Cheaper e-books will kill us, says publisher

[lilac_jive]

What it boils down to is this: Waaa I dun wanna spend more money to make more money!

[zyzzyva57]

Why are Kindle books half the price?

Why do big publishers and authors not realize how much money they miss for those non-Kindle owners

[pilotbob]

Originally Posted by zyzzyva57

Why are Kindle books half the price?

Because Amazon subsidizes them. Not because the publisher likes Kindle users more.

BOb

[lilac_jive]

Originally Posted by zyzzyva57

Why are Kindle books half the price?

Why do big publishers and authors not realize how much money they miss for those non-Kindle owners

Amazon takes a loss on the 9.99 NYT bestsellers.

[Xenophon]

Originally Posted by kacir

Dear Mr. Justus

Thank you for a valuable insight.

Please have a look at www.Baen.com
They have managed to sell DRM free books for very atractive prices for years.
<SNIP>

You missed a couple of things on that one: And make money quite nicely on them. And have eSales that, although running 2nd to U.S. paper sales, exceed all non-U.S. paper sales combined.

All this while charging (in the internal accounting sense, that is) each e-book sold its pro-rata share of the fixed costs, and paying authors a per-copy royalty that is better than m.m.paperback (but slightly less than hardcover).

And those "very attractive prices" range from $6.00 per book (quantity one) to $1.88 per book (in some bundles -- 8 books for $15). And the books are available electronically before paper publication, and never go out of print.

Xenophon

[DixieGal]

Hey you guys, as much as I agree with all of the above comments, I must play devil's advocate here. Us epurchasers are a tiny fraction of the book buying population. Until there are more ebooks being purchased than pbooks, it would be an added (although minimal) expense to offer new titles in eformats, and from the publishers' points of view, they might feel it is reasonable to sell ebooks at the same or slightly higher price as pbooks, as if they were considered "special" such as large print or something.

We are a tiny fraction of the book buying population, but we are a very vocal sub-population. Until there are many many more ebook buyers clamoring for significantly reduced prices for ebooks, it will be a slow struggle to convince mainstream publishers to get on board.

One thing that could help our cause would be a standard universal format. Mobi, eReader, LRF, whatever, as long as it is one unified format. At that point, publishers would have to acknowledge the growing demand for ebooks and the ease of supplying content at reduced prices. Instead of several formats, only one format would have to be handcrafted, which seems to be the point they are using to justify higher costs.

Meanwhile, I just wanna read, and I'll shop around for the best price on every book I purchase. Eventually, I hope those booksellers who are able to provide content at the best prices and easiest downloads will rise to the top.

[cstross]

Originally Posted by Alexander Turcic

Wow. This interview is not for the faint of heart. Anybody care to bite at this?

Yes.

I'm afraid that this is exactly how the major publishers perceive the ebook market.

Baen are an anomaly: eight people in the company, a [founding -- RIP] CEO with a whim of iron, and a technically ept geek to run the ebook subsidiary. More importantly, Baen were an independent -- 33% owned by Tor, but otherwise privately owned by Jim plus friends and family. That's why they've persistently run rings around the other US SF publishers. Tor is part of Macmillan, Ace are part of Penguin, and in those corporations policy is set at a global, multi-publisher level, by people who don't have a clue about the technology.

(I have heard one editor lamenting how, when trying to hook up with an ebook publisher, his house's lawyers had sent them draft legal contract boilerplate that included terms governing the return of stripped covers for credit -- with the word "e-book" slipped in to replace "paperback".)

[cstross]

Originally Posted by pilotbob

wow just wow. This only demonstrates to me how clueless this guy (industry?) is about technology.

It is "comparable" cost to set up a physical warehouse as it is to set up a digital infrastructure?

My understanding is that Hachette spent something like EUR 16 million on their ebook virtual warehouse infrastructure.

Because they treat vendors like Fictionwise as virtual wholesale customers, and have to handle accounting for ebook sales exactly the same way they would handle dead tree sales, and in turn allocate royalty payments accordingly. And stick DRM checksums on each outgoing ebook copy; sell 5000 copies, ship 5000 files (which each have to be generated separately on an encryption server).

They've done their best to port their existing business model to the electronic world, because nobody has the authority to say "this business model is obsolete -- here's a completely new one" (not merely because it would screw their career if they made a wrong call, but because there's internal corporate resistance to it: lots of people will lose their jobs if the old business model is junked).

[pilotbob]

Originally Posted by DixieGal

We are a tiny fraction of the book buying population, but we are a very vocal sub-population. Until there are many many more ebook buyers clamoring for significantly reduced prices for ebooks, it will be a slow struggle to convince mainstream publishers to get on board.

You only have to look at the print media of newspapers and magazies. I am sure their CEOs thought that people getting news on the internet was a niche thing. It is such a small market... we're good to go.

Now suddenly the whole industry is in trouble. But, those that got on line early are in a good position.

With ebook sales doubling year over year it doesn't take Charlie Epps to figure out that a geometric progressions means that in a short amount of time ebook sales will be larger than pbook sales. It has happened with digital music, it is now just about there for digital movies... The publishing industry is walking around with EYES WIDE SHUT.

BOb

[yagiz]

I work in software development and half of our business come from very large online retailers. There's no doubt that there's an upfront investment in order to sell something online. But I seriously doubt that the price is comparable to setting up a printing house.

I appreciate that, probably, most of the books are designed as PDFs or similar format for paper printing. Therefore, there must be some additional cost in converting and creating a new layout. However this still couldn't justify a similar price.

I'm sad (for the people who are in this industry) to think that their jobs in publishing is shifting from paper-based towards digital. But so are the job and market opportunities.

[BlackVoid]

These guys should go out of business.

[Mr. Goodbar]

Originally Posted by DixieGal

Hey you guys, as much as I agree with all of the above comments, I must play devil's advocate here. Us epurchasers are a tiny fraction of the book buying population. Until there are more ebooks being purchased than pbooks, it would be an added (although minimal) expense to offer new titles in eformats, and from the publishers' points of view, they might feel it is reasonable to sell ebooks at the same or slightly higher price as pbooks, as if they were considered "special" such as large print or something.

We are a tiny fraction of the book buying population, but we are a very vocal sub-population. Until there are many many more ebook buyers clamoring for significantly reduced prices for ebooks, it will be a slow struggle to convince mainstream publishers to get on board.

One thing that could help our cause would be a standard universal format. Mobi, eReader, LRF, whatever, as long as it is one unified format. At that point, publishers would have to acknowledge the growing demand for ebooks and the ease of supplying content at reduced prices. Instead of several formats, only one format would have to be handcrafted, which seems to be the point they are using to justify higher costs.

Meanwhile, I just wanna read, and I'll shop around for the best price on every book I purchase. Eventually, I hope those booksellers who are able to provide content at the best prices and easiest downloads will rise to the top.

I agree that we are a small and probably vocal group, however the same argument can be made in any business transformation. Horses to cars, mainframes to distributed computing, newspapers to the internet etc. Good companies see where things are going and develop plans to adapt.

[Shaggy]

Originally Posted by pilotbob

wow just wow. This only demonstrates to me how clueless this guy (industry?) is about technology.

That was my first thought. He's either clueless, or blatantly lying. I wouldn't be surprised if the publishers are hoping that they can keep the extra savings, rather than pass them on to the customers. Either that or they're afraid of ebooks and are trying to kill them before they become mainstream.

It may be a similar issue to the music industry. I suspect the RIAA isn't trying to sue people because they care about the individual infringers. What they're really trying to do is kill P2P sharing through intimidation/fear because they consider it a competitor. Their real fear is that when it becomes easy for musicians to promote/distribute their own material on the internet, the RIAA companies won't be necessary anymore. They don't really care about Joe Schmoe distributing a couple files, but they're terrified that Metallica will decide to go independent.

It's probably not quite as bad with publishers, but they may be afraid of a time when their function is reduced to being editors.

[pilotbob]

Originally Posted by Shaggy

I suspect the RIAA isn't trying to sue people because they care about the individual infringers. What they're really trying to do is kill P2P sharing through intimidation/fear because they consider it a competitor.

The RIAA don't care about copyright, or the artists rights. They only care about revenue... and this is why they sue people. The RIAA is trying to keep themselves relevant in the eyes of the industry.

BOb

[RWood]

Ebooks are going to be mainstream. It is simply a question of time. Will pbooks vanish? Not completely.

It all boils down to when, not will ebooks replace pbooks as the main form of publishing.