Show Us the Numbers

To the public at large, as to me, it seems like a no brainer that ebooks should cost much less than print books. You don't have to pay for printing, after all, nor do you have to pay much for distribution, and you don't have to give the same kind of cut to ebook stores, who, after all, don't have to pay things like rent. And yet, there's been some rumblings from the industry about how lower costs of ebooks will hurt publishing (via @RonHogan), and that ebooks still cost money (via @bookavore); "We still pay for the author advance, the editing, the copyediting, the proofreading, the cover and interior design, the illustrations, the sales kit, the marketing efforts, the publicity, and the staff that needs to coordinate all of the details that make books possible in these stages."

Really? Because it seems to me that the amount of money the publisher has to spend on printing, distribution and the cut given to the bookstore are a HUGE percentage of the cost of a book. (Especially considering the paltry advances and marketing budgets publishers seem to have these days.) And the one thing I haven't seen from anyone is hard numbers. Listen, publishing industry, you want me to believe you that ebooks should cost more than $10 a pop? Show me. How much does it cost to print books in various print runs? How much is distribution and how much does the bookstore get? How much do you lose in returns from the bookstores when they don't sell the books. (A non-issue with ebooks.) All that isn't enough to give me a steep discount? Alright, convince me. I'm listening. Because right now it sure sounds like bullshit.

Edit: The first link did not say what I thought it said. Apparently the author was complaining about Amazon demanding the same discounts (to them) on ebooks that it gets for print books. I agree with the author that this is crazy. Ebooks cost much MUCH less to store than print books, and so the bookstore should get less money for them.

Comments

pricing doesn't equal cost

Eric,

Pricing isn't always tied to cost. Ebooks do cost less to produce, but that doesn't mean they will cost less. The margin on books is historically very low. Can you really blame publishers for trying to make a little bit more money on ebooks? Don't they have an obligation to do this, legally speaking?

In the end, the pricing of ebooks will be determined by the market. I think a tiered pricing scheme will eventually win out. Why would you pay $15 for an ebook? Maybe because it just came out and isn't available anywhere else. After a few months, that price might drop to $10, then to something like $7. Timing and demand will set the price of ebooks much more than the cost of production.

"The margin on books is

"The margin on books is historically very low. Can you really blame publishers for trying to make a little bit more money on ebooks?"

Yes.

"Don't they have an obligation to do this, legally speaking?"

No.

No, they do not have an obligation to make the consumer pay more just because they want more money. As a consumer, that kind of attitude makes me want to punch the publishing industry in the face.

Flaccid numbers?

Not being a total insider I certainly can't give you hard numbers - Suffice it to say, my traditionally printed novels were recently made available in Kindle editions by my publisher. As I understand it, Amazon only pays the publisher 35% of the sale - and, Amazon DOES take returns on Kindle books. Also, my contract calls for a slightly higher royalty on an e-book than on a traditional print book.

But, by the same token, there is no physical stock or remaindering going on.

So, I wholeheartedly agree on pricing structure. My novels which sell for $14.95 in a Trade Paper format are priced at $7.99 retail on Kindle, and sold by Amazon at $6.39 or thereabouts, which I think is fairly reasonable, considering.

However, 10 bucks and above seems awfully ridiculous to me as well.

Yeah... I know... I didn't really help at all did I? (LOL)

MRS

The cost of ebooks

Let me preface by saying all our ebooks, including the ones on Kindle, have a retail of $6.99, which is the cost of a short mass-market paperback. We didn't pick this cost at random but because it allows us to offer competitive discounts and still make a nice return while at the same time not being painfully expensive. Given most of our vendors (we don't sell direct) discount that price, you can usually get one of ours for around $5-$6.

Storage is not the only cost for an ebook, and using it as the sole criterion for setting price is disingenuous. Yes, storage is cheap, but not so the salaries of the people who are paid to ensure the storage facility runs 24/7, stays free of malware and otherwise make certain your Kindle books are there when you want them. Advertising costs also have to be considered, whether we like it or not. As long as a Kindle (or any other e-reader) is a novelty, the company selling it will need to market it, and that takes money.

The publishers who complain about Amazon's cut are paying that much and more to distributors to market their titles to bookstores. Those who don't employ outside distributors are paying sales staff, so adding their salaries/commissions to the bookstore discount probably makes the cost the same. Their gripe is that they insist Amazon is a retailer, not a distributor, and therefore should be happy with the standard 40% discount. Small presses make the some complaint, so it's not a question of size but of the unwillingness of the industry to expand their definitions. Well, that and their determination that Amazon has plans to take over the entire bookselling world.

I sometimes get a feeling the publishing industry--large and small, mainstream and indie--is under the misapprehension that Amazon is there for their benefit, and so should sacrifice their own profits so the publishers can catch a windfall. I'm willing to be proved wrong.

"Yes, storage is cheap, but

"Yes, storage is cheap, but not so the salaries of the people who are paid to ensure the storage facility runs 24/7, stays free of malware and otherwise make certain your Kindle books are there when you want them. Advertising costs also have to be considered, whether we like it or not. As long as a Kindle (or any other e-reader) is a novelty, the company selling it will need to market it, and that takes money."

Again, I'd like to see some hard numbers for these things, especially from major publishers.