note that it is some unknown person on BoingBoing that characterizes ebooks as a "small subset of rights." While I do agree that current ebook implementations do restrict certain rights, it does not restrict others (e.g. quoting for fair use; you'd just have to type it manually, rather than cut & paste from the ebook) and even adds others (e.g. you can't back up your paper books to CD or Mozy for safe keeping; instant free delivery; reading across multiple devices; on some platforms, text-to-speech capabilities etc). In some cases, you can even check out an ebook from the library without physically going there.

I.e. people get up in arms over lost abilities, but for some odd reason never include the new abilities in their outrage or calculus. H'm....

I concur the situation is very different between paper books and ebooks -- as one might expect with a change in medium. However, it still doesn't equate purchasing an ebook with a digital movie rental that only lasts 24 hours.

[Terisa de morgan]

Originally Posted by Direct Ebooks

Another point to bear in mind is that in Europe, VAT tax is applied on eBooks at up to 21% which is significant.
This adds greatly to the retail price of eBooks.

You can't discard that reason. Spanish VAT tax is now 4% and the prices haven't gone down.

Originally Posted by Direct Ebooks

Retailers are also charged a fulfillment fee by adobe etc to deliver the eBook to the customer.

I think that only if there's DRM but I'm not sure. But the Adobe DRM system costs a lot of money (and publishers have to include it in the final price).