Is Publishing Doomed? JOHN B. THOMPSON with Williams Cole

[Kali Yuga]

Originally Posted by HamsterRage

The price of books is way, way higher today....

Yes. That's true of many products, as is the inverse.

The CPI is a very broad measure of a wide variety of goods. Again, since we are looking at a 40-year period, it should not be surprising in the least that Specific Commodity X may be much lower or higher than the CPI.

E.g. all it would take is a big run-up in any of the costs for a 10 year period, and voila, you've outpaced the CPI. Unless your prices have a reason to decline drastically, you'll stay above that CPI 20 more years down the road.

What commodities would you like to examine? Most non-food items have radically changed since 1970. How about coffee: $0.10 in a shop in 1970 ($0.55 in 2009 dollars). Isn't that same cup at least $1, maybe $1.50? Perhaps $2.50 and up at Starbucks?

And on the other side, the price of rice steadily declined for years (e.g. $550/ton in India in the early 70s down to $200 in 2001), and then went through the roof during the 2007/2008 global food crisis. Or, the lowest-end IBM PS/2 in 1987 (8mhz CPU -- whoooie that's fast!) was $2595, or $4836 in 2009 dollars. The highest-end was $10,895, and in 2009 dollars that's $20,304. Even if we completely disregard factors like CPU speed or HD size, a personal computer was significantly more expensive in 1987 than today -- as we might expect, given its rarity in '87 and ubiquity today.

And of course there are issues such as how often the "bucket" of goods used to compile the CPI is updated, how it differs from other indexes that focus on raw goods, or producer's prices, or....

Using the CPI as a yardstick for one specific commodity is like fumigating your whole house just to kill one mosquito.

Originally Posted by HamsterRage

That's not really a fair comparison.

There are almost no "fair" comparisons, when you're looking at 40 years of price changes, especially if you aren't factoring in changes in wages.

Originally Posted by HamsterRage

I did check for industry averages, and the average price of a car in 1970 was $3,900 or $22,400 in 2010 dollars....

I hate to quibble, but....

http://www1.eere.energy.gov/vehicles...t_fotw219.html

In year 2000 dollars, a new car in 1970 = $15k. In 2001, $21k. It hasn't changed much since.

I concur the Mustang is a highly specific example, but a) I don't think I'm that far off, and b) the more general point is that it is downright uncommon for any commodity to peg to the CPI.

Originally Posted by HamsterRage

Books, on the other hand, haven't improved in any way that I can detect over the years.

They are produced faster, the image quality is significantly better (looked at a 70s art book lately?), chain stores barely existed in the 70s, retailers are clambering all over each other to offer free shipping....

It's not the same type of change, but the reality is that almost no non-food commodity has avoided alteration since 1970. (And even food has radically changed, due to subsidies, factory farming, GM, improved yield, globalization....)

Originally Posted by HamsterRage

For myself, I've always figured that people don't bitch too much about the price of paper books because they know that they will eventually be able to get everything at half the cover price in a used book store, or borrowed from friends (or shared with friends).

Wait, people don't bitch about the price of paper books?!? Who knew?

The real salve in that aspect is that the big box retailers are often treating highly popular books as loss leaders and slashing the daylights out of the cover prices just to get bodies in the door. E.g. people think of new hardcovers as costing them $12.50 instead of the $25 cover price.

[HamsterRage]

Originally Posted by Kali Yuga

Yes. That's true of many products, as is the inverse.

The CPI is a very broad measure of a wide variety of goods. Again, since we are looking at a 40-year period, it should not be surprising in the least that Specific Commodity X may be much lower or higher than the CPI.

E.g. all it would take is a big run-up in any of the costs for a 10 year period, and voila, you've outpaced the CPI. Unless your prices have a reason to decline drastically, you'll stay above that CPI 20 more years down the road.

Check. You'll see that books have outstripped CPI for virtually any time period you care to pick over that 40 year time span. So it's not some short term anomaly that happened decades ago.

What commodities would you like to examine? Most non-food items have radically changed since 1970. How about coffee: $0.10 in a shop in 1970 ($0.55 in 2009 dollars). Isn't that same cup at least $1, maybe $1.50? Perhaps $2.50 and up at Starbucks?

And on the other side, the price of rice steadily declined for years (e.g. $550/ton in India in the early 70s down to $200 in 2001), and then went through the roof during the 2007/2008 global food crisis. Or, the lowest-end IBM PS/2 in 1987 (8mhz CPU -- whoooie that's fast!) was $2595, or $4836 in 2009 dollars. The highest-end was $10,895, and in 2009 dollars that's $20,304. Even if we completely disregard factors like CPU speed or HD size, a personal computer was significantly more expensive in 1987 than today -- as we might expect, given its rarity in '87 and ubiquity today.

THANK YOU!!!! You make my point for me. For all of those examples we can point to something and say, "here's why it's differed from CPI". But, as you keep saying, "the cost of books has nothing to do with the price". So how DO we explain the extraordinary rise of the price of books over 40 years??????

I hate to quibble, but....

http://www1.eere.energy.gov/vehicles...t_fotw219.html

In year 2000 dollars, a new car in 1970 = $15k. In 2001, $21k. It hasn't changed much since.

What quibble. My source said the average price of a car in 1970 was $3,900, yours says $3,700, which is close enough for me. Your data stops at 2001, I checked up to 2010, so comparisons are meaningless. I'm assuming "it hasn't changed much since", is just an attempt at humour.

They are produced faster, the image quality is significantly better (looked at a 70s art book lately?), chain stores barely existed in the 70s, retailers are clambering all over each other to offer free shipping....

It's not the same type of change, but the reality is that almost no non-food commodity has avoided alteration since 1970. (And even food has radically changed, due to subsidies, factory farming, GM, improved yield, globalization....)

More humour? All along we've been talking about mass market novels and now you toss in art books? Try to stay on topic. I just went to my bookshelf and pulled out a paperback printed in the 70s and compared it to a recent paperback. Guess what? There's no difference! Go figure.

You can't be seriously comparing any kind of change to books to the change in cars over 40 years. Can you?

Wait, people don't bitch about the price of paper books?!? Who knew?

I thought the whole point of this thread was how people bitch more about the price of ebooks than paper books. Did I miss something?

[Kali Yuga]

OK, let's try this again.

Individual products do not track well to the CPI. And it's not the job of the CPI to say that "any product that costs more than it did in 1970 (in adjusted dollars) is a rip-off."

That belief ignores dozens (if not hundreds) of complicated factors including disposable income, wages, currency values, the product's popularity and sales rates, the price range of the product, taxes, consumption rates, tariffs, imports vs exports....

The CPI is a broad measure drawn from a "basket" of goods. The likelihood of one specific product perfectly matching the CPI is as unlikely as a company's growth rates to perfectly match GDP, or its stock price to perfectly match the S&P 500.

Originally Posted by HamsterRage

Check. You'll see that books have outstripped CPI for virtually any time period you care to pick over that 40 year time span.

Uh huh. If you average out the increase in CPI from 1970 to 2009, the annual rate is approximately 4.5%. (I.e. start with $1 in 1970, increase your amount by 4.5% per year, and in 2009 you'll have $5.56.)

What does it take to roughly double that ($1 in 1970, to $9.70 in 2009), as books have done? An annual average increase of 5%.

Wow. Books outpaced inflation by an annual rate of 0.5%. What a pack of thieves.

Of course that does not in any way reflect the reality. Inflation was very high in some years, low in others; book prices rose much faster than CPI in some years, and not in others.

[Sil_liS]

It seems to me that we are getting a little bit sidetracked in this thread since there have been too many posts about the prices of cars from before I was born.

I realize that I'm not exactly impartial in the whole publishers vs. readers conflict of opinions. But I did find this article written by the managing director of an ebook store.

The problems with the agency model really boil down to:

First, Price Fixing, illegal at worst, highly suspect at best and not really in the interests of the consumer. I would say that at least 50% of emails to our customer services are "Why are ebooks more expensive than paperbacks, are you mad?" The next 49% are complaints about DRM and Digital Editions...

There you have it, the two biggest hurdles for our ebook customers to jump, unrealistic pricing and fiddly restrictions. This is made worse by consumer experience of music downloads.

To be fair, the current book industry practice of having an RRP and setting a "discount from the RRP" pretty much dictates the selling price of a book anyway, based on perceived value to the consumer. It all seems a bit arbitrary. As an independent, small, ebookseller, price fixing is actually quite handy for us as it levels the playing field and we don't have to compete on price. But this is beside the point.

Secondly, this agreement makes a retailer an agent. An agent does not to have to run expensive customer service operation and has limited requirement to add value. This is a bit like an affiliate in the online world.

Will Hachette (and others) provide a full customer service operation to support their "agents"?
Why don't they just set up a glorified affiliate scheme and we just direct traffic to them and they pay us a commission that way?

Finally, there is an argument that Agency agreements protect authors. Authors really do get a raw deal out the existing setup, but fixing prices is not the way to make it better, unless the same approach is applied to physical books (God forbid).

The cost price of a book to retailers should reflect a fair level of remuneration for an author, the balance being a fair assessment of publisher costs and profit expectations.

[HamsterRage]

Originally Posted by Kali Yuga

OK, let's try this again.

Individual products do not track well to the CPI. And it's not the job of the CPI to say that "any product that costs more than it did in 1970 (in adjusted dollars) is a rip-off."

That belief ignores dozens (if not hundreds) of complicated factors including disposable income, wages, currency values, the product's popularity and sales rates, the price range of the product, taxes, consumption rates, tariffs, imports vs exports....

The CPI is a broad measure drawn from a "basket" of goods. The likelihood of one specific product perfectly matching the CPI is as unlikely as a company's growth rates to perfectly match GDP, or its stock price to perfectly match the S&P 500.



Uh huh. If you average out the increase in CPI from 1970 to 2009, the annual rate is approximately 4.5%. (I.e. start with $1 in 1970, increase your amount by 4.5% per year, and in 2009 you'll have $5.56.)

What does it take to roughly double that ($1 in 1970, to $9.70 in 2009), as books have done? An annual average increase of 5%.

Wow. Books outpaced inflation by an annual rate of 0.5%. What a pack of thieves.

Of course that does not in any way reflect the reality. Inflation was very high in some years, low in others; book prices rose much faster than CPI in some years, and not in others.

None of which changes the fact that, in relation to what your money is worth today, books are twice as expensive as they were in 1970. It matters not that they stuck the knife in slowly, we're all still bleeding the same.

[karunaji]

Originally Posted by HamsterRage

None of which changes the fact that, in relation to what your money is worth today, books are twice as expensive as they were in 1970. It matters not that they stuck the knife in slowly, we're all still bleeding the same.

As the material costs comprise only 10% of the total price, the real question would be to ask how many human work hours are spent for producing each book sold and how many hours you have to work to buy it.

[Elfwreck]

Originally Posted by karunaji

As the material costs comprise only 10% of the total price, the real question would be to ask how many human work hours are spent for producing each book sold and how many hours you have to work to buy it.

No, how many hours went into the entire production run, vs how many *all* the buyers have to work to buy *all* the copies.

Talking about the author's hundreds or thousands of hours of work would only be relevant if the author were selling a single copy. Ditto, advances, editing costs, and advertising.

Some costs are per-title (like author advances); some are per-unit (like printing), and some of the per-unit costs vary widely depending on how many units. (It's cheaper per book to print 10,000 than to print 50 copies).