Gizmodo: How Much It Actually Costs to Publish an Ebook vs. a Real Book

[dmaul1114]

Originally Posted by ficbot

...and in any other business, if you had customers prepared to pay X and you wanted to charge Not-X, you would work to bring your costs down and streamline your operation to retain the customers you have and attract new ones.

Well e-books are new, and are a pretty tiny portion of overall book sales still.

So as it grows the market will determine where e-book pricing needs to be to maximize sales. It's too small a niche to have much influence on pricing yet.

My only concern is that it works out so authors get their same $ per copy and not less $$$ because they get a set % of sales and ebooks are cheaper. Authors aren't working any less hard, publishers are by saving some on shipping and printing etc.

But that's on publishers to not rape authors on e-books, and on authors to not sign crappy contracts. Heck, as e-books go big time established authors won't even really need publishers any more. They can just put out stuff on their own like bands like Pearl Jam do now.

Sell digital content on their websites, hire a printer to do smaller runs and sell books on the website and in independent books stores or maybe one chain etc.--all of which Pearl Jam did with their last album. Only available on their website, in Target and in some independent stores as they are no longer signed to any record label, having fulfilled their long contract with Epic with the album before this one.

[Alisa]

So the publishers have chosen a business model that loads a disproportionate amount of the cost on an overpriced hardcover. This figure means absolutely nothing in relation to ebooks without the figures for the subsequent print releases.

[dmaul1114]

Originally Posted by Alisa

So the publishers have chosen a business model that loads a disproportionate amount of the cost on an overpriced hardcover. This figure means absolutely nothing in relation to ebooks without the figures for the subsequent print releases.

Yep, costs are front loaded into hardcovers and always have been.

The question is whether people are ok with front loading the costs into e-books as well when only the hardcover is out in print?

Are people ok paying $10-15 or whatever for an e-book when the hardcover comes out and then getting price cuts in the ebook when the paperback is out (so it costs the same or less as the cheapest paperback version)?

I am personally, and think that type of window pricing scheme is fine. I waited for paperbacks in the past for most books and could wait for the e-book price drop.

[Alisa]

Originally Posted by dmaul1114

Yep, costs are front loaded into hardcovers and always have been.

The question is whether people are ok with front loading the costs into e-books as well when only the hardcover is out in print?

Are people ok paying $10-15 or whatever for an e-book when the hardcover comes out and then getting price cuts in the ebook when the paperback is out (so it costs the same or less as the cheapest paperback version)?

I am personally, and think that type of window pricing scheme is fine. I waited for paperbacks in the past for most books and could wait for the e-book price drop.

I agree that front loading is ok with ebooks to some extent but the difference will have to be smaller. They are not giving you a higher quality physical product. All they have is the time element.

[dmaul1114]

Yep, I'd say make most e-books $10-15 at the hard cover release, and then drop them when the mass market paper back is out and put it at that price or lower.

The e-book should never cost more than the cheapest paperback version.

[bgalbrecht]

Originally Posted by dmaul1114

Yep, costs are front loaded into hardcovers and always have been.

The question is whether people are ok with front loading the costs into e-books as well when only the hardcover is out in print?

Are people ok paying $10-15 or whatever for an e-book when the hardcover comes out and then getting price cuts in the ebook when the paperback is out (so it costs the same or less as the cheapest paperback version)?

I'm OK with that, as long as the publishers consistently follow that pricing model, and don't leave the prices at hardcover prices forever, like MacMillan often does.

My biggest problem with the Agent model is that if the retail stores are choosing to heavily discount certain hardcovers (e.g., NY Times bestseller list), and the publisher doesn't like it, they'll just leave the ebook price at their hardcover MSRP equivalent ebook price, and the ebook will end up priced higher than the discounted hardcovers. I think this will slow the adoption of ebooks, and the publishers know it and want it that way. They still haven't figured out the optimal pricing strategies for ebooks, and don't know for sure whether ebooks will primarily cannibalize hardcover sales, paperback sales, or both.

[dmaul1114]

Agreed, the pricing scheme needs to be standard.

And the way to help that along is to vote with your wallet and not buy e-books that don't follow that pricing scheme, and write the publisher and tell them why you haven't bought the book yet.

[Kali Yuga]

Originally Posted by Dumas

While I'm not sure we can know if figures shown are too low or too high, we can certainly know that their model incorrectly mixes fixed and variable costs and is therefore fundamentally flawed.

Any such analysis is going to be "flawed." Costs will vary based on how many copies the book sells; the size of the advance; the type of edition, and so forth. Nor is this intended to be a comprehensive analysis. Instead, the point is that while ebooks do cost less to publish than paper books, the cost savings are far smaller than most people expect.

Originally Posted by Dumas

My take-aways/translations from the article...

...looks an awful lot like confirmation bias in action. Or at least unreconstructable cynicism.

Originally Posted by Dumas

2. "printing costs may vanish" means the marginal costs of eBook production is zero.
3. "a raft of expenses that apply to all books, like overhead, marketing and royalties, are still in effect" means there are fixed costs (except for royalties, a variable cost) which would be incurred whether or not an eBook is offered/sold.

Yes. And? That doesn't alter the fact that the paper-related costs hover around 15%, you still have significant fixed costs to publish the title, and that consumers overestimate the cost savings of ditching paper.

Originally Posted by Dumas

....publishers are somehow able to engage in what I understand by definition to be the practice of price fixing.

Yeah, not really. It's an example of publishers setting prices, and in terms of what price to set, it's no different than groupings around common cover prices. It would elevate to illegal price fixing if there was evidence that all publishers were colluding to set prices, as opposed to competing against one another for selling goods. We also don't know if discounting has been completely eliminated, though it is unlikely that Amazon can declare a 50% discount across the board without the publishers reacting.

And really, it's no different than Apple setting a "$1 per music track purchase," except that it's the publishers rather than the retailer that establishes prices.

Originally Posted by Dumas

5. "At a glance, it appears the e-book is more profitable. But, ..." means it either is or it isn't.

No, it means the situation is more complex than it appears at first glance, as explained by subsequent sections of the article.

Originally Posted by Dumas

6. "e-books still represent a small sliver of total sales, from 3 to 5 percent." means they are not selling enough which would have nothing to do with publishers making e-books available or delaying their release in conjunction with the publication of new titles.

That's because it doesn't.

The percentage of ebook sales has more to do with near-total apathy by the public for ebooks until about a year ago, combined with a lack of compelling (and/or affordable) devices for reading ebooks.

In the meantime, publishers do not have unlimited funds, are in fact cranking out more ebooks (e.g. Amazon now has 450k ebooks, up from 350k last September), signed a huge agreement with Apple to put out ebooks on what is expected to be a popular platform, and delays (which aren't terribly common yet) have been shorter than the hardcover-to-paperback delays.

Originally Posted by Dumas

7. "publishers want to avoid lower e-book prices (because) print booksellers would be unable to compete means we (publishers) intend to push the price of a product as high as possible, leading to profits for all sellers, another component of price fixing.

Compete against themselves?

The goal of anyone who is selling a good is to hit an optimal price. Some believe that would be a higher price (fewer sales but better margins), others think lower (more sales, but worse margins). This is normal, ordinary, everyday, morally acceptable behavior.

You also seemed to blip past the part of the article where they pointed out that publishing is not a gold mine, and that no one is getting obscenely rich off of publishing books. Accusing publishers of excessive greed is laughable, especially when you consider the actions of, say, bankers circa 2006 or 2009....

[DawnFalcon]

Originally Posted by dmaul1114

My only concern is that it works out so authors get their same $ per copy and not less $$$ because they get a set % of sales and ebooks are cheaper.

Oh that's easy. Publishers should redirect their spend on DRM to authors.

[Elfwreck]

Originally Posted by dmaul1114

My only concern is that it works out so authors get their same $ per copy and not less $$$ because they get a set % of sales and ebooks are cheaper.

Authors make less per paperback than per hardcover; why shouldn't they make less per ebook? Lower unit costs; potentially higher volume of sales; no restriction on how long it can remain "in print" so they can continue making royalties long after it's slipped off the "currently popular" charts.

The real issue is, why are publishers insisting on benchmarking ebooks against hardcovers instead of paperbacks? Why not release them when the paperback comes out--at slightly lower than the paperback price? (Rhetorical questions. We know the answer to that: because they think they can get $13-15 per ebook instead of $4-6 per ebook.)

[dmaul1114]

Well I see nothing with bench marking them with hardcovers while only the hardcover is out. Allows e-book fans who want to read the book right away to buy the book for a higher price (but still less than the hard cover). Those who choose not to can wait for the paper back to come out, and the e-book to drop in price to at or below that level.

Of course, the problem is when that drop in e-book price doesn't come when the paperback launches. But if the price drops in e-books are standard at that time, I have no problem with e-books being priced higher when the hardcover is the only print version.

As for author's take's--is that true across the board? I was under the impression that in most contracts--at least for successful authors who have clout in negotiations--they get the same take per copy sold for hard back and paperbacks. And publishers just price hardbacks much higher to try to make back the author's advance, printing costs etc?

[Dulin's Books]

Originally Posted by Elfwreck

Why not release them when the paperback comes out--at slightly lower than the paperback price?

Because as many people have stated here people want the ebook the same day as the hardcover is released or they will be "forced" to find illegitimate copies on the net.

many people here have said they will brook no delay at all - even a short one that launches the ebook a little while after the hardcover as several of the publishers have mentioned.

[kindlekitten]

I think many of us that feel that way would be willing to pay, maybe not quite the hardcover price, but more than the normal ebook cost with the expectation that once the paperback version is out the release price of the ebook would go down

[carbonize]

Those figures make me laugh. In my experience ebooks cost as much to buy as the physical version. In some cases I have seen the ebook for sale at a higher price than the hardback version. Here's some information Neal Asher (British sci-fi author) gave me.

Generally the percentages for authors are this: HB 7 – 15% MMPB 6 – 12% whilst on an ebook it is about 20%, so yes, the author is getting a bit more. Oh and remember, when a book is sold at a discount of say 20% that comes off of the percentage the author gets. Incidentally, retailers get the books from the publisher for as much as 50% off the cover price.

[Shaggy]

Originally Posted by dmaul1114

But that's on publishers to not rape authors on e-books

Oh, they would never do that.

Heck, as e-books go big time established authors won't even really need publishers any more.

Makes you wonder if high prices and DRM are an attempt to make the eBook niche go away. Kill off your future competition before it goes big-time.

I've been saying for years that the RIAAs lawsuit campaign isn't being done because they're worried about lost sales, it's because they're terrified that artists will figure out that P2P can replace them.