Before you read the below post, please vote in the following poll. For a brand new book that is also available in hardcover at $25.00, what do you think the e-book should cost? (People who subscribe via e-mail will need to click through to see the poll).
Did you vote? Cool.
(and let me pre-empt my not-interested-in-ebook friends: I know. There’s no option for backlighting grayscale look feel smell DRM you’ll go blind bathtub. Just vote for the option you feel sounds about right)
Now. As I’m writing this post, I have no idea how that poll will go and what consumers think a new e-book should cost, but I can confidently guess it’s less than what publishers think they should cost.
As everyone knows, once the first e-book copy is produced it doesn’t really cost much extra for the next million to be shipped electronically. When they sell e-books, publishers save on printing, binding, warehousing, shipping, returns, etc. etc. etc. Therefore, e-books save publishers money and consumers expect that e-books should be cheaper than paper books (and agents and authors expect that their electronic royalties should be higher than with paper book royalties).
So. How much do publishers save with e-books?
According to HarperStudio publisher Bob Miller, the printing/binding cost of most books is about $2.00. Let’s just say for the purposes of this post that the other incidental costs relating to print books (shipping, warehousing, returns) comes to another couple of dollars, so, let’s say, print costs translate to roughly $4.00 on a $25.00 hardcover. (I’m not a publisher and thus this number should be taken with a grain of salt. Also it varies from book to book).
Thus, assuming the discounts to booksellers and e-booksellers are the same, in order to preserve the same profit margin on an e-book for this $25.00 hardcover, an e-book would need to cost roughly $17.00.
(The math: $25 x 50% discount = $12.50 to publisher, minus $4.00 print costs = $8.50; $17.00 x 50% discount = $8.50. Note that the $8.50 is not profit – that is the chunk out of which they have to cover costs and pay authors. Also see this post and this post for more info on how revenue is broken down between bookseller, publisher, agent and author.)
Where do the other costs of producing an e-book go? Paying the author, marketing and publicity, editorial, sales, production, overhead, accounting, etc. These are fixed costs that exist whether it’s a print book or an e-book.
Now, I understand that lower prices result in more sales, and that publishers might need to recalibrate their pricing model to best utilize electronic sales. Margin per copy isn’t everything if publishers are able to make it up in volume. Also bear in mind that for now, as I explained yesterday, major publishers (with the exception now of Macmillan) are being paid for Kindle e-books on the basis of the hardcover list price, not the price Amazon actually charges.
But what we’re seeing from the Macmillan/Amazon spat is great anxiety on the part of the publishers about a (for now completely theoretical) future in which they receive income based on a $9.99 price point. This was never a business with huge profits. If publishers are ever paid on the basis of a $9.99 price point for their blockbuster books rather than $24.95 the pie will have shrunk by over half. And that is striking fear into the heart of publishers. Publishers want to push up from $9.99 so badly some are willing to accept less money per copy sold just to make that happen.
And yet, underlying all of this nuts and bolts reality for publishers is a cold fact. When it comes to a publishers’ fixed costs and margins and legacy business models: consumers don’t care. They have their own idea about what an e-book “should” cost. An e-book feels like it should cost a lot less than something tangible like a paper book. And in a digital era consumers can ruthlessly enforce the perceived value of a digital product with their dollars and with piracy.
You can plainly see the dilemma the publishers are facing, especially if/when e-books grow to be bigger than print book sales. There’s a gap between their margins and the e-book expectations of consumers. Right now Amazon is filling that gap by taking losses on e-books in order to sell Kindles. But publishers worry that can’t last forever. The pressure is building, and someone is likely going to feel the squeeze, as authors already are.
Anonymous says
i think they should cost 5-10 BECAUSE i buy more ebooks then books. i mean WAY MORE .
i can trade books w/ family
maybe a 'bulk purchase plan' would work. like buy credits for x number of books for x dollars.
seriously books get expensive. if they were more affordable people would read more. (and lots of local libs don't carry 'specialty' books)
Bane of Anubis says
Where's the $0 option? 🙂 — JA Konrath's got some interesting points and numbers regarding the free model, though I think he stole my oh-so-novel idea of using ads to create income (Google does this? Facebook, too? You don't say.)
karen wester newton says
I don't see a poll, Nathan– no link or anything.
I feel so bad for the many authors hurt by this brouhaha. The whole situation is fraught with irony, because everyone involved loves books. And the authors, who are most directly affected by book prices, have the least control!
Bradley Robb says
The great thing about eBooks is that, when priced low enough, the scale of volume far outpaces per-unit savings at the higher end.
If eBooks are priced in "impulse buy" territory, consumers can become far more accustomed to buying before trying and not into using illicit means to sample.
The other item to consider is that "pricing to cost" is always a losing tactic because it limits flexibility. Costing to price is the modus operandi of digital commerce.
J.A. Konrath has been quite public about his successes and failures when selling digitally. His personal ideal price is $1.99 (though he'll be forced to price at $2.99 to take advantage of the new Amazon Agency model offered last week).
I've been saying for over a year now that $2.99 is perhaps the ideal price point (given favorable revenue splits) to maximize sales and win out in pure volume.
Several authors and numerous publishers are quick to play the value card, but in a digital environment the onus of value has shifted. Publishers are no longer selling to retailers. Under the agency model, publishers are now selling to consumers. And with consumers, you have to meet their value, not ask them to meet ours.
karen wester newton says
Oh, there it is! You know, an interesting point would be, what should the cost be once the book is out in paperback? One reason so many Kindle owners are steamed at Macmillan is they don't seem to lower the kindle price once the paperback comes out. It might be under $10, but the paperback is still cheaper.
Ink says
I found it interesting yesterday that a lot of people are picking Amazon on account of seeing Macmillan as employing a short term strategy to protect their hardcover sales (and thus seeing Amazon as the more forward looking and industry beneficial).
Which is curious, because to me it looks more like a very farsighted move by Macmillan for a very different aim – that as yet undiscovered future Nathan mentioned. The key point is that Amazon is selling the books as loss leaders. They're losing money on books to make money on Kindles. Probably a lot of money on Kindles.
But how long will this last? The basic fact is that the Kindle is, right now, in a boom market. A new technology, a changing framework… they push the change and supply the technology to feed it. Profitable. But boom markets are limited. At some point in the future the Kindle market will become saturated. Most of the people who want an ereader will have one. Yes, they'll still sell some, and people will replace old ones. There will still be money there. But the big boom profits will vanish, and gross sales will deteriorate to a lesser, more steady level. But after the boom ends there will be millions of ereaders out there and the ebook sales will be going up and up and up.
So… decreasing profits from selling Kindles and increased losses from the sale of books to feed the Kindles already sold into that saturated market. That's not good for Amazon. Obviously they won't just sit there and do nothing.
Two likely options:
1) Amazon raises their prices, regardless of the noble ideal of $9.99 a book. And, after selling books as loss leaders for a few years, there's the fear that they'll have something close to a monopoly and will be able to set prices however they want. Not usually good for the consumer.
or 2) Amazon holds to the 9.99 ideal and simply slaps publishers and authors in the face with new demands. They'll carve their profits out of the writer/publisher share, and maybe at a fatal level.
I agree that Macmillan and the other big publishers are fearing this latter option in particular. Will Amazon turn on them? But if Apple could provide the same opportunities as Amazon… the publishers then have some leverage to negotiate different terms of sale.
I think those publishers are probably looking at their bottom lines right now very closely. Because the big publishers could simply take their ebook business elsewhere. I'm sure Apple would be happy to step in. There would be short term losses, certainly, as some ebook sales would be lost during the switch. But much better now, when ebook sales are still only a small percentage of the market, than in a few years when that percentage (and thus the initial loss) would be much greater.
I'm guessing publishers are thinking that now is one of the optimal times to make a stand. Amazon's only real response, other than to play ball with the publishers, is the nuclear option. The threat (right now) of withholding paper book sales. But that's Amazon's revenue stream as well as the publishers… a dangerous game of chicken indeed, and one likely fraught with a lot of legal complications. And maybe Apple would be saying "Hey, we can handle the paper book sales too…" Or some other enterprising company with the same idea.
I think everyone's jockeying for position in a race that's only just started.
Scott Marlowe says
once the first e-book copy is produced it doesn't really cost much extra for the next million to be shipped electronically
Exactly. So there's some upfront costs which are more than made up for in the long term. Few years back eBooks weren't even the hot topic that they are today. Publishers should be happy they have another means by which to extend their viability instead of trying to gouge consumers.
Kate London says
When I'm buying a book,(digital or otherwise)I don't really care about how it is packaged, but more about the QUALITY of the story. For some authors I would gladly pay $25 for thier eBook, and others I would only pay $1 for a hardback.
I think Amazon should let the market decide who is worth what.
T. Anne says
Right now I'm snapping up e-books at the 9.99 or less price point. A $17 book would make me say whoa and wait for some kind of sale or reduction. But then again, I don't purchase $25. brand new hardcovers either. I hate to sound that way because I am a writer and I do want to see the business prosper, but I'm a consumer too.
Kate says
How did things go down with the CD to MP3 switch? Speaking for myself, I didn't necessarily expect to pay less for music just because I didn't get a CD too. Again, I'm not an expert, but it doesn't seem like music is THAT much cheaper (as in 75% cheaper, give or take) now that it's mostly distributed electronically. Ya know?
And yet, I don't want to pay $25 for an ebook. I don't even want to pay $25 for a hardback book. In fact, I don't pay $25 for a hardback. I wait for paperback. I am the quintessential fickle consumer, I guess.
Nathan Bransford says
I think people might be a little sanguine about the potential for very low priced e-book sales making up for low margins in volume. For one reason, at least some of these sales would come at the expense of paper books that have a much higher margin.
For the other – do you really think twice as many books would be sold if everyone cut their prices in half? I'm not so sure.
Nathan Bransford says
Well said, Ink.
Ink says
And Bane, you're killing me… you gonna stick ads in my books? Man. Luckily Toronto beat the Lakers the other day, or I'd be really steamed at you.
John Ross Harvey says
My current books are between $14 and around $6 so an ebook should be $2 – $5. My opinion anyway.
Not that mine are selling to begin with. Not even a charity incentive is working.
www. (my name) .com
Favoured Girl says
I think an ebook shouldn't cost more than $10 and that is really the maximum I'm prepared to pay. Publishers really need to be creative with keeping their costs to a minimum if they want to remain in business. In a tight economy, books are considered a luxury by consumers. If they are too pricey, there are other things for people to spend their money on.
Anonymous says
I am weary of this "what a book should cost" argument. If $17.00 is a sustainable price (I voted the 10-14 & then read your post), then let's go with that.
There are so many unseen costs to producing a book – I think it would behoove bloggers, rather than taking up the cri d'coeur of Americans spoiled by our economy of scale, to educate people about these costs.
@anony 11:52, I don't care how many books you buy. maybe you need to buy fewer or buy more carefully. this drive to buy everything without any interest or grasp in what it takes to deliver that to you insults every writer / agent / editor / publisher who labors to bring you something finite and pleasurable.
Amazon's gaming the system to benefit Kindle sales (what's the REAL COST of that cheap slap of plastic? both production and environmental ie., disposition of when it hits planned obsolescence?) is equally tiresome. I go out of my way not to buy from them. In fact, 100% of my purchases are from my local independent bookstore w/ the occassional B&N purchase. I buy very carefully. I buy what I plan to read (not just own or the first graph). And then I do what is my right with a physical object: I pass it onto to another person.
annmariegamble says
Another reason people think e-books should cost less is the perception that they get less. I may have already spend hundreds on the e-reader. I can't (easily) pass it on to my mom when I've finished reading it. I frequently don't get the illustrations or even nice page layout. And after Amazon's "1984" debacle, I'd wonder which books would still be on my reader when I got up in the morning.
I empathize that publishers are having to invest in research and development for the new technology and distribution models. But the expectation that consumers ought to be happy to cover these costs until new standards settle into place seems at best naïve.
Rick O says
"Right now Amazon is [..] taking losses on e-books in order to sell Kindles."
In this case, "taking losses" is a bit of misdirection though, right? They are paper losses. That's what I don't get in all of this — everyone is screaming about how much money will be lost. But it won't — it's all just paper losses and accounting tricks.
It's like the people complaining that their house has lost value over the last two years — a paper loss. The house hasn't lost anything, they just paid too much to begin with. The housing market is adjusting to the new economic model. (… wherein people can't just print money anymore.)
The same could be said about ebooks: the paper loss being decried right now is only because the system is adjusting to the new model.
Joseph L. Selby says
Your math is immediately flawed in that you assume a 50/50 split between publisher and marketplace for ebooks. Both Amazon and Apple are pushing 70/30, so to match a $25 book, an ebook need only be $12.14.
And that does nothing to combat perceived value. If I'm buying a brand new hardback, I'm getting it at 30% off anywhere I shop, so I'm buying the book for only $17.50 and I get to keep it forever and put it on a shelf and blah blah blah. Versus a file that sits on the marketplace's server that I can't move to different devices? The value of the product just isn't the same.
David H. Burton says
I'm going out on a limb here, but I'm going to speculate that your blog is primarily followed by book industry types (authors, agents, editors, etc).
I can't help but wonder if this poll will be slightly skewed simply because the majority of those voting have a stake in this business. Yes, we are all book lovers, but the average consumer may vote differently simply because they don't have as vested an interest.
Just a thought.
sharigreen says
I figure e-books should only be a few bucks cheaper (say, reg price minus the $4 print/production costs). We're paying for the content, not the paper it's printed on.
Anonymous says
When ebooks are created/published the same time as the hardcover/print book, then my arguement is this:
The hardcover/print carries the cost of editing/production/print. Once you've made that, the ebook seems incidental. Click, click, done, it's up for sale. It seems almost like its an afterthought.
The ebook isn't the ONLY release. It's more of a supplemental release. You did all the work with the print copy you made, sales tend to go with the print copy, so why not use that to recoup the cost? Ebooks seem almost like pure profit – like soda or popcorn at your movie theater.
Once it starts to be an "ONLY EBOOK" release, then I understand putting the pressure of recouping costs on the price. But for simultaneous releases, it doesn't quite make sense to me.
I'm not in publishing. I'm mentioning all this as a consumer only. This is just my opinion, but I think it's something that maybe publishers should address. They mention that print costs are only $2-3, but that relies on the idea that there's only ONE format in which the book is being offered, and with print and digital, there's TWO.
Yes, I want my authors to get paid. Lots of money. But I also want a straight answer about some of these inconsistencies.
Prove me wrong, publishers, please!
Anonymous says
It's very simple: CUT OVERHEAD!
I plan on starting a publishing company and doing precisely that.
sjp
Nathan Bransford says
joseph-
That's not quite right. The 70/30 model is based on a lower price point, rather than the hardcover list price. 50% of the hardcover price is more than 70% of $14.99. See my post yesterday for more.
Kate says
Favoured Girl makes a good point. The other day, I calculated that I have well over 600 worth of unread books in my apartment. (I'm sure many of us have WAAYYY more than that, book hoarders, ya know). So books on my reading list that I don't currently own are moving down the list until I've read the books that I do own. (Among the list of 'read' books, Nathan: The Secret Year. Great!)
I'm against these same issues in my business right now. My work has value. I provide a skill that has value. But I can't control the fact that consumers aren't willing to pay what I think it's worth. Items, service, stocks, whatever, are only WORTH what people will pay for them. Anything else is just theory. Or wishful thinking. Painful.
Moira Young says
Okay, I'm thinking hypothetically right now, as an unpublished writer who hopes to be published in the next few years and therefore may have to deal with these issues, so consider this comment to be open brainstorming … but say the price *does* drop or remain at a $9.99 price point. Say that way more books are sold at a lower price point and everyone reads way more because of it.
Would that, then, possibly speak well for any author who has the savvy to advertise their books online, in whatever way they can? Does that mean that books will get by more on their own merit? Will we see the death of advances? Will we see the death of writers who can't sell well? And will we see that niche writers who know how to promote themselves are able to actually reach their entire niche audience?
Will Espresso machines replace print publishing overall? Will publishers release "special hardcover collectors' editions" only for books already on the bestseller list?
Most importantly, what does it all mean for writers? Are we wise to support higher or lower price points? If we reach a point where we rely on selling lots of copies, does DRM become a good thing?
And can they come out with DRM that protects authors but doesn't interfere with accessibility for the print-impaired, and DRM where the bookseller doesn't have the ability to edit bookshelves and wishlists and play Big Brother?
Hmmm. I thought I knew where I stood, but it's all back to Team My Head Hurts.
James says
I've never bought an ebook and don't have a reader, so take this with a grain of salt, but I certainly wouldn't pay more than 9.99 (and even that seems high)for a book that I may have to repurchase someday if/when the technology changes, or I get a different brand of reader. If it's a book I'll never read again, I'll get it from a library, if I will read it again, I'll shell out for the paper copy. I learned after buying VHS tapes and then DVDs not to purchase very much content dependent on changing technologies. I doubt I'll buy many blu-rays for that reason, and I doubt I'll buy many ebooks either.
Nathan Bransford says
anon@12:11-
Production costs may be covered by the print book for now, but that era doesn't look like it's going to be around for long. Publishers can't count on the fact that five to ten years from now they'll still have print books to rely on. They have to find a model that works for e-books, and this is what this post gets at.
Chuck H. says
OK,Bransford, I voted though I really don't care. I buy very few books and the ones I do are $40-$50 each. However, those books will around for my great-great-grandchildren to read (my great-grandchildren are here already). Digital books? Probably not so much.
Wendy Qualls says
Okay, so the actual printing/binding costs aren't that big a chunk of the hardcover price – what about the shipping/storing/inventory costs? Those are also eliminated with ebooks, and those have to make up a few more bucks of the total price. With an ebook, you have to have server space (and IT folks to manage) a virtual store on the front end – but on the back end, you pretty much only need a copy and a few backups for redundancy. On the other hand, paper books require warehouses, trucks, forklift operators, tape/boxes/shipping pallets, gasoline to transport them with . . . even with Amazon's consolidated warehouse model, that can't be cheap.
Nathan Bransford says
wendy-
I discussed that, it's part of the $4.00.
Bradley Robb says
@Nathan
I've got a graph for you – https://www.flickr.com/photos/soporic/4325564480/sizes/o/
That's based on the stats presented by Verso Digital at DBW last week, albeit mathematically corrected.
As O'Reilly found out, raising prices creates a massive and marked decrease in sales. When O'Reilly raised the price of an iPhone eBook app from $5 to $10 there was a 75% drop in sales. They were making twice as much per unit, but receiving half the total revenue. The actual book price? $30.
Those sales difference when modeled on the $13 eBook (from a $10) predict a 43.72% drop, and moving from $10 to $15 predicts a 65.34% drop. This means that publishers might see a small total revenue gain at $13, but will see marked drop at $15.
Unfortunately, the data set I have doesn't account for prices below $10, so I have to use Konrath's anecdotal evidence, but the change is much larger than you'd think.
And since authors and agents receive a percent, pushing for the highest total revenue is in all of our best interests.
If publishers really want to get out from under Amazon's thumb, demand DRM-free or DRM-interoperable eBooks. That way, device lock-in is mitigated. Customers are far more beholden to the device they've sunk hundreds of dollars into and holds their library hostage than they are authors or publishers they like.
Bane of Anubis says
Bryan, you can always buy the ad-free model for $9.99. For $19.99, you can get the one w/ interactive clips and hyperlinks. People like options almost as much as they like free.
As far as the northern territory debacle of 2010, I must say the K- Train is starting to look a bit rusty.
Scott says
I agree with the first post. I mean, I have a ton of hardbacks that were given to me by friends as "you must read this". The publisher got zip, nada, nothing from me, nor do they get anything when I pass said books on to friends/family. Now, with ebooks I'm paying for every single book, so, technically, the publisher is making (and/or losing depending on the math) money with every e-purchase.
It seems to me, since e-books aren't transferable through Kindle, that e-books would be the wave of future. Just a thought.
josephrobertlewis says
What about a dynamic pricing model? For instance, if your book on Amazon only sells 5 copies this month, the price is automatically reduced by 50 cents for next month(because it is in low demand). But if your book sells 500 copies this month, then the price goes up 2 dollars for next month (because it is popular). Thus, popular books become more expensive and unpopular books become more affordable, dynamically balancing cost and demand (because there is no such thing as "supply" and demand in a digital economy).
Scott Marlowe says
I can't help but wonder if this poll will be slightly skewed simply because the majority of those voting have a stake in this business.
I was thinking the same thing. The poll is kind of meaningless w/out accompanying demographics. But oh well… it is what it is.
Cheryl says
I've paid $15 for a digital download of a $20 new release movie. Why wouldn't I pay a similar amount for an e-book?
I believe the pricing of e-books should follow the pricing of the print publication. If it's a new release and only available in hardcover for $25, a $15 e-price doesn't seem unreasonable. If I don't like those prices, I'll wait for them to fall when the trade paperback and mass market version become available.
Just because consumers want it when they want it, doesn't mean it should be given away for pennies on the dollar.
Reena Jacobs says
I understand the concept of maintaining a profit margin. From your model HC have a higher profit margin than MM books. Also, authors tend to receive a higher commission percentage on HC. However, should the profit margin be the same for an eBook?
Regardless on whether the publisher releases the HC or MM version first, an eBook is a version onto itself, and thus deserves a different profit margin. My understanding is authors often receive a higher royalty on eBooks than HC or MM versions. Publishers can afford to give more because of the low costs of producing electronic copies in mass.
I'm not saying to lower or raise the cost of eBooks or change the royalties for authors. However, I think its unfair to think of eBooks in terms of MM, HC, or trade copies for that matter.
I can't imagine a publisher trying to force a $25 price tag on a MM book just because the HC version has a higher profit margin. Each version has a different profit margin, which I think deserves different pricing models.
I wonder why they don't focus on staggering the release date on the eBooks instead of trying to force it into a model that fits another version.
Nathan Bransford says
Of course it's unscientific, it's a blog!
Anonymous says
Amazon is taking a loss on SOME books (typically the "best sellers" from mainstream publishers), and these make up about 20% of total sales in the Kindle store.
I know they are making money on my books, as I am an independent (they keep 65% of revenue from my sales). So, overall, they are not losing on the Kindle store, just on certain popular titles.
The loss leader come-on is great marketing. My supermarket does the same thing . . . they put the milk or bread or eggs on sale, at a loss, to get me in the door. While I'm there I also buy the profit generating items . . . meat, canned goods, etc. So overall, they make money on my order.
The milk vendor doesn't tell them what price to put on the product . . . the store sets the retail price, and if they want to sell an item at a loss this week . . . . that's their business . . .
Anonymous says
If the e-reader was free (or $25.00 with ten books) and the books stable and sharable (like real books) and between 9.99-12.00, then I would get three e-readers (and 30 books). Right now I am not planning on buying an unstable, expensive, stand alone reader.
That the books are over $5.00 for a several hundred dollar reader offends me more than the technology excites me.
I wonder, why not proceed like movies: first release at the theaters (translation: hardcover)/
then–later– release at the video stores (translation paperback and e-reader higher end) and THEN to e-book discounted?
josephrobertlewis says
You can't compate books to movies. Watching a movie in the theater is a very different experience from (1) seeing it on a plane, (2) renting it from a store, (3) getting the 3-disk DVD, or (4) watching it on TV.
But reading a book is always the same experience, it's just text. It's not any bigger or louder or more social with more features (yet) just because it's a hard cover vs MM vs ebook. Thus, the pricing really should be more similar across book types.
Kristi says
I'm one of your not-interested-in-ebooks-friends but I did vote. It seems this whole issue isn't going away anytime soon. *sigh*
dawt says
I think along the same lines as Kate London's comment, I'll pay more for books written by my favorite authors or books that look especially delicious.
I prefer to buy my books second-hand, anywhere between $1 and $10, and I also take advantage of on-line swap sites (cost is postage only, average is about $3). When it comes to my favorite authors, though, I'll pay the full cover price for a hard back because I intend to keep them forever. (I love, love, love it when I can buy an autographed HB directly from the author!)
I understand all of the hoopla concerning the value of e-books, nothing is very clear-cut. I just hope that, in the end, everyone gets their fair piece of the profit pie without gouging readers' wallets.
Fiona says
Several bloggers have calculated publisher's overheads like this, and all of them have left out the cost of distribution and returns.
Given that there's an approximate 50% return rate on print books, which doesn't exist for ebooks, that's a huge chunk of the cost that vanishes.
Returns are what makes the publishing industry lag behind most other industries; the lukewarm response to the espresso machine and the all-out panic over ebooks has been beyond disappointing.
Erin says
I don't get the same value from an ebook. I don't. Yes, I get the same text, but I can't pass it along to a friend or sell it to a used bookstore. Moreover, there is currently no end in sight to the format wars (no, Apple, you did not help us on this one!). As a result, I can't be sure that the hundreds of kindle books I own will still work in five years when all of this shakes out. Value is not just about the perceived shipping/storage/paper costs of the publisher. I get less. There's nothing "perceived" about it. I'm fine with that at this point because I pay less for the books, and I adore the convenience of purchased the next book I must. have. this. instant. from the comfort of my home at 2AM.
Annalee says
In trying to discern the value of a new hardcover-title ebook, I think it's important to factor not just the value of that particular book, but all the books it's subsidizing. All the new authors and smaller projects that publishers are able to take risks on because–and only because–they have revenue from blockbuster releases.
Would I pay $17 for a brand-new ebook? Yes I would (assuming [insert my usual DRM screed here]). The alternative is a world where only mega-blockbusters get published, and books with smaller audiences get shut out.
Amazon isn't interested in low prices for consumers. It's interested in selling kindles. Personally, I'm interested in the market model that's going to make the most cool stuff available for me to read. And $10 new releases of blockbuster titles aint it.
Anonymous says
Look I love books. Love them. I read EVERYTHING (well except romance and YA vampire angst) and always will.
I see everyone's point of view here, but honestly, one thing keep jumping out at me in the (seemingly) monthly internet flurry of publishing industry upheavals.
Publishers have a ridiculous business model and they don't know how to adjust it to 2010. A $25 book with $4 in cost that you sell to retails for $12.5 and net $8.5 to cover all of you expenses yada yada yada – really? Exactly how long did you think this system was going to work??? (not YOU Nathan – I mean the industry)
So Joe Author's book comes out and XYZ publishing brings in $8.5 on every sale to pay the author -say – 10% of cover ($2.5) and is left with $6 to pay staff, promotion, lights, heat and rent.
That $8.5 on the $25 cover price is ~ 35% gross profit aka before expenses. That's a good profit margin in most businesses. If publishing is struggling with 35% gross and can't pull a better net out of that, they need to do some serious retooling. Getting rid of the idiotic returns policy when you are already giving book stores a 50% discount would help.
No I am not trying to hurt bookstores, but if you are paying $12.5 on a $25 HC and selling it 30% off you are seling it for 17.50. You $5 profit is 40% gross – the book store has a higher profit margin than the publisher and gets to make returns.
The whole business model is a wreck. The excuse of 'publishing isn't like other businesses' that people like to throw around is crap. Of course it isn't like other businesses. No other business would run so inefficiently and survive.
Now there are other businesses that run on higher and lower gross profit margins. But publishing really doesnt seem to be in a position to play with prices. Cost cutting is the way to go it would seem. They cut cost MAJORLY when they basically turned agents into their slush readers and yet they are still struggling. Too many huge advances and big celeb books are killing them. Kicking authors to the curb before they can establish a readership is turning most authors into 1-3 book losing propositions that the publisher never sees a return on.
Maybe it's time for a look inside the biz instead of pointing fingers at Amazon ( not that I have much love for Ama-monopoly either)
Lisa_Gibson says
I believe we are definitely moving to this digital transition. Before long, all college texts will be digital, etc.
I think the cost should be less but not markedly so. At this point, the cost needs to be raised.
I also like to think that digital readers may attract a greater number of readers among the younger crowd, particularly males. You know how guys love their gadgets (and no, that's not a euphemism for anything). ;o)
Terry says
This boggles my mind. But even I can see this is just the start of, what's beginning to look like a cockfight.