ANOTHER "Why Do Ebooks Cost So Much?" ARTICLE

[M. R. Mathias]

Originally Posted by Ravensknight

No, it is not worth something extra. The background of the author, when it has NOTHING to do with the story, adds/detracts not at all from the value of the story.
I'm not paying $10 to read a fantasy novel by a no-name prison hack. I'd pay maybe $2-3 to try out a new author though. And if I liked the story, then I'd buy later novels, probably at a higher price.
But it would have to do with the quality of the story, not the authors lifestyle.

You get the first 100,000 words of my hacked out work free. So you get more for free from me than you do for the 3.00. I swear the lack of intelligence in the hack posters here is beyond me. YOU GET TO TRY 100,000 words of my book free which is only 43%
Or you could go try 80k for 3 bucks. Which makes more sense to do stupid?

PS - go here Fantasy Book critics and scroll down a little and look on the right. I have a copy of the 5 star review these folks are posting of my work this week. This site has a counter at the bottom that shows nearly 2 million hits and this blog has a sub of over 3500 followers.
If I am a no name hack then why am I getting a 5 star here and listed as a notable release? Your lack of cooth is pathetic. This no name prison hack has written nine novels over 100k most over 200k and at least 60 short stories and if you want to buy my books for less than ten bucks you trash can mouth having dork you better do it before you hear who my name is. Because there is no doubt that you will.

[poohbear_nc]

Please note that this is a discussion-based community and as such everyone is entitled to share his or her opinion politely. Even if you personally consider another person's opinion useless, please let's all remain civil and polite to each other.

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[M. R. Mathias]

Originally Posted by poohbear_nc

Please note that this is a discussion-based community and as such everyone is entitled to share his or her opinion politely. Even if you personally consider another person's opinion useless, please let's all remain civil and polite to each other.

Mobileread Posting Guidelines .

Thank you,
The MobileRead Moderating Team

Sorry Poohbear just defending myself!

[Fbone]

Originally Posted by Elfwreck

I can't, at the moment, do digital library books; I'm not dealing with ADE.

And currently, odds are that any book I actively want to read will be available through my friends faster than I'll be able to find it at a library I have easy access to.

I understand.

I won't patronize used book stores and thrift stores, etc.
I pay $150/yr through my property taxes for library services. I refuse to pay twice for the same book.

I usually can obtain my books at my local library and if they dont have one, they retrieve it from an area library in a couple days.

[HamsterRage]

Originally Posted by DMcCunney

The problem is that 80% or more of the cost of producing a book is incurred before you ever get to the point of actually issuing an edition, whether print or ebook.

Now, you see, that's where I get stuck. I see this repeated and repeated and repeated, and I just don't believe it. For tiny print runs, maybe. But for something where you print, say, 100,000 copies - even at unit cost of $1 to print and ship there's just no way.

And what's getting counted in "cost" before printing? I have a feeling that the author's advance is getting counted in that, and that it's a big part of it. But that's just an advance, right? Essentially a loan that's going to be clawed back out of the author's royalties AFTER the book has been printed - it's not an up-front cost. If you want to be super technical about it, I guess you can count some sort of value for the lost investment income that the publisher didn't get from that money because it was loaned to the author.

And finally the idea that it's 80% REGARDLESS of whether it's print or ebook, is mathematically impossible. Paper books have a non-zero unit cost, so the more you print, the smaller a percentage of the costs are going to be pre-production. On the other hand, something like %99 of the costs for an ebook are pre-production, since the production costs are close to zero on a per unit basis.

[Soldim]

Originally Posted by HamsterRage

And what's getting counted in "cost" before printing? I have a feeling that the author's advance is getting counted in that, and that it's a big part of it.

Proper editing, typesetting, proofreading & formatting will get you at between 20 and 30k US$. Then there's the costs for fancy cover + other marketing and publisher overhead. I'd estimate 50k US$ not excessive before a single copy is printed and the author has seen a dime.

One of the pros for eBooks I have not seen mentioned in the handful of posts I have skimmed through in this thread is the much longer shelf time. That's also one of the cons ... once an eBook is out there it will be forever competing for the customers interest. Dead-tree books have a limited shelf time -- between weeks and months.

[MrPLD]

This thread is starting to make my head hurt a bit.

For our production, it worked out about $35,000 for author wages, $10,000 for editing, proof, artwork, website, media and typesetting; then we were ready for letting the world get at it. Using a POD service we make about $5/book, and the ebook is also $5 (well, 4.99). Of course, these are very cheap figures because it's a two-person team and we just sub-contracted out various jobs.

I must say, the big upside of eBooks is that you can send them off at whim to reviewers and it has no real cost, unlike a printed book which incurs freight above and beyond the printing cost.

Paul.

[J. Strnad]

The author's personal background might very well encourage me to pick up a title, if it was relevant. His personality is more important, though, because that will significantly effect the tone of the book and the writing style.

[HamsterRage]

Originally Posted by MrPLD

This thread is starting to make my head hurt a bit.

For our production, it worked out about $35,000 for author wages, $10,000 for editing, proof, artwork, website, media and typesetting; then we were ready for letting the world get at it. Using a POD service we make about $5/book, and the ebook is also $5 (well, 4.99). Of course, these are very cheap figures because it's a two-person team and we just sub-contracted out various jobs.

I must say, the big upside of eBooks is that you can send them off at whim to reviewers and it has no real cost, unlike a printed book which incurs freight above and beyond the printing cost.

Paul.

Paul,

Those numbers sound reasonable, and about what I'd expect for a typical book. Maybe going to $20K. For most books, I don't think you'd count author's wages as cost, simply because they get paid a slice off each sale and that cost is incurred after the book sold.

I have a hard time wrapping my mind around the marketing costs. It seems to me that an awful lot of marketing happens in the store, although I do see books advertised in the "Books" section of the weekend paper and I rarely see book adverts on TV (and if I do, they are for big name authors who sell millions of copies). So my guess is that the marketing really does scale to the print run size.

That being said, there really isn't too much chance to spend a lot on marketing in the store when you're talking about an eBook. Presumably, you can pay to get the book "featured" on the website or in an email to regular customers.

In any event, I'm not seeing the 80% cost arising out of this.

[MrPLD]

I like to think of marketing costs as something separate from the original costs. Marketing costs are one of those things that just keeps on building building and... you get the idea.

The model for working out costs obviously changes depending on what method was used to generate the book to the point that it's ready for publication.

Anyhow, it's past 2am here - I'm probably rambling like an idiot now

[Fbone]

Originally Posted by HamsterRage

In any event, I'm not seeing the 80% cost arising out of this.

I'm confused. Do you believe the number should be higher or lower than 80%?

[HamsterRage]

Originally Posted by Fbone

I'm confused. Do you believe the number should be higher or lower than 80%?

If you count the author's royalty as a per unit cost to the publisher then I figure it should cost something like $2-3 per unit to print & distribute a book.

So at 10,000 copies, you're talking $20-30K compared to something around $10-20K for the preproduction. Which would put the pecentage at less than 50%.

I'd be willing to believe that big name authors like Stephen King get a lot more up front costs. But those authors are expecting to sell hundreds of thousands of copies. So the pbook only expenses are going to be up near the $million mark.

Going the other direction, I can't see publishers spending $30K on a book that's expected to sell only 2000 copies. And at $3 a copy in production costs, that's what they'd have to spend to have 83% in pre-production costs. And at $10 a unit, they'd only gross $20K from sales, so they'd lose money.

Let's keep going with the math. At 5000 units sold (with a printing & royalty cost of $3/unit), they would need to spend $60K up front to hit the 80% mark. But the gross sales would only be $50K at $10/unit. So they'd lose a lot of money, especially since the publisher only gets a portion of the gross sales.

What if the unit costs are lower? OK, well the royalty has to stand at about $1, so put the printing & distribution costs at $1/unit for a total of $2/unit. Let's stick to 5000 units printed (which I'm told is good numbers for a typical book to sell). That's $10K in per/unit costs which means they need to spend $40K to keep that 80% ratio. But that only grosses $50K and the total cost to the publisher is $50K. And of course, the publisher only gets something around half of the gross. So, once again, the publisher loses money.

At $0.75/copy royalty, and $0.50 printing and distribution, the publisher has to spend $25K to hit the 80% ration, with a total cost of about $31K. At 50% of the gross, they still lose $6K on the book.

There you go, from what I can figure, the only way for a publisher to spend 80% of the cost of a pbook "before it gets anywhere near printing" is to lose money on the book.

I'd call that myth, "Busted".

[DMcCunney]

Originally Posted by HamsterRage

Now, you see, that's where I get stuck. I see this repeated and repeated and repeated, and I just don't believe it. For tiny print runs, maybe. But for something where you print, say, 100,000 copies - even at unit cost of $1 to print and ship there's just no way.

The fact that you don't believe it doesn't make it untrue.

For instance, here's a snippet of a message posted to a list I'm on a while back by some in the production end of publishing:

The unit manufacturing cost (paper, print, and bind) of a dead tree edition is as follows:

mass market: $.50 - $1.
trade paper: $1-2
hardcover: $2-$4.

These are "typical" numbers at a medium-to-large trade publisher. Small presses and ultra-short-run presses (e.g. academic presses) typically have higher unit costs, which might explain why some small presses go the all-ebook route, offering paper only via POD.

The costs above specifically do not include warehousing or distribution.

If the above numbers seem too low, they can be even lower. The biggest costs in printing are in "setup" and "make ready": creating the plates from which the work will be printed, putting the plates on the press, inking, putting paper in the press, and running test copies to make sure everything is correct. The incremental cost of producing additional copies once the above is done is a fraction of the above, largely composed of the cost of the paper and the additional time of the pressman.

Paper/Print/Bind costs will be a total amount for the press run of the book. If the press run is doubled, the total paper/print/bind cost does not double, as the additional costs are the incremental ones. The total cost is allocated over the press run, so the cost per book of paper/print/bind drops.

And what's getting counted in "cost" before printing? I have a feeling that the author's advance is getting counted in that, and that it's a big part of it. But that's just an advance, right? Essentially a loan that's going to be clawed back out of the author's royalties AFTER the book has been printed - it's not an up-front cost. If you want to be super technical about it, I guess you can count some sort of value for the lost investment income that the publisher didn't get from that money because it was loaned to the author.

It is definitely part of the upfront cost. The publisher issues it to get the right to publish the book, as one of the first steps in the process. And the advance will influence other costs. as the larger the advance, the more effort the publisher will want to put into selling the book (and the larger the initial press run is likely to be.) What about it do you think makes it not an upfront cost? The publisher has already spent that money, and all they have at the moment is a manuscript. In fact, they may not have that: for established authors with track records, a book is usually sold on the basis of an outline and some sample chapters, so the author will typically get a 50% cut of the negotiated advance with the contract, and the other 50% when the completed manuscript is turned in. (Authors who have not sold books before will have to turn in a completed manuscript, to prove they can.)

And note that while it technically is an "advance against royalties", and the publisher hopes that the book will "earn out" - that is, sell enough to cover the costs and the advance, and sell additional copies on which the author is due additional royalties - the majority of books don't earn out. The advance is the only payment the author sees. (And the author's agent will probably try to negotiate an advance high enough that the book won't earn out.)

And finally the idea that it's 80% REGARDLESS of whether it's print or ebook, is mathematically impossible. Paper books have a non-zero unit cost, so the more you print, the smaller a percentage of the costs are going to be pre production. On the other hand, something like %99 of the costs for an ebook are pre production, since the production costs are close to zero on a per unit basis.

True, and thanks for the correction. There is a unit cost in ebooks, though it's vanishingly small. But that simply reinforces my point.

And those costs incurred before the book is actually issued do not magically decrease simply because an ebook is the intended end result.
______
Dennis

[HamsterRage]

Originally Posted by DMcCunney

The fact that you don't believe it doesn't make it untrue.

8<----------------------------

The costs above specifically do not include warehousing or distribution.

8<----------------------------

It is definitely part of the upfront cost. The publisher issues it to get the right to publish the book, as one of the first steps in the process. And the advance will influence other costs. as the larger the advance, the more effort the publisher will want to put into selling the book (and the larger the initial press run is likely to be.) What about it do you think makes it not an upfront cost? The publisher has already spent that money, and all they have at the moment is a manuscript. In fact, they may not have that: for established authors with track records, a book is usually sold on the basis of an outline and some sample chapters, so the author will typically cat a 50% cut of the negotiated advance with the contract, and the other 59% when the completed manuscript is turned in.

First, just because you keep repeating it doesn't make it any more true than me not believing it makes in untrue.

Second, it doesn't sound fair to leave out warehousing or distribution, as they both contribute to the costs that the publisher needs to recover.

Third, I'm not an accountant, but I'd be willing to bet that those advances go on the books as something other than just a "cost". So I don't think that just because it hits the same definition of "spent" as we'd use for our household expenses means that it should really be viewed as an upfront cost in the complex accounting of a book contract.

But let's play the numbers game according to the way you've represented the numbers. I'll go for a "good" projected sale of 5000 copies, with an advance equal to 10% of the cover price of $10 for a mass market paperback, or $5000. So the unit cost is now $1, and we'll warehouse and distribute for free. The total printing cost is $5K, and that's going to be 20% of the total cost. Which means that the total cost of the book run is $25K. Total gross sales will be $50K and let's assume that the publisher nets half of that (which is generous), which is $25K. So they come out totally flat on the book, assuming that there are zero returns and the books magically appear in the stores without spending anything to warehouse them or ship them.

So I still say, "Busted".

[DMcCunney]

Originally Posted by HamsterRage

First, just because you keep repeating it doesn't make it any more true than me not believing it makes in untrue.

Most of the folks I hang out with are in publishing, and the numbers I quote here come from folks who deal with them for a living.

Second, it doesn't sound fair to leave out warehousing or distribution, as they both contribute to the costs that the publisher needs to recover.

No, and I'm not trying to leave them out. I'm simply giving an example of one set of costs that isn't as high as normally believed. Paper/print/bind and warehousing/distribution make up at most about 20% of the book's cost. The breakdown between them will probably vary depending upon the book.

Third, I'm not an accountant, but I'd be willing to bet that those advances go on the books as something other than just a "cost". So I don't think that just because it hits the same definition of "spent" as we'd use for our household expenses means that it should really be viewed as an upfront cost in the complex accounting of a book contract.

It's money the publisher has actually spent, before they even have something ready to go to press. I'd call that a "cost", and I'm willing to bet the accountants would, too. It's something they hope to recover through sales, but they may not in fact do so.

But let's play the numbers game according to the way you've represented the numbers. I'll go for a "good" projected sale of 5000 copies, with an advance equal to 10% of the cover price of $10 for a mass market paperback, or $5000. So the unit cost is now $1, and we'll warehouse and distribute for free. The total printing cost is $5K, and that's going to be 20% of the total cost. Which means that the total cost of the book run is $25K. Total gross sales will be $50K and let's assume that the publisher nets half of that (which is generous), which is $25K. So they come out totally flat on the book, assuming that there are zero returns and the books magically appear in the stores without spending anything to warehouse them or ship them.

5,000 is a decent sale for a first novel published in hardcover at a price 3 times that of the PB, where you haven't offered a huge advance.

If the best you do on a mass market PB is 5,000 copies, you're screwed. I heard from a bookseller a while back about a mass market PB edition that had a press run of three times that, and was stunned. I couldn't image they would make any money, even if every copy sold.

So I still say, "Busted".

I get my numbers from people in the industry who deal with this every day. If you aren't willing to take my word for it because it doesn't fit what you want to be true, whose word will you take?

For that matter, what do you think an ebook should cost? Let's assume you're only doing an ebook edition, and paper/print/bond/warehouse/distribute costs don't come into it. (Some folks here seem to think the ebook can piggy back on the work done for the pbook, and the pbook covers the costs. Unfortunately, the accounting doesn't work that way...)

What do you think the non-paper/print/bond/warehouse/distribute costs are, and why?
______
Dennis