Article: Is Someone Fixing Ebook prices?

[Elfwreck]

At my most charitable, I can be happy that more people are becoming aware of the problems with the ebook industries.

However, paper books have always been prone to "fixed" prices: there's a price printing on the cover, and that's what you can expect to pay. Sometimes you can find a sale, sometimes your local shop has discounts, but mostly, that's the price, especially for paperbacks.

Is he making noise that B&N, Borders, and Powell's all sell the same physical book at the same price? Of course not.

He's *almost* discovered the real issue, which is the utter lack of substance to the prices. We expect paper books to cost the same anywhere, because we assume they took (roughly) the same costs to get there: printing, packaging, shipping, inventory, storage, shelving... those add up, and the difference between the work to get a book to B&N and to get it to the college bookstore are small enough that we're not surprised at the lack of difference in price. And we're aware that every person in that chain gets a cut of the price: the paper manufacturer, the printer, the guys who stack the books onto trucks, the guy who drives it, the clerk who enters it into the store database, the college student who puts it on the shelf & later takes your money for it.

Ebooks aren't paying any of those guys, which means (1) the prices could be substantially lower for the same profits and (2) individual stores should have a lot more leeway to offer lower prices as incentives.

[kennyc]

Originally Posted by jgaiser

Sorry.. It's an Oregon thing.

Not really: http://www.derp.org/

[jgaiser]

Originally Posted by kennyc

Not really: http://www.derp.org/

Hmm??? I'm beginning to think that somebody is not using Google before thinking up fancy acronyms

[lilac_jive]

This is the derp I'm talking about
http://www.urbandictionary.com/define.php?term=derp

[leebase]

Originally Posted by Elfwreck

He's *almost* discovered the real issue, which is the utter lack of substance to the prices.

As if "cost of production" ever had much to do with pricing.

Lee

[thinkpad]

I was most interested to see if Google would better Amazon pricing. After all, Google is king of free. I also checked pricing and availability at Apple's iBookstore and the Nook store. I expected that "premium-pricing everything else" Apple would ask the most for the novella? It's $6.99, and only available for iOS, which means iPad, iPhone and iPod touch, baby. But Barnes & Noble charges more: $7.19. Not even Apple could top the Nook ebook. Google does a little better than Apple -- $6.15. Amazon: $4.79.

This is why I choose the Kindle in the first place. Broad selection and prices below $10. That's more or less changed with the agency pricing

[rogue_librarian]

Woohoo, Captain Obvious rides again! Lovely (?) article.

[murraypaul]

Originally Posted by Elfwreck

However, paper books have always been prone to "fixed" prices: there's a price printing on the cover, and that's what you can expect to pay. Sometimes you can find a sale, sometimes your local shop has discounts, but mostly, that's the price, especially for paperbacks.

Really?
Maybe at physical stores, maybe.
But online, this just isn't true.
From a quick look at Amazon, the majority of paperbacks are discounted.

[kennyc]

Originally Posted by murraypaul

Really?
Maybe at physical stores, maybe.
But online, this just isn't true.
From a quick look at Amazon, the majority of paperbacks are discounted.

And both new and used are usually available simultaneously.

[Sil_liS]

I like one comment better than the whole article:

If your book is anything like this post, even fixing its price at $0.01 won't help you.

[Kitabi]

One can blame the books published by Agency 5 for fixing but I am at a loss about the lack of price variation among other publishers - Random House and Vintage (both owned by Bertelsmann) for instance. Anytime I look at their eBooks, they are priced the same at the sellers' websites.

My suspicion is, this has to do with inventory. With pbooks, sellers have inventories which need to be cleared. Keeping inventories by staying at a fixed price has costs. This is not the case with eBooks. There are a few copies per publisher which are just being copied over and over again every time a sale is made. There are minimal costs associated with inventory (there are server storage and power costs etc). So, no eagerness to discount the books.

[abookreader]

but I am at a loss about the lack of price variation among other publishers - Random House and Vintage (both owned by Bertelsmann) for instance. Anytime I look at their eBooks, they are priced the same at the sellers' websites.

Amongst the big retailers, it is usually because somebody (Amazon, Barnes, Kobo etc) sets a price and then everybody else drops to meet it. You can even report a lower to price to Amazon and see if they'll drop to meet it. I've had moderate success ... usually within a day or two Amazon will have the same low price.

That isn't price fixing either.

[Rhynedahll]

As I understand it (from an article I read online, but did not bookmark) the big publisher's costs for ebooks are mainly overhead, not production costs.

According to that article, production is a tiny part of the price of a book. Most is taken up by the costs associated with editing, formatting, advertising, author royalty payments, etc. It doesn't matter if its paper or electronic, a mainstream book will cost X, which won't be a small number.

[Andrew H.]

Originally Posted by Elfwreck

Ebooks aren't paying any of those guys, which means (1) the prices could be substantially lower for the same profits and (2) individual stores should have a lot more leeway to offer lower prices as incentives.

Book prices aren't now and have never been (at least since the printing press) about the cost of materials.

The $20+ difference between the cost of a hardback and the cost of a paperback has almost *nothing* to do with the difference in materials, which is maybe $1. It has everything to do with the fact that people will pay more for hardbacks. Yet people don't seem to be complaining about this, despite the fact that the $15-20 difference in price between the hardback and paperback price is much larger than the price difference between ebooks and paperbacks.

Prices are set *by the market.* Which means that they are set by what people are willing to pay. They are not set according to some fixed scheme where publishers are only allowed to make a fixed profit on a book, meaning that if the costs go down, they are obligated (morally or otherwise) to drop prices so that still only make the same fixed profit. It sounds ridiculous just typing that.

Now I happen to think that most hardback-equivalent e-books should cost around $9.99. Not because I think that the comrade publishers are only entitled to a fixed profit on each book, but because I tend to think that increased sales would make up for the lack of profit per book. And so I figure that they will finally come around to this realization.

I could be wrong, of course...but if I'm right, I think that the publishers will figure this out themselves, as they have a lot more interest in maximizing their overall profit than I do.

[toddos]

Originally Posted by Andrew H.

The $20+ difference between the cost of a hardback and the cost of a paperback has almost *nothing* to do with the difference in materials, which is maybe $1. It has everything to do with the fact that people will pay more for hardbacks. Yet people don't seem to be complaining about this, despite the fact that the $15-20 difference in price between the hardback and paperback price is much larger than the price difference between ebooks and paperbacks.

Actually, the reason hardcover books are priced higher is (or was, in the past) related to materials cost -- hardcover print runs are smaller, which means that you don't get as much economy of scale nor can you amortize your other fixed cross over as many sales. That's why paperbacks are also called "mass market" books -- when a book makes it to paperback, the print run is much larger and thus the cost per book is smaller.

Ebooks are like infinite mass market -- there's 0 production cost, and you can instantly create billions of them. Thus they should never be priced higher than the average paperback and not the hardcover, despite releasing at the same time as the hardcover.