I'll echo others. There ain't any bestselling hardcovers on Amazon that are $26. They are in the $12-$16 range.
And considering the reseller doesn't have to keep warehouses full of books and you don't have to have distributors who take a cut etc then the cost for an e-book should be under $10. $9.99 was too much.
The problem is the publishers want to make even more money off ebooks than they were with hardcovers and paperbacks.
Hell publishers can start their own site. Put a computer in the basement and have it serve up millions of books. They take up next to no room. BAndwidth and computing power to do that is dirt cheap. And make a simple program to download the books and throw them into iTunes like Amazon does with mp3s.
One thing for sure is these guys are never going to price things too low.
You do know that whatever the selling price the retailer decides on, the publisher was still getting the same price right? If some retailers wished to take a tiny margin or even make a loss-leader, that doesn't change any of the other figures.
So take their cut of $13 and minus the $3.25 that goes into printing, shipping, and storing books. Add on the 30% cut that Apple would get. I seem to get a price of $13.93 ($13.99 rounded up). And that's giving them the exact same profit, not any more. So I don't know where you're getting your "$9.99 is just too much" math from.
I understand that you don't find that amount of value in the product and you're fully justified to feel that way. Just don't insist that the math backs your argument and the publishers are just greedy. Your simple server solution still neglects the fact that even with all the physical medium's costs factored out, ebooks would still not be as cheap as you would like them to be.
And also remember that ebooks should come down in price over time like normal books do as initial costs have been paid off. If they don't, then we all surely have something to complain about.
Using the figures the publishers themselves quoted, they make $13.67 profit on a $26.00 ebook. The same $26.00 paper book gets them something like $4.00 profit. So they are making four times the profit per ebook.
That's why the ebooks aren't 26 bucks, next time read what you write before submitting it
All these costs have nothing to do with distributing physical books. With the e-Book in play, I could see a lower cost publisher that does everything that the current publisher's do minus printing, storing, and distributing the physical books.
Plus, with iTunes and Amazon, the middle-man expenses are much less, as you don't have to support stores like Barnes and Noble who need to pay rent and hire employees.
OK, so I don't get your argument. Especially if you've actually read the article.
If you take a typical $26 hardcover book, of which the publisher gets $13 to take care of costs, and the minus the $3.25 per book for "printing, storing, and distributing the physical books", and add on Apple's 30% cut, you come to just a hair under $13.99 which is right in the middle of the article title's range.
That's taking out the middle man who could give you the deep discounts out of their 50% cut. That's taking out the physical medium costs. That's using Apple or Amazon (under the new model) as an outlet. Actually I forgot to add the $.50 per book to convert to digital (which shouldn't ever be totally automated.) So where's the savings suppose to come from? You can only cut production costs (which would affect the quality of the ebook) or royalties (which definitely won't go over well with authors who were told they would get more with this setup)
I hear that you believe the price is too high for the market. In that regard I agree. I'll just wait to see if the price will decrease over time like normal books do. If they do so, then I have no complaints about it's initial cost. That's a setup I'm used to.
I regularly pay more than $26:00 for hardcovers. Rohinton Mistry's "A Fine Balance cost $35:00 when published and no way was I going to wait for the paperback!
1 DOLLAR. That is the fair price for something that can be replicated for ever at no cost. The same for any CD, DVD or Blu-ray downloaded from their owners using P2P. They increase worldwide sales thousands of times. Piracy disappears overnight. Everybody wins.
Wow. That sounds simple!
Why don't you develop a business to do just that, and make a killing?
I'll echo others. There ain't any bestselling hardcovers on Amazon that are $26. They are in the $12-$16 range.
And considering the reseller doesn't have to keep warehouses full of books and you don't have to have distributors who take a cut etc then the cost for an e-book should be under $10. $9.99 was too much.
The problem is the publishers want to make even more money off ebooks than they were with hardcovers and paperbacks.
Hell publishers can start their own site. Put a computer in the basement and have it serve up millions of books. They take up next to no room. BAndwidth and computing power to do that is dirt cheap. And make a simple program to download the books and throw them into iTunes like Amazon does with mp3s.
One thing for sure is these guys are never going to price things too low.
One thing you're leaving out - support for the purchases. Digital retailers may not have warehouse space, but they require support staff. I have many clients that self-publish digital information products. Prices range from $17 to $2500.
One thing they have in common is full time person(s) to handle support suppot requests for their orders. People have a hard drive crash. People forget their username and password. Their email changed, so they need that changed. If something is DRM'd and the customer uses a new computer, there's a support request. If there's a Windows DRM scheme used and the customer has a Mac, there's a support request. And, believe it or not, some people call and ask why their "book" never arrived in the mail.
Based on my client's customer size, I'd hate to imagine the amount of customer support larger operations need.
So no one can actually show any proof that Amazon is taking a loss, yet no one seems to question this?
It's a bonifide fact. The publishers have said that they were getting the same cut they usually get regardless of Amazon's price so Amazon was most definitely selling those as loss leaders. And contrary to popular perception, Amazon wasn't selling all of their ebooks for $9.99 or less. They were selling the popular ones at a loss to bring in readers.
"Amazon buys and resells e-books in the same way it handles printed books, by paying publishers a wholesale price that is generally equivalent to half the list price of a print edition. Because Amazon has discounted the price of most new and popular e-books on its Kindle e-reader to $9.99, it loses money on most of those sales."
I fully understand the marketing strategy and financial logic behind the higher premium prices for e-books, HOWEVER, I still believe it's all verging on ridiculous. I think a "sweet spot" from a CONSUMER VIEWPOINT for e-book prices would be between $3.99-$6.99. Yes, I know this is impossible financially due to the various royalties & costs involved by the publishers, but $12.99-$14.99 will make me very less likely to purchase their books. The ONLY exception would be textbooks. I will be willing to pay top-dollar for textbooks that don't weigh 10 pounds in my bag.
Yes, from my point of view that's a nice sweet spot as well.
And if publishers are sincere in their stated intent on letting ebooks price decrease with time to match their physical book twin after initial costs have had a chance of being paid off, then we should see prices dip toward those figures. If that happens, then I have no problem with their higher initial costs.
I would really be happy to see this price spread with the first books to get offered on the iPad. I hope they aren't just going to offer the bestsellers now. We'll just have to wait and let the publishers show their hand.
Maybe publishers are trying to kill off the ebook?
Totally: Publishers are just like the music industry. They are not certain what to do in order to keep up with the changes and still make a profit. But, since Ebooks are the future...they will figure it out. It would be nice if they would be pro-active (unlike the music industry which is accurate in suspecting consumers of widespread piracy). If they fail to figure it out, they will die..just like land lines are dying and carburetors have been dead for years.
If the big publishing houses are not careful, they will be faced with authors who sell their own E-books online directly to the consumer. Change or die.
The problem is that you can get ebooks from your local library. Why pay for a book from these publishers when you will be able to get it for free on your ioad from your local library
Ps you can take them out from home using your library card
Like all the articles I've seen on this topic, the paperback phase pricing of ebooks remains unaddressed.
I agree. And even though publishers like Macmillan have voiced their intent to do so, the history of ebook pricing doesn't reflect that well. So we'll just have to wait and see. It would be great if the iBooks store launched with a price spread of ebooks! I don't know if we'll see that this early though.
How does this author do this before they become well known? Who pays their expenses then? Should they mortgage their house, if they have one? Ty to take a loan out from a bank (which won't give it to them for this anyway)?
Guys like Dan Brown and Patterson get millions as an advance on every book they write. If they leave the publisher, that won't happen. Most of them are quite content where they are. The reason why most authors move to different publishers is because they don't think they're being promoted enough, aren't being given the best editors, etc.
How will that work when there is no publisher?
The strategy would likely not work for unknown authors unless they could find financial backers. A super star author like JK Rowling already did a limited edition book deal with Amazon, and Steven King did a limited "e" book with (I think) Amazon also. For the well-known authors the publicity would likely be provided by Apple or Amazon.
The problem is that you can get ebooks from your local library. Why pay for a book from these publishers when you will be able to get it for free on your ioad from your local library
Ps you can take them out from home using your library card
You know, booksellers have existed just fine alongside libraries for ages. And many people like to own a permanent copy (physical or electronic) instead of borrowing it for a short time. And the selection of books (especially ebooks) from the library will not be all-inclusive.
So I don't see what the problem is. This brings up nothing new.
I wonder why publishers are afraid of killing the Barnes and Nobles. What about the mom and pops that B&N killed? Apple will just take their place, amongst others. If Amazon couldn't kill the brick and mortars, certainly Apple can. Too bad, the model they are trying to protect needs to evolve, not get artificially stifled.
Such is the way of capitalism. So what if Borders and Barnes and Noble die, there will be someone to take their place. They aren't dying from lack of demand, they are dying because they are antiquated.
If the big publishing houses are not careful, they will be faced with authors who sell their own E-books online directly to the consumer. Change or die.
The printing is the "easy" part. The hard thing is promotion and publicity. That takes more money, and more skill than many imagine.
An interesting calculation at CreateSpace. If I self-publish a 200 page 5x8 book for $9.95 my share from CreateSpace is $0.47. Their share, for printing and selling expenses is $9.48. Interesting.
The problem is that you can get ebooks from your local library. Why pay for a book from these publishers when you will be able to get it for free on your ioad from your local library
Ps you can take them out from home using your library card
Our library offers digital loans. One problem is that even though are digital, there are a set number who can have the title signed out at one time. If you must have a book at a set time, say for a school book report, you must buy or find someone else to borrow from.
I would have to ask the question: If you were getting by just fine on $9.99 prior to the iPad rollout, then what is the excuse to claim the additional $4 bucks is needed, except to gouge the customer?
If it wasn't profitable, they wouldn't be selling it, even at $9.99.
Sigh, as has been reported many places before, Amazon was selling those $9.99 ebooks as a loss leader. The publishers weren't losing money because Amazon was paying them half the list price of the physical book. The publishers were getting afraid of the power that Amazon was amassing. Kind of like the electronic version of Wal-Mart. They wanted a more sustainable model that let other stores compete against Amazon and didn't undervalue their goods in the public's eye. Which the $9.99 price for bestsellers was.
"Amazon buys and resells e-books in the same way it handles printed books, by paying publishers a wholesale price that is generally equivalent to half the list price of a print edition. Because Amazon has discounted the price of most new and popular e-books on its Kindle e-reader to $9.99, it loses money on most of those sales."
These charts show the publisher's gross in shades of green with the lightest green being the publisher's net. Remember, until recently, Amazon was taking 70% of gross, not the 30% shown in these charts. At $13.99, publishers will make about the same as they do now with hardcovers. Authors benefit from the eBook price structure.
BTW: How do you "rent a book?" Either you read it or you don't.
If the big publishing houses are not careful, they will be faced with authors who sell their own E-books online directly to the consumer. Change or die.
I think this exact thing is going to happen if the iPad takes off. Stephen King will be first in line to do it.
There seems to be nothing stopping people from publishing their own ebooks anyway.
I bet we'll see a huge influx of new desktoppublished books in the itunes store.
Comments
I'll echo others. There ain't any bestselling hardcovers on Amazon that are $26. They are in the $12-$16 range.
And considering the reseller doesn't have to keep warehouses full of books and you don't have to have distributors who take a cut etc then the cost for an e-book should be under $10. $9.99 was too much.
The problem is the publishers want to make even more money off ebooks than they were with hardcovers and paperbacks.
Hell publishers can start their own site. Put a computer in the basement and have it serve up millions of books. They take up next to no room. BAndwidth and computing power to do that is dirt cheap. And make a simple program to download the books and throw them into iTunes like Amazon does with mp3s.
One thing for sure is these guys are never going to price things too low.
You do know that whatever the selling price the retailer decides on, the publisher was still getting the same price right? If some retailers wished to take a tiny margin or even make a loss-leader, that doesn't change any of the other figures.
So take their cut of $13 and minus the $3.25 that goes into printing, shipping, and storing books. Add on the 30% cut that Apple would get. I seem to get a price of $13.93 ($13.99 rounded up). And that's giving them the exact same profit, not any more. So I don't know where you're getting your "$9.99 is just too much" math from.
I understand that you don't find that amount of value in the product and you're fully justified to feel that way. Just don't insist that the math backs your argument and the publishers are just greedy. Your simple server solution still neglects the fact that even with all the physical medium's costs factored out, ebooks would still not be as cheap as you would like them to be.
And also remember that ebooks should come down in price over time like normal books do as initial costs have been paid off. If they don't, then we all surely have something to complain about.
It won't because it's BS.
Using the figures the publishers themselves quoted, they make $13.67 profit on a $26.00 ebook. The same $26.00 paper book gets them something like $4.00 profit. So they are making four times the profit per ebook.
That's why the ebooks aren't 26 bucks, next time read what you write before submitting it
All these costs have nothing to do with distributing physical books. With the e-Book in play, I could see a lower cost publisher that does everything that the current publisher's do minus printing, storing, and distributing the physical books.
Plus, with iTunes and Amazon, the middle-man expenses are much less, as you don't have to support stores like Barnes and Noble who need to pay rent and hire employees.
OK, so I don't get your argument. Especially if you've actually read the article.
If you take a typical $26 hardcover book, of which the publisher gets $13 to take care of costs, and the minus the $3.25 per book for "printing, storing, and distributing the physical books", and add on Apple's 30% cut, you come to just a hair under $13.99 which is right in the middle of the article title's range.
That's taking out the middle man who could give you the deep discounts out of their 50% cut. That's taking out the physical medium costs. That's using Apple or Amazon (under the new model) as an outlet. Actually I forgot to add the $.50 per book to convert to digital (which shouldn't ever be totally automated.) So where's the savings suppose to come from? You can only cut production costs (which would affect the quality of the ebook) or royalties (which definitely won't go over well with authors who were told they would get more with this setup)
I hear that you believe the price is too high for the market. In that regard I agree. I'll just wait to see if the price will decrease over time like normal books do. If they do so, then I have no complaints about it's initial cost. That's a setup I'm used to.
So, who pays $26.00 for a hardcover bestseller?
I regularly pay more than $26:00 for hardcovers. Rohinton Mistry's "A Fine Balance cost $35:00 when published and no way was I going to wait for the paperback!
1 DOLLAR. That is the fair price for something that can be replicated for ever at no cost. The same for any CD, DVD or Blu-ray downloaded from their owners using P2P. They increase worldwide sales thousands of times. Piracy disappears overnight. Everybody wins.
Wow. That sounds simple!
Why don't you develop a business to do just that, and make a killing?
I'll echo others. There ain't any bestselling hardcovers on Amazon that are $26. They are in the $12-$16 range.
And considering the reseller doesn't have to keep warehouses full of books and you don't have to have distributors who take a cut etc then the cost for an e-book should be under $10. $9.99 was too much.
The problem is the publishers want to make even more money off ebooks than they were with hardcovers and paperbacks.
Hell publishers can start their own site. Put a computer in the basement and have it serve up millions of books. They take up next to no room. BAndwidth and computing power to do that is dirt cheap. And make a simple program to download the books and throw them into iTunes like Amazon does with mp3s.
One thing for sure is these guys are never going to price things too low.
One thing you're leaving out - support for the purchases. Digital retailers may not have warehouse space, but they require support staff. I have many clients that self-publish digital information products. Prices range from $17 to $2500.
One thing they have in common is full time person(s) to handle support suppot requests for their orders. People have a hard drive crash. People forget their username and password. Their email changed, so they need that changed. If something is DRM'd and the customer uses a new computer, there's a support request. If there's a Windows DRM scheme used and the customer has a Mac, there's a support request. And, believe it or not, some people call and ask why their "book" never arrived in the mail.
Based on my client's customer size, I'd hate to imagine the amount of customer support larger operations need.
So no one can actually show any proof that Amazon is taking a loss, yet no one seems to question this?
It's a bonifide fact. The publishers have said that they were getting the same cut they usually get regardless of Amazon's price so Amazon was most definitely selling those as loss leaders. And contrary to popular perception, Amazon wasn't selling all of their ebooks for $9.99 or less. They were selling the popular ones at a loss to bring in readers.
Publisher Wins Fight With Amazon Over E-Books
"Amazon buys and resells e-books in the same way it handles printed books, by paying publishers a wholesale price that is generally equivalent to half the list price of a print edition. Because Amazon has discounted the price of most new and popular e-books on its Kindle e-reader to $9.99, it loses money on most of those sales."
I fully understand the marketing strategy and financial logic behind the higher premium prices for e-books, HOWEVER, I still believe it's all verging on ridiculous. I think a "sweet spot" from a CONSUMER VIEWPOINT for e-book prices would be between $3.99-$6.99. Yes, I know this is impossible financially due to the various royalties & costs involved by the publishers, but $12.99-$14.99 will make me very less likely to purchase their books. The ONLY exception would be textbooks. I will be willing to pay top-dollar for textbooks that don't weigh 10 pounds in my bag.
Yes, from my point of view that's a nice sweet spot as well.
And if publishers are sincere in their stated intent on letting ebooks price decrease with time to match their physical book twin after initial costs have had a chance of being paid off, then we should see prices dip toward those figures. If that happens, then I have no problem with their higher initial costs.
I would really be happy to see this price spread with the first books to get offered on the iPad. I hope they aren't just going to offer the bestsellers now. We'll just have to wait and let the publishers show their hand.
Maybe publishers are trying to kill off the ebook?
Totally: Publishers are just like the music industry. They are not certain what to do in order to keep up with the changes and still make a profit. But, since Ebooks are the future...they will figure it out. It would be nice if they would be pro-active (unlike the music industry which is accurate in suspecting consumers of widespread piracy). If they fail to figure it out, they will die..just like land lines are dying and carburetors have been dead for years.
Ps you can take them out from home using your library card
Like all the articles I've seen on this topic, the paperback phase pricing of ebooks remains unaddressed.
I agree. And even though publishers like Macmillan have voiced their intent to do so, the history of ebook pricing doesn't reflect that well. So we'll just have to wait and see. It would be great if the iBooks store launched with a price spread of ebooks! I don't know if we'll see that this early though.
How does this author do this before they become well known? Who pays their expenses then? Should they mortgage their house, if they have one? Ty to take a loan out from a bank (which won't give it to them for this anyway)?
Guys like Dan Brown and Patterson get millions as an advance on every book they write. If they leave the publisher, that won't happen. Most of them are quite content where they are. The reason why most authors move to different publishers is because they don't think they're being promoted enough, aren't being given the best editors, etc.
How will that work when there is no publisher?
The strategy would likely not work for unknown authors unless they could find financial backers. A super star author like JK Rowling already did a limited edition book deal with Amazon, and Steven King did a limited "e" book with (I think) Amazon also. For the well-known authors the publicity would likely be provided by Apple or Amazon.
The problem is that you can get ebooks from your local library. Why pay for a book from these publishers when you will be able to get it for free on your ioad from your local library
Ps you can take them out from home using your library card
You know, booksellers have existed just fine alongside libraries for ages. And many people like to own a permanent copy (physical or electronic) instead of borrowing it for a short time. And the selection of books (especially ebooks) from the library will not be all-inclusive.
So I don't see what the problem is. This brings up nothing new.
Such is the way of capitalism. So what if Borders and Barnes and Noble die, there will be someone to take their place. They aren't dying from lack of demand, they are dying because they are antiquated.
If the big publishing houses are not careful, they will be faced with authors who sell their own E-books online directly to the consumer. Change or die.
That's already here: http://www.lulu.com http://www.cafepress.com http://www.createspace.com/ <- An Amazon company.
The printing is the "easy" part. The hard thing is promotion and publicity. That takes more money, and more skill than many imagine.
An interesting calculation at CreateSpace. If I self-publish a 200 page 5x8 book for $9.95 my share from CreateSpace is $0.47. Their share, for printing and selling expenses is $9.48. Interesting.
The problem is that you can get ebooks from your local library. Why pay for a book from these publishers when you will be able to get it for free on your ioad from your local library
Ps you can take them out from home using your library card
Our library offers digital loans. One problem is that even though are digital, there are a set number who can have the title signed out at one time. If you must have a book at a set time, say for a school book report, you must buy or find someone else to borrow from.
I would have to ask the question: If you were getting by just fine on $9.99 prior to the iPad rollout, then what is the excuse to claim the additional $4 bucks is needed, except to gouge the customer?
If it wasn't profitable, they wouldn't be selling it, even at $9.99.
Sigh, as has been reported many places before, Amazon was selling those $9.99 ebooks as a loss leader. The publishers weren't losing money because Amazon was paying them half the list price of the physical book. The publishers were getting afraid of the power that Amazon was amassing. Kind of like the electronic version of Wal-Mart. They wanted a more sustainable model that let other stores compete against Amazon and didn't undervalue their goods in the public's eye. Which the $9.99 price for bestsellers was.
Publisher Wins Fight With Amazon Over E-Books
"Amazon buys and resells e-books in the same way it handles printed books, by paying publishers a wholesale price that is generally equivalent to half the list price of a print edition. Because Amazon has discounted the price of most new and popular e-books on its Kindle e-reader to $9.99, it loses money on most of those sales."
BTW: How do you "rent a book?" Either you read it or you don't.
If the big publishing houses are not careful, they will be faced with authors who sell their own E-books online directly to the consumer. Change or die.
I think this exact thing is going to happen if the iPad takes off. Stephen King will be first in line to do it.
There seems to be nothing stopping people from publishing their own ebooks anyway.
I bet we'll see a huge influx of new desktoppublished books in the itunes store.