Simon & Schuster is delaying ebooks by four months

[kindlekitten]

haha! awesome!

[Daithi]

[Regarding my post that ebooks were substancially cheaper than hardcovers.]

Originally Posted by charleski

*snip* and frankly this myth has been debunked several times on this forum and elsewhere. eBooks do represent a saving on costs and overheads, but not nearly to the degree that some people seem to imagine, and much of the saving comes at the distribution and retail end, which is covered by the 55% the publisher never sees.

This "myth" has NOT been debunked. The fact is that printing costs run about 20% of a book's costs, returns are another 20% cost, and distribution (BTW, NOT paid by retailer) is 10%+. Ebooks are absolutely substancially cheaper than hardcovers and even paperbacks. There is no doubt in my mind.

I really don't understand why publishers are not concentrating on growing the high margin side of their business. This is business 101.

[rhadin]

Originally Posted by kennyc

I don't believe it. With printing, distribution, stocking, returns. I don't believe it for a second.

This seems to be a common mantra: "I don't believe it." I know it is nearly impossible to change a belief. All I can retort is that I have worked in the publishing industry for 25 years, including a stint as a publisher, and I do believe it.

[kindlekitten]

could you give us a break down on a book, say such as the latest King novel to market?

[rhadin]

Originally Posted by Daithi

This "myth" has NOT been debunked. The fact is that printing costs run about 20% of a book's costs, returns are another 20% cost, and distribution (BTW, NOT paid by retailer) is 10%+. Ebooks are absolutely substancially cheaper than hardcovers and even paperbacks. There is no doubt in my mind.

Maybe the problem is one of numbers (): arguing the costs of a single ebook as opposed to a complete product line. For example, Simon & Schuster publishes 2,000 titles each year so although the cost to produce a single ebook might be inexpensive compared to the cost of producing a single pbook, that equation changes when the costs of producing 2,000 books is considered. Something has to subsidize the costs of the book that sells 500 copies and is, economically speaking, a failure/disaster. If every title sold 20,000+ copies the parameters of the argument might change, but few titles of all the titles published reach such a plateau. And most books (if I had to guess, I'd guesstimate at least 75%) do not break even, let alone earn a profit.

The other "fallacy" is the attempt to impose two disparate economic models on a single product. You can't divorce ebooks from pbooks until we reach the day, which is still years away, when there are no pbooks, just ebooks. Until then both ebooks and pbooks need to fit within a single economic model.

[kindlekitten]

it sounds like there are an awful lot of ifs, ands, thens and so on to support the equitable pbook argument. as far as this statement; Until then both ebooks and pbooks need to fit within a single economic model., goes, I think it has already been proven that there is a failure in that logic line.

if nothing else, take it from the environmental impact approach and look at all of the fines, penalties, negative impact and so on that are involved with paper production. that in itself, once ebook publications become the norm has to be HUGE! I think every publisher who continues to dig their heels in over this should be forced to live downwind of a puplmill until they get their act together

[rhadin]

Originally Posted by kindlekitten

could you give us a break down on a book, say such as the latest King novel to market?

I'm not sure who this question is addressed to, and I doubt anyone here knows the marketing budget for the King book, although I can assure you it was hundreds of thousands of dollars if not several million dollars. I know that when I prepared a marketing budget for a book that had no chance of selling anything close to what King's book will sell, the minimum budget to get reviewers, distributors, and retailers to even consider the book was $50,000 -- and that was in the early 1990s. Marketing costs ran 5 to 10 times -- and sometimes more -- the print costs (and we haven't even gotten into editorial costs, nonprinter production costs, acquisition costs, etc.). On one book we did, our out of pocket costs ran more than $200,000 and the number of copies sold ended up being less than 3,000, with a suggested retail price of $29.95 and thus a wholesale price of $14.97.

Somewhere over the entire product line those losses have to be made up.

[rhadin]

Originally Posted by kindlekitten

it sounds like there are an awful lot of ifs, ands, thens and so on to support the equitable pbook argument. as far as this statement; Until then both ebooks and pbooks need to fit within a single economic model., goes, I think it has already been proven that there is a failure in that logic line.

You can't divorce the Stephen King pbook from the Stephen King ebook in your economic model. They must fit together. They are the same product in just a different format. Consequently, you cannot act as if ebook pricing can be established using economic model A and the pbook pricing using model B. There isn't a failure in the logic line; there is a failure to accept that the products are not divorceable from each other.

The King books are a poor choice to use for the argument over pricing because of its high sales volume. It is an atypical product, just like the Harry Potter books were atypical for children's books. A better subject for the debate are the low and mid list books whose sales are more usual for publishing.

Originally Posted by kindlekitten

if nothing else, take it from the environmental impact approach and look at all of the fines, penalties, negative impact and so on that are involved with paper production. that in itself, once ebook publications become the norm has to be HUGE! I think every publisher who continues to dig their heels in over this should be forced to live downwind of a puplmill until they get their act together

You can't take it from the environmental perspective unless you are to suddenly stop creating pbooks altogether and only create ebooks, something that is no more realistic than saying you and everyone else should heat and cool their home with wind power starting tomorrow and all other forms of energy will cease effective tomorrow. The switch from p to e will take time and until that occurs, you have to look at a book as a single product in various forms, not each form as a standalone proposition.

[kindlekitten]

Originally Posted by rhadin

You can't divorce the Stephen King pbook from the Stephen King ebook in your economic model. They must fit together. They are the same product in just a different format. Consequently, you cannot act as if ebook pricing can be established using economic model A and the pbook pricing using model B. There isn't a failure in the logic line; there is a failure to accept that the products are not divorceable from each other.

The King books are a poor choice to use for the argument over pricing because of its high sales volume. It is an atypical product, just like the Harry Potter books were atypical for children's books. A better subject for the debate are the low and mid list books whose sales are more usual for publishing.



You can't take it from the environmental perspective unless you are to suddenly stop creating pbooks altogether and only create ebooks, something that is no more realistic than saying you and everyone else should heat and cool their home with wind power starting tomorrow and all other forms of energy will cease effective tomorrow. The switch from p to e will take time and until that occurs, you have to look at a book as a single product in various forms, not each form as a standalone proposition.

there's a hell of a lot of "cant's" in there that are being conquered everyday. your arguments sound like hackneyed business school arguments from people unwilling to change. this is a new market and needs to be treated as such. I would think an intelligent publisher would start up a new division just for ebooks and let that ball roll and see what happens. it's a new tomorrow and thinking MUST change!

[Harmon]

Originally Posted by kennyc

I don't believe it. With printing, distribution, stocking, returns. I don't believe it for a second.

You are a publisher. You gross 5 dollars for each volume sold. Assume that you can sell the same number of books in either pbook or ebook form.

You can ship 100 pbook volumes to a reseller and get paid in advance to the tune of, say, half the 5 buck price, or $250. Later, when only 40 of the books sell, it turns out that the reseller only owes you $200 for the books actually sold. The rest are returned to you and you have to refund the seller 50 bucks. But of course, in the meanwhile, you've had the whole $250 to work with from the very beginning of the transaction.

Or you can authorize the reseller to sell the ebook. You get 5 bucks each time an ebook sells, and eventually, over time, you get $200.

So, do you want 250 now, repay 50 later, or 5 bucks a sale as the sales occur? Take into account that you have to pay your staff now, not when the sales occur, so if you have a slow seller, you are going to have to borrow money to pay your costs under the ebook system, whereas the resellers are advancing you that money under the pbook system.

Ebook publishing requires publishers to revamp their financing model, and in a detrimental fashion. Maybe this explains the 4 month lag time - it's not that they want to make Big Bucks off of the hardback sales, it's that they want to continue to get their upfront cash from the resellers, and they can't get upfront cash from ebooks.

[kennyc]

Originally Posted by rhadin

This seems to be a common mantra: "I don't believe it." I know it is nearly impossible to change a belief. All I can retort is that I have worked in the publishing industry for 25 years, including a stint as a publisher, and I do believe it.

Then prove it. I've seen nothing here or anywhere else that agrees with you.

[kennyc]

Originally Posted by rhadin

Maybe the problem is one of numbers (): arguing the costs of a single ebook as opposed to a complete product line. For example, Simon & Schuster publishes 2,000 titles each year so although the cost to produce a single ebook might be inexpensive compared to the cost of producing a single pbook, that equation changes when the costs of producing 2,000 books is considered. Something has to subsidize the costs of the book that sells 500 copies and is, economically speaking, a failure/disaster. If every title sold 20,000+ copies the parameters of the argument might change, but few titles of all the titles published reach such a plateau. And most books (if I had to guess, I'd guesstimate at least 75%) do not break even, let alone earn a profit.

The other "fallacy" is the attempt to impose two disparate economic models on a single product. You can't divorce ebooks from pbooks until we reach the day, which is still years away, when there are no pbooks, just ebooks. Until then both ebooks and pbooks need to fit within a single economic model.

I don't even want to discuss the business as a whole, there is no need to. Because then you start talking about loss leaders and etc. etc.

Keep it simple compare apples to apples, oranges to oranges, one pbook to one ebook.

And yes you can divorce them if you are interested in a true comparison and the results apply across the board.

[kennyc]

Originally Posted by rhadin

...

Somewhere over the entire product line those losses have to be made up.

Again. I don't care. Compare apples to apples.

[kennyc]

Originally Posted by Harmon

You are a publisher. You gross 5 dollars for each volume sold. Assume that you can sell the same number of books in either pbook or ebook form.

You can ship 100 pbook volumes to a reseller and get paid in advance to the tune of, say, half the 5 buck price, or $250. Later, when only 40 of the books sell, it turns out that the reseller only owes you $200 for the books actually sold. The rest are returned to you and you have to refund the seller 50 bucks. But of course, in the meanwhile, you've had the whole $250 to work with from the very beginning of the transaction.

Or you can authorize the reseller to sell the ebook. You get 5 bucks each time an ebook sells, and eventually, over time, you get $200.

So, do you want 250 now, repay 50 later, or 5 bucks a sale as the sales occur? Take into account that you have to pay your staff now, not when the sales occur, so if you have a slow seller, you are going to have to borrow money to pay your costs under the ebook system, whereas the resellers are advancing you that money under the pbook system.

Ebook publishing requires publishers to revamp their financing model, and in a detrimental fashion. Maybe this explains the 4 month lag time - it's not that they want to make Big Bucks off of the hardback sales, it's that they want to continue to get their upfront cash from the resellers, and they can't get upfront cash from ebooks.

Yes and no. You are right about the upfront money perhaps, but it depends on the terms the retailer has with the publisher --- perhaps 90 days, which means they could get the books and not have to pay for them and perhaps even return them before they had to.

The costs and the distribution mechanism are critical. There are shipping costs, warehouse costs etc. You can say those are all built in but the are going to vary from book to book and the equivalent costs for the ebook are tiny in comparison. There is no retail sales people etc. Just an on-line presence. No storage costs no production costs (minimal at least) so the profit on the ebook is perhaps 2-10 times more than for the pbook. In your example you are assuming the profit is the same. It's not.

[Daithi]

Originally Posted by rhadin

The other "fallacy" is the attempt to impose two disparate economic models on a single product. You can't divorce ebooks from pbooks until we reach the day, which is still years away, when there are no pbooks, just ebooks. Until then both ebooks and pbooks need to fit within a single economic model.

I didn't divorce ebooks from pbooks. Quite the opposite, as I specifically assumed that both ebooks and pbooks were both being printed. I just pointed out that if you are going to produce both, you should focus on the business line that has the highest margin -- ebooks. Furthermore, I believe the logic behind my argument is valid whether it is one title being produced or 20,000.