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Michael Davis
05-04-2012, 01:37 AM
As I sit here, trying to finalized the draft of my next novel, my wife is raving my ear off about the skullduggery being exercised by the publishers of her favorite authors. Seems they are now charging as much for E format as for paperback. She is so "perturbed" she's actually taken to fire off letters to the authors explaining she will no longer read their books "after this mockery" ( her words, not mine.) Course I realize its not the authors at fault, but you tell her, I'm sure as heck not going to just into this one (g).

I'm fortunate that my publisher has a brain and loyalty to their readers and retains a sane pricing structure ($6 for my new releases and $3 for many on my back list). This eventually has to backlash on these blind mice, like the brain dead corporates at Spirit airline denying a stage 4 cancer patient a refund. Amazing some of the decisions companies make.

Jonathan Dalar
05-04-2012, 01:58 AM
Much of the cost of publishing is sunk into editing, copyediting, proofing, and marketing, much more than the actual cost of paper and ink. That is one of the key reasons why ebooks are as expensive or almost as expensive as print. It's a huge misconception among readers, who think almost all the cost is the cost of cutting down trees and marking them up.

Perks
05-04-2012, 02:01 AM
Just to expand on what Jonathan just said, Digital Book World has a great article on why electronic versions of books cost what they do.

http://www.digitalbookworld.com/2012/consumers-upset-and-confused-over-e-book-pricing/

Pippi
05-04-2012, 02:04 AM
When I'm going nuts my better half brings me a nice cup of tea (hint hint).
Nathan Bransford explains the pricing here: http://blog.nathanbransford.com/2011/03/why-some-e-books-cost-more-than.html
(although it's pretty much what Johnathan said)

Rubay H.
05-04-2012, 02:15 AM
Whether it's amazon't fault or the publishers, I'm a little concerned that neither one of them really cares that the customer feels as they they are getting blunt objects shoved up their backside.
However you look at it, it's not good for business.

You can tell your wife that I sympathize and that she should demand from you some chocolate. ;)

squalorcat
05-04-2012, 02:27 AM
As a former publishing house intern, lemme tell you something, buddy:

The publishers aren't going to read the hate. They're going to pass it off to the intern, who will then write an apologetic letter and RUN TO THE MAILROOM BEFORE CLOSING TIME.

Once they start losing money and sh** gets real, they'll start to reconsider.

shadowwalker
05-04-2012, 02:30 AM
Do many authors with websites/blogs make an attempt to educate their fans about this? Just curious.

James D. Macdonald
05-04-2012, 02:32 AM
Amazon set prices artificially low, losing money on each sale, in order to put their rivals out of business and gain a monopoly.

If Amazon gains that monopoly ... watch out for prices then.

Kerosene
05-04-2012, 03:01 AM
If Amazon gains that monopoly ... watch out for prices then.

B-B-but it's not a monopoly...


I think the e-book and self-publishing through amazon (and other companies) is very smart and ideal.

Some (physical) publishing can kill the author. But that's a fact and really can't change for the better.

Namatu
05-04-2012, 03:11 AM
Whether it's amazon't fault or the publishers, I'm a little concerned that neither one of them really cares that the customer feels as they they are getting blunt objects shoved up their backside.
However you look at it, it's not good for business.It's not good business to set your prices so low you don't make money. Publishers need to make money so that their staff and their authors can make money.


Amazon set prices artificially low, losing money on each saleAnd this has warped expectations of how much ebooks should cost.

I'm sorry, but just because it's not a print book you can file on your shelf doesn't mean it's worth less. The same amount of work, effort, and investment went into creating the digital product, just like the print.

Ebook sales are increasing rapidly, as they have been for the last several years. An increase in demand isn't conflating prices above what you would normally pay for a book. It's setting prices for e and print on par with one another. (Unless you're Amazon.) That's not going to change.

Michael Davis
05-04-2012, 03:14 AM
Ref sending to the publisher, I think my wife did the smart thing and sent her "feelings" to the authors themselves via their web sites. Already got several responses.

Ref the cup a tea, I aren't made her favorite cup of java (DD) and it soothed her feathers, but only to the bottom of the cup (g).

PortableHal
05-04-2012, 03:26 AM
Doug Bolden explains why e-books cost as much as paperbacks...right here (http://www.wyrmis.com/blots/2011/17/blot11318.html).

I like #3: Little known fact: every single copy of an ebook is typed by hand.

Perks
05-04-2012, 03:27 AM
Whether it's amazon't fault or the publishers, I'm a little concerned that neither one of them really cares that the customer feels as they they are getting blunt objects shoved up their backside.
However you look at it, it's not good for business.

You can tell your wife that I sympathize and that she should demand from you some chocolate. ;)I can't help but marvel that people will happily pay $5 for a Caramel Macchiato that will be gone in fifteen minutes, but get the vapors when asked to spend $8 or $9 on a book. 'Sweird to me.

Soccer Mom
05-04-2012, 03:46 AM
I can't help but marvel that people will happily pay $5 for a Caramel Macchiato that will be gone in fifteen minutes, but get the vapors when asked to spend $8 or $9 on a book. 'Sweird to me.

This. Publishers will charge what the market bears. I don't mind paying paperback prices for an ebook. If it's an author I want, I happily plunk down my $12 for that brand new release. For me, it's worth it.

As an author, I'm not interested in selling my full length novel for $2.99. There is a lot of labor there. I like making more than the price of a cuppa joe off the hours of labor. Funnily enough, the cover artists, editors, and marketing team for my publisher feel the same way. A book is a product with many people involved in the making, people who do this professionally need a living wage.

Perks
05-04-2012, 03:57 AM
A book is a product with many people involved in the making, people who do this professionally need a living wage.

In an ebook, all the editing, copyediting, cover design, and marketing that goes into the paper version still gets done. The typesetting costs are still there as formatting. And then it's nice to pay the author, too.

Jamesaritchie
05-04-2012, 04:06 AM
I seem to be teh only one on earth who thinks prices for pretty much all fiction, e-books or print, are remarkably low. I see people screm at teh price of a book, and then spend twice as much for DVD. Or for weekly trips to Starbucks. Or for you name it.

Books aren't overpriced, they're undervalued.

And Amazon sucks.

veinglory
05-04-2012, 04:20 AM
The most expensive thing in a novel is not the paper, it is the words. That is why different formats are similar prices.

bkendall
05-04-2012, 04:22 AM
Books are definitely undervalued, james. I agree completely. I think it's just that convenience is taking over and has been for years. I offer an apology for derailing OP.

Soccer Mom
05-04-2012, 04:24 AM
In an ebook, all the editing, copyediting, cover design, and marketing that goes into the paper version still gets done. The typesetting costs are still there as formatting. And then it's nice to pay the author, too.

Exactly. The different venues have different formatting requirements (Kindle vs epub) which complicates matters and requires even more labor.

IceCreamEmpress
05-04-2012, 04:30 AM
Ref sending to the publisher, I think my wife did the smart thing and sent her "feelings" to the authors themselves via their web sites.

I don't see how that's "the smart thing"--the authors have no control over what prices publishers set for ebooks. That's like writing to Steven Spielberg because you think the prices at the movie theater are too high.

Bubastes
05-04-2012, 04:41 AM
We writers know that ebooks cost as much to produce as paper books, but the average person doesn't know that and doesn't care. It's all about perception (as Mr. Bubs likes to remind me, perception is reality). I don't know how to change that perception, but there you go.

Deb Kinnard
05-04-2012, 04:59 AM
I'm still out with the rest of the jury as far as why e-book prices must of necessity be set so high. I usually go to the Passive Guy or Boing Boing for cogent explanations, and here's what I've gathered from what these dudes say:

Let's say you're a print publisher. Once you acquire, edit, design a cover, layout, and print a book, all those costs go into that print book. If then you release an e-version, all these tasks are already finished except formatting the text for the various e-reader platforms. Where then is the additional cost that makes the e-book price point the same as the print book?

I submit that once you've done all the routine things for a print book, the marginal additional cost to produce the e-book is very minimal. Certainly not additional expense that would justify charging one price for both types of release.

My understanding. Of course in this economy our readers don't want to pay exorbitantly high prices for much of anything.

Namatu
05-04-2012, 05:08 AM
Let's say you're a print publisher. Once you acquire, edit, design a cover, layout, and print a book, all those costs go into that print book. If then you release an e-version, all these tasks are already finished except formatting the text for the various e-reader platforms. Where then is the additional cost that makes the e-book price point the same as the print book?

I submit that once you've done all the routine things for a print book, the marginal additional cost to produce the e-book is very minimal. Certainly not additional expense that would justify charging one price for both types of release.Why should the price for an ebook be different than the print? It's the same book, different format. Yes, the same work went into it, because it's the same book. Whether you store it on your ereader or on your bookshelf should not affect the price you pay for it.

Perks
05-04-2012, 05:08 AM
I submit that once you've done all the routine things for a print book, the marginal additional cost to produce the e-book is very minimal. Certainly not additional expense that would justify charging one price for both types of release.

The two formats aren't the same price. Here's our own Alex Adams' WHITE HORSE at B&N - a discounted $13.31 for Hardcover (Normally $19.99) and $9.99 for Nook

http://www.barnesandnoble.com/w/white-horse-alex-adams/1104277503?ean=9781451642995

Ebooks are about 10% cheaper to produce than print books.

James D. Macdonald
05-04-2012, 05:26 AM
Where then is the additional cost that makes the e-book price point the same as the print book?

Much as I like Cory....

The cost is in the sales. A sale is a sale is a sale. Regardless of the platform.

Why should publishers undersell themselves? How does that make the slightest lick of sense?

HoneyBadger
05-04-2012, 05:39 AM
Why should the price for an ebook be different than the print? It's the same book, different format. Yes, the same work went into it, because it's the same book. Whether you store it on your ereader or on your bookshelf should not affect the price you pay for it.

Yes, but print books can be lent, resold, or given away.

Print books can be read without any other purchase or accoutrement.

If DRM wasn't an issue, I wouldn't have a problem with similar print and e-book pricing, but as it stands, you're paying nearly as much (and sometimes more) for something you, the consumer, can use less freely.

virtue_summer
05-04-2012, 05:46 AM
I submit that once you've done all the routine things for a print book, the marginal additional cost to produce the e-book is very minimal. Certainly not additional expense that would justify charging one price for both types of release.

Why should the ebook purchaser only have to pay for the extra work, and not the base work of producing the book in the first place? Why should the print buyers be required to pay for the writing, editing, etc, and the ebook buyers just have to pay for "the marginal additional cost" of that format? That's a strange argument. You're treating the ebook as an extra, assuming the work is all done and the costs all recouped already on the print book so that the ebooks only have to be sold for the additional work they produce instead of being factored into the costs of the book, period.

thothguard51
05-04-2012, 05:57 AM
Most of my friends think I am crazy to pay $9.99 for an e-book. I ask them what if e-books were not available, what would you pay then?

They all tell me that's different. They can hold the paper book, put it on its shelf, smell it and loan it other friends, or sell it to a used book store to get more books.

I hand them my Kindle Fire and they look at me funny. I tell them you are holding 100 books in the palm of your hand. Can you do that with a paper books?

Lastly, I'll ask them if they would take a pay cut so their employer could lower the price of their products so us consumers can pay less. So far, no one has said yes to that proposition...

Labor is 1/3 to 1/2 of most business expenses, but in publishing labor is closer to 2/3 the expense. Closer to 100% if you self publish.

Now, for back list, I do expect to pay less, but if its a book I really, really want, less is subjective...

Michael Davis
05-04-2012, 07:06 AM
Ref Debs comments, I agree. When you look at the cost components of a set price, the labor of creation (for the author) is the same regardless of format. Yet the other elements are quite different. E has no shipping cost, paperbacks do. E has no material cost, paperbacks must be printed. E versions reside on a database and a mirror copy is transmitted via the web; paperbacks (depending on the layers in the supply chain) usually must change hands several times. All these establish a differential in the natural cost model.

If the prorated elements weren't different for both media, why are royalties so much higher for E than PB.

Not arguing, just my perspective, which brings me back to my original premise of the post: buyer perception is the key, like several posters have noted. If someone says "You have a choice between this gold leaf wrapping or this brown paper wrapping, but inside you get the same candy nugget (the story) do ya think the customer will not question why they're paying the same for both. What every logic publishers use to explain it, buyer perception will prevail, and eventually result in lost sells because wise competitors will step up and fill the void, they always do.

Anyway, my point was not that I'm concerned about the equivalence of price setting across the media, rather that my wife and her reading groups are PO'ed to infinity and beyond. Frankly since I started writing, my reading time has nearly vanished.

Ref the comment about it being preferred to get royalties on a higher priced book, my experience has been the opposite. Each time my releases go to the back list, the increased volume in sells far out ways the decrease in price, and that's not just my experience. I've read several web articles about the "S" curve affect of price on sells volume for books, including one Mr Konrath (https://plus.google.com/116545910411481156433) posted (I think) last year.

But again, these are JMO and not meant to cause anyone heartburn.

shadowwalker
05-04-2012, 07:21 AM
I suppose one could also say "It takes 5000 print books sold to recoup the costs of acquisition, editing, etc, so starting with print book 5001, the price should drop to reflect that."

Shadow_Ferret
05-04-2012, 07:37 AM
I can't help but marvel that people will happily pay $5 for a Caramel Macchiato that will be gone in fifteen minutes, but get the vapors when asked to spend $8 or $9 on a book. 'Sweird to me.

I would never spend $5 for a coffee, and I get the vapors over $8 books because I remember paying $0.60 for those things.

And I still have a hard time being convinced that an eBook should cost as much as a paperback considering there are no supplies involved, no paper, no printers, no binding, no storage, no shipping. In college, we put out a small press magazine. All our costs were printing costs. The magazine was therefore priced to recoup that cost. Had there been the Internet or an ability to distribute the magazine electronically back then, there'd have been no cost whatsoever.

James D. Macdonald
05-04-2012, 07:52 AM
Not even the cost of the slush-reader's time?

poetinahat
05-04-2012, 07:59 AM
Yeah, I remember paying 20c for a candy bar. That doesn't mean that 20c is where the price should be today, forty years later.

Not following that logic, which ignores several points already made in this thread.

mscelina
05-04-2012, 08:25 AM
Ref Debs comments, I agree. When you look at the cost components of a set price, the labor of creation (for the author) is the same regardless of format. Yet the other elements are quite different. E has no shipping cost, paperbacks do. E has no material cost, paperbacks must be printed. E versions reside on a database and a mirror copy is transmitted via the web; paperbacks (depending on the layers in the supply chain) usually must change hands several times. All these establish a differential in the natural cost model.

If the prorated elements weren't different for both media, why are royalties so much higher for E than PB.

Not arguing, just my perspective, which brings me back to my original premise of the post: buyer perception is the key, like several posters have noted. If someone says "You have a choice between this gold leaf wrapping or this brown paper wrapping, but inside you get the same candy nugget (the story) do ya think the customer will not question why they're paying the same for both. What every logic publishers use to explain it, buyer perception will prevail, and eventually result in lost sells because wise competitors will step up and fill the void, they always do.

Anyway, my point was not that I'm concerned about the equivalence of price setting across the media, rather that my wife and her reading groups are PO'ed to infinity and beyond. Frankly since I started writing, my reading time has nearly vanished.

Ref the comment about it being preferred to get royalties on a higher priced book, my experience has been the opposite. Each time my releases go to the back list, the increased volume in sells far out ways the decrease in price, and that's not just my experience. I've read several web articles about the "S" curve affect of price on sells volume for books, including one Mr Konrath (https://plus.google.com/116545910411481156433) posted (I think) last year.

But again, these are JMO and not meant to cause anyone heartburn.

After reading this post, I've come to the conclusion that you really don't know enough about e-books to attempt to hold up your end--or your wife's end--of the debate.

First off, e-book publishers ARE charged a delivery fee by the third party retailers. E-books aren't free to create. E-publishers pay the editor, the proofreader, the cover artist, the interior book designer, the formatter. They pay for art images, for marketing, for font licenses. They pay for websites and IT. So your--*cough*--any perception that e-books are somehow less valuable because there are 'no' costs is way out there past left field, past the bleachers, past the parking lot, and somewhere in the next town.

Your wife can screech all she wants to about the costs of digital books, but until she has a real understanding of how the system works, she's just blowing out a lot of hot air. *shrug* So let her buy paper books. That way she's happy and you're not making a cake of yourself by spouting off "facts" that are wrong.

Just sayin'...

Terie
05-04-2012, 09:35 AM
Ref sending to the publisher, I think my wife did the smart thing and sent her "feelings" to the authors themselves via their web sites. Already got several responses.

Yeah, and I bet not one of those several responses mentioned how hurt the author felt over your wife's e-mails. I have a friend who's also an NYT bestseller, and though she replies to the messages that she gets like that with unbelievable grace, I also know that her feelings are hurt and she's very frustrated at the ignorance out there about how publishing works.

So I wouldn't be bragging if I were you or your wife. All she did was cause pain and frustration to those authors. Not sure how you calculate that that was such a 'smart thing'.




Let's say you're a print publisher. Once you acquire, edit, design a cover, layout, and print a book, all those costs go into that print book. If then you release an e-version, all these tasks are already finished except formatting the text for the various e-reader platforms. Where then is the additional cost that makes the e-book price point the same as the print book?

You're leaving out one key element in your calculations: Every e-book bought is one print book less that was bought. E-books aren't extra copies sold in addition to the print books sold; they're actually copies sold instead of print books sold.

That is, the pre-fork costs have to be spread over the e-book ediition as well as all the other editions.

skylark
05-04-2012, 11:12 AM
So what is the difference in production costs between a physical book and an ebook?

That's what the difference in price should be.

I work for a computer software company, and the difference in price between the download version and the physical version is the cost difference to us of producing and shipping the two versions. Nobody's upset by that. Ever.

I think what annoys people about ebook pricing is that in a lot of cases applying that logic implies that the physical production costs of a printed book are minute, zero or sometimes even negative when compared to an ebook which has had the same amount of writing and editing time, of money spent on cover design, and so on. That can't be right, surely?

jjdebenedictis
05-04-2012, 11:13 AM
All our costs were printing costs. The magazine was therefore priced to recoup that cost. Had there been the Internet or an ability to distribute the magazine electronically back then, there'd have been no cost whatsoever.There's a rather glaring, ginormous difference between that scenario and a publishing house's. You obviously were happy working for free.

Salaries are the big cost to publishers. Paper is pretty cheap; storage is pretty cheap.

Talented artists, editors, marketers and managers who have to pay rent in New York? Not cheap.

Also, if a publisher offers ebooks, that requires they start paying a whole new category of salary. They now have to hire computer techs to create their distribution system and keep it running smoothly.

And computer techs don't come cheap because they can find a job in any industry.

Terie
05-04-2012, 11:17 AM
So what is the difference in production costs between a physical book and an ebook?

That's what the difference in price should be.

I work for a computer software company, and the difference in price between the download version and the physical version is the cost difference to us of producing and shipping the two versions. Nobody's upset by that. Ever.

I think what annoys people about ebook pricing is that in a lot of cases applying that logic implies that the physical production costs of a printed book are minute, zero or sometimes even negative when compared to an ebook which has had the same amount of writing and editing time. That can't be right, surely?

Around US$2-3 per hardback. Less for paperbacks.

Terie
05-04-2012, 11:34 AM
All our costs were printing costs. The magazine was therefore priced to recoup that cost. Had there been the Internet or an ability to distribute the magazine electronically back then, there'd have been no cost whatsoever.

There's a rather glaring, ginormous difference between that scenario and a publishing house's. You obviously were happy working for free.

Salaries are the big cost to publishers. Paper is pretty cheap; storage is pretty cheap.

Talented artists, editors, marketers and managers who have to pay rent in New York? Not cheap.

Also, if a publisher offers ebooks, that requires they start paying a whole new category of salary. They now have to hire computer techs to create their distribution system and keep it running smoothly.

And computer techs don't come cheap because they can find a job in any industry.

There's also the most glaring omission that JJ managed to forget (:D): paying the, yanno, writer. The advance is one of the biggest costs to a book and the one that most of us folks here are actually the most interested in.

skylark
05-04-2012, 11:47 AM
Around US$2-3 per hardback. Less for paperbacks.

Then that's a reasonable price differential to have between the two formats, surely?

Stijn Hommes
05-04-2012, 01:42 PM
Much of the cost of publishing is sunk into editing, copyediting, proofing, and marketing, much more than the actual cost of paper and ink. That is one of the key reasons why ebooks are as expensive or almost as expensive as print. It's a huge misconception among readers, who think almost all the cost is the cost of cutting down trees and marking them up. Sure, I understand those, but that still doesn't explain the discreprency between books that have actual physical copies that need to be stored by a wholesaler and digital files. If a retailer can get a 50% discount from a wholesaler, customers should be able to get something similar because storage of stock no longer needs to be calculated into the price.

bearilou
05-04-2012, 03:41 PM
I'm kind of with Deb on this one.

Not sure how well this is going to go over but...

...it's not just the actual costs that has people in arms over the ebook pricing issue.

It's the perception.

It's the perception that ebooks are 'relatively new'.

It's the perception that before the ebooks, there's the physical books. 'Well, they are already doing all that work for the print book. All the costs are already absorbed by the hard cover and paperback releases. IF the editing has already been done on the book for those two physical items, if the time and energy has gone into getting the book ready for physical print ALL YOU GOTTA DO IS* push a button, insta-ebook and VOILA! Where's the cost for doing that?'

It's the perception that ebooks really are a 'push button, ebook ready' mentality. This is not helped in the current environment of DIY. Nor is it helped by Amazon.

It's the perception that there are already other ebooks available on Amazon for $0.99/2.99/4.99 so the publishers are looking to do nothing more than gouge the consumer.

It's about perceived value. It's about how authors are perceived to be more in control of the process. It's about how the authors are perceived to be paid more than they are.

It's all about the perception, which clearly isn't matching reality.


I seem to be teh only one on earth who thinks prices for pretty much all fiction, e-books or print, are remarkably low. I see people screm at teh price of a book, and then spend twice as much for DVD. Or for weekly trips to Starbucks. Or for you name it.

Books aren't overpriced, they're undervalued.

And Amazon sucks.

Sadly, yes.


The most expensive thing in a novel is not the paper, it is the words. That is why different formats are similar prices.

I totally agree...and yet here is where I am afraid I'm going to get into trouble.

A lot of the perception about the undervaluement of an author's work rests squarely on the backs of writers. How many times in this very forum, has an author said 'I'll give my words away for free if someone will read them' or some variation.

In the self-publishing realm, authors give their books away for free, they price their books low in the hopes that someone will buy them.

In the discussions about does a reader really care if a book is self-published or trade published? The consensus appears to be that a reader doesn't. Until that book is priced differently. Then they want to know why 'this author over here has books priced at $2.99 but not that one?'

Then all of a sudden, it's the greedy author/publisher's fault for pricing it so high, wanting to gouge the consumer.

It's about the perceptions and how in the mind of the reader/consumer there are important distinctions that are not being made.

It's those perceptions that have to be busted. Not sure how. I have some ideas, just from the perspective of a reader, but I know they will not go over well. They may not even be realistic, but I do see where many readers are coming from. :e2zipped:

*pet peeve number one

Stacia Kane
05-04-2012, 03:43 PM
I can't help but marvel that people will happily pay $5 for a Caramel Macchiato that will be gone in fifteen minutes, but get the vapors when asked to spend $8 or $9 on a book. 'Sweird to me.


This is exactly, EXACTLY, what I was going to say.

Stacia Kane
05-04-2012, 03:52 PM
Yeah, and I bet not one of those several responses mentioned how hurt the author felt over your wife's e-mails. I have a friend who's also an NYT bestseller, and though she replies to the messages that she gets like that with unbelievable grace, I also know that her feelings are hurt and she's very frustrated at the ignorance out there about how publishing works.

So I wouldn't be bragging if I were you or your wife. All she did was cause pain and frustration to those authors. Not sure how you calculate that that was such a 'smart thing'.





Also, this. I've gotten a few of those emails, too. It is very hurtful. Nothing like opening your emails and finding a message that someone doesn't think your hard work is worth a couple of bucks.

It's mean, and it's rude, and it's hurtful and insulting.

Perks
05-04-2012, 03:56 PM
So what is the difference in production costs between a physical book and an ebook?

That's what the difference in price should be.
About 10% less. Most often, e-versions are more deeply discounted than 10% off the hardbound print price.

http://www.digitalbookworld.com/2012/consumers-upset-and-confused-over-e-book-pricing/

seun
05-04-2012, 04:02 PM
Ref sending to the publisher, I think my wife did the smart thing and sent her "feelings" to the authors themselves via their web sites. Already got several responses.


How is that the smart thing to do?

Bubastes
05-04-2012, 04:31 PM
I totally agree...and yet here is where I am afraid I'm going to get into trouble.

A lot of the perception about the undervaluement of an author's work rests squarely on the backs of writers. How many times in this very forum, has an author said 'I'll give my words away for free if someone will read them' or some variation.

In the self-publishing realm, authors give their books away for free, they price their books low in the hopes that someone will buy them.

In the discussions about does a reader really care if a book is self-published or trade published? The consensus appears to be that a reader doesn't. Until that book is priced differently. Then they want to know why 'this author over here has books priced at $2.99 but not that one?'

Then all of a sudden, it's the greedy author/publisher's fault for pricing it so high, wanting to gouge the consumer.

It's about the perceptions and how in the mind of the reader/consumer there are important distinctions that are not being made.


You won't get any flaming from me. I have friends who are readers and not writers, and they don't care how a book is published. They notice the story and the price. That's it.

And if writers don't value their own work, why should anyone else?

Perks
05-04-2012, 04:34 PM
Someone had to link to Harlan Ellison's famous rant "Pay the Writer"

http://www.youtube.com/watch?v=mj5IV23g-fE

(Not exactly safe for work, due to the fact that he's very angry. And it shows.)

Old Hack
05-04-2012, 04:36 PM
There's a discussion going on in E-Publishing which is almost identical to this one, if anyone's interested. (http://www.absolutewrite.com/forums/showthread.php?t=239597)

Most of what I was going to be said has already been said but this one point stuck out for me, and I don't think I've understood Stijn's point properly:


Sure, I understand those, but that still doesn't explain the discreprency between books that have actual physical copies that need to be stored by a wholesaler and digital files. If a retailer can get a 50% discount from a wholesaler, customers should be able to get something similar because storage of stock no longer needs to be calculated into the price.

It seems to me that you're suggesting that retailers only get discounts on physical books, and not on e-books; or that readers buy print books from retailers, but get their e-books from places which aren't retailers. I'm confused, and don't want to be. Could you clarify, please?

Phaeal
05-04-2012, 04:52 PM
A lot of people nowadays have raging cases of entitleditis. They think they should profit from the work of others without a fair exchange of goods. Hell, they think others should give them their work for free! If they get a Groupon for fifty percent off a restaurant, do you think they'll go back to the restaurant and pay full price? Hell no. A little later on, they'll wonder why that restaurant went out of business. Oops.

Just a wee mini-rant. Off to work now.

Amarie
05-04-2012, 05:21 PM
There's also the most glaring omission that JJ managed to forget (:D): paying the, yanno, writer. The advance is one of the biggest costs to a book and the one that most of us folks here are actually the most interested in.


Sadly, given the amount of most advances, they are actually not one of the biggest costs to a book.

Overhead is the biggest cost.

Here's a link to an agent's breakdown of the costs (http://stevelaube.com/who-gets-paid-in-publishing/) a paperback book retailing at 15.00

according to him, overhead per book in his example is 1/5 the cost, printing is about 1/12 the cost, and the author's royalty which goes against the advance is about 1/15

they aren't going to pay a big advance if they don't expect to sell enough copies to make a profit, so the advance will be in line with projected sales.

charmingbillie
05-04-2012, 05:45 PM
This is my perspective as a reader and not a writer. I've had a Kindle almost from the beginning (not quite, because my first was a Kindle 2). I'm on my second Kindle. I love it. My thoughts on price have changed in that time. Because when I first got it I was all gung-ho CHEAP BOOKS! And now, not so much.

I still find it really really hard to resist books that I sort of vaguely want if they're priced at 1.99. However, I've come to realize that mostly those books just clutter up my archives and I never quite get around to reading them. The books I actually want and actually read are 9.99 and 11.99, and 12.99. And you know what? They're still cheaper than a hardcover. They're delivered to me instantly the minute they're released. They don't take up room in my house.

So, honestly, I've come to not care all that much about what an e-book costs. I care a lot more about whether it's a book I actually want or not.

BethS
05-04-2012, 05:51 PM
I can't help but marvel that people will happily pay $5 for a Caramel Macchiato that will be gone in fifteen minutes, but get the vapors when asked to spend $8 or $9 on a book. 'Sweird to me.

This, times about a hundred.

BethS
05-04-2012, 06:05 PM
...it's not just the actual costs that has people in arms over the ebook pricing issue.

It's the perception.

Yes to that and everything that followed.

Perks
05-04-2012, 06:11 PM
The books I actually want and actually read are 9.99 and 11.99, and 12.99. And you know what? They're still cheaper than a hardcover. They're delivered to me instantly the minute they're released. They don't take up room in my house.

Ha! Me, too. Somehow it doesn't feel quite writerly of me, but what I'd love to have is the hardbound book for my shelf (because, apparently, I love dusting) and the ebook version to read. Maybe a bundling-type deal will come with hardbacks soon.

I love having my Nook with me when someone recommends a book. I can instantly download a sample and keep track of all the things I was to read.

Now if I could just read faster...

iRock
05-04-2012, 06:13 PM
Ref sending to the publisher, I think my wife did the smart thing and sent her "feelings" to the authors themselves via their web sites. Already got several responses.


Your wife is a very rude, thoughtless and not even remotely smart about this subject.

That's me sending my "feelings" her way. I suggest you educate her (and yourself) before she flaps her gums again at the very people who have no control over prices, which are more than fair.

escritora
05-04-2012, 06:22 PM
Also, this. I've gotten a few of those emails, too. It is very hurtful. Nothing like opening your emails and finding a message that someone doesn't think your hard work is worth a couple of bucks.

It's mean, and it's rude, and it's hurtful and insulting.

I never internalized it that way, but can see why you and others do.

I simply roll my eyes and delete the email.

JBuck
05-04-2012, 06:28 PM
A lot of people nowadays have raging cases of entitleditis. They think they should profit from the work of others without a fair exchange of goods. Hell, they think others should give them their work for free! If they get a Groupon for fifty percent off a restaurant, do you think they'll go back to the restaurant and pay full price? Hell no. A little later on, they'll wonder why that restaurant went out of business. Oops.

Just a wee mini-rant. Off to work now.

Exactly how I feel when people step into my bookstore and rant and rave about how much books cost and that it's unfair because after they've read it, it's useless.
The amount of times I've had to bite my tongue, being a writer, and not point at my blood shot eyes and say, okay, I've given up the whole sleep thing for years to write books (that are not even published yet!!!) and you're telling me they cost too much? That writers should just entertain for free? That bookstores should sell books at cost price and thus go out of business - just so you can go and spent ten times that amount on your nails or hair or dvds or games? -(nothing personal against any of those things, btw).
*sighs*
That's my rant over with.

JSSchley
05-04-2012, 07:20 PM
Sure, I understand those, but that still doesn't explain the discreprency between books that have actual physical copies that need to be stored by a wholesaler and digital files. If a retailer can get a 50% discount from a wholesaler, customers should be able to get something similar because storage of stock no longer needs to be calculated into the price.

But they *do* get a 50% discount. A lot of the time.

My favorite example of this? STEVE JOBS came out last October. Amazon, in their infinite business hawkishness, decided to make it a loss leader, forcing BN.com and several other websites to do the same. The book was $35.00 retail. Invoice would be $17.50. Maybe a bit less since I'm sure some were bought nonreturnable, etc. Amazon set the hard copy as a loss lead at $14.70-something.

The ebook was originally priced at $16.99, under the agency model, so it was not discounted.

But at $16.99, the consumer was already paying only 48% of the cost of the hardcover.

Every cent of that 50% discount and then some was passed on to the reader of the e-book. Amazon simply chose not to mark UP the hardcover and make profit from it, and so it looked as though the books were the same price. ETA: and it bears pointing out that because customers screamed, the price of the ebook was subsequently dropped to $14.99. So right now, if you buy an e-edition of this book, you are getting a 68% discount. And the publisher only makes 70% of that, whereas they make 100% of the $17.50 they sell the hardcover for. What most readers seem to want is for the ebook to be 50% of the cost of a hardcover that's already been discounted 40% or more, and that makes the e-book price only about 25%-30% of the actual retail price of the book. That, to me, is a lot to ask for something that ultimately only cost a dollar or two less to produce than its physical counterpart.

amyashley
05-04-2012, 07:55 PM
We are not paying for production costs, not really. We are paying for entertainment, education, titillation. What is that worth?

Ninety-nine cent thrills don't go very far.

GregB
05-04-2012, 08:03 PM
Here's a link to an agent's breakdown of the costs (http://stevelaube.com/who-gets-paid-in-publishing/) a paperback book retailing at 15.00


That's useful, thank you. And it shows why the "10%" company line doesn't pass the sniff test. Here's the breakdown from the link -- alongside it, I've provided the same breakdown for digital using agency pricing and a 25% net royalty to the author.

http://i315.photobucket.com/albums/ll442/gbenage/costs-2.jpg

Now, I think more than half the overhead is dedicated to print -- the sales department, print buyers, warehousing, shipping, inventory costs/taxes, insurance, vendor management, etc. But we'll call it half to be conservative.

Readers' complaints are legitimate. Authors might have a gripe, too. The only reason publishers are trying to maintain high price levels for digital books is that (1) they can, so far, and (2) they don't want to cannibalize the sales of print books, which still account for 75-80% of their total sales.

That's understandable, but no one -- including authors and agents -- should find the "10%" talking point especially convincing.

DCDaugherty
05-04-2012, 08:12 PM
Was shelf life ever figured in the forecasts for print books? I mean, it seems, if the average shelf life of a typical print book is (6,12,18 months?), that would be a consideration in price, as in you'd need to price accordingly--and usually higher--so you could recoup your expenses in a limited window of time.

With ebooks, you all but eliminate that window (what is the maximum not "work for hire" contract these days? 35 years?). If so, 35 years to recoup expenses seems like it leaves a bit better margin for error.

How much does shelf life figure into the price?

Amarie
05-04-2012, 08:14 PM
That's useful, thank you. And it shows why the "10%" company line doesn't pass the sniff test. Here's the breakdown from the link -- alongside it, I've provided the same breakdown for digital using agency pricing and a 25% net royalty to the author..


Greg, I didn't think it's a 25% net royalty for most. The ebook vendor gets a cut of the author's royalty, so it's more like 17.5 net (that's pre-agent commission.)

eta: Though for the purposes of your example, you need to use the 25%, so it's gross royalty, right? (It's been a while since I took economics!)

GregB
05-04-2012, 08:33 PM
Hey Amarie -- yeah, you can see how the 25% net shows up as 17.5% of list in my little table.

Jonathan Dalar
05-04-2012, 08:59 PM
I suppose one could also say "It takes 5000 print books sold to recoup the costs of acquisition, editing, etc, so starting with print book 5001, the price should drop to reflect that."

Sure, if you want to assume publishers, authors, etc., don't want to actually profit from their work, but just break even. It's not a matter of recouping costs and calling it quits. Sure, once you break even, the price can be dropped, but it's done to increase sales, and thus profits.


Sure, I understand those, but that still doesn't explain the discreprency between books that have actual physical copies that need to be stored by a wholesaler and digital files. If a retailer can get a 50% discount from a wholesaler, customers should be able to get something similar because storage of stock no longer needs to be calculated into the price.

Of course overhead is taken into consideration, as are returns. But bear in mind there are a lot of costs not usually considered by the reader with regard to the overall price of the book. The man-hours required for editing a book, for example, have to cover a place for the editors to work, their equipment (computers, programs, etc.), energy to run the place and keep it the correct temperature, rent for the building, etc. Same goes with the entire process during the creation of a book.

So we're looking at a much smaller piece of the pie with regards to warehousing and shipping costs, especially when you factor in the HTML coding, server, bandwidth, and other costs associated with ebooks but not paper books.

So really we have the following (over-simplified) formula:

Total Cost: A + B + C + D + E + F + G = H
Print: I - H = Cost of book allocated to print version.
Ebooks: I - (E + F + G) = Cost of book allocated to digital version.

Where: A = Author, B = Editing, C + Overhead, D = Marketing, E = Printing, F = Shipping, G = Returns, H = Coding, and I = Total cost

So, (E + F + G) - H = Cost difference between print and digital. The more H costs (in comparison to E, F, and G), the closer the digital price will be to the print price.

Hope that made some semblance of sense.

Namatu
05-04-2012, 09:17 PM
I spy math. :chair

Since my brain has just exploded from the algebraic equations and such, I'll stick to something simple. Personally, I don't mind spending what I spend on books, be they print or electronic. The cost for that entertainment or education is worth it. And if I'm not willing to pay? I go to the library.

shadowwalker
05-04-2012, 09:27 PM
Sure, if you want to assume publishers, authors, etc., don't want to actually profit from their work, but just break even. It's not a matter of recouping costs and calling it quits. Sure, once you break even, the price can be dropped, but it's done to increase sales, and thus profits.

I understand that, and I didn't mean to imply that the print books should be sold at the 'new' cost. I was responding to this idea that ebooks don't cost that much more to produce so shouldn't be priced like print books. So - once the base costs of the print book were covered, if that "don't cost more to produce" argument were used, the print books should be heavily discounted just as they want ebooks to be, because those costs were already paid.

shadowwalker
05-04-2012, 09:33 PM
I spy math. :chair

Since my brain has just exploded from the algebraic equations and such, I'll stick to something simple. Personally, I don't mind spending what I spend on books, be they print or electronic. The cost for that entertainment or education is worth it. And if I'm not willing to pay? I go to the library.

True enough. Really, are people going to stop buying their favorite authors because the ebooks are priced higher than they'd like? They might balk at first, complain - but eventually they'll tire of trying to find decent reading at the freebie or cheap cheap cheap levels and come back. I've hesitated at buying print books because of price - but I just wait until I do have the money, because they're authors I truly enjoy.

mpclemens
05-04-2012, 10:01 PM
I wonder how much of the perceived price unfairness is because e-books aren't "real" to the reader in the way a printed, bound book is real? If I buy a book, especially a hardcover, then it sits on the shelf, becomes part of my decor, maybe advertises to my guests that I have excellent (or terrible) taste. A bound and printed book is its own reading device -- a single-function piece of technology with infinite battery life, never crashes, can be used on airplanes, but has no backlight and general portability issues.

I wonder how much of the e-book buying world thinks "Well, I already spent $xxx on this fancy tablet/smart phone/ereader, and I can download apps for $0.99, so why should I spend $10 on a book? If I hate it, that's two lattes I could have bought instead." The cheap app influence shouldn't be ignored. If someone can spend hours a week playing a 99-cent game app, maybe a $10 e-book that can't be signed by an author, shown off in your house, loaned to a friend, and ultimately donated to the library book sale does look a little limiting.

I'm not defending the mentality, but if you've gotten conditioned to paying no more than $3 for any sort of e-entertainment on your tablet... well, why should a book cost more? (goes the thinking of this imaginary person.) We're a culture getting accustomed to cheap or free, instant digital amusements from our gadgets. That's a tough ecosystem for a book to thrive in.

One other spurious thought: it seems like a lot of the "Yeah! E-books should be cheaper!" responses are assuming that preparing the e-book comes after the print edition, when the "hard work" is done and paid for. My perception is that they are done at the same time, and the costs are composite: there is editing, formatting, proofing, and distribution regardless of the media.

Still, as a consumer/reader, I expect e-books to be cheaper. Much cheaper. And I know that's unfair to everyone involved in making the books... but it's still my expectation.

kaitie
05-04-2012, 10:33 PM
Then that's a reasonable price differential to have between the two formats, surely?

Now take into account that there are other costs of ebooks that aren't there for paperbacks. For instance, formatting for each file type and server costs. It might not come out to exactly the price of the paper, but it's not like you can just subtract the paper and warehousing costs. You have to also consider that creating an ebook has costs that don't exist for paper books.

Something I haven't seen mentioned yet is that right now we can look at this and say, "Well, it doesn't hurt anything for an ebook to be less because the editing costs, etc. were all covered by the paperback version."

I can understand that logic. The idea is that the only new costs are essentially formatting costs, and that is much less than the cost of editing, cover art, etc.

But what about books that only come out as ebooks? And what if we really do move more to a situation where most books are available as ebooks and only bestsellers and so on are sold as paperbacks?

If ebooks are sold at drastically reduced prices, what happens when ebooks become dominant and those reduced prices can't pay the bills for editing, cover, and so on? Either prices will have to rise to account for this, or everyone involved (particularly the author) will just be expected to take a hit on their pay.

You can't expect me to believe that an author deserves to get paid less in the future just because people want to pay less for ebooks. In fact, I'm kind of offended by the idea that some people think so little of books and the hard work that goes into writing them that they wouldn't buy even their favorites because the price was too high. Talk about devaluing someone's work.

Personally, I'll pay hardcover prices for a favorite author or book. I don't mind shelling out extra cash when it's something I know I'll love and cherish and enjoy. I'd rather pay a couple of dollars more to help an author earn a living wage (or closer to one). How is it fair of me as a reader to expect an author to keep writing books on a regular basis if I'm not willing to pay a little extra so that the author can afford to do it.

buz
05-04-2012, 10:36 PM
If someone can spend hours a week playing a 99-cent game app, maybe a $10 e-book that can't be signed by an author, shown off in your house, loaned to a friend, and ultimately donated to the library book sale does look a little limiting.Lawlz, who gets books in order to do those things? I get books to read them. Then I'm done and unless they are all nostalgic or whatever for me (I do still have all my Roald Dahl books from my childhood and they look like a shitmonster's been chewing on them) I want them gone. They take up space. When I travel they make packing a crapfest. Getting rid of them is a pain in the ass.

If I want a cheap book, I get it used. If I want it new, I pay for it. If I want it instantly, I get it electronically, and I don't see how that's dramatically different from getting it in paper. I get a book for the content, not decoration or paper or physical space or "the smell", and that is the same regardless.

Occasionally it's not worth the money, but most of the time it absolutely is. An app cannot make me cry or laugh or connect deeply with made-up people. The most an app ever did was keep me busy while I have to sit around waiting for something boring and piss me off. Angry Birds is TOO HARD. :P

I can see maybe expecting e-books to be slightly cheaper, but .99? If I see anything for .99 where that is not the general accepted standard (yanno, gum) it is sort of a warning, to me. If the sellers think it's worthless, then so do I. Unless it's at a yard sale and they're selling a taxidermied alligator wearing a monocle and a stovepipe hat.

But I'm all old and behind the times. I'm not even sure what the names of the band members of One Direction are.

Namatu
05-04-2012, 10:39 PM
I wonder how much of the perceived price unfairness is because e-books aren't "real" to the reader in the way a printed, bound book is real?A lot.


I was responding to this idea that ebooks don't cost that much more to produce so shouldn't be priced like print books. So - once the base costs of the print book were covered, if that "don't cost more to produce" argument were used, the print books should be heavily discounted just as they want ebooks to be, because those costs were already paid.Let's look at this another way. A designer designs a lovely pair of jeans. Thousands of copies of these jeans are made. They're marketed, launched, and people buy them at the price offered. When the number of sales have covered the cost it took to create and produce that product, should the price of the jeans be heavily discounted because those costs were already paid? The only time that happens is during a sale. At all other times, the price point remains the same. Books, both print and e, do go on sale. Maybe not as often, and not to the extent that you may want, but it happens.

Perks
05-04-2012, 10:43 PM
And I guess I don't know what all the bellyaching is about anyway. We live in a unique time where someone needn't be infuriated by the price of ebooks. Outside of tapping a few pixels, it's just as easy to get 10 books for .99 a piece as it is to get one book for $9.99.

Plenty to choose from. Have at it!

Medievalist
05-04-2012, 10:44 PM
The book is not the container; the book is the contents.

If an ebook is released at more or less the same time as the hardcover or paperback, I see no reason why it should be more than a few dollars less. I think the ebook cover price/list price should reflect the costs of the contents--including acquisition and editing.

When I buy a book, I'm buying it for the contents, not the container.

Moreover, as a writer, I understand and share the concerns about undercutting print sales by selling ebooks at more than a few dollars less than the print version.

I am paid in part based on the cover price of the books.

mpclemens
05-04-2012, 10:53 PM
Lawlz, who gets books in order to do those things? I get books to read them. (snip) I get a book for the content, not decoration or paper or physical space or "the smell", and that is the same regardless

Same here. Our sagging bookshelves at home tell the tale. And many of the "one offs" do make it to the library, to be bought and read again by someone else. Hopefully by a lot of Someone Elses. But I've known people who seem to subscribe to the "book as furniture" mentality, and even a few people with no books at all.

I doubt any are regular AW-type people.


Unless it's at a yard sale and they're selling a taxidermied alligator wearing a monocle and a stovepipe hat.

Would totally buy this. And name it. And place it next to the typewriter as a muse, damn the cost.

GregB
05-04-2012, 11:30 PM
The book is not the container; the book is the contents.


If we're talking about perceived value now, I agree with that. Print loyalists will rhapsodize about the visual, tactile and olfactory aesthetic qualities of printed books, but DRM-free digital has a higher perceived value for me.

Of course, publishers have spent the modern age training their customers that there's a different price for books in different formats (HB, TPB, MMPB, let alone audio) based on their cost to deliver to the reader. So readers think, okay, so now I'm due a price break for digital, right?

"No, format doesn't matter."

skylark
05-04-2012, 11:50 PM
Now take into account that there are other costs of ebooks that aren't there for paperbacks. For instance, formatting for each file type and server costs. It might not come out to exactly the price of the paper, but it's not like you can just subtract the paper and warehousing costs. You have to also consider that creating an ebook has costs that don't exist for paper books.

I did take it into account, or thought I had. I asked what the difference in costs was, not what the costs you get in hardcopy but not electronic versions are.

It just seems to me that every time anyone says "okay, so what are the numbers here?" and even an approximate
a number's given, someone else comes along and says "but that's wrong, you haven't accounted for this cost." Normally without giving a number.

I'd like to account for this cost. Really. Once you've done all the common things (paying the writer, editing, cover design, marketing and so on) then what is the difference in cost to a publisher between selling a hardcopy version and an electronic version of the same book?

Jonathan Dalar
05-05-2012, 12:06 AM
I understand that, and I didn't mean to imply that the print books should be sold at the 'new' cost. I was responding to this idea that ebooks don't cost that much more to produce so shouldn't be priced like print books. So - once the base costs of the print book were covered, if that "don't cost more to produce" argument were used, the print books should be heavily discounted just as they want ebooks to be, because those costs were already paid.


The problem is, you can't just assume ebooks are an "extra" above and beyond a print book. You can't just absorb all costs with the print version and sell the ebook with the assumption of coding and digital sparklization minus all your overhead and creation-based costs.

Well, you could, but it would throw your accounting all off and it would jack up the payment structure.

Also, the issue of "perceived value vs. actual cost" is a very real one. There is a reason that say, some alternate fuels are not mainstream yet. The cost of manufacturing is far greater than the perceived value in the public's eye. The manufacturer would not make any money off the product because it couldn't sell it for a price that would recoup costs.

The perceived value of an ebook is lower than the actual cost a lot of times, but not so far off they can't charge enough to profit from it. In this case, all it costs is a lot of bitching about why they're ripping us off for something intangible, hence the basis for this thread.

shadowwalker
05-05-2012, 12:27 AM
A lot.

Let's look at this another way. A designer designs a lovely pair of jeans. Thousands of copies of these jeans are made. They're marketed, launched, and people buy them at the price offered. When the number of sales have covered the cost it took to create and produce that product, should the price of the jeans be heavily discounted because those costs were already paid? The only time that happens is during a sale. At all other times, the price point remains the same. Books, both print and e, do go on sale. Maybe not as often, and not to the extent that you may want, but it happens.

That's precisely what I'm saying. Just because the costs have been covered by X number of items doesn't mean that the rest should be discounted.

Medievalist
05-05-2012, 12:30 AM
It just seems to me that every time anyone says "okay, so what are the numbers here?" and even an approximate
a number's given, someone else comes along and says "but that's wrong, you haven't accounted for this cost." Normally without giving a number.

Maybe because some of us are tired of answering the same question over and over and over, with links. Once more:

http://www.nytimes.com/2010/03/01/business/media/01ebooks.html?src=twt&twt=nytimes

http://theharperstudio.com/2009/02/the-kindle-and-questioning-the-economics-of-ebook-publishingthe-conversation-continues/

http://news.cnet.com/8301-1023_3-57412587-93/why-e-books-cost-so-much/?tag=nl.e404

http://www.digitalbookworld.com/2012/consumers-upset-and-confused-over-e-book-pricing/

http://thisisyogic.wordpress.com/2012/04/10/ethical-reading-ethical-publishing/

The difference in price for a commercially published and produced book in ebook and print forms with day-and-day or close to release is about 10% of the cover price. That is, the cost savings are largely in printing and binding, though there may be others depending on the publisher (i.e. print run sizes, warehouse/stock storage, etc.) and of course, the book.

Namatu
05-05-2012, 12:49 AM
The difference in price for a commercially published and produced book in ebook and print forms with day-and-day or close to release is about 10% of the cover price.Oh good. That math temporarily messed with my comprehension skills. ;)

Namatu
05-05-2012, 12:50 AM
The difference in price for a commercially published and produced book in ebook and print forms with day-and-day or close to release is about 10% of the cover price.This number was also cited previously in this thread.

Perks
05-05-2012, 12:52 AM
Hopefully, this isn't too much to quote from the Digital Book World article (http://www.digitalbookworld.com/2012/consumers-upset-and-confused-over-e-book-pricing/). It's not something we've covered specifically in this thread. The process for the conversion is not just a push of a button and you've got an ebook.


To be sure, the production costs of e-books vary depending on a number of factors. A simple EPUB conversion can cost as little as $200 and a full-blown book app can cost up to $100,000, according to Andrea Fleck-Nisbet, head of digital publishing at Workman.
At Aptara, a major e-book production company, the cost can range from $0.20 to $0.90 a page for a simple conversion, according to Sriram Panchanathan, senior vice president for digital solutions at Aptara. Due to a large volume of titles to convert, many of Aptara’s clients have hired teams of project management professionals who help manage the process of working with Aptara as part of their job. (These teams also attend to tasks like digital rights acquisition, design and e-book distribution management.)
“Some of the larger publishers have entire teams of ten to fifteen people dedicated to managing this relationship,” said Panchanathan. “Smaller publishers have two or three people managing the process.”
The median salary across the U.S. for a low-level digital project manager is $73,678, according to Salary.com. Counting benefits and taxes to employ such workers, the cost to a small publisher in having a two-person project management team starts at around $200,000 a year.
If a small publisher employed such a team to manage the e-book production process, and that publisher converts, say, 100 books a year, that’s another $2,000 added to the cost of each e-book. More senior project managers often have salaries over $100,000.
At a large publishing company with a dozen or so product managers at various levels, the costs can easily be estimated at over $1 million a year. Of course, larger publishing companies are more likely publish more books and could have a lower cost-per-book.
Another hidden e-book cost is that of distribution. According to Panchanathan, e-book distributors typically take a cut of 2% to 9% of every sale.

Perks
05-05-2012, 01:06 AM
It also compares a $26 hardcover to a $12.99 ebook -- but of course, if ebooks always got a 50% discount from the latest print format, there wouldn't be quite so much complaining about ebook prices...

I'm trying to find one, but aren't most, if not all hardcover/ebook list prices for big publisher releases in about this range? I've looked at a dozen new releases and haven't found one that wasn't.

buz
05-05-2012, 01:09 AM
You keep saying this magical 10% but you never back it up, or explain it. You've been called out on this at least twice on the other thread, which you never responded directly to, and now you're here saying the same thing without support.


Actually, if you click on the links Medievalist provided, you will see this:


E-book production “costs 10% less” than print book production, said Molly Barton, Penguin’s global digital director. Hardly the vast savings that many consumers imagine. “But the largest expense is author payment and always has been.”

(From http://www.digitalbookworld.com/2012/consumers-upset-and-confused-over-e-book-pricing/, cited by Medievalist)

So. I'm not saying that this Molly Barton person is exactly right in that statement (and it's not like I would know) or that it's factual or totally valid (because, again, I am ignorant) but it's unfair to say stuff like "you never back it up" when you don't look at the supporting information provided.

Soccer Mom
05-05-2012, 01:17 AM
*modly note* I've edited the thread title to reflect the topic of dicussion. As you were.

Cliffhanger
05-05-2012, 01:24 AM
Actually, if you click on the links Medievalist provided, you will see this:



(From http://www.digitalbookworld.com/2012/consumers-upset-and-confused-over-e-book-pricing/, cited by Medievalist)

So. I'm not saying that this Molly Barton person is exactly right in that statement (and it's not like I would know) or that it's factual or totally valid (because, again, I am ignorant) but it's unfair to say stuff like "you never back it up" when you don't look at the supporting information provided.

As pointed out by GregB, many / most of those articles completely ignore the actual differences in overhead costs involved in physically printing books when talking about the disparity.

Medievalist
05-05-2012, 01:43 AM
I'm trying to find one, but aren't most, if not all hardcover/ebook list prices for big publisher releases in about this range? I've looked at a dozen new releases and haven't found one that wasn't.

Generally day and date releases for hardcover and ebooks are $12.99 or $14.99 for the ebook.

Perks
05-05-2012, 01:54 AM
Generally day and date releases for hardcover and ebooks are $12.99 or $14.99.Right. And the print list price is about $26.


It also compares a $26 hardcover to a $12.99 ebook -- but of course, if ebooks always got a 50% discount from the latest print format, there wouldn't be quite so much complaining about ebook prices...

So, since this is the case, what's the problem again?

Ava Glass
05-05-2012, 01:57 AM
Talented artists, editors, marketers and managers who have to pay rent in New York? Not cheap.


I think this is part of the overhead costs others point out in this thread. Why Manhattan? It looks more and more unnecessary as the years pass. Sourcebooks is based in a suburb of Chicago. Harlequin is in Toronto. Artists and editors can live anywhere.

ETA: I dare anyone to go to Dear Author (http://dearauthor.com/) or SBTB (http://smartbitchestrashybooks.com/) and tell the readers (aka customers) over there that they're acting "entitled" when they complain about ebook prices. Jane and Sarah recently created a website called Support the Settlement (https://support4settlement.wordpress.com) where readers can use a form to send a message to the DoJ.


I am a long time consumer of books. I spend close to $100 per month on digital books and we digital readers have been treated poorly by publishers for years. They have been slow to digitize books. When they finally did make digital copies available, they would “window” them, meaning paper books would be released first and digital books would be released later, without any price reduction. The digital copies of their books are often poorly formatted, with serious errors, and often without color covers.


Digital readers are also subjected to paying the same cost for digital books or sometimes even increased costs despite having far fewer rights. We can’t lend the book to a family member or friend. We can’t transfer a book from one device to another. We can’t resell the book. Our own copyright rights as a reader are totally ignored under the ebook model and having to pay increased prices as a result of an improper conspiracy by the publishers is outrageous.

MacAllister
05-05-2012, 02:00 AM
Greg B and Cliffhanger, you both need to ease up on the ridiculous amount of snotty condescension you're displaying. It's tiresome.

And I can't help but note that neither of you are offering anything in the way of evidence that contradicts the numbers you're challenging, so you're simply being argumentative and rude.

Stop it.

Here's another article that puts the estimation of producing the physical ink-n-paper artifact at approximately 15% of the total cost of the book (http://www.wired.com/magazine/2010/08/pr_burningquestion_ebooks/), by the way -- and further notes that there are costs associated with producing an eBook that producing a printed book doesn't incur:

“People vastly overestimate how much a publisher saves,” says Erik Sherman, an analyst and author who studies ebook economics. Turns out, the physical aspects of book production can account for as little as 15 percent of the cost of the title. The rest can be divvied up among the author, editor, designer, marketers, publicists, distributors, and resellers. A lot of fingers dip into that $14.99 money pie before the house takes a slice.

“People would have heart attacks if they knew all the costs associated with digital publishing,” says Maja Thomas, senior vice president of the Hachette Book Group’s digital division. Tacking an e onto a book requires antipiracy software, digital warehousing, extra legal support, and programmers to adapt each title for Android, iPhone, Kindle, and all the other formats. That’s on top of the regular costs of turning a manuscript into a finished product.

More discussion establishing the approximate percentage of cover price for producing the physical book (http://www.guardian.co.uk/books/booksblog/2011/aug/04/price-publishing-ebooks):

In his forthcoming book Free Ride: How Digital Parasites Are Destroying the Culture Business and How the Culture Business Can Fight Back (http://www.randomhouse.com/book/203846/free-ride-by-robert-levine/9780385533768/), the American author Robert Levine has an excellent chapter on publishing (http://www.guardian.co.uk/books/publishing) in which he interrogates the forces driving the pricing of books, in both their paper and digital forms. And some of the explanations he gives are (to me at least) surprising. For example, it turns out that "publishers only spend $3.50 to print and distribute a hardback". (Let's say it's £3 in Britain.) So when, this autumn, you go into your local bookshop and spend £30 on that gorgeous copy of...<snip>

And yet another article (http://www.lifehacker.com.au/2012/03/printing-isnt-the-costliest-part-of-producing-books/), establishing the same thing.

So let's move on, and take it as a given, then, that producing the physical artifact just doesn't cost as much as people like to think, eh?

And if not, then bring some evidence to refute that assertion.

Namatu
05-05-2012, 02:14 AM
I think this is part of the overhead costs others point out in this thread. Why Manhattan? It looks more and more unnecessary as the years pass. Sourcebooks is based in a suburb of Chicago. Harlequin is in Toronto. Artists and editors can live anywhere.Who says they're all in Manhattan? The managers may be there (or not) and the majority of the work may be outsourced anywhere between Maine and Australia. I don't mean that to sound argumentative (if it does). There is loads of outsourcing going on because the volume is too much to handle completely in-house.

Ava Glass
05-05-2012, 02:20 AM
Who says they're all in Manhattan? The managers may be there (or not) and the majority of the work may be outsourced anywhere between Maine and Australia. I don't mean that to sound argumentative (if it does). There is loads of outsourcing going on because the volume is too much to handle completely in-house.

I was responding to a post from earlier. I should have included more in the quote.



Salaries are the big cost to publishers. Paper is pretty cheap; storage is pretty cheap.

Talented artists, editors, marketers and managers who have to pay rent in New York? Not cheap.


But seriously, why are the offices in Manhattan still? And I'm talking about "New York" publishing, as I gave examples of successful publishers that aren't.

Cliffhanger
05-05-2012, 02:21 AM
Greg B and Cliffhanger, you both need to ease up on the ridiculous amount of snotty condescension you're displaying. It's tiresome.

And I can't help but note that neither of you are offering anything in the way of evidence that contradicts the numbers you're challenging, so you're simply being argumentative and rude.

Stop it.

Here's another article that puts the estimation of producing the physical ink-n-paper artifact at approximately 15% of the total cost of the book (http://www.wired.com/magazine/2010/08/pr_burningquestion_ebooks/), by the way -- and notes that there are costs associated with producing an eBook that producing a printed book doesn't incur:

The articles cited to explain the 10% figure don't actually explain the 10% figure, so we're calling him on it. Read them, they ignore the actual overhead cost differences entailed by physically producing a book. Citing an article that doesn't actually address the issue doesn't count as "backup" where I come from.

I posted all my figures in the other (http://www.absolutewrite.com/forums/showthread.php?t=239597), similar thread. I thought better than to post a wall of text here as well.

The key phrase in the bit you quoted is bolded below:


“People vastly overestimate how much a publisher saves,” says Erik Sherman, an analyst and author who studies ebook economics. Turns out, the physical aspects of book production can account for as little as 15 percent of the cost of the title. The rest can be divvied up among the author, editor, designer, marketers, publicists, distributors, and resellers. A lot of fingers dip into that $14.99 money pie before the house takes a slice. As little as. Meaning in the best of all possible situations, no more than 15%. Most cases aren't the best of all possible worlds.

If my responses strike you as snooty, I apologize. I've worked in the industry long enough to know this poster is flat-out wrong. And simply repeating the same tired arguments again and again don't turn fiction into fact.

Everyone's entitled to their own opinions, not their own facts.

GregB
05-05-2012, 02:24 AM
So, since this is the case, what's the problem again?

Problem, I'm not even sure how it's possible since the cost differential is only 10%.

Prices have been all over the place since the DoJ hammer came down. And of course that 50% ebook discount doesn't translate to other formats than hardcover.

So right now on B&N I can get King's 11/22/63 in hardcover for $19.98, or I can pay $16.99 for ebook. If I want Abercrombie's The Heroes, I can take the paperback for $10.98 or the ebook for $9.99.


Greg B and Cliffhanger, you both need to ease up on the ridiculous amount of snotty condescension you're displaying. It's tiresome.

And I can't help but note that neither of you are offering anything in the way of evidence that contradicts the numbers you're challenging, so you're simply being argumentative and rude.

Stop it.


I have offered contradictory evidence, and I've challenged the evidence (i.e. links) provided by others. In return, I get more links to industry sources ignoring the massive overhead costs of putting printed books in readers' hands (or the pulper's).

I truly don't want to be rude or condescending, though, and you're the boss, so I'll stop it.

Medievalist
05-05-2012, 02:26 AM
I think this is part of the overhead costs others point out in this thread. Why Manhattan? It looks more and more unnecessary as the years pass. Sourcebooks is based in a suburb of Chicago. Harlequin is in Toronto. Artists and editors can live anywhere.

Overhead is a cost of doing business; it applies to things like space and electricity and software and hardware, and support staff.

An awful lot of the people who do the actual hands-on-work of publishing aren't in Manhattan, but the accounting and executive folk still are, especially for the very large publishers. For instance, Macmillan and their parent company have offices in the Flatiron building, but increasingly editors are all over--and paid on 1099s.

It's not broken out specifically on P & Ls. Quite often the book uses out of house staff for design, or editorial, so those costs will be listed on a P & L.

But other than the printing and binding costs, I don't see why acquisition, editing, art, proofing etc. aren't considered shared for day-and-date release.

Once the file forks, going to printers or to ebook production staff, the costs differ, but up to that point it is the same file, the same product and shared costs.

Actually, I think looking a P and Ls makes some sense.

Some samples (these are from a variety of publishers, of various kinds):

http://pimpmynovel.blogspot.com/2009/10/p-1-of-4-basics.html

http://gropenassoc.com/blog/2009/11/a-typical-trade-titles-pl/

http://www.stevenpressfield.com/2011/09/a-matter-of-infinite-hope/

http://www.annagenoese.com/article_series/demyst/free_articles/article_p_and_l.html

These days the P and L master spreadsheet is often a closely held trade secret document, but I've seen long-term professionals do a P & L on a napkin.

Note that during the course of a book's lifetime—from proposal before acquisition to release and tracking—the P and L is a living document.

This article has a breakdown as well (http://www.nytimes.com/2010/03/01/business/media/01ebooks.html?src=twt&twt=nytimes).

There's potential for some quibbling from some publishers, but it does seem fairly accurate based on my experience in commercial print and epublishing.

Based on everything I know, and I've worked on a lot of books, print and digital in production (not to mention as an author and editor), that 10% of cover price as a fairly reasonable ballpark figure for the difference in production costs for an ebook and a printed book of the same text is pretty accurate.

Keep in mind that the assumption that a publisher will have to keep stock in warehouses is not so much the case these days. Publishers still do this for textbooks, but back in the 1990s Random House had a warehouse just for the Modern Library. Now, they instead do smaller print runs just in time--in part because of much better inventory and shipping data.

You will see a more noticeable disparity between production costs for a printed book with lots of color images and an ebook, but for text-dominant books, not so much.

Medievalist
05-05-2012, 02:36 AM
But seriously, why are the offices in Manhattan still? And I'm talking about "New York" publishing, as I gave examples of successful publishers that aren't.

One reason has to do with shipping (short print runs can be drop-shipped almost anywhere), but honestly, fewer and fewer of the actual hands-on people are in Manhattan. And now, printers are all over.

I mean, sure Macmillan is the Flatiron building, but their owner is a very large international conglomerate, and is the real tenant.

More and more of the production staff are elsewhere, and paid on 1099s.

MacAllister
05-05-2012, 02:37 AM
If my responses strike you as snooty, I apologize. I've worked in the industry long enough to know this poster is flat-out wrong. And simply repeating the same tired arguments again and again don't turn fiction into fact.

Everyone's entitled to their own opinions, not their own facts. [emphasis added]

Yet here you are, demanding that people currently working in the publishing industry accept your opinion as fact, no matter how many times across various threads you've been carefully and courteously refuted by publishing professionals, with sources cited. Strange.

The poster you're asserting is "flat out wrong" has worked in the industry for around thirty years, for example, and still does.

And pretty much everyone else I know currently working in the industry agrees with what Medievalist has posted.

That includes people currently working at St. Martin's, Tor, Hatchette, Baen, and a pretty good handful of non-fiction small presses, as well -- in the US, Canada, and the UK.

Cliffhanger: What IS your industry background, precisely, if you're going to cite yourself as an authority?

Which publishers have you worked for, and in what capacity, for how long, please? I'd be happy to make a couple of discreet phone calls to my own publishing contacts, to vouch for your experience and expertise -- it's a pretty small world, after all.

GregB
05-05-2012, 02:47 AM
Strange. The poster you're asserting is "flat out wrong" has worked in the industry for around thirty years, and still does.


FWIW, I don't think Med or anyone else is wrong about print production costs being an incremental 10-15%. I also agree with Med that overhead costs associated only with print production, distribution, retail and inventory management won't show up (generally speaking) on a individual book's P&L.

They're real costs, though. And they will show up on the publisher's P&L. So as digital continues to gain increased share of sales at the expense of print, the publisher (or its corporate parent) will downsize those cost centers even though they don't show up on an individual book's P&L. That's because they're still real costs of print, and, for example, the sales team or the print buyer can't do much to sell digital books.

I don't have Med's experience, though I did co-own and operate a small press for four years, then went to work for a larger publisher (http://www.fantasyflightgames.com/) first as a managing editor and later as the executive in charge of product development.

I think readers have a sense of that vast commercial infrastructure that's developed over the decades to put printed books into readers' hands, even if they can't break it down, and they believe publishers are setting the price of digital books, in part, to continue supporting that infrastructure. And they're right.

Cliffhanger
05-05-2012, 03:10 AM
Yet here you are, demanding that people currently working in the publishing industry accept your opinion as fact, no matter how many times across various threads you've been carefully and courteously refuted by publishing professionals, with sources cited. Strange.

For the third time, those sources completely ignore the crux of the matter, printing costs (and the other associated costs of physical products I've mentioned repeatedly). The articles linked are not "support" for the position.


The poster you're asserting is "flat out wrong" has worked in the industry for around thirty years, for example, and still does.

And pretty much everyone else I know currently working in the industry agrees with what Medievalist has posted.

Strange that people in the industry are arguing for higher ebook costs (self-serving), and someone formerly in the industry is calling them on it (no stake either way).


Cliffhanger: What IS your industry background, precisely, if you're going to cite yourself as an authority?

Which publishers have you worked for, and in what capacity, for how long, please? I'd be happy to make a couple of discreet phone calls to my own publishing contacts, to vouch for your experience and expertise -- it's a pretty small world, after all.

All I have is your word of her credentials. This is an internet forum. She could be the former head of every publishing company ever. That still doesn't change the numbers. Not that it's worth anything given that, but sure, I'll bite. I've been an acquisitions editor, editor, book designer (print and digital), and spent about half my career as a production & design manager. I know the costs involved in printing books, and I know the costs involved in digital books. The claim that digital books are nearly as expensive as print is simply wrong.

Look over the numbers I provided in the other thread. None of those were ever refuted, because they're accurate. Going digital you don't have the cost of physical printing, you have less of a distribution cut taken out (30% from the highest digital distro, Apple; 65% from most print distros), you have no shipping & warehousing costs, and you have no taxes on stock. Yet, ebooks "cost" nearly the same as print books, and people still in the industry will say it's anything except what it is, grabbing for more profit. Again, I think the industry needs to earn more. They more than deserve it. But the math doesn't lie.

HoneyBadger
05-05-2012, 03:28 AM
All I have is your word of her credentials. This is an internet forum. She could be the former head of every publishing company ever.

So... why are you posting on a board owned and run by someone you don't trust?

Stacia Kane
05-05-2012, 03:42 AM
All I have is your word of her credentials. This is an internet forum.


Actually, since you obviously know what a sigline is--you have one of your own--you have her word for it, too. Just click. Google her name. It's pretty simple.

Cliffhanger
05-05-2012, 04:20 AM
It's not a question of resumes, but math. She's citing sources that don't actually support her position and ignoring the basic math.

Ava Glass
05-05-2012, 05:30 AM
I think it would help both sides if we quoted from the sources a little more.

I have a question. In the comments of the Digital Book World article (http://www.digitalbookworld.com/2012/consumers-upset-and-confused-over-e-book-pricing/) someone writes:


What’s not being said is how publishers think in terms of “print first,” which raises the cost of e-book production (because you have to convert from a page layout format to a page-flow format). If they thought in terms of “e-book first,” the cost would go WAAAAAAAAAAAY down. The path from Microsoft Word to Adobe InDesign to ePub is circuitous, because you convert from text-flow to page-layout back to text-flow. The path from Microsoft Word to ePub is more of a straight line.Is this true? Is the path of book production manuscript-->print book-->ebook?




Here are some quotes from the Nathan Bransford CNET article (http://news.cnet.com/8301-1023_3-57412587-93/why-e-books-cost-so-much/?tag=nl.e404):



The vast majority of a publisher's costs come from expenses that still exist in an e-book world: Author advances, design, marketing, publicity,office space, and staff.

And even aside from financial considerations, publishers' entire reason for existence is bound up in print. The major publishers are, quite simply, the best companies in the world at getting print books from authors to readers. Most of the tools at their disposal for making a book a hit are tied to a print world, from buying front-of-the-bookstore placement (yes, publishers pay for that) to book tours.
As the exponential growth of e-books has slowed, some publishers are even whispering their hopes (http://www.idealog.com/blog/extending-the-life-of-bookstores-is-critical-but-devilishly-difficult) that perhaps the rate of e-book adoption will slow further and print will be viable well into the future.
Emphasis mine. Doesn't this imply that at least part of the cost of an ebook is still tied to supporting a print infrastructure?

Medievalist
05-05-2012, 05:59 AM
Is this true? Is the path of book production manuscript-->print book-->ebook?

Well, not exactly. It can be, especially for older releases, which can be a nightmare because of problems with old files and OCR.

But on a new books, a book with something like date-and-day release, the printing and ebook production happen in tandem, more or less.

I mentioned the file fork: it's a fork in the workflow at the point where you have proofed galleys, when the book is finalized in terms of all the text, including the frontmatter and the index, and captions as well as the body text, the book exists in something like InDesign, or Quark Express or even Framemaker.

That file is "forked"--it goes to the right to the printer(s) and to the left, to the ebook production team.

It's the right point in the process because the book is "finished." That is, the contents are final.

Depending on the house and the team, they will likely run some in-house scripts to add or modify some of the data, then run other scripts/use humans to export it for the rough flow into various ebook formats.

In some cases, you flow the text into a pre-built shell. In others you gack the formated text out of specific areas in the layout and build the file.

Then each file (likely .pdf, .ePUB and .amz) is processed separately; front and back matter is added, stylesheets for things like absence/presence of headers, chapter openers, parts/sections, captions, are applied, internal links for the TOC are finalized (in some cases the TOC xml file is hand-generated, in others it's built by a script), the specific frontmatter/back matter for each ebook version is added, special features (i.e. linked indices, etc.) are added; cover and internal art are finalized.

Then each file is checked visually by a living human for problems/errors, and goes to QA for check on the various devices.

After it passes QA and validation, it goes to be uploaded, where it typically has to be validated against each retailer's spec (all ePubs are not the same; there's Nook ePub, Adobe ePUB, Apple ePub . . . ).

The DRM is applied, unfortunately, at different points depending on the file format and the local workflow; in some cases, using proprietary tools, in some cases as part of the final upload and a check box.

Then you wait to see if the retailer will reject the file. Sometimes they do, for odd reasons.

Then you check to make sure the retailer or a glitch hasn't associated weird metadata or something in the description and catalog database.


Doesn't this imply that at least part of the cost of an ebook is still tied to supporting a print infrastructure?

Pre-fork costs like acquisition/advance, licensing, editing, copyediting, proofing, indexing . . . those are shared costs.

There's good reason to consider marketing costs as shared as well.

To a publisher releasing print and ebook formats, the costs up to the point of the fork are part of the cost of the book. They really are. It's the same book, just in a different container. The author is paid for each container in a combination of advance and (potential) royalties, typically. For some publishers, there's no advance, and a higher royalty; that depends on the contract.

Ebook rights, hardcover rights, paperback rights, audio rights, foreign rights, those are all the book in different containers. The author has to be paid for them.

But absolutely publishers are looking at the need to keep making printed books, to sell to libraries, to sell in bookstores, on or offline.

Perks
05-05-2012, 06:05 AM
Problem, I'm not even sure how it's possible since the cost differential is only 10%.

Prices have been all over the place since the DoJ hammer came down. And of course that 50% ebook discount doesn't translate to other formats than hardcover.

Yeah, 11-22-63 costs $35.00 in a bookstore, so the ebook is vastly cheaper. And yes, I was speaking of hardcover and since every hardcover I looked at was in a range of about 40 - 50% more expensive than the ebook version, I'm thinking the outrage over ebook prices might be just a little overstated.

Yes, Amazon deeply discounts hardbacks, and that's a matter of some contention, so the differences look less impressive on the Amazon website, but I think it's pretty clear that ebooks are being sold at substantial discounts over the hardcover prices.

Shadow_Ferret
05-05-2012, 06:22 AM
The book is not the container; the book is the contents.



No, the story is the contests. The book is the whole package.

If it was just the contents, then I wouldn't have several different Shakespeare on my shelf, all packaged differently. I wouldn't have a whole shelf of Robert E. Howard, many have the same contests, the same stories, but the packaging is different.

For me, if it was just content, I could see going with eBooks, but I collect the whole package. I like having them on display. And I like paging through them.

Ava Glass
05-05-2012, 06:43 AM
Well, not exactly. It can be, especially for older releases, which can be a nightmare because of problems with old files and OCR.

Oh, I've seen lots of complaints about badly converted old books, so I heartily disagree with anyone who says it's easy to convert old print to ebooks. It is sooo more than a "push of a button."



I mentioned the file fork: it's a fork in the workflow at the point where you have proofed galleys, when the book is finalized in terms of all the text, including the frontmatter and the index, and captions as well as the body text, the book exists in something like InDesign, or Quark Express or even Framemaker.

I'm not sure I chose the right wording for my question. If I didn't, I apologize. I should have asked "is the path 'text-flow to page-layout back to text-flow'?" I'm genuinely asking because I really don't know.

Soccer Mom
05-05-2012, 06:44 AM
No, the story is the contests. The book is the whole package.

If it was just the contents, then I wouldn't have several different Shakespeare on my shelf, all packaged differently. I wouldn't have a whole shelf of Robert E. Howard, many have the same contests, the same stories, but the packaging is different.

For me, if it was just content, I could see going with eBooks, but I collect the whole package. I like having them on display. And I like paging through them.

But you bought them for the Shakespeare, right? Not because you wanted some cardboard and paper. You wanted the contents. The other is just packaging of the contents.

Medievalist
05-05-2012, 06:48 AM
No, the story is the contests. The book is the whole package.

If it was just the contents, then I wouldn't have several different Shakespeare on my shelf, all packaged differently.

Dude, the contents of those books isn't the same.

Two editions of the same play aren't the same. The contents are different.

The editor and edition make so much difference that I can refer to first folio vs. Johnson, vs, Coleridge, vs. Rouse vs. Braunmuller vs. Taylor with respect to editions of Macbeth, and other Shakepeare lovers will know exactly what books I'm referring to because the contents are all different.

Medievalist
05-05-2012, 07:06 AM
I'm not sure I chose the right wording for my question. If I didn't, I apologize. I should have asked "is the path 'text-flow to page-layout back to text-flow'?" I'm genuinely asking because I really don't know.

It's more like one of those charts where you have multiple paths depending on the answers to questions.

Because of the nature of print--that is, you can't correct things after the galley stage, in practical terms--the text is finalized for print before the ebook is made.

You can't just rely on the text being edited before the galley stage because typesetters are human, errors may be introduced and it's not uncommon for earlier errors to be missed. That's why there's a galley stage (and there's a similar stage in the ebook production too). Errors can be things like bad breaks, or kerning problems, or ordinary typos, or italic overruns, for instance. Most of those are things that will affect or could effect the ebook too.

So it makes sense to have the fork when the file is sent to be printed.

Also, in rough terms, the time between sending the file to the printer(s) and the time the book is ready to ship is a great time to produce the ebook, which involves a much smaller team (possibly a single production worker with an admin/manager) or it may be shipped to a conversion company.

But the ebook file has benefitted from acquisition, editing, proofing, and even typesetting and design applied to the printed book.

Williebee
05-05-2012, 07:11 AM
Look over the numbers I provided in the other thread. None of those were ever refuted, because they're accurate. Going digital you don't have the cost of physical printing, you have less of a distribution cut taken out (30% from the highest digital distro, Apple; 65% from most print distros), you have no shipping & warehousing costs, and you have no taxes on stock. Yet, ebooks "cost" nearly the same as print books, and people still in the industry will say it's anything except what it is, grabbing for more profit. Again, I think the industry needs to earn more. They more than deserve it. But the math doesn't lie.

Most of the other items have been addressed, but, as to the section I've bolded?

Speaking as the manager of a server farm that includes webservers, DNS servers, database servers, file servers and several other utility servers, both hardware and virtually based, the statement in bold is absolutely untrue. Whether the product is sitting in a box in a warehouse or a server in a rack, there is still storage and delivery costs. Might not be as much (and I would love to see a legitimate comparison), but it IS still there.

mscelina
05-05-2012, 08:15 AM
Originally Posted by Cliffhanger


Look over the numbers I provided in the other thread. None of those were ever refuted, because they're accurate. Going digital you don't have the cost of physical printing, you have less of a distribution cut taken out (30% from the highest digital distro, Apple; 65% from most print distros), you have no shipping & warehousing costs, and you have no taxes on stock. Yet, ebooks "cost" nearly the same as print books, and people still in the industry will say it's anything except what it is, grabbing for more profit. Again, I think the industry needs to earn more. They more than deserve it. But the math doesn't lie.

Most of the other items have been addressed, but, as to the section I've bolded?

Speaking as the manager of a server farm that includes webservers, DNS servers, database servers, file servers and several other utility servers, both hardware and virtually based, the statement in bold is absolutely untrue. Whether the product is sitting in a box in a warehouse or a server in a rack, there is still storage and delivery costs. Might not be as much (and I would love to see a legitimate comparison), but it IS still there.

QFT. I'd get back into this conversation if I thought it would do any good, but I'm sure that the owner of an epublisher, who has worked in epublishing for years, wouldn't be considered a credible source. I can assure you, however, that every delivery of every ebook purchase results in a delivery charge from the retailer, and that every ebook does just exist in the ether to be produced like a magician's rabbit when someone wants to purchase one. At our publishing house, we've developed a database system that stores ebooks in every format, at every stage in the publication process. And the last time I checked--which was today, by the way--all that coding and IT work costs a fortune. In fact, earlier this week, we were looking into app creation and development based upon a model we've created. The initial developmental costs? Over $50k for the individual platform we were developing--and that price is cheap.

Oh--sorry. Forgot that my credentials aren't good enough to chip in to this conversation.

GregB
05-05-2012, 12:12 PM
Williebee and mscelina, I hope you'll address a follow-up comment for me. No doubt there are overhead costs to maintain a digital store and to process purchases/downloads. Just as there are overhead costs for a retailer to maintain a print store and process transactions -- including technology infrastructure! The main difference, of course, is the vast difference in productivity between the digital and print retailer. Anyway, we don't need to break down those costs, because they aren't a separate line-item borne by the publisher; those costs are covered by the discount offered to the retailer. Obviously, much lower retail overhead (or higher productivity, depending on how you want to look at it) is a crucial reason the retailer will take a much smaller piece of the revenue for a digital book than it requires for a printed one.

Or...maybe we're not talking about retail overhead? Are we instead talking about the publisher's need to store a copy and backup(s) of digital files, and the bandwidth required to upload an ebook to a digital retailer? If so, are we then trying to compare those costs to the costs associated with shipping, warehousing, insuring, and paying taxes on printed inventory, along with processing returns and pulping/remaindering unsold inventory? What about the cost of maintaining the technology infrastructure to manage that inventory efficiently? Because these considerations would seem to underline the cost differential between print and digital.

Al Stevens
05-05-2012, 05:01 PM
I know the costs involved in printing books, and I know the costs involved in digital books. The claim that digital books are nearly as expensive as print is simply wrong.A publisher produces a book in multiple formats. If the publisher chooses to amortize the costs over all sales irrespective of format, the costs of digital and physical formats of the same book are the same.

Shadow_Ferret
05-05-2012, 06:59 PM
But you bought them for the Shakespeare, right? Not because you wanted some cardboard and paper. You wanted the contents. The other is just packaging of the contents.
Actually, in a sense, I did buy it for the cardboard and paper because, as I said, I can hold it, put it on display, and thumb through it. As a collector, digital versions just don't cut it.

Dude, the contents of those books isn't the same.

Two editions of the same play aren't the same. The contents are different.

The editor and edition make so much difference that I can refer to first folio vs. Johnson, vs, Coleridge, vs. Rouse vs. Braunmuller vs. Taylor with respect to editions of Macbeth, and other Shakepeare lovers will know exactly what books I'm referring to because the contents are all different.
Just curious. Are all those versions available as eBooks? I know I've Googled an eBook version of The Globe Illustrated Shakespeare: The Complete Works Annotated, but can't find it. But I fully admit my Google-fu isn't very good.

Anyway, I apologize. I think we're going way off topic from pricing and into the realm of simply why I prefer physical books to digital.

Stacia Kane
05-05-2012, 07:51 PM
It's not a question of resumes, but math. She's citing sources that don't actually support her position and ignoring the basic math.


You're the one who brought up resumes/credentials.

Cliffhanger
05-05-2012, 09:43 PM
A publisher produces a book in multiple formats. If the publisher chooses to amortize the costs over all sales irrespective of format, the costs of digital and physical formats of the same book are the same.

Which is an accounting trick, not a cost inherent in producing a digital book. Directly comparing digital to print in so far as the actual difference in cost involved in bringing a book to market in either format are possible, have been done, and show a wildly cheaper avenue in digital only production. The distro storing files is part of their cut, the pub storing files is a standard practice with print or digital, that storage is miraculously cheep shouldn't be ignored, that print ready files are huge compared to all the various digital formats is also being ignored.

Stlight
05-05-2012, 09:57 PM
Where publishers put out print and ebooks, if the print book didn't exist there would be no ebook.
For epublishers all costs must be spread over the ebooks.

In either situation, why shouldn't the ebooks bear their share of the fixed costs to produce the book in any form? What makes them so special that they get a free ride?

Every product that goes out the door should pay its share in the fixed costs. If each unit doesn't pay for its share the business dies.

As ebooks take a greater share of the market from print books, then ebooks have to carry a greater share of the fixed costs. That is the way business works.

eqb
05-05-2012, 10:00 PM
Directly comparing digital to print in so far as the actual difference in cost involved in bringing a book to market in either format are possible, have been done, and show a wildly cheaper avenue in digital only production.

Could you provide a link to that study? Or if not that, cite the sources and provide more details?

GregB
05-05-2012, 10:04 PM
You're the one who brought up resumes/credentials.

Hey Stacia, in fairness to Cliffhanger, it was Mac who brought up credentials and questioned whether his were sufficient to disagree with Medievalist.

P.S. LOVE that cover!

Namatu
05-05-2012, 10:09 PM
Why shouldn't the ebooks bear their share of the fixed costs to produce the book in any form? What makes them so special that they get a free ride?Stlight's whole post, but especially this. By insisting that the production of ebooks is cheaper and that the cost to the consumer should be so much less than a print product, it sounds to me as if that position holds my work as an editor on that book - and everyone else who's worked on it, including the author - in lesser value because of the format in which it's distributed, despite the "fork" that Medievalist mentioned, which doesn't happen until late in the process.

I guess I just don't get why everything that happens before a book goes to market - the vast majority of which is the same regardless of distribution format - should be ascribed a different value depending on that format.

Medievalist
05-05-2012, 10:22 PM
Where publishers put out print and ebooks, if the print book didn't exist there would be no ebook.
For epublishers all costs must be spread over the ebooks. .

Yes.

If a book is digital only it still:

1. Is acquired—and yes, advances may be paid on exclusively digital books; it depends on the book and the publisher. (Note that publishers still will pay an advance for a paperback trade and/or mass market edition of a previously published hard cover first ed).

2. Is edited.
3. Is proofed.
4. Is designed (typography, layout, dingbats/ornaments, etc.).
5. Has a cover at least; hence artwork and licensing.
6. Is produced; flowing, some value of typesetting depending on the book and the publisher; may have custom links in an index, may have rich media (links to publisher controlled Websites with updated content, music, video, special images, etc.).
7. Miscellaneous fees, depending on the book and the file—DRM licensing (i.e. Adobe), font licensing, other resource licensing; ISBN.
8. QA (Checking the book by hand/eye; running verifier scripts, checking features (i.e. cover display, TOC, links, basic functionality) on the actual devices)
9. Uploading/metadata/book description/
10. Marketing
11. Live archiving (assets kept and tracked, all files maintained and kept current)
12. Depending on the publisher, they may have internal transaction servers/software/staff
13. Fees (depending on the publisher) for a third-party retailer (Apple, Amazon, B & N, CreateSpace, eSellerate, etc.
14. Royalties--depending on the book, the publisher may have to track and pay royalties to the author, internal art licensess, other asset licensees (i.e. fonts, video, music, etc.)

When the two books are produced in tandem attributing all the costs to the print book for shared assets/services is just not logical.

At some publishers the P & L will track hardcover, softcover, and digital versions (based on ISBN).

In many ways, the digital book production is just another container—hardcover, trade paper, mass market paper, book club, tie-in, package cover (i.e. bundling books, casing them as a set, etc. ).

Amarie
05-05-2012, 10:26 PM
I think people are talking of many different things here, and it's not easy to compare.

Some are talking of companies that produce both ebooks and print books, and some are talking of companies that just produce ebooks.

It's also very hard to compare costs when we are trying to compare companies of vastly different sizes. I don't think anyone can disagree that the overhead costs of a big 6 company based in New York are huge compared to a smaller epub-only company outside of New York.


The only way to do an accurate comparison would be to get data from a small to midsize print-only company and compare it to an epub-only company of the same size.


Fascinating discussion though. I'm glad to see it staying so civil.

Cliffhanger
05-05-2012, 10:34 PM
I'm talking about the differences between taking a single book to market either as a print format or as a digital format.

What's at question here are the unique costs associated with each format, not universal costs. You have to pay a cover designer and an editor irrelevant of the format, digital vs print, which makes it a universal cost. The only way to honestly compare them is contrasting the unique costs to each, or those aspects that are so different to each that they deserve mention, such as the different rate taken out for distribution.

Many costs are universal, only a few are truly unique to format. Keeping the lights on, IT people, computer network, FTP, editors, cover designers, marketers, computers, files storage, etc are all universal costs. You're going to pay for these things irrelevant to the form you book comes out in.

The unique costs are very few: physically printing, shipping & warehousing, taxes, distribution, and royalties.

Printing costs are a significant expense, that simply isn't incurred with digital. Depending on various factors, this can be as much as $5 per unit on a trade paperback with a 5000 unit offset print run. Again, no correlary in digital.

Shipping & warehousing costs fluctuate so are hard to nail down. There are none of these costs in digital. Yes, you need to store the digital files, but that is a universal expslense, you don't need to store files just because it's a digital book, an pub worth their salt is going to keep their prig ready files. Compare the files sizes (print ready) to the various digital formats and the printers files still take more space. But again, you're storing the files anyway so this isn't unique.

Taxes. You still pay taxes for various bits of doing business, but there are no taxes levied against digital stock on your serves, but there are on physical product in the warehouse.

Distribution. Typically the distribution channel takes 65% of retail and the pub only gets 35%. With digital it varies, but to make things easier let's use Apple which takes 30% of retail, leaving 70% for the pub.

Royalties. Print typically sees up to 10% of retail, while digital often sees 50% or retail.

In each way that is actually unique to digital books, they are at a huge advantage. The only way to honestly compare these is to acknowledge which bits are universal and which are unique, then compare them side by side.

kaitie
05-05-2012, 11:22 PM
I think people are talking of many different things here, and it's not easy to compare.

Some are talking of companies that produce both ebooks and print books, and some are talking of companies that just produce ebooks.

It's also very hard to compare costs when we are trying to compare companies of vastly different sizes. I don't think anyone can disagree that the overhead costs of a big 6 company based in New York are huge compared to a smaller epub-only company outside of New York.


The only way to do an accurate comparison would be to get data from a small to midsize print-only company and compare it to an epub-only company of the same size.


Fascinating discussion though. I'm glad to see it staying so civil.

This doesn't really matter much, though, IMO, because in the end the expected price of ebooks are similar. Readers don't understand the costs that go into it in the first place. Just as print books are expected to cost similar amounts regardless of who is publishing them, so are ebooks. The difference is that some ebooks are bearing all of the costs of the product, whereas others might be sharing those costs with print versions.

Terie
05-05-2012, 11:54 PM
I'm talking about the differences between taking a single book to market either as a print format or as a digital format.

But that's not what this thread is about. This thread is about people (the OP and his wife, to begin with) who are complaining about the price of an e-book as compared to the same book in print form. Which, of necessity, means discussing the costs associated with books released in both formats, not one or the other.

Cliffhanger
05-06-2012, 12:13 AM
But that's not what this thread is about. This thread is about people (the OP and his wife, to begin with) who are complaining about the price of an e-book as compared to the same book in print form. Which, of necessity, means discussing the costs associated with books released in both formats, not one or the other.

The comparison is still relevant as the universal costs are not paid twice for one book released in both formats, and discussing the actual cost differences associated with the format (the unique costs) can show us at what price point pubs can make the same profit from each, i.e. at what price point a digital book can be sold and still make as much, if not more, per unit as a print book.

Medievalist
05-06-2012, 12:23 AM
I've worked in the industry long enough to know this poster is flat-out wrong. And simply repeating the same tired arguments again and again don't turn fiction into fact.

Really? That's very convenient from the postion of anonymity.

I can go into any library or bookstore and find books with my name on the cover and inside.

Going all the way back to 1989.

I've typeset books for the Modern Library, produced over 100 ebooks by authors ranging from Neil Postman to Richard Lanham, licensed rights for print and digital titles, and been hired as a consultant by W. W. Norton and Xerox.

I've created royalty tracking and report generating systems, and cashed my own royalty checks for better than twenty years.

I'm known in real life by editors, typesetters, publishers and hundreds of authors because I've worked on their books.

I get that you're a librarian, I get that you've probably worked as an employee at a small or niche indie pres, but you really don't have as much experience as you think you do.

Williebee
05-06-2012, 12:59 AM
Shipping & warehousing costs fluctuate so are hard to nail down. There are none of these costs in digital. Yes, you need to store the digital files, but that is a universal expslense, you don't need to store files just because it's a digital book, an pub worth their salt is going to keep their prig ready files. Compare the files sizes (print ready) to the various digital formats and the printers files still take more space. But again, you're storing the files anyway so this isn't unique.

Still not true. Perhaps because you don't understand the digital/technology aspects.

In digital land:
"Warehousing" = Storage and databasing. The digital files you maintain for integrity are not the same copies of the file you are maintaining in various formats for purchasers to download at any time around the clock. (And keeping up to date so that they still work every time one of the collection of E-readers does an update.)

"Transportation: = digital access and transmission. Which equals the hosting servers, the firewalls, routers, wiring, switches, power and support staff -- whether you host them yourself or are paying a server farm to do it; and the bandwidth that is being used for window shoppers to view your product offerings and the bandwidth involved in the downloading of purchases.

Another thought related to this +/- debate -- if I buy six copies of a book at the bookstore I pay for that shipping cost every time I buy it, Same price, each time (yeah, unless I buy in bulk.) Compare that to the digital copy I purchased once and can pull copies down for each of my devices. The seller(s) have to factor that reality of their bandwidth expenses into the cost of doing business.

I'm not suggesting that digital is cheaper or more expensive or even "just the same" as a print copy.

I will suggest that the interactive opportunities of digital and the development and programming behind taking advantage of that will soon make this debate obsolete.

Medievalist
05-06-2012, 01:30 AM
Since the tax laws changed (via the Supreme Court's 1979 ruling in Thor Power Tool Company v. Commissioner of Internal Revenue (http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=439&invol=522)) to require publishers to pay taxes on the real value on stock in a warehouse, large-scale warehousing of inventory, common in the past, dropped off significantly.

After the Supremes were done, publishers (and other inventory-based businesses) couldn't semi-arbitrarily reduce the real value of inventory that hadn't sold, a technique that reduced taxable income.

Publishers reduced print-run sizes to avoid taxable inventory, and with better tracking, print runs got much closer to advance orders in size, and back lists shrank.

So warehouses started to shrink. Inventory control and tracking got better, and faster (30 days instead of 90). With digital printing and better web-press technology, and companies like OPM becoming even larger, and using better technology, warehouses have become a smaller part of the picture for publishers.

Printers will ship books to Amazon, B and N, and distributors. Typically, distributors don't even unpack the books; they stash the bar-coded UPC labeled boxes on shelves. And they don't keep a lot of back inventory either, for the same reasons publishers don't. (And this is part of the demise of the midlist, too, and why the best PR is a NEW BOOK, while the old one is in print, so sales increase, and maybe, you'll be reprinted).

Publishers do have some stock warehoused, but it's not anything at all like it was in the 1990s. Some publishers use rented storage units now, designed for consumer use.

There's no point in lots of stock. It's much easier to track inventory and sales—from the cash register pos to the distributor/central office, to the publisher. The publisher has to pay taxes and warehousing costs on stock.

There's a reason a hardcover release of a mid-list or low-ranking "best seller" title sells through so fast—and why you'll see lots of large print run authors remaindered, but not so much the middle rankings. You'll see Robert Jordan, for instance, but not so much Jo Walton—because the initial print runs are smaller for the two books, comparatively, and both runs are smaller than they would have been in the 1990s.

I know that W. W. Norton still has warehouses plural but they're mostly for textbooks, not consumer mass market/trade.

Small print runs are the rule now too, and they're faster printers.

James D. Macdonald
05-06-2012, 04:38 AM
1. Is acquired—and yes, advances may be paid on exclusively digital books; it depends on the book and the publisher. (Note that publishers still will pay an advance for a paperback trade and/or mass market edition of a previously published hard cover first ed).


Even if the publisher pays no advances at all, there's still an acquisition cost: The time and salaries of the slush readers and the acquiring editors. The time to send an acceptance letter to the author, the time to receive a reply. How much does it cost to get that work on the table and signed as a forthcoming book, before the first bit of actual editing is done?

HoneyBadger
05-06-2012, 05:07 AM
Chuck Wendig (http://terribleminds.com/ramble/2012/05/02/thinking-the-wrong-things-about-e-book-pricing/) posted recently about the ebook pricing crisis and sums up this entire thread, pretty much.


It matters little what the e-book actually costs.

It only matters what the audience thinks they should cost.

Now, the audience won’t agree on an actual number (they’re cagey, those fuckers), but what they do seem to roughly agree on is, e-books should be cheaper than their print counterparts. What the e-book actually costs is irrelevant. What matters is the expected value loss by going with an ephemeral digital item — and, further, added into that is the expectation of, “I bought a device to read this, which cost me money already.”

Old Hack
05-06-2012, 09:48 AM
Forgive my following paretheses.


It matters little what the e-book actually costs.

It only matters what the audience thinks they should cost.

If the "audience" (why not "reader", or "customer"?) thinks that e-books should retail for less than they cost to produce, which does often seem to be the case, then the publisher is stuck. The only options for them there are to either lose money on the book, which would be ridiculous, or to stop putting out e-editions completely, which would also be ridiculous. Or to put out books which hadn't been the focus of enough attention, which would rightly upset readers and authors.

Big publishers are often criticised for being slow to adapt to new technology (when often they're no slower than anyone else, because as this thread shows much of what they do isn't understood by people without publishing experience, and it happens behind-scenes); then when they do use it, and use it properly (by which I mean they spend money to put out the best books they can, in the way they think their readers will most enjoy them), they're criticised for overpricing their books. I have no doubt they'll adapt and find ways to resolve this, because adapting is what publishing does: change is the only constant I've seen in my years at the coal-face. But I am getting very weary of seeing writers unfairly directing their anger at trade publishing, instead of learning why things are as they are.

Cliffhanger
05-06-2012, 12:01 PM
In digital land:
"Warehousing" = Storage and databasing. The digital files you maintain for integrity are not the same copies of the file you are maintaining in various formats for purchasers to download at any time around the clock. (And keeping up to date so that they still work every time one of the collection of E-readers does an update.)

The exported InDesign file package for a print book, mostly straight text little to no images runs about 200mb (cover & interior, all images, fonts, etc). The actual ready to sell PDF of the same book runs about 22mb. The Complete Works of Shakespeare .epub I have is 2.2mb, fairly well done, including cover image. You can store 10 of those per salable PDF, or about 90 Complete Works of Shakespeare .epubs for each printers package for a print book. I doubt you need that many different iterations of the same book.


"Transportation: = digital access and transmission. Which equals the hosting servers, the firewalls, routers, wiring, switches, power and support staff -- whether you host them yourself or are paying a server farm to do it; and the bandwidth that is being used for window shoppers to view your product offerings and the bandwidth involved in the downloading of purchases.This is misleading, as is part of the top bit I quoted. These aren't costs incurred by actually producing a digital book, but rather a cost incurred for hosting a storefront to sell digital books directly as a publisher. Many digital publishers don't have their own storefronts, but rather rely on distribution channels (Apple, Amazon, Powell's, etc) to host and sell the files. So again, these are possible costs incurred for directly selling digital books on your site, but not for simply producing a digital book. But, the additional bandwidth load of customers window shopping your website would be incurred irrelevant of which distribution model you chose.

But fine, for the sake of argument, toss those both out. You're still left with several factors that make a staggering difference in the cost of production.

Printing. These costs are a significant expense, that simply isn't incurred with digital. Depending on various factors, this can be as much as $5 per unit on a trade paperback with a 5000 unit offset print run. You have to roughly quadruple the print run, around 18-20k, to bring you down around $2.50 per unit. So for that 5k print run that's a $25,000 expense just to print the books, not including overages. For the larger print run you're looking at $50,000 to print, not including overages.

Distribution. Typically the distribution channel takes 65% of retail and the pub only gets 35%. With digital it varies, but to make things easier let's use Apple which takes 30% of retail, leaving 70% for the pub. I'm using Apple here because it's a nice round number and they also take the largest chunk of each sale that I'm aware of.

Royalties. Print typically sees up to 10% of retail, while digital often sees 50% of retail.

So run the same book through those numbers. Fiction, nothing fancy design-wise, or production-wise (no spot colors, or wonky trim). A $25 trade paperback would earn the publisher 35% of retail from a standard distro channel sale, so $8.75. Then consider the $5 per unit to actually print the physical product, brings us down to $3.75 for the publisher to pay all expenses. Next up is the royalties, which if we're generous are 10% of retail, or $2.50, finally bringing us down to $1.25 per unit for the pub to pay all expenses. When people say publishing is a narrow margin industry, they ain't kidding.

The same content as an ebook would look like this. At less than half the cover price of the trade paperback, say $10, our ebook (sold through Apple, the biggest distro hit) would lose 30% of retail off the top, so $7 goes to the publisher. Out of that you're then paying, if generous, about 50% of retail in royalties to the author, so drop $5 off that, which leaves the publisher $2 per unit sold to keep the lights on and cover all expenses. So at less than half the retail price, a single digital sale nets the publisher more per unit.

For the sake of argument, let's run that 20k print run and jump the ebook price up to match. The retail of most books are about 5-6x the printing cost, so let's say our $2.50 per unit print run will each retail at $15 because it's a nice round number (and 6x the print costs). So $15 retail gives the publisher $5.25 per unit per sale, minus the print costs ($2.50), leaving $2.75. From that we need to pay royalties, $1.50 (10% of retail still), which leaves $1.25 for the publisher to cover all expenses.

The digital sale of the same content, at the same price ($15), would have $10.50 go to the publisher per unit (30% for the distro). Minus the 50% of retail for royalties ($7.50) which leaves $3 per unit to cover all expenses.

Several unique factors are scrubbed from these figures for the sake of argument, each of which would lean the scales further toward digital books being cheaper. Also the extreme case is taken, such as using Apple which takes the largest piece of the pie compared to other digital distros, and assuming the highest royalty rate of any digital publisher I've seen for these figures. Using more accurate figures in each case would shift the scales even more in favor of digital.


I will suggest that the interactive opportunities of digital and the development and programming behind taking advantage of that will soon make this debate obsolete.I couldn't agree more. I would add that with the increasing quality and slowly decreasing price of POD, we will likely see nothing less than a paradigm shift in publishing quite a bit sooner than some are willing to accept.

bearilou
05-06-2012, 03:36 PM
If the "audience" (why not "reader", or "customer"?) thinks that e-books should retail for less than they cost to produce, which does often seem to be the case, then the publisher is stuck. The only options for them there are to either lose money on the book, which would be ridiculous, or to stop putting out e-editions completely, which would also be ridiculous. Or to put out books which hadn't been the focus of enough attention, which would rightly upset readers and authors.

Yep. Honestly, this is what it comes down to. Perception. And it's not just perceptions of authors. I hear far more squawking from readers than I hear from authors. As an author, yes I've squawked *shameface* but only because, as you point out below, I didn't understand the process.

But I'm a writer and as a writer, I'm familiarizing myself with the whole process so I'm following the conversation with a little more understanding than, say, my mother would (even though I think she's a pretty bright lady, she's still ignorant of the publishing process).

I have conversations with my reader friends and even though I think they're pretty bright, too, (I surround myself with bright people!) they also don't understand just how involved the process is.

I know this thread has been tiresome for some and I am sorry that you're tired for repeating yourself again (and you are, I'm aware of that), for some reason the information has finally 'clicked' with me.

I finally understand more. (Just for what it's worth, it was Medi's fork discussion that finally made the leap for me)


Big publishers are often criticised for being slow to adapt to new technology (when often they're no slower than anyone else, because as this thread shows much of what they do isn't understood by people without publishing experience, and it happens behind-scenes); then when they do use it, and use it properly (by which I mean they spend money to put out the best books they can, in the way they think their readers will most enjoy them), they're criticised for overpricing their books. I have no doubt they'll adapt and find ways to resolve this, because adapting is what publishing does: change is the only constant I've seen in my years at the coal-face. But I am getting very weary of seeing writers unfairly directing their anger at trade publishing, instead of learning why things are as they are.

I'm afraid it's just going to get worse before it gets any better. It's back to that perception thing, and with the rise of Amazon self-publishing and how 'easy' it appears to be, along with the dreadfully low priced books, coupled with the fact that many readers don't care 'who' is the publisher, flavor it with (sorry to say) dreadfully written books that shouldn't see the light of day before an editor can get a look at it, topped with the attitudes of many writers who are willing to give their work away for nothing just for the chance to be 'published and read'...all these little things are starting to contribute to the furthering chasm of understanding with the general reader.

DennisB
05-06-2012, 03:46 PM
I wonder how many people who have weighed in here have actually run a retail business. If the reader believes an ebook is worth the same as a cup of coffee, and won't pay more, then (sadly) that's what it's worth. Demand sets prices, no matter what people think about Amazon.

Amarie
05-06-2012, 05:00 PM
Royalties. Print typically sees up to 10% of retail, while digital often sees 50% of retail.

.


Thanks for all the info. I just wanted to add that most authors I know would love to make 50% of retail on ebooks. 25% before others take their share is more typical for many.

James D. Macdonald
05-06-2012, 05:52 PM
If perception is reality then the sun really does go around the earth.

I track all the e-books that contain my stories.

Two of the consistently best-selling cost the readers, respectively, $6.99 and $10.99.

Price is by no means the limiting factor on books.

Nor, if I'm looking for an action/adventure novel will I buy a sweet romance instead even if the first costs twice as much as the second.

Books are unique art works, along with everything else they may or may not be. While a consumer may pick one bar of soap over another because of a two-cent price difference that just doesn't work with books (as many an MBA who thought they could be publishers have learned to their sorrow).

shadowwalker
05-06-2012, 05:57 PM
I wonder how many people who have weighed in here have actually run a retail business. If the reader believes an ebook is worth the same as a cup of coffee, and won't pay more, then (sadly) that's what it's worth. Demand sets prices, no matter what people think about Amazon.

But customer education (ie, advertising) is also a factor in what customers perceive as value. And who better to give the customers (readers) that information than the authors - the reason people want to buy books at all? And that would also involve explaining the difference between a marketing ploy and actual value. Not to mention perhaps reminding ourselves that if our work is worth $25 in print, it's worth $25 in digital, gold inlay, or carved on rock.

I still maintain that people will gripe, but like anything else, they'll learn about it and then get used to it. If they don't like the price of ebooks, they'll buy their favorite authors in print.

Alitriona
05-06-2012, 05:58 PM
I wonder how many people who have weighed in here have actually run a retail business. If the reader believes an ebook is worth the same as a cup of coffee, and won't pay more, then (sadly) that's what it's worth. Demand sets prices, no matter what people think about Amazon.

And if readers believe ebooks should be free, which many do, does that mean writers should stop writing or publishers should throw their hands up and stop publishing altogether?

If I believe my coffee should be free, my local deli is still not going to provide it as less than cost because I want them to. Cost includes the time to make it as well as the price of the coffee beans. If a business can't make a profit, it goes out of business. Publishing is a business and authors are in that business.

I wouldn't expect a plumber to fix my pipes for free or for what I decide is fair based on no knowledge of plumbing. I can't decide what a doctor costs, or a designer pair of shoes. So why should a reader with a woeful knowledge of publishing decide how much a ebook costs?

Perks
05-06-2012, 06:20 PM
I wonder how many people who have weighed in here have actually run a retail business. If the reader believes an ebook is worth the same as a cup of coffee, and won't pay more, then (sadly) that's what it's worth.

That doesn't work with gasoline, eggs, cable tv, or mascara... or pretty much anything I can think of. Consumers grumble and pay anyway.

It would be nice if readers understood what all went into producing a book. Some will learn about it, most will never know and buy what they like anyway, and a few will strike a wordmine and fill their libraries with .99 ebooks.

Williebee
05-06-2012, 06:20 PM
This is misleading, as is part of the top bit I quoted. These aren't costs incurred by actually producing a digital book, but rather a cost incurred for hosting a storefront to sell digital books directly as a publisher. Many digital publishers don't have their own storefronts, but rather rely on distribution channels (Apple, Amazon, Powell's, etc) to host and sell the files. So again, these are possible costs incurred for directly selling digital books on your site, but not for simply producing a digital book. But, the additional bandwidth load of customers window shopping your website would be incurred irrelevant of which distribution model you chose.

It's not misleading, it's looking at the cost of doing business. Certainly some publishers hire/pay other companies to host and retail their product. Just as with brick and mortar stores that cost is factored into the price.

The bolded section is certainly true. The bandwidth for window shopping (hopefully) happens either way. But not the cost of uploading salable copies and downloading (transportation.)

Books don't exist in a vacuum. A single copy certainly doesn't. The cost of producing and the cost of selling are tied together with a number of other factors when the price is set -- if a company wants to stay in business.

Cliffhanger
05-06-2012, 09:42 PM
It's misleading because you're saying a digital publisher needs a storefront of their very own, on their own website, to sell digital books. Which is like saying a print publisher needs a brick and mortar store of their very own to sell print books. It's simply not true. The cost of a digital storefront of the publisher's very own is not an expense that needs be included in the price of the digital book, just as the cost of setting up a brick and mortar store of the publisher's very own is not an expense that needs be included in the price of the print book.

The cost of databases, increased traffic, downloads of sales, files storage for sales, etc are all expenses paid for (and covered by) the online distributor. Those expenses are all wrapped up in the cut the distro takes off the top. Apple takes the most (30%) which is why I used their figure.

Again, as mentioned, the 30% distro cut and the 50% royalties figure are intentionally high. Using more accurate numbers for each would yield even more of a disparity between print and digital, in favor of digital making more money for the publisher per unit.

Cliffhanger
05-06-2012, 09:56 PM
But customer education (ie, advertising) is also a factor in what customers perceive as value. And who better to give the customers (readers) that information than the authors - the reason people want to buy books at all? And that would also involve explaining the difference between a marketing ploy and actual value. Not to mention perhaps reminding ourselves that if our work is worth $25 in print, it's worth $25 in digital, gold inlay, or carved on rock.

I still maintain that people will gripe, but like anything else, they'll learn about it and then get used to it. If they don't like the price of ebooks, they'll buy their favorite authors in print.

But that's the very heart of the issue underlying the pricing question. What's the fiction worth? The price of a printed book is not the same as the worth of the fiction contained therein. The price of the printed, physical thing is simple a factor of the price of printing, and the means of distribution.

Perfect example: hardback vs trade paperback vs paperback. The same contents (the fiction) are priced at wildly different points. Something like $26, $16, and $8 typically. The fiction isn't different based on the physical container (the book block + cover), yet the price fluctuates. Why? Because the cost of these objects is based on the cost of production and bringing that object to market. Not on the inherent value of the contents (the fiction).

kaitie
05-06-2012, 10:23 PM
But even if the price varies, the point is still (unless you can provide links otherwise) that ebooks don't cost vastly less than print books to produce, which is what many readers seem to think. Thus, if a reader thinks a book should cost no more than $2.00, that price point isn't realistic for the publisher if it doesn't cover costs.

Amazon has made a concerted effort to sell ebooks cheaply, even at a loss, in order to encourage readers to only buy ebooks from Amazon. They've also done the opposite. When they feel a publisher charges too much, they've lowered the costs of hardcovers to less than the ebook precisely to rile up readers to put pressure on publishers for lower prices--prices that only Amazon can sustain because they have enough money coming in from other sales to avoid losing in the short-run. The goal is to make readers expect ebooks to cost less so that publishers are pushed to cut costs and go under or keep costs higher (at which point Amazon still wins because they get the customers). And it's working.

Nathan Bransford did a couple of surveys only a year apart, and you can see a marked difference (http://blog.nathanbransford.com/2011/06/are-attitudes-about-e-book-prices.html) in the prices that customers expected. A couple of years ago, readers wouldn't have cared about a 9 or 10 dollar ebook. Now that's viewed as too high by the majority. I'm sure the glut of self-published books that are being sold for a dollar or two have helped. Even if a reader doesn't read those books, it does make you say, "Why should I pay $10? This other book is only $1."

Lexxie
05-06-2012, 10:35 PM
I really don't care how much I have to pay for an e-book, if it is by an author I love, or part of a series I really like, I will buy it. I have so many books to read, I really want to make sure that I get good quality, and I am willing to pay to make sure I get the best quality I can.

I am 'only' a reader, and I may be in the minority among readers, but I have bought a few e-books that were very cheap, and in most cases I realized very quickly just why those books were so cheap. I think even $0.99 is too expensive for something that is so badly written that it is hard to read and even harder to understand the story. Which is why I am willing to pay $12 for a book I have high hopes for based on the author or what friends who like the same kinds of books as me think about it.

Terie
05-06-2012, 10:51 PM
I wonder how many people who have weighed in here have actually run a retail business. If the reader believes an ebook is worth the same as a cup of coffee, and won't pay more, then (sadly) that's what it's worth. Demand sets prices, no matter what people think about Amazon.

Everybody here who wants to be able to buy a brand new car of any make and model for under $2,000, raise your hands.

Wow! Look at all them hands!!!

Now let's see if auto dealerships lower their prices.

Ooops.

GregB
05-06-2012, 11:00 PM
That doesn't work with gasoline, eggs, cable tv, or mascara... or pretty much anything I can think of. Consumers grumble and pay anyway.


I'm sure that's comforting to unemployed newspaper and magazine journalists, film and food critics, and encyclopedia writers. ;)

Personally, I don't think "customers will grumble and pay anyway" is a particularly sound business strategy in a world where vast amounts of dirt-cheap or free media content is at every customer's fingertips.

Medievalist
05-06-2012, 11:14 PM
Personally, I don't think "customers will grumble and pay anyway" is a particularly sound business strategy in a world where vast amounts of dirt-cheap or free media content is at every customer's fingertips.

If people want quality they'll pay for it.

If they don't, they won't.

But people deserve to be paid for their work, and that includes authors, agents, editors, sales and marketing, production staff and all the others involved with making book.

GregB
05-06-2012, 11:27 PM
If people want quality they'll pay for it.


Not if they can get "quality" elsewhere for less than a particular provider wants to charge for it, or for free. Encyclopedia Britannica is a quality encyclopedia, but people aren't willing to pay for it anymore because they can get the same, quality information for free.

Likewise, if readers (a declining population, to be sure) can't find quality ebooks for less than $12.99 or whatever, then there's no problem and the whistling I hear isn't actually in the vicinity of a graveyard.

kaitie
05-07-2012, 12:02 AM
I'm fairly certain that the last I heard, book sales have increased over the past several years.

I'm not sure where the rumors that readers are an endangered species comes from, but the sales data doesn't seem to support it.

Cliffhanger
05-07-2012, 12:03 AM
But even if the price varies, the point is still (unless you can provide links otherwise) that ebooks don't cost vastly less than print books to produce, which is what many readers seem to think. Thus, if a reader thinks a book should cost no more than $2.00, that price point isn't realistic for the publisher if it doesn't cover costs.

You're asking me to find a source from a publishing insider, on record as saying that publishers are charging too much for ebooks? I'll get right on that. But, here's a good article that sums things up nicely (http://articles.businessinsider.com/2012-04-16/tech/31347874_1_ebook-prices-lower-prices-to), including a bit of what we're seeing here already, the claim that the new delivery method (digital) must conform to and cover expenses for their legacy business model.

I've shown the math above. None of the industry people have refuted the numbers I've provided, only sidestepped the issue, and vaguely mentioned other costs as necessary when they aren't. It comes down to three things: Printing costs, royalties, and the distribution cut. All other costs are universal, or near enough for the sake of argument. The numbers speak for themselves.


Amazon has made a concerted effort to sell ebooks cheaply, even at a loss, in order to encourage readers to only buy ebooks from Amazon. They've also done the opposite. When they feel a publisher charges too much, they've lowered the costs of hardcovers to less than the ebook precisely to rile up readers to put pressure on publishers for lower prices--prices that only Amazon can sustain because they have enough money coming in from other sales to avoid losing in the short-run. The goal is to make readers expect ebooks to cost less so that publishers are pushed to cut costs and go under or keep costs higher (at which point Amazon still wins because they get the customers). And it's working.A business that will say or do anything to get ahead, weaken its competition, and stay in business? What's the world coming to. I agree, they're asshats in the way they're squeezing people out of business. But don't lay customers expectation of lower prices for digital content squarely at the feet of Amazon.

Customers aren't stupid. Any business who treats their customers like they're idiots deserves to fail. This isn't a hard issue to understand. It costs money to manufacture a product, the same product without those manufacturing costs should cost less. Print vs digital. Yes, there are still manufacturing costs involved (the universal costs I've mentioned), but their are unique costs to printing that digital simply doesn't have a corollary for. And yet publishers want to price digital at the same point as print and are boggled by customers' resistance.

You're talking about the use of a scarcity pricing model applied to a post-scarcity product. It doesn't work. The customers aren't stupid enough to believe it. And publishers are scared shitless.


Nathan Bransford did a couple of surveys only a year apart, and you can see a marked difference (http://blog.nathanbransford.com/2011/06/are-attitudes-about-e-book-prices.html) in the prices that customers expected. A couple of years ago, readers wouldn't have cared about a 9 or 10 dollar ebook. Now that's viewed as too high by the majority. I'm sure the glut of self-published books that are being sold for a dollar or two have helped. Even if a reader doesn't read those books, it does make you say, "Why should I pay $10? This other book is only $1."Welcome to capitalism. This is how you have second hand bookstores, the first-sale doctrine, and customers pissed about no corollary with digital. Why should the customer pay $10 for a $1 book? They shouldn't unless they want to. The market will only bear what customers are willing to pay.

Publishers raise digital prices, sales drop off, but customers still want their digital content so piracy increases. Print prices continue to creep up, sales taper off, and publishers panic and try to find somewhere to make extra revenue. Compared to print books, digital books have a huge profit margin so pubs increase digital prices... sales drop off...

But here's Neil Gaiman on digital piracy and print sales (http://www.absolutewrite.com/forums/www.youtube.com/watch?v=0Qkyt1wXNlI).

Perks
05-07-2012, 12:06 AM
I'm sure that's comforting to unemployed newspaper and magazine journalists, film and food critics, and encyclopedia writers. ;)

Different story altogether. When they started giving away their content (and bargeloads of it) for free on the internet, that's when people started thinking they shouldn't have to pay for information.

Fiction and non-fiction have very different troubles with the internet.

Ava Glass
05-07-2012, 12:07 AM
Big publishers are often criticised for being slow to adapt to new technology (when often they're no slower than anyone else, because as this thread shows much of what they do isn't understood by people without publishing experience, and it happens behind-scenes); then when they do use it, and use it properly (by which I mean they spend money to put out the best books they can, in the way they think their readers will most enjoy them), they're criticised for overpricing their books I have no doubt they'll adapt and find ways to resolve this, because adapting is what publishing does: change is the only constant I've seen in my years at the coal-face. But I am getting very weary of seeing writers unfairly directing their anger at trade publishing, instead of learning why things are as they are.


But Mike Shatzkin says "Trade publishing has historically been one of the least efficient businesses in existence." I'd link to his post, but his site today is setting off my anti-virus. I suspect something happened to it.

This BusinessWeek article (http://www.businessweek.com/articles/2012-04-26/amazon-vs-dot-publishers-the-book-battle-continues?chan=technology+companies_) supports his statement. It's basically about how Amazon wants publishers to switch to PoD at least for slower-moving titles, but publishing won't do it. The reasons given are pretty much "it will change things."



Publishers worry that a widespread shift to print on demand could, like the advent of e-books, disrupt their century-old business model. Companies such as Random House and Simon & Schuster have spent decades investing in their own supply chains, storing books in giant warehouses and developing the transportation infrastructure to ship those volumes to stores within days. If print on demand became widespread, publishers could cut their fixed costs and solve the perennial problem of stores returning unsold books. But that would throw into doubt almost everything else about the way big publishers conduct business, since they’re compensated based on the range of services they provide, from editorial guidance to storage and distribution. Print-on-demand technology would make it harder for the publishers to justify keeping a large majority of a book’s wholesale price.

One of the New York publishing chiefs says that even allowing titles to be printed on demand by Amazon when shortages occur is a bad idea, since it might encourage the company to order fewer printed books.Stuff like this adds to the public's idea that big publishers could charge less for ebooks if they just got with the times and didn't try to preserve their old model.




Smaller publishers that have already made the switch away from printing and storing their own books say it’s well worth it. “Instead of putting all those books in a warehouse, you free up cash flow to invest in R&D,”

Toothpaste
05-07-2012, 12:13 AM
Cliffhanger - I don't think anyone is arguing that ebooks shouldn't be priced slightly less than physical books. Yes, publishers currently aren't doing that, and I think most would agree that isn't wise. But is that all you're trying to say? Because no one is saying otherwise. What people are saying is that ebooks aren't so much cheaper to produce that publishers can afford to sell them at the price readers seem to want (ie: 99cents or heck even free).

In general I think that's what's happening in this thread. You think people here are insisting there isn't enough of a price difference to price ebooks cheaper, but that's not what people are saying. People are however being very very clear that there still are costs for creating ebooks, that there isn't a huge difference in cost to produce them, and thus while yes they should be cheaper, we shouldn't utterly devalue books either. I think what's happening here is people are so afraid of books being totally devalued, they are skipping over the bit where they actually say, "I agree, ebooks are cheaper to produce" because the second they say that the assumption is that they are MUCH cheaper to produce.

GregB
05-07-2012, 12:31 AM
I'm fairly certain that the last I heard, book sales have increased over the past several years.

I'm not sure where the rumors that readers are an endangered species comes from, but the sales data doesn't seem to support it.

According to a July 2011 Harris Poll, from 2010 to 2011:

* The percentage of U.S. adults who purchased zero books increased from 21% to 32%.

* The percentage of U.S. adults who read zero books increased from 9% to 15% (this includes students, btw).

Year-over-year book sales over the past couple years have shown modest growth because (1) the economy was emerging from the worst recession in seventy years, (2) even modest inflation means that total sales will increase even as purchases remain constant, or decline, and (3) the population grows every year.

If you want further statistics on the decline in the percentage of the population who purchase and read creative literature for entertainment, Google will provide you with an abundance of sources. For a longer view of these trends, this (http://www.newyorker.com/arts/critics/atlarge/2007/12/24/071224crat_atlarge_crain?currentPage=1) article from The New Yorker is a good place to start.

GregB
05-07-2012, 12:38 AM
Different story altogether. When they started giving away their content (and bargeloads of it) for free on the internet, that's when people started thinking they shouldn't have to pay for information.

Fiction and non-fiction have very different troubles with the internet.

Really? I don't know about you, but all of my commercially published books are available for free on the internet. Beyond that, today there are 50,000+ titles available for free in the Kindle store, not counting the thousands of commercially published titles I have access to through my Prime membership. No doubt, many of them suck, but Amazon is very good at only showing me the good ones.

That's today, and obviously fiction hasn't gone as far down that road as have news and general information. Do we believe it will be harder to find great free books next year, or in five years? Do we really believe that these facts will not exert downward pressure on prices in the meantime?

kaitie
05-07-2012, 12:53 AM
Cliffhanger - I don't think anyone is arguing that ebooks shouldn't be priced slightly less than physical books. Yes, publishers currently aren't doing that, and I think most would agree that isn't wise. But is that all you're trying to say? Because no one is saying otherwise. What people are saying is that ebooks aren't so much cheaper to produce that publishers can afford to sell them at the price readers seem to want (ie: 99cents or heck even free).

In general I think that's what's happening in this thread. You think people here are insisting there isn't enough of a price difference to price ebooks cheaper, but that's not what people are saying. People are however being very very clear that there still are costs for creating ebooks, that there isn't a huge difference in cost to produce them, and thus while yes they should be cheaper, we shouldn't utterly devalue books either. I think what's happening here is people are so afraid of books being totally devalued, they are skipping over the bit where they actually say, "I agree, ebooks are cheaper to produce" because the second they say that the assumption is that they are MUCH cheaper to produce.

What she said.

Perks
05-07-2012, 12:54 AM
Really? I don't know about you, but all of my commercially published books are available for free on the internet. How's that?

Perks
05-07-2012, 12:55 AM
Oh wait. I think I know what you're talking about. Sorry, brain fade. I don't know if the books I own are available on file-sharing sites.

GregB
05-07-2012, 01:06 AM
How's that?

Here (http://fb2.booksgid.com/content/31/cameron-haley-mob-rules/1.html) you go -- enjoy! PW says it's "zippy." :D

Perks
05-07-2012, 01:11 AM
Here (http://fb2.booksgid.com/content/31/cameron-haley-mob-rules/1.html) you go -- enjoy! PW says it's "zippy." :D

Oh, you just mean the books you wrote, not the books you own. I see.

Al Stevens
05-07-2012, 01:15 AM
People are however being very very clear that there still are costs for creating ebooks, that there isn't a huge difference in cost to produce them...

One-time, up-front acquisition and development costs are not that much different. Marketing costs are about the same.

But production, storage, and distribution costs--the on-going costs that are a function of in-place facilities and quantities of books produced--are miles apart.

And then there are fixed administrative costs, which will be whatever they have to be. When times are good, you can have a bizjet. But at other times...

It has been argued in the past (not necessarily on AW) that publishers demand higher e-book prices than their costs would justify primarily because they fear that lower prices for essentially the same content would shift consumers in large numbers to the less-expensive product and threaten the publishers' established business model. I don't have links (it was a while back) and, of course, you never hear that argument being made on the record by insiders who would know for sure. Given all that, however, it had a ring of truth.

But savvy corporations, even big ones, adjust to changing times.

One insider, who shall remain unnamed here, an acquisitions editor for a big 6 company, and one with as many years in the business as anyone I know, tells me that the shift to digital and POD is inevitable, and that the big 6 employer is well aware of it, has already made changes, and is bracing for more.

In a market-driven economy, that piece of information bodes well for writers and editors, the first tier of expertise without which this industry could not exist. Because without such recognition and preparation, top-heavy publishers would be in an irreversable death spiral, and small presses with their bare-bones (and sensible) business model would take over.

It also bodes well for readers, because eventually prices will level out.

(IANAP. Take all this with a grain of salt. If only for your blood pressure.)

Williebee
05-07-2012, 01:44 AM
"miles apart"? Show me, please.



It has been argued in the past (not necessarily on AW) that publishers demand higher e-book prices than their costs would justify primarily because they fear that lower prices for essentially the same content would shift consumers in large numbers to the less-expensive product and threaten the publishers' established business model.

I can give you an equally plausible example, IMHO. If the value of something is a perceived value, then perhaps the industry is just trying to support the perception of value? (It's a theory, with about as much weight.)

So far, in my life, I've sold radio airtime, electronics, power tools, pizza and Harleys. One statement from the beginning to now still holds its grain of truth.

"A lot of people can tell you the price of something. Doesn't mean the understand the value."

GregB
05-07-2012, 02:06 AM
Top 12 titles from Angry Robot (http://angryrobotbooks.com/), along with their ebook prices. How can they do it? Don't they realize the cost differential between print and digital is only 10%?

Book of Secrets, Chris Roberson, $2.99
Triumff: Her Majesty's Hero, Dan Abnett, $2.99
Infernal Devices, KW Jeter, $4.79
Empire State, Adam Christopher, $3.99
The World House, Guy Adams, $2.99
The Damned Busters, Matthew Hughes, $2.99
The Bookman, Lavie Tidhar, $2.99
Camera Obscura, Lavie Tidhar, $4.79
The Knights of Breton Court, Maurice Broaddus, $8.49 (pre-order)
The Nekropolis Archives, Tim Waggoner, $7.69
Walking the Tree, Kaaron Warren, $2.99
Vegas Knights, Matt Forbeck, $4.99

Mr Flibble
05-07-2012, 02:18 AM
Top 12 titles from Angry Robot (http://angryrobotbooks.com/), along with their ebook prices. How can they do it? Don't they realize the cost differential between print and digital is only 10%?

Book of Secrets, Chris Roberson, $2.99
Triumff: Her Majesty's Hero, Dan Abnett, $2.99
Infernal Devices, KW Jeter, $4.79
Empire State, Adam Christopher, $3.99
The World House, Guy Adams, $2.99
The Damned Busters, Matthew Hughes, $2.99
The Bookman, Lavie Tidhar, $2.99
Camera Obscura, Lavie Tidhar, $4.79
The Knights of Breton Court, Maurice Broaddus, $8.49 (pre-order)
The Nekropolis Archives, Tim Waggoner, $7.69
Walking the Tree, Kaaron Warren, $2.99
Vegas Knights, Matt Forbeck, $4.99

Aren't Angry Robot having a sale atm? Why yes, yes they were, 50% discount.

Triumff for instance is now £4.49 ($5.99)

Using sale prices as an example doesn't really wash.

RichardGarfinkle
05-07-2012, 02:19 AM
I know this is a derail, but there has been another market lately with a massive reduction in prices: Software. High end software is still expensive but people now expect high quality programs at the cost of apps, which are dirt cheap or free.

That change of user perception is cutting down the cost and driving up the production values of just about everything in the software market. Users may pay for quality or they may simply wait for people to lower the costs on quality to match what they are willing to pay.

Al Stevens
05-07-2012, 02:20 AM
"miles apart"? Show me, please.
I think the comparisons of the differences, for example, between the costs of building and maintaining a warehouse and a fleet of trucks (or the monthly UPS charges) and the cost of content servers should suffice. I don't have those numbers at hand, which is why I said "miles," but it really should be obvious.


One statement from the beginning to now still holds its grain of truth.

"A lot of people can tell you the price of something. Doesn't mean the understand the value."
Yet another pithy maxim: "It's worth what somebody will pay for it."

GregB
05-07-2012, 02:28 AM
Aren't Angry Robot having a sale atm? Why yes, yes they were, 50% discount.

Triumff for instance is now £4.49 ($5.99)

Using sale prices as an example doesn't really wash.

Um. They were running a sale from their website, with a coupon code. It ended yesterday. Fortunately, all of the prices I listed were the current ones from Amazon. If you prefer to pay an extra couple bucks for Triumff direct from Angry Robot (sans sale), I support that decision 100%. Alternatively, you could purchase it for your Nook at...$2.99.

Al Stevens
05-07-2012, 02:31 AM
I know this is a derail, but there has been another market lately with a massive reduction in prices: Software. High end software is still expensive but people now expect high quality programs at the cost of apps, which are dirt cheap or free.

That change of user perception is cutting down the cost and driving up the production values of just about everything in the software market. Users may pay for quality or they may simply wait for people to lower the costs on quality to match what they are willing to pay.
There's an interesting dynamic at play here, which separates this market from the consumer book market. High-end software is typically purchased by corporations and government agencies where the purchasing agent is spending money from the organization's coffers and not his own. Apps are bought by individuals.

There are exceptions, of course, but how many freelance writers do you know who own legal copies of the complete professional Adobe or Office suites?

ETA: Probably too much derail. Slapping own wrists. Mod intervention expected.

Mr Flibble
05-07-2012, 02:34 AM
Um. They were running a sale from their website, with a coupon code. It ended yesterday. Fortunately, all of the prices I listed were the current ones from Amazon. If you prefer to pay an extra couple bucks for Triumff direct from Angry Robot (sans sale), I support that decision 100%. Alternatively, you could purchase it for your Nook at...$2.99.


Triumff is £4.49 on amazon (uk) too as of right now. Cheaper than the ppb, but only by a couple of quid.

If Barnes and Noble decide to discount/have a sale, up to them. But they are taking the loss (as amazon did/do on the old model, loss leaders to help boost the kindle, creating false expectations of cheap prices.) It is not a normal price. (B&N lists it as discounted)

If a book shop has a sale this is not indicative of usual 'this is how cheap it can be/should be' prices

At least try to report your facts accurately, without trying to handwave over the facts. Thanks.

GregB
05-07-2012, 02:50 AM
Triumff is £4.49 on amazon (uk) too as of right now. Cheaper than the ppb, but only by a couple of quid.


Here are the prices we see in the U.S. Because I'm in the U.S., these were the prices I listed. I believe there are additional charges applied to ebooks in the UK and continental Europe (VAT?).

http://i315.photobucket.com/albums/ll442/gbenage/amazon.jpg


http://i315.photobucket.com/albums/ll442/gbenage/bn.jpg



At least try to report your facts accurately, without trying to handwave over the facts. Thanks.

You're welcome! :)

Mr Flibble
05-07-2012, 03:03 AM
And that could not of course be amazon discounting it in a sale? Because that ain't it's usual price - if it was, amazon.uk would be cheaper too, surely? (and amazon are notorious for selling stuff at a loss that is tied to the kindle...) It won't actually let me access the US kindle and show a price or whether it's discounted, so I can't say for sure - but if the pub is offering it at $5.99, then you can be sure this is a dicsounted price. And therefore...not applicable to the point in hand, expect to nail home th eidea that retailers take a loss on book sto get their ereader selling and THAT is (part of)what makes people think ebooks should be cheaper.

So, after changing your tune a time or two, wanna try again?

GregB
05-07-2012, 03:11 AM
So, after changing your tune a time or two, wanna try again?

How have I "changed my tune"? I don't know how Angry Robot sets the prices on their website. I know when I was in the business, we didn't discount from list because we didn't want to undercut our retail partners upon whom the majority of our sales depended. Angry Robot doesn't consult me, so I can't say whether or not this is what drives their direct pricing strategy.

It's certainly true that Amazon or B&N might discount ebooks to sell their devices, however. To circumvent such greasy practices, I suggest buying from Diesel and saving a buck.

http://i315.photobucket.com/albums/ll442/gbenage/diesel.jpg

Cliffhanger
05-07-2012, 03:21 AM
Cliffhanger - I don't think anyone is arguing that ebooks shouldn't be priced slightly less than physical books. Yes, publishers currently aren't doing that, and I think most would agree that isn't wise. But is that all you're trying to say? Because no one is saying otherwise. What people are saying is that ebooks aren't so much cheaper to produce that publishers can afford to sell them at the price readers seem to want (ie: 99cents or heck even free).

In general I think that's what's happening in this thread. You think people here are insisting there isn't enough of a price difference to price ebooks cheaper, but that's not what people are saying. People are however being very very clear that there still are costs for creating ebooks, that there isn't a huge difference in cost to produce them, and thus while yes they should be cheaper, we shouldn't utterly devalue books either. I think what's happening here is people are so afraid of books being totally devalued, they are skipping over the bit where they actually say, "I agree, ebooks are cheaper to produce" because the second they say that the assumption is that they are MUCH cheaper to produce.

No, the prevailing myth is that ebooks are similar in costs to producing a print book, this is simply false. As I've shown with three little numbers. Yet we still have this kind of response...


"miles apart"? Show me, please.

I, for one, already have. At least three times on this thread alone. But hey, what's a fourth time showing the same math that no one has refuted or been able to contradict between friends.

There are no printing costs for ebooks. A trade paperback costs about $5 to actually physically produce the book block and cover. The cut the distributors take for each mode is significantly higher with print books, 65% of retail eaten by print distribution, whereas only 30% of retail is eaten by digital distribution. Yet, royalties are often significantly higher with digital, up to 50% of retail in some cases, while print only manages 10% or retail, and often less.

A trade paperback priced at $25 will yield $1.25 to the publisher after the above are considered, this is what they have to pay for everything else to stay in business and bring the book to market.

An ebook priced at $10 will yield $2 to the publisher after the above are considered, this is what they have to pay for everything else to stay in business and bring the book to market.

The costs of bringing an ebook to market are significantly cheaper than bringing a print book to market, shown just above, and several times throughout the thread. Hell, as above, the publisher makes more per unit with a digital sale at less than half the price of a print sale. Why? Because they're so much cheaper to produce.

Mr Flibble
05-07-2012, 03:22 AM
But, and here is the important point as pertains to this conversation, this is way below the price the publisher wants - this is the retailer discounting, This has no bearing AT ALL on how much the ebook costs to produce.

If I buy a book in for £4 and decide to sell it for two, this doesn't mean the book cost less to produce, only that I am trying to entice readers in.

So, what was your point again? Because you aren't making a lot of ense in your last posts. What booksellers decide to price it at is not the same as what the book cost to produce, especially in a sale.

So can you provide some better figures? Because 'this book is on sale here' isn't representative. It's a sale (or someone trying to corner the market by being the cheapest so everyone buys their ebook reader;))

Give me non sale prices. That'd be a start....and then we can get into the business models. If you like.

GregB
05-07-2012, 03:34 AM
But, and here is the important point as pertains to this conversation, this is way below the price the publisher wants - this is the retailer discounting, This has no bearing AT ALL on how much the ebook costs to produce.


Angry Robot sells to online retailers at a wholesale price. The price at which the online retailer sells that digital book to readers is irrelevant to Angry Robot. Maybe that wholesale price is $2.00, in which case Amazon and B&N are making a buck (33% gross margin) on every book sold and Diesel is breaking even in an effort to gain market share. Angry Robot doesn't care -- $2.00 is $2.00.

What matters to Angry Robot is whether or not they can afford to sell to online retailers at $2.00. Apparently they can, and I would suggest that this is because they aren't worried about cannibalizing print sales or covering all of those print overhead costs that almost no one in this thread will acknowledge.

Mr Flibble
05-07-2012, 03:47 AM
What matters to Angry Robot is whether or not they can afford to sell to online retailers at $2.00. Apparently they can

Big assumption - maybe they can't and the retailer takes a loss (a amazon do/have done)

Do you know how all these places are pricing their stuff and why? If it is at a huge discount, well, it's prolly cos they are having a sale. Because if they could , would the pub not undercut? I would , if I could. Hey, dudes, it;s cheaper here! You know why? Because it costs them to sell book sthrough third party sites. It costs ME when my pub sells through 3rd part site (I get less royalties)


Your business (or oher) logic is screwed. If Angry Robot COULD sell their books at $2.99 all the time and make a profit in the face of the opposition...why aren't they? Because they need to make money. Because it would cost them money and they would go bust and oh look! authors are not getting paid

Look. Publishing is a behemoth and it needs to change and it will but it will take time. In the meantime, this is how much ebooks cost, because the price differential is low. Or you culd read books by epubs that have a different business model and are cheaper.

Buy the books

Or don't

If people don't buy them, the market will die
if they do, itwon't.

GregB
05-07-2012, 04:02 AM
Big assumption - maybe they can't and the retailer takes a loss (a amazon do/have done)


You're not tracking. Angry Robot gets a wholesale price from the retailer on every copy sold. It has no control over (or concern about) the price at which the retailer sells to its customers.

Angry Robot makes its ebooks available at a wholesale price of $2.00. The retailer is free to price that ebook at $2.99 (Amazon, B&N), or $1.98 (Diesel), or $12.99 (?). Maybe the retailer is discounting (Amazon, B&N) in order to sell a device, or maybe it's discounting just to gain market share even though it doesn't have a device (Diesel). Angry Robot doesn't care. It gets $2.00 per sale.

For Angry Robot, the question is whether or not they can deliver a competitive product at a competitive wholesale price. They appear to be thriving, so I think the answer to that question is, "yes."

Sheryl Nantus
05-07-2012, 04:07 AM
What matters to Angry Robot is whether or not they can afford to sell to online retailers at $2.00. Apparently they can, and I would suggest that this is because they aren't worried about cannibalizing print sales or covering all of those print overhead costs that almost no one in this thread will acknowledge.

But... it's a sale.

Samhain regularly gives away one or two titles a month for free - but *only* for that month. After that the price goes back up to normal.

They do this to increase sales. They take the loss, since authors still get paid (and Amazon, etc.) for the books themselves but it's an effort to sell more when the books go *BACK* to the regular price.

I have no idea why you're taking a situation where books are on sale and using it to illustrate your argument. It's like me going to Walmart, digging a t-shirt out of the remainder bin for $0.99 and whining that all shirts should cost less than a buck.

And, seriously - how many of us actually know the inside of a digital publisher's world? Or even a publisher's world, period? There's a lot of figures being tossed around and concepts when none of us, with a few exceptions, have ANY experience in the field.

Just my thoughts.

Sheryl Nantus
05-07-2012, 04:10 AM
There are no printing costs for ebooks. A trade paperback costs about $5 to actually physically produce the book block and cover. The cut the distributors take for each mode is significantly higher with print books, 65% of retail eaten by print distribution, whereas only 30% of retail is eaten by digital distribution. Yet, royalties are often significantly higher with digital, up to 50% of retail in some cases, while print only manages 10% or retail, and often less.

A trade paperback priced at $25 will yield $1.25 to the publisher after the above are considered, this is what they have to pay for everything else to stay in business and bring the book to market.

An ebook priced at $10 will yield $2 to the publisher after the above are considered, this is what they have to pay for everything else to stay in business and bring the book to market.

The costs of bringing an ebook to market are significantly cheaper than bringing a print book to market, shown just above, and several times throughout the thread. Hell, as above, the publisher makes more per unit with a digital sale at less than half the price of a print sale. Why? Because they're so much cheaper to produce.

I might have missed this in a previous post, so forgive me for asking... but what experience do you have in the publishing field to deliver such definite numbers?

Thanks in advance.

GregB
05-07-2012, 04:14 AM
But... it's a sale.


Unbelievable. It's not a sale. The entire Angry Robot catalog is priced in the range of the top 12 I listed.

Angry Robot had a sale on its website that ended Saturday. That sale had nothing to do with the retail price of its ebooks from online retailers.

Sheryl Nantus
05-07-2012, 04:19 AM
Unbelievable. It's not a sale. The entire Angry Robot catalog is priced in the range of the top 12 I listed.

Angry Robot had a sale on its website that ended Saturday. That sale had nothing to do with the retail price of its ebooks from online retailers.

What's unbelievable?

Al Stevens
05-07-2012, 04:23 AM
A trade paperback costs about $5 to actually physically produce the book block and cover.That seems high. I published a 370-page 6x9 paperback with Createspace. They charge me $4.45 for each author copy.

When I order 20 copies, it's just about five bucks each including shipping.

Given that they must have some profit in there, and given that it's POD, I would expect a similar book in offset run quantities to cost the publisher a lot less per copy.

GregB
05-07-2012, 04:25 AM
What's unbelievable?



But... it's a sale.


That?

GregB
05-07-2012, 04:27 AM
That seems high.

Cliffhanger pays too much for offset. Don't let that detract from the rest of what he has to say. ;)

Sheryl Nantus
05-07-2012, 04:33 AM
Sorry - didn't know I wasn't smart enough to follow this conversation.

I'll go do some reading and writing.

;)

Al Stevens
05-07-2012, 04:34 AM
Cliffhanger pays too much for offset. Don't let that detract from the rest of what he has to say. ;)
And 25 bucks retail for a trade paperback just to make a tiny profit? Those publishers must be losing a lot of money. Or the retailers.

GregB
05-07-2012, 04:40 AM
Sorry - didn't know I wasn't smart enough to follow this conversation.


This strikes me as passive-aggressive, but just in case, I'm not questioning your intelligence. I felt like your "But...it's a sale" response ignored everything I'd just written. Reviewing the past few posts, I still feel that way. That doesn't mean I think you're stupid.

BTW, I see all your titles are available for less than $5.00. Are they on sale?

GregB
05-07-2012, 04:46 AM
And 25 bucks retail for a trade paperback just to make a tiny profit? Those publishers must be losing a lot of money. Or the retailers.

No, the formula evidently doesn't work in that direction. The production costs of hardcover are, at most, $2.00 more than MMPB, so clearly all hardcovers retail for $10.00. For TPB it's maybe a dollar, which means the average list price of a trade paperback is $9.00. I'm not sure what to tell you if you're seeing different prices for TPB and HC titles.

Al Stevens
05-07-2012, 05:16 AM
I'm not sure what you just said. Too much alphabet soup. Or whether it was serious.

MacAllister
05-07-2012, 06:14 AM
Yeah, you know what? This is just going in circles, and in spite of requests for civility, the tone from a couple of posters keeps sliding towards condescending and snotty. We're going to take a break.

Cliffhanger, no one is attempting to refute your "math" because it's painfully clear to everyone here except maybe Greg B that you simply don't know what you're talking about, and your numbers don't bear any relationship to reality.

But there's a thread like this about every other week, so let's all cross our fingers that the next one isn't quite so dysfunctional.

Old Hack
05-08-2012, 09:33 PM
I've asked Mac if it's ok to post in this thread, just once, even though it's been locked, and she's agreed that it might be useful. I don't intend to start this conversation up again, but thought that a definitive answer to the production costs of various book types might be a useful note to end this discussion on. (http://www.absolutewrite.com/forums/showthread.php?p=7258498#post7258498)

For those of you who aren't aware, Torgo is an anonymous editor for a big publisher. These are real figures, from a reliable source.


Some actual numbers for you to chew on. I opened up a P&L this morning that has four editions - Hardback, Trade Paperback, Paperback and ebook.

The cost of printing, shipping and warehousing these books - respectively: £1.17 per copy; 90p per copy; 20p per copy; and nothing.

Total PPB cost across all editions is £19,337 - that's approximately 10% of projected revenue. There's also £7,633 of plant costs like editorial plant (freelance proofread, most likely) and artwork, which apply to all editions. We also chuck in £2,266 for stock provision.

The biggest line items, though, are marketing - at £30,000 - and the author's advance, at just under £45,000.

What's our total profit margin when all is said and done? 8.95%. What would it be without the ebook edition? 2.23%. We're such greedy bastards.

And with that, this thread is locked for good.