
The economics of the $9.99 ebook - AaronChua
http://ac-idealog.blogspot.com/2009/05/economics-of-999-ebook.html
======
electromagnetic
This is such an uninformed argument, publishing has a narrow profit margin.
These companies aren't trying to extort you at 2000% profit like other
companies.

The entire publishing process is designed to filter out the chaff. First you
need an agent (this is undeniable when some publishing houses won't accept a
submission without one) whose job it is to first find publishers that are
interested and then to make them pay every penny they're willing for it. When
a first time author like Stephanie Mayer gets handed $750,000 for a series,
that's because their agent just got handed 75,000-112,000. If you go it alone
you'd probably get less than what your agent alone would get.

After the books in the publishing house, it is usually reviewed by like up to
5 editors who give their opinion before it's handed over to one editor who
they believe is the best for it. You then get an editor, who through multiple
revisions helps the author get the book to a better standard and quite often
to more closely resemble the authors original idea.

I've worked with editors, and they're very passionate and put a lot of
themselves into the work. This isn't something you're going to get at some
slapped together organization. The argument that they're being replaced by
digg (in the disaggregate link) is completely laughable, I'm sorry but digg
and HN link mostly to articles at websites that all have editors. Just because
people aren't committed to one information source and choose their own news
(hence why some people get several news papers in the morning) doesn't mean
the editors job is [gone].

Then he argues that it's help authors by allowing them to produce more
books... Some authors release a book every few years and some release one
nearly every 3 months (Stephen King). This isn't an efficiency model that can
simply be stepped up by a new technology. It's an entirely ignorant argument.

This article is just plain bad. No one should sell their work at $9.99 a copy
if it isn't going to cover the costs. In the publishing world especially, you
should never release a copy for such a low price when the majority of books
make most of their money in the first few months to a year when the book is
priced the highest.

I hate these articles, because they're always written by people who are so
uninformed on the issues. They're by people who assume the end is nigh for
corporate publishing, despite the fact that there's been little to no effect
on traditional publishing media, in fact global book sales have been on an
increase over the past years.

~~~
AaronChua
Great comment. I have posted it at my blog.

Actually, I do deal with publishers quite a bit, as well as music labels and
broadcasters. It is not that they are not dedicated to their work.
Unfortunately, the economics of the Web works against these cost structures.
It might not happen to books yet but with new reading devices and new
marketplaces coming up, I think changes will come.

As to my comment on new genres of books being created, this argument is not
unique. Every new medium will create a new form of media that suits its
characteristics. Online video created 1 minute clips. Mobile created mobile
books (in Japan currently).

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asciilifeform
That's $9.99 more than I'm willing to pay for any book which I cannot sell,
cannot lend to a friend, and could be retroactively censored or deleted from a
central location at the publisher's whim. Not to mention one which will vanish
when the publisher goes out of business.

~~~
mechanical_fish
Seriously? You wouldn't even pay, say, $0.99 to _rent_ a book? I pay more than
that, in time and gasoline, every time I check a book out from the library.

Just driving to the library or the post office, spending 10 minutes, then
driving back is a 30-minute commitment for me. If my time is worth $20 per
hour, that's $10 right there, not counting the cost of gas or the odds that
the book I want isn't available. Unless I'm very diligent about checking out
books in large batches (and how many books can I really read before my three
weeks is up and they become due at the library?) I might be saving money with
a Kindle [1], even if each book self-destructed, Mission-Impossible style,
three months after I paid $10 for it. Which they don't.

I am an old-school book collector; it runs in my family. And, yet, when I look
at my shelves I dream of actually owning fewer of them. The world has changed.
Amazon and Abebooks exist now. By this point, very few of my books are
sufficiently precious and sufficiently likely to go out of print that I need
to physically hoard them myself -- such books do exist, but they're much fewer
in number, perhaps no more than a single bookshelf's worth.

Yeah, I guess the apocalypse could wipe out Amazon and Abebooks, or the
copyright Gestapo could create some kind of digital Fahrenheit 451. But,
really, what are the odds? To worry too much about that is like hoarding beer
because Prohibition might come back. I'm literally more worried about my house
burning down.

I'll worry when we reach the point that important books are routinely
published in electronic form _alone_ , with no paper copies _anywhere_. But I
don't think that will ever happen. Indeed, the preservation of archival
versions might become an even more significant _raison d'etre_ for paper
publishers -- we really need _more_ archives, and more librarians and editors,
to select, print out, and preserve all the great blog posts and HN comments
that will otherwise be lost to linkrot, or buried in spam and rendered
unfindable, within my lifetime.

I still love libraries. Shelves of books make me happy. But that thrill is not
what it once was. Because it was the exciting feeling of knowing that you were
surrounded by the work of centuries of scholars, that the world's knowledge
was within reach. And that's true all the time now. I live in a library 24/7.
I have to take special measures, like hiking out of cellular range, to
_escape_ that feeling of being surrounded by knowledge. I could sit here in
this chair for the rest of my life and never run out of interesting things to
read, watch, or listen to, so long as someone keeps paying the Comcast bill.

\---

[1] Ignoring the cost of buying the Kindle in the first place, of course.

------
stuff4ben
What a great opportunity it would be for someone to replace the traditional
role of the publisher with what the blog-author calls a "lightweight service".
Then authors could go directly to these disaggregated services for marketing
and editing and then to Amazon for e-publishing. The traditional publishing
houses are going the way of the dodo and print newspaper.

~~~
AaronChua
Yeah, I fully agreed with your view. That is why I am building a service that
allows authors to easily create an iPhone application simply by uploading
their book. The idea is to use the iPhone application as a base from which the
authors can build their community or fans upon.

------
russell
"Beyond new structures, we will also see new genres or formats of books that
are more light weight and easier to produce. These will enable authors to
produce more books."

Really? I read mostly science fiction and CS books. I am not sure what these
new genres are, but I dont find the idea compelling. Lightweight books? Half a
century ago SF books were 120 to 150 pages long. I like the current 300-400
page books better. Lightweight technical? If I want lightweight, I read blogs.
The fiction authors that I read produce 2 or 3 books per year. Writing is hard
work, and I dont see format changes changing that. Authors need to make a
living. The generally poor quality of OSS documentation attests to that.

There is probably room to squeeze some fat out of $50-100 technical books.
Safari rents a selection of books for a reasonable amount per month, so that
could be a good model. And there are educators working on low cost/free
textbooks.

I would hate to see well written books replaced by crowdsourcing.

ADDENDUM: There is a small but growing trend for authors to put out a free
online version at the same time the book is published. It seems to actually
increase book sales.

------
Derbasti
It is hard to claim that eBooks are too expensive while audio books are
already profitable at 10$. Hence, I think that the discussion about the need
for high prices for eBooks is ridiculous.

~~~
electromagnetic
Audiobooks are an after-publishing product. Once a novel has become
profitable, they can hand the book to a voice actor and say 'read', they then
sell the product for $10 because it no longer kills their bottom line.

The reason eBooks don't cost like this, is because people want them here and
now like you get with a real book. I'm sorry, but if people want a $10 book,
do what everyone else on the fucking planet does and wait for it to come down
in price! There's lots of books in book stores that cost less than $10, so why
pay for an ebook? You're never going to get a brand new ebook at $9.99 and it
cover the cost of the process. Your best bet is a $10 eBook released a year or
so after publication like with an audiobook, or discounted mass market
paperbacks.

~~~
lliiffee
If ebooks cost 10% of what books used to cost, but everyone buys 10x as many
books because of the lower cost, convenience of buying and storing them, etc.,
then the costs can be covered the same as today.

~~~
jeffesp
This ignores the fact that there might be a fixed cost per book. If it is 10%
of the current book price, then you are making no profit. Books don't just
grow on trees. It also assumes that I have time for 10x as many books because
they are cheaper. Currently, my time is more of a premium than my convenience
or money.

~~~
lliiffee
It seems to me that the marginal cost for an ebook is indeed zero. (Or very,
very nearly zero: do you count the cost of the electricity or bandwidth to
download it?) You disagree?

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robryan
Can't say I've ever had a problem paying a decent amount for a book. Never
been a fan of ebooks either.

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TallGuyShort
It's true. I would've bought 5 or 6 e-books in the past month if they were all
$9.99.

The ones I needed were well over $50 and so I spent the extra time finding
free alternative. They're lower quality, but unless it's under $10 it's worth
the extra research I have to do myself.

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m_eiman
From the article: "More and more, ancillary revenue sources will reduce the
reliance on book sales."

What -would- the ancillary revenue sources be for writers?

I doubt they can do what the rock stars are doing and sell ten of thousands of
tickets for $50 for people to come listen to them reading their books..

Off the top of my head I can't think of anything that would scale enough to be
worthwile.

~~~
bitmason
Yeah, I've heard this one before. A few authors do have decent speaking gigs
(often for keynotes and things like that) but they're the exception. And those
who can make money this way are already doing it. The whole idea that there's
some huge untapped pot of money in live performances (for reading, music, or
whatever) is pretty silly.

------
zandorg
I recently self-published (via <http://Lulu.com> ) a 730-page book of stories
in hardback. I disabled Download as PDF. This means someone would have to scan
it in and proofread it (the difficult bit) to get it in a digital format. I
like that barrier to piracy.

[Additional] Also, Xlibris.com is not as convenient as Lulu, but it's much
much cheaper.

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TweedHeads
99cts ebooks.

No need for publishers.

Write your own book and sell it on AppStore alikes.

Everybody can be a writer.

Convenience wins.

Everybody wins.

~~~
bitmason
So are you not going to edit the book? Or just have a friend do a cursory job
for free? How are you going to promote the book so people know about it? Of
course, you don't have to do any of those things to get an ebook out there but
getting a quality ebook out there and marketing it are something else again.

~~~
TweedHeads
I understand your point, but the thing is lowering the entry barrier so
everybody can write AND publish on their own. If you want to spend on a more
professional publishing I bet online stores can give you extra exposure for a
"fee" at the same time a new crop of side business like editing, proof
reading, marketing, etc can grow to make the market healthier and self
sustainable.

So, a newbie can write an publish, their work may start at 99cts so if they
hit the jackpot a million copies sold can make them millionaires over night.

Professional books, best sellers, academic books etc, can hire professionals
to do their job, same as you can do your own web site if you wish, or hire web
designers to do a more professional job, which most big companies do. And sure
they can sell it for $9 or a thousand, up to them or to the market to decide
their price and worthiness.

It all starts at 99cts.

Again, no need for the publisher.

