Publishers still missing the point on e-book prices

[spindlegirl]

Originally Posted by HansTWN

Unlike with phone or tablet apps, I am sure that nobody fills their new reader with new books right away. Probably they start loading old books first, or try downloading a few free ones? If the reader was a gift they might take some time to figure things out. There will be a time lag before they start buying.

I'm one of the rare exceptions then. I got my first Kobo in April, and greedily gulped all the PG, Smashwords, and MR freebies to stick on it. As of yet, I have never owned a phone or tablet (not a mobile phone anyway), and so a book reader is probably, a "cute" little nicety by comparison to those growing up in the texting and smartphone generation.

I now have a Sony reader and it didn't take me long to stick all my calibre library onto it. I think e-readers are amazingly cool and I know a lot of other people my age (mid 40s) who aren't as impressed because it doesn't do all the stuff Ipod touches do and it's black and white.

I have no interest in Angry Birds or Texting, but give me lots of stuff to read all in one little thing and I am happy.

I also agree with you in your other post here where you said:

Originally Posted by HansTWN

Sure, some people may not think much about prices now, but when they read about it on this forum or elsewhere they might wake up -- and slowly there will be more and more of us. And this is what you fear and what we want to happen. So yes, people will continue to complain, get used to it.

I can understand how some people are tired of reading about people's disapproval of prices, but for those who do disapprove, it's a relief to see that a great many consumers also agree.

[Elfwreck]

Originally Posted by HansTWN

Unlike with phone or tablet apps, I am sure that nobody fills their new reader with new books right away.

Mostly, nobody fills their reader with books, ever. Even the older, smaller ones dealing with internal memory only can hold a ridiculous number of books. Once you get into memory cards, you have the ability to carry enough books to crash the OS or at least make them totally unnavigable.

With an average novel at about 500kb (with cover art), a 2-gb card can carry about 4000 ebooks. Without cover art, they can be 200kb each... 10,000 book library on one small card. And that's without getting into short stories at 75kb each.

(Sorry; just tangenting. Not relevant to discussion. I'm just constantly amazed at the sheer amount of TEXT I can carry around in my purse these days.)

[Fbone]

Originally Posted by TechnoCat

Suppose your casual approach to correlation was applied to intelligence correlated to patents and companies founded - would that seem fair and legitimate to you?

I don't possess the intelligence necessary to comprehend this statement.

[Greg Anos]

Originally Posted by Elfwreck

Mostly, nobody fills their reader with books, ever. Even the older, smaller ones dealing with internal memory only can hold a ridiculous number of books. Once you get into memory cards, you have the ability to carry enough books to crash the OS or at least make them totally unnavigable.

With an average novel at about 500kb (with cover art), a 2-gb card can carry about 4000 ebooks. Without cover art, they can be 200kb each... 10,000 book library on one small card. And that's without getting into short stories at 75kb each.

(Sorry; just tangenting. Not relevant to discussion. I'm just constantly amazed at the sheer amount of TEXT I can carry around in my purse these days.)

Ain't it GRAND, Elfwreck!!!!
(And if they had been willing to support SDHC, there would have been 32GB chips. 160,000 books on a chip, anyone?)

[elcreative]

Originally Posted by Ralph Sir Edward

Ain't it GRAND, Elfwreck!!!!
(And if they had been willing to support SDHC, there would have been 32GB chips. 160,000 books on a chip, anyone?)

But they do support SDHC... well some certainly do, all Sonys have since 505 (after firmware upgrade) through the x50s (don't know about the new one as don't have it).

[EricLandes]

Originally Posted by HansTWN

Of course this author is not interested in having lower prices.

This perfectly illustrates a point I haven't seen made in this entire thread (and I've read nearly all of it) that I think will prove very important in less than two years.

Authors shouldn't care less what their books sell for. They should care about how much revenue is generated. Their royalties are percentages of revenue, not a strict $/copy model.

Early on in this thread, there was a conversation about how obviously people are paying $12.99 and up for agency-priced ebooks because of the growth we're seeing in the ebook industry.

What we'll never know (because that portion of the ereader adoption curve is past) is how much the growth would have been without agency pricing. I haven't done the research, but it would be very interesting to see how Random House ebook numbers looked versus, say, Penguin before March 2011 (when RH went agency).

Nearly all the costs in producing an eBook are generated before the book goes on sale. The cost per sale after that is essentially zero. When putting a book on sale, the publisher's job should be to price it at a point that maximizes revenue. This has the best chance of recouping the production costs and has the side effect of generating the most income for the author.

This is not the case for paper. There are significant per-sale costs for paper which put a floor on the price that can be charged and still make a profit.

The problem with the industry right now is ebook sale percentages aren't high enough for ebooks to drive their own market freely. Paper still rules (at 80+% of revenue), and publishers can't afford to undercut their own product. So, while a $4.99 price might maximize the revenue for a particular author's ebooks, that price will destroy the market for a $14.99 paperback (not mass-market) of the exact same book.

Self-published authors don't have these paper chains weighing them down. So they can sell at $2.99 (the cheapest price to gain the maximum percentage revenue on Amazon) and not worry about losing money because after they've recouped costs, it's ALL profit. Indie publishers have leaner fixed costs outside of production, so they can price things cheaper and still come out okay.

The changes in the industry have only just begun. We'll see some major shifts when ebook revenue hits 40-45% of total. Then I'm betting you'll see one major publisher flip from paper-first to ebook-first with paper only for books that "deserve" it.

[HansTWN]

To avoid any misunderstandings -- I don't believe it makes sense to price the latest bestseller at $2.99 or 5.99. But the problem is the agency model, which amounts to price fixing and led to price increases of almost 50%.

[leebase]

Sure, it lead to price increases...because Amazon had priced the entire NYT Best Sellers list below cost in order to monopolize the ebook market. Which they pretty much succeeded in doing.

The agency ebook pricing is a reduction in what they were asking for hard backs.

Lee

[HansTWN]

Originally Posted by leebase

Sure, it lead to price increases...because Amazon had priced the entire NYT Best Sellers list below cost in order to monopolize the ebook market. Which they pretty much succeeded in doing.

The agency ebook pricing is a reduction in what they were asking for hard backs.

Lee

You forgot to add "anyway", meaning "Which is what Amazon pretty much succeeded in doing, anyway". The agency agreement didn't stop them, it was just a kick in the consumers' behinds. Seems most people will buy from Amazon unless Amazon is more expensive (more options, better service, better website).

[leebase]

Originally Posted by HansTWN

You forgot to add "anyway", meaning "Which is what Amazon pretty much succeeded in doing, anyway". The agency agreement didn't stop them, it was just a kick in the consumers' behinds. Seems most people will buy from Amazon unless Amazon is more expensive (more options, better service, better website).

Or rather "Amazon had ALREADY" achieved it's near monopoly position as the Publishers acted so late.

The consumers weren't shafted. The consumers had been mislead by Amazon as to what the true price of the product was. Of COURSE consumers always want cheaper prices. That doesn't mean a company that's providing merchandise for cheap is doing the consumers a favor.

Big Co. comes into a small town and sells items for a loss untill all Small Co competitors are put out of business. Then Big Co. is free to raise prices.



Lee

[tubemonkey]

Originally Posted by leebase

Big Co. comes into a small town and sells items for a loss untill all Small Co competitors are put out of business. Then Big Co. is free to raise prices.

Does that mean Walmart charges higher prices in smaller cities than they do in larger ones?

[tubemonkey]

Originally Posted by HansTWN

Seems most people will buy from Amazon unless Amazon is more expensive (more options, better service, better website).

Frequently, I'll choose Amazon over Best Buy, Target, Walmart or other local stores for those reasons. Saves me a trip to the store.

[JD Gumby]

Originally Posted by tubemonkey

Does that mean Walmart charges higher prices in smaller cities than they do in larger ones?

Yes, but only to the extent that they have to cover employee costs and the cost of shipping with lower volumes of merchandise at those stores (not too much difference in staffing levels between their average stores and their smallest stores, and the cost of shipping a half-full truck is the same as a full truck, really, and sometimes more if those stores are away from the major highways and population concentrations).

[tubemonkey]

Originally Posted by JD Gumby

Yes, but only to the extent that they have to cover employee costs and the cost of shipping with lower volumes of merchandise at those stores (not too much difference in staffing levels between their average stores and their smallest stores, and the cost of shipping a half-full truck is the same as a full truck, really, and sometimes more if those stores are away from the major highways and population concentrations).

Then I'll only shop in big city Walmarts

[leebase]

I left out specific company names to deal with the topic. Price dumping is a predatory practice and is not in the best interest of the consumer. It's not when the subject at hand is foreign steel, it's not when it's ebooks.

Lee