Future Ebook Price Point

[taustin]

Originally Posted by Rob Lister

If you're talking e-books (and we are) then the costs per copy is zero.

That simply isn't true. Servers aren't free, and neither are high speed pipes to the internet. And both require people and electricity (I'll bet Amazon spends more on electricity every day than you or I will in an entire lifetime to keep them working properly.

Per copy, ebooks are cheaper than paper books, but they are not free.

[murraypaul]

Originally Posted by HarryT

It's a question of whether it's commercially viable to produce a book at $1 per copy. If your costs are $2 a copy, it clearly isn't.

You can't possibly know whether your costs are $2 per copy unless you know in advance how many copies you are going to sell. If you sell twice as many as predicted, your costs are $1 per copy, half as many and they are $4. And copies sold is not independent of price.

[murraypaul]

Originally Posted by Rob Lister

How long before ebooks hit the $1 price point that music has? Will it ever?

I'd agree with another poster that, for me, it already has.
Most of the books I've bought have been 99c. Some at $1.99 and a couple at $2.99. I don't think I've gone above that. I let the Amazon recommendations system guide me and act as my not-crap filter, and it has worked pretty well.

[murraypaul]

Originally Posted by taustin

That simply isn't true. Servers aren't free, and neither are high speed pipes to the internet. And both require people and electricity (I'll bet Amazon spends more on electricity every day than you or I will in an entire lifetime to keep them working properly.

Per copy, ebooks are cheaper than paper books, but they are not free.

I doubt that the electricity and bandwidth costs of delivering a couple of hundred KB of ebook are even measurable. There is a definite back-end cost of actually processing the payment, that is a real per-copy cost.

[TFeldt]

While it's true that ebooks aren't free (per copy) I'd just like to put it in perspective. I pay 135kr, which is $20.266 dollars per month per vps I store in the cloud. With each vps I get 1 terrabyte of bandwidth every month.

Let's say the average size of an ebook is 2mb, that's being fairly generous. I can send 500,000 ebooks per month on my puny bandwidth alone. That comes to a cost of $0.00004 per book. Note that the cost of power, maintenance and hardware is included in it. Heck, it even includes redundant backup. You can be certain that it's vastly cheaper for amazon since they own their own datacenters and fibre connections, thus there's no middle man that takes its cut as it is for me.

So no, ebooks aren't free, but it'd be intellectually dishonest to count the per-copy fee as anything but irrelevant compared to what pbooks cost per copy. The only real cost of ebooks is the creation of the original formatting, which can be expensive.

[kennyc]

Originally Posted by TFeldt

While it's true that ebooks aren't free (per copy) I'd just like to put it in perspective. I pay 135kr, which is $20.266 dollars per month per vps I store in the cloud. With each vps I get 1 terrabyte of bandwidth every month.

Let's say the average size of an ebook is 2mb, that's being fairly generous. I can send 500,000 ebooks per month on my puny bandwidth alone. That comes to a cost of $0.00004 per book. Note that the cost of power, maintenance and hardware is included in it. Heck, it even includes redundant backup. You can be certain that it's vastly cheaper for amazon since they own their own datacenters and fibre connections, thus there's no middle man that takes its cut as it is for me.

So no, ebooks aren't free, but it'd be intellectually dishonest to count the per-copy fee as anything but irrelevant compared to what pbooks cost per copy. The only real cost of ebooks is the creation of the original formatting, which can be expensive.

It's not the storage costs or bandwidth -- it's more the personnel and management that is required to maintain the catalog, copies, updates, versions, etc.

[TFeldt]

Originally Posted by kennyc

It's not the storage costs or bandwidth -- it's more the personnel and management that is required to maintain the catalog, copies, updates, versions, etc.

Which I clumped together as creating the original formatting. I should probably have been more specific. Amazon doesn't actually maintain their catalogues, the authors / publishers do. The only time amazon would get directly involved is if they receive a complaint. It's all automated, they populate their database with content from the publishers' databases, or the authors enter it themselves in the case of self-publishing. Just imagine if amazon were to enter all the data for all their products, electronic and physical. There'd be more updates than their entire workforce's man-hours each day.

I'm sure there's exceptions for specific products but for 99% of the products it will be automated. Also explains why some amazon product pages look like utter horror stories and others like works of art.

[kennyc]

Originally Posted by TFeldt

Which I clumped together as creating the original formatting. I should probably have been more specific. Amazon doesn't actually maintain their catalogues, the authors / publishers do. The only time amazon would get directly involved is if they receive a complaint. It's all automated, they populate their database with content from the publishers' databases, or the authors enter it themselves in the case of self-publishing. Just imagine if amazon were to enter all the data for all their products, electronic and physical. There'd be more updates than their entire workforce's man-hours each day.

I'm sure there's exceptions for specific products but for 99% of the products it will be automated. Also explains why some amazon product pages look like utter horror stories and others like works of art.

Nope, I've been in this business to long to believe that. There will be system management, backup processes, software that is used to update/maintain versions etc (even if the authors/publishers are doing it -- but that's not likely to be the case because Amazon would want to manage things)

[TFeldt]

What exactly are you referring to? The maintaining of their databases' content or the maintaining of their physical systems? For content it will be automated, this is easily verified by simply checking the content of an amazon page versus the book's isbn number in other databases. The descriptions will almost always be identical. Sometimes additional information is added, and this will be done by the publishers. I doubt any publisher would allow a retailer to randomly add their own synopsis.

If you're referring to maintenance of the amazon network then sure, there's probably massive amounts of maintenance. But the kindle network isn't even a drop in the ocean compared to the rest of amazon, and that's not even factoring in that amazon runs one of the largest (if not the largest) virtualization service in the world with their e2c and s3.

All of their services run on e2c and s3, which they designed specifically to scale to their own requirements, they just sell the surplus resources. Is there maintenance of e2c and s3? Of course, mindboggling amounts of it. But does that directly relate to the kindle network? No. Does the maintenance required by kindle even scratch the surface of the total amount of maintenance for their network? No.

[kennyc]

So you say. I say there are significant human maintenance costs associated with providing books to the public to purchase. Amazon's cost of doing business - above and beyond the intitial production, editing, etc. of the book itself. There are on-going management and maintenance costs. It is not free.

[TFeldt]

Originally Posted by kennyc

So you say. I say there are significant human maintenance costs associated with providing books to the public to purchase. Amazon's cost of doing business - above and beyond the intitial production, editing, etc. of the book itself. There are on-going management and maintenance costs. It is not free.

But I've never said it was free, I was specifically talking about per-copy costs. Believe I used the term no less than three times in my post. I'm explicitly agreeing that there are substantial costs to bringing an ebook to the public, even used the term "expensive". It's just really dishonest for anyone to say that the cost per copy is anywhere near comparable.

And I didn't say it, amazon did. You're welcome to check their developer pages for detailed information on how e2c and s3 works. Very little, except their proprietary backend, is kept secret.

[kennyc]

You said

Originally Posted by TFeldt

While it's true that ebooks aren't free (per copy) ...

So no, ebooks aren't free, but it'd be intellectually dishonest to count the per-copy fee as anything but irrelevant compared to what pbooks cost per copy. The only real cost of ebooks is the creation of the original formatting, which can be expensive.

Which is just simply wrong. There are significant costs in both hardware and personnel to manage the databases, updates, etc. involved.

[murraypaul]

Originally Posted by kennyc

It's not the storage costs or bandwidth -- it's more the personnel and management that is required to maintain the catalog, copies, updates, versions, etc.

But those aren't per-copy costs, they are per-title costs.

[kennyc]

Originally Posted by murraypaul

But those aren't per-copy costs, they are per-title costs.

Well, overall cost, true.

[TFeldt]

Originally Posted by kennyc

Which is just simply wrong. There are significant costs in both hardware and personnel to manage the databases, updates, etc. involved.

But there's no hardware. e2c and s3 are entirely virtualized. They're abstract environments. There's no maintenance at -all- of kindle systems because there are no specific kindle systems. Every single time you download something from amazon you're doing it from a virtual system. These systems are created on demand to balance the load.

Do these virtual systems run on physical hardware? Absolutely. Does the physical hardware require maintenance? Certainly. But does anyone go into the server hall and say "I need to fix the kindle servers"? No. There are no specific systems dedicated to anything, everything is virtual. When a physical system goes down hundreds or even thousands of virtual systems blink off as well, but then they're instantly load-balanced to another virtual instance. That's the whole point of e2c and s3 (for storage).

Thus, there's zero hardware costs for kindle in specific. This is easily verifiable since amazon was doing e2c and s3 long before kindle arrived, and they'd be doing it whether or not kindle existed today. If they fix a physical server then you can't say they're doing it because kindle needs it, they're doing it because e2c needs it. You might argue that "didn't they have to expand when they opened the kindle store" but even that reasoning doesn't work since they're selling surplus resources. If they have a surplus then they don't need all the resources they've already got.

On the topic of content updates we'll have to agree to disagree. I've never heard of anyone maintaining indexes doing manual updates unless there's specific complaints. Not like they can even do manual updates when a book is updated since it's updated by the publishers or authors, not by amazon. With update I mean corrected spelling, extra content, et cetera.