

Memo To Ian Fleming’s Heirs - mikecane
http://mikecanex.wordpress.com/2010/11/03/memo-to-ian-flemings-heirs/

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Tyrannosaurs
This sort of misses the point. Pricing is generally driven by one thing -
profit maximisation. That's very different to maximising volume sales.

Even if you can go and buy a paperback for $1, there are evidently enough
people buying the $10 version (or they wouldn't sell it at that point).

If they price the eBook based on the competition from used paperbacks, they're
going to risk people who would have paid $10 buying the cheap eBook instead.
That may increase volume sales but given their age and the likely number you
could shift even selling them for a $1 (after all there are plenty sat unsold
in the second handbook shops, it's not like they're flying off the shelves
even at that price) the total profit would be lower.

So you may not think it's not worth $10 but they know that most people think
that and they don't really care. They'd rather sell to 100 people at $10 than
500 at $1 and if you're one of the 400 not buying at the higher price they're
not fussed.

The other point is that I think people massively over estimate the cost of the
physical medium for books. In the UK you can buy a printed copy of War and
Peace (nearly 1000 pages) for £1 and at that price it's profitable. The paper
is pretty low quality but it's 1000 pages, printed and shipped and profitable
for both the publisher and the retailer. Given that I don't think we should
expect massive differences between the cost of physical and eBooks.

~~~
bryanlarsen
"Pricing is generally driven by one thing - _short-term_ profit maximisation."

There, fixed that for you. His argument is that they're trading short term
gain for long term pain by turning customers into pirates or _shudder_ library
patrons.

Of course, it may be argued that they're maximizing long term gain at the
expense of short term gain by "convincing" users that $10 is an appropriate
price for off-list books.

I agree with the author, but there is merit to the other argument.

~~~
Tyrannosaurs
Sorry, how does that work?

People aren't pirates or not pirates - there's nothing that says that once you
become a pirate that's you for life. I'm sure there are people who've pirated
stuff on here who also buy stuff. One incident doesn't determine your future
behaviour.

The decision point is different for each person for each medium and each
specific product. You may be willing to pay $5 for the new William Gibson but
I may think it's worth $20. If they price it at $10 I think it's a bargain,
you go looking for a torrent. We both read it, you love it, I hate it. Next
time our valuations on it may be completely different and our actions
completely different.

And with each transaction being an individual thing it all comes back to what
you see as short term profit.

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bryanlarsen
_Sorry, how does that work?_

Two ways: facility and habit.

There are still a lot of people out there who don't know how to use bittorrent
nor how to convert pirate ebooks to display on a Kindle. Given enough
incentive, they'll learn.

Second is habit. Nobody exhaustively checks alternatives every time. Once
you've learned that ebook prices are usually too expensive, you don't even
bother checking the price before you head to your favorite torrent site.

~~~
Tyrannosaurs
In terms of incentive to learn, we're talking about maybe $10 for a book. This
is a relatively small amount of money for something which will likely keep the
person entertained for several hours over a week or two. In addition most
readers are educated, employed and earn above average which puts them in the
class of people where time (to learn these things) is proportionally more
important to them than money. You talk about giving people enough incentive
but I really don't see that many people being strongly incentivised to learn
by that sort of saving.

You're also making the assumption that book X has no substitute and that they
must read this but this is rarely the case (and in those situations the item
will actually almost always have a higher value to the individual increasing
the price they're willing to pay).

If I look at the Spy Who Loved Me and I find that it's £5.25 on Amazon and I
think that's not a good price, I could easily see that I could get Casino
Royale for £4.35. If I think that's too expensive it would take me about 30
seconds to see that I could get The Girl With The Dragon Tattoo for £2.68 or
the Lost Symbol for £2.76.

Piracy is not just not the only alternative and indeed I'd suggest that in the
vast majority of cases it's not the main alternative.

(If you think that £2.68 is too much for a novel then might I ask what the
reasonable price is at which you'd buy rather than pirate? My guess would be
that it's likely to be in the area where the publisher essentially doesn't see
you as a potential customer anyway (at least not a profitable one) and broadly
doesn't really care what you do).

Beyond this you assume that initial attempts at piracy will be positive where
research shows that this isn't the case. If someone attempts to find a torrent
and spends half an hour battering their head against password protected files,
dead links and so on, they're just as easy to write the whole thing off. At
that point buying behaviour is actually reenforced as they now longer see
downloading as a viable option.

As for habits the use of the work "exhaustive" to relate to an Amazon search
which might take 30 seconds is misleading. I agree that you're not going to
search 50 sites to find the best price but a search on Amazon to get a
ballpark figure isn't onerous at all. Where someone has made some sort of
investment in a new behaviour pattern it might be true that it was more of a
one way trip but in this case the barrier to returning to legitimate
purchasing is so low as to not be there.

EDIT: I would accept that there are some instances where book piracy will be
(and is) rife. Generally these would be where the price is higher (computer or
academic books for example) increasing the incentive, and where the potential
customer / pirate is more familiar with the technology and therefore the
barriers to moving into piracy are lower but for mass market books I don't see
it being an issue in the way you describe.

~~~
bryanlarsen
People don't generally care about absolute amounts. People care about "fair"
amounts. And if they think $10 is unfair, they won't spend it even if they're
going to get way more than $10 of value out of a book.

For myself, if I'm going to read any old book, I'll grab one from the basement
or from the library rather than paying $2 for something that will have
negative value to me once I'm done with it. (my basement is filled with books,
I don't need more). OTOH, I'll readily pay $30 if I have to read it now.

~~~
Tyrannosaurs
I agree with that. My contention is unfair pricing doesn't necessarily make
people pirates, indeed it will more commonly just make them customers of
something they see being priced more fairly.

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kevinelliott
"There is no way in hell I am paying frontlist pricing for the work of a dead
author whose works can be had for about a buck in used paperback."

Well said and good point.

I know that many publishers are justifying that they are charging near dead-
tree version pricing because of "costs associated with conversion to eBook
formats." That's a sham, because 99% of the eBooks out there do not even have
formatting as nice as the printed books, nor do they have the photos or
imagery associated with chapters. At least, the Amazon and Apple eBooks. I
have seen some PDF eBooks from notable publishers (O'Reilly and Pragmatic) who
format their eBooks quite nicely.

If publishers can make their eBooks look nearly as fantastic as their dead-
tree versions (if not better), then I think it's fair to charge near dead-tree
pricing. Otherwise, who are they fooling? Most of them are doing a "print to
PDF" not actually formatting it.

~~~
Tyrannosaurs
The eBooks I've read on the Kindle seem very very low rent conversions -
tables of contents aren't usually linked, links to additional notes at the
back of the book are missing (as in the superscript isn't there, let alone
linked).

~~~
barrkel
I've seen obvious OCR errors too.

~~~
adolph
Some errors could be deliberate to detect copyright infringement:

<http://bldgblog.blogspot.com/2010/10/trap-rooms.html>

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mikecane
I just want to make it clear that nowhere did I ever state people should
pirate the books. If I thought they should, I would have provided a very
convenient link to the pirate site. I wanted the Fleming company to be aware
they weren't sitting on some sort of OPEC-like monopoly -- which is the
thinking that apparently drives the current Agency pricing model in
publishing.

Pricing is the hot topic in publishing right now. Notice how someone such as
Konrath is raking in the dough with his $2.99 eBooks.

It doesn't matter what the publisher thinks the "value" is -- it's the price
people are willing to pay that matters. Does Konrath think his stuff is
devalued because it's no longer in paper form at a higher price? Or does he
see the greater value in having a larger income?

Tell me, does being free devalue the software a lot of you use? I don't think
so. But if they tried to price it, what would you be willing to pay?

You're all very smart people here (and I state that without any sarcasm), so I
wonder if anyone here has devised any sort of pricing algorithm that could be
applied to publishing?

I always hold up the Henry Ford model: he priced his cars cheap because he
wanted them above all to be affordable and to sell. I think publishing needs
to have the same attitude. When people disagree with that, I'm just puzzled
and stumped.

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cowboyhero
That's an odd rant. The same argument could be made for any popular author
(King, Rowling, Peterson, etc).

The eBooks are priced that way because the estate is afraid of devaluing the
Bond brand. (Publishers know that eBook pricing is a race to the bottom and
they don't want to get there too soon.)

Bond is like Batman or Holmes. Three generations going and his adventures are
still published and republished in hardback, special editions, omnibuses, and
variant cover paperbacks. There's also a lucrative secondary market of
neverending sequels and spinoffs.

The estate doesn't want to screw Penguin on pricing by offering an electronic
version at $2 when the dead tree version is $15. That undercuts the publisher
across the entire line of Bond products.

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loewenskind
You generally pay what something is worth to you, not some small percentage
more than the creator invested to make that something. eBooks are very
convenient compared to books. I can get them easier and they don't have the
issues of a physical book. I can have literally rooms worth of books on my
iPad and if I move I don't have to dread carrying my library around.

If technical books weren't already so expensive I would be willing to pay
_more_ for an equivalent eBook than a physical one.

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cosgroveb
Call me crazy but I think that publishers should try to sell their e-books at
whichever price they want to... Pirates are going to pirate, people looking
for the best bargain they can by hunting around ad used book stores will do
just that.

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mattmaroon
This is akin to saying "I can download music for free so record labels should
give theirs away on iTunes."

~~~
brownleej
The author isn't recommending that they give anything away for free. He is
talking about how to determine a fair price. Your analogy does not apply.

~~~
zavulon
I don't think it's really the "fair" price.. it's the price that he, the
author, would consider buying the books instead of pirating them. Whether that
price is really "fair" is debatable.

Now, I love freedom of information, torrents, open source, and all of that,
but putting myself in any author's shoes, I think it would be infuriating to
hear this kind of argument. "I can pirate your book for free, so a fair price
would be $1 dollar. I don't care how much work you put in it." (Yes, I know
Ian Fleming is dead, but this applies to any other author as well)

~~~
jerf
There's no such thing as a universal fair price. There's the situation when
the price is lower than your personal valuation of the good, then you buy it,
and there's case where it isn't, in which case you don't. (And don't forget
opportunity costs when factoring in your "personal price", there's a lot of
things I might be willing to spend $10 on in isolation but I can't actually
buy all of them, and you have to factor that in to your personal price.)

It's not wrong to sell it for $10, it's not wrong for your price to be $1, the
latter fact doesn't give you a license to pirate it simply because your
personal price is lower.

You can sort of composite up a semi-universal concept of a "fair price" by
looking at a suitably chosen large group of people but it's still just an
approximation.

