Publishers still missing the point on e-book prices

[stonetools]

Today, I was able to score three well regarded history books by Stephen Ambrose for $1.99 each-80 percent off the listed price. I also downloaded another free Konrath novel. So far this month, 16 books for $12.
Yup, this ebook pricing is unaffordable! It's impossible to find discounts any longer, because publishers don't discount.....

Edited- thanks to BN Free Fridays, now 17 books.

[HarryT]

Originally Posted by Nyssa

If any book were £4.85 which I believe is the conversion for $7.50 then I would consider it, but at £7.50 which I believe converts to $11.60 - No way!

It's still less than the standard UK paperback price, which is £7.99

[pdurrant]

Originally Posted by HarryT

It's still less than the standard UK paperback price, which is £7.99

As I've mentioned before, I think a reasonable ebook price for something that's out in paperback for £7.99 is about £3.99, certainly less than £4.99.

Reasoning: paperback discount to retails is between 50 and 60%. Say 55%. Cost of production of paperback (when including returns) is probably £1.00 per copy sold. Paperback royalty is usually 8% rising to 10% or even 12%, but let's say 8%.

Income from paperback sale = 45% of £7.99 = £3.60
Less cost of printing/storing/shipping/returns PER COPY SOLD: £1.00
Less author's royalty: £0.64
Gross profit per paperback: £1.94

For ebooks, retail discount is 30%. VAT is 15%.
Income from ebook sale at £3.99: £2.43
Less author's royalty: £0.61 (25% of net)
Gross profit per ebook: £1.82

[HarryT]

Oh, I agree, and it would have to be a book that I really wanted for me to pay that much. This week, though, I have paid £8.85 each for four James Herriot eBooks, simply because they are among my favourite books, and I've been waiting an eternity for them to appear as eBooks.

[ATDrake]

Originally Posted by stonetools

It's impossible to find discounts any longer, because publishers don't discount.....

Just so you know, those three Stephen Ambrose* books are not being offered by the original Agency 6 publishers, but by a small imprint** which looks like a DTP publisher, which means that Amazon can at their discretion discount those particular books however much they like regardless of what the publisher sets as suggested retail.

* Who, incidentally, happens to be if not an outright plagiarist, then extremely sloppy in properly crediting his sources for re-arranging their words since his university days and sometimes riddled with factual errors.

This did not stop me from enjoying Band of Brothers when I read it, but due to the above lack of quality control, I'd consider his works library reads only and take what he writes with a decided grain of salt for its purported historical value.

** PREMIER DIGITAL PUBLISHING [allcaps theirs] also carry some of Piers Anthony's books, which they've put into the Prime Lending Library program which I understand all the Big 6 publishers have refused to participate in.

Mind you, their prices are still fairly low, but this just bears out the OP article's point about publishers perhaps doing better by setting lower price points than previously expected.

[sabredog]

Originally Posted by stonetools

Today, I was able to score three well regarded history books by Stephen Ambrose for $1.99 each-80 percent off the listed price. I also downloaded another free Konrath novel. So far this month, 16 books for $12.
Yup, this ebook pricing is unaffordable! It's impossible to find discounts any longer, because publishers don't discount.....

Edited- thanks to BN Free Fridays, now 17 books.

No one said you cannot buy discounted books. But most often, they are geo restricted.

In the main, new release ebooks, ie next in a series . are full price, comparable to a hardcover. RM Meluch's next book in the Merrimack series is a case in point there, at $14.99. Each new ebook release of the Starfist series retailed for $32.99.

Discounts will always be available and ' take advantage of them if I can. BUT, I liken that to heavily discounted remainder piles outside a brick and tile bookshop.

[Nyssa]

Originally Posted by HarryT

It's still less than the standard UK paperback price, which is £7.99

$12.35 for a paperback!! Oh, no no no no no.

[sabredog]

Originally Posted by Nyssa

$12.35 for a paperback!! Oh, no no no no no.

That is cheaper than Australia. A paperback costs AU$20 here

[Fbone]

Paperback prices in the US have hit $9.99 plus tax. Brings the total to just shy of $12.35.

[Nyssa]

Originally Posted by Fbone

Paperback prices in the US have hit $9.99 plus tax. Brings the total to just shy of $12.35.

Well that shows how long its been since I bought a new paperback in store. My last purchases have either been through Amazon, with no tax, or from a used book store.


The most I remember paying is $8.99 plus tax, so about $9.63.

Actually even at $9.99 the total would be approx. $10.70, which is still expensive as far as I'm concerned.

[Elfwreck]

Originally Posted by Andrew H.

Sorry, no. Even cursory research will show you that 70-80% of books don't earn back their advance. This is well understood and has been the case for many years.

Books that don't make back their advance are still usually profitable for the publishers. The Myth of the Unearned Advance goes into details.

Assumptions:
Advance paid to author: $10,000
Retail price: $13.00 (paperback)
Net price: $6.50 (this is what the publisher receives when they sell the book – to dealers, big box retailers, distributors, etc. )
Copies sold: 10,000

Scenario one: Author earns 14% of net for each book sold. ($6.50 net x 14% royalty x 10,000 sold)
Thus, after selling 10,000 copies the author has earned $9,100.
Leaving $900 of the advance unearned.
...
Fixed costs
Editorial expense: $8,000 (includes all stages of the editorial process)
Design (typesetting/cover): $4,000
Printing and warehousing: $15,000 (the approximate cost of printing 12,000 copies)
Marketing and PR: $10,000 (an average of $1 per book)
Administrative costs: $13,000 (20% of the net revenue)
Advance paid to author: $10,000
TOTAL COSTS: $60,000

Profit for the Publisher: $5,000 (or 7.7% of revenue before tax)
or the $65,000 in revenue minus the $60,000 of total costs.
...
Scenario one – (with the unearned advance still on the books) has a profit of $5,000 for the publisher.

With those numbers, my quick calculations say the publisher loses money if they sell less than ~5400 copies. Of course, the publisher wants profit, not just expense-covering, or it's not worth printing... but they're not *losing* money, even if the author doesn't get anywhere near the advance, as long as they hit their cover-expenses level, which is substantially lower than when the advance starts to pay out.

[Fbone]

Recalculate the "Net price" with the 55% discount that Ingram, B&T and Amazon are demanding and see how the final numbers look.

[Blue Tyson]

Originally Posted by sabredog

That is cheaper than Australia. A paperback costs AU$20 here

Some of those will be $35, though, probably.

[Fbone]

Originally Posted by sabredog

That is cheaper than Australia. A paperback costs AU$20 here

And what is minimum wage in Australia?

[sabredog]

Originally Posted by Fbone

And what is minimum wage in Australia?

What is hell does that have to do with the price of a paperback?

Blue Tyson has published some damning reports about how the big publishing companies are ripping off customers here in Australia compared to overseas markets.

You might want to read those on Teleread and here on Mobileread.