Ebook prices

[Hellmark]

Originally Posted by mldavis2

Let's not overlook the amortization of advertising that must be overcome with new releases - something older books have already done, hopefully. At any rate, older books are seldom advertised after initial release unless noted on the cover of a newer release as an author's previous successful work to entice buyers to pick a copy of the latest and greatest.

It isn't just advertising that has to be amortized. Editing, proofreading, etc. Older books should have had their expenses covered long ago, thus allowing for more wiggle room in the price. Also, as books age, their sales start to slump since most of the potential market has already got it and moved on, so it is common to use that new found wiggle room to lower the price to attract missed buyers.

On the older books, if you've already covered the proofing, editing, etc, that leaves the per unit production costs, which is where things start really changing between ebook and printed. eBooks, generally the only per unit cost is the DRM fees, where as on a printed book you have printing, binding, packing, shipping, storage, etc to contend with. These costs, on for both print and electronic are peanuts compared to the amortized expenses (with some estimates are that on average the production cost of a hard cover, before shipping and storage, is 70 cents). Say if the entire cost to the publisher is a buck on a book, on the comparative scale that's still substantially more than the ebook cost. I'm trying to find out how much the DRM per unit cost is exactly, but not had much luck so far.

[pdurrant]

Originally Posted by Pinecone

The books that were mentioned early were IN PRINT, IN COPYRIGHT books. Just older books.

If a new paperback costs $9.99. And a ebook of the same books is $9.99.

And an new printing of an old book is $9.99. Why would anyone expect the ebook version to be substantially less?

I expect them to cost less because they have a lower perceived (and actual) value to to buyer, and because they can cost less and still generate the same income for author, retailer and publisher.

They can cost less because of the significantly lower overheads and retail margin on ebooks. For paperbacks, publishers offer retailers a 55% (or more) discount on the RRP, accept returns, and have to pay for printing, storage and distribution.

For ebooks they offer a 30% discount, and have no printing, storage or distribution costs. Any DRM costs are met by the retailers from their 30%.

Here's an example of a major publisher getting it more or less right: The Agatha Christie books from Harper Collins.

Paperback RRP: £6.99 (Amazon Price £4.36)
eBook Agency Pricing: £3.99

Note that Amazon can offer a 37.5% discount on the RRP on the paperback and still make a profit.

We can even use our knowledge of things to look at the publisher revenue from these two editions.

Paperback: £6.99
55% to retailer: £3.85 (Amazon actually sells at £4.36, so income £0.51)
Printing, storage shipping (guess): £0.70
Royalty (8%?): £0.56
Publisher income: £1.88

eBook: £3.99
VAT: £0.67
30% (of ex-VAT) to retailer: £1.00 (Amazon income £0.51)
Royalty (25% of remainder): £0.58
Publisher income: £1.74

It looks about right to me. This is why ebooks can cost less than the paperback edition.

They should cost less than the paperback edition because, as mentioned, ebooks have no resale value at all, and have significant restrictions on their use.

It's interesting to note that in the income from paperback vs income from ebook, only Amazon are making significantly more from the ebooks than from the paperbacks.

I think that publishers are giving Amazon far too large a cut of the ebook income at 30%. 20% or even 15% would be more reasonable. (That would be £0.66 or £0.50 in the above example.)

[tompe]

Originally Posted by pdurrant

They should cost less than the paperback edition because, as mentioned, ebooks have no resale value at all, and have significant restrictions on their use.

They also have significant more functionality like "search". So I do not see how you can compare the extra things you get with and ebook and the things you loose and say that this lead to less value. I actually value being able to search very high and I never sell paper books so I do not feel at all that they should cost less.

[mldavis2]

@pdurrant is spot-on in stating that eBooks have significant restrictions on their use (assuming DRM). This, for me, is the dividing line in determining the value of each book for my use, not necessarily reflective of the market in general.

Books are expensive if you buy first-edition hardbacks, perhaps $30US. They are somewhat less so with first run paperbacks, typically $15US. Later runs come in around $10US and sometimes a bit lower, so for $10US I can choose an eBook from a major author or wait a year or two for a $10US pBook, or go find one for 'free' in my local library. The question then is, would I want to keep it, loan it to other book-loving friends, or give it away and/or delete/archive it. What value do I place on the ability to loan it to a friend? If it's an "airport" book that's just a fun read with little redeeming psychological or informational value, it's worth less to me than a classic or a literary gem. Fun books are a weekend fling - a cheap mistress perhaps - but nothing of perpetual interest. (Apologies for the sexual bias in that analogy. )

So my answer is, "it depends on the book." I return to a few books to re-read certain passages, seldom the entire book. In recent years, I have collected statements or paragraphs of choice in a text file for future retrieval and consideration. My bookshelves have been purged of excess volumes and donated to local libraries or given to appreciative friends, but my eBooks never will be. That restriction is "value added" to publishers and authors and is a major consideration as to which format I choose for each book and what I'm willing to pay for it. pBooks should generate more sales and hence more profit due to their lack of 'unauthorized' circulation potential. Yes, I know how to remove DRM restrictions from books, but I don't go there. If I want to share a book or if I purchase a book to share, I buy a pBook if the price is reasonable. That ability to share has a value all its own and may well be the reason pBooks will survive and continue to demand slightly higher prices.

[Pinecone]

I never said ebooks COULDN'T cost less.

My point is, in the current market, they DON'T cost less. Newly released or any currently in print as pbooks.

And your example of Agatha Christie books is proof in point. The in print pbooks sells fo about 4, and the ebook sells for about 4. Similar pricing. If the pbook sold fo 6, the ebooks ould sell for about 6, because under current pricing, ebook and pbooks (actual selling prices) about the same.

Now for CRASY ebooks pricing, look at the last two Alistair MacLean's UNACO books, written by Hugh Hiller. NOT in print as pbooks. Just came out in ebook at $19.99. WTF?! Other UNACO books are out at $7.99.