When an ebook costs over 90% of the price of a hardcover, am I going to buy the ebook, which I can't lend, resell, or give away, or the ebook, which can only be read by me? The answer is simple, I'm going to buy whatever the cheapest physical book is.
In Canada, with a Kobo, buying from Chapters/Indigo, the trade paperback is often cheaper than the ebook. This is my situation, and it means that the only time I buy an ebook is if I'm extremely motivated to read a book right now and I can't get it digitally from the library. If I had a situation where I was travelling and extremely space-constrained I might pay the premium for an ebook, but that hasn't happened to me yet.
All that doesn't mean I don't read ebooks, but that I don't buy them. The ebooks I read come from the library, (I'm a member of two libraries with great ebook selections), or are classics from Project Gutenberg or similar.
I suppose it depends on your priorities. For me, the value of instant delivery, searchability, zero physical space consumed, and near infinite portability far outweigh the value of lending, reselling or giving away. Maybe I'm selfish, but if I have to choose between something that works really well for me while I have it, and something that is easier to pass on to someone else, I'm going to go with the former. Having both would be better, but if I'm forced to pick one, it's an easy decision...
I agreed with this point of view, having my entire library searchable & available while travelling was the selling point for me... until I received an email from Amazon saying my version of Kindle For Mac will stop working on September 15. And I can't run the new version, because the Macs I'm running Kindle on can't be upgraded beyond Mac OS X 10.7.
I have plenty of other devices so I'm not (yet) locked out of my library, and those Macs can be converted to Windows 10 (which does run the latest Kindle software)... but it reminded me it isn't a forever library. I need to make non-DRM'd archive copies of all my digital books if I want to be able to use them for more than 4 to 5 years.
You could probably use the kindle cloud reader for them, https://read.amazon.com/ probably not as good an experience but it's an option at least while you figure out what path you want
Zero physical space can be pretty important - I get that - but yeah, priorities.
Also, it drives me mad that families have to have some weird hacky system to share ebooks - either have all ereaders use the same Amazon/Kobo/Whatever account, thus messing up any recommendations, or DRM stripping, which is a pain.
The times I really want to read a book now the instant delivery is great, but I think there have only been 3 times in the something like 4 years that we've had an ereader in the house that I've wanted a book that badly and the ebook hasn't been available at a library.
Edit: I do wish physical books were searchable, and had a built-in dictionary.
Add to that the adjustable font sizes. I suppose I could have one set of glasses for computer work and another set for reading, but the adjustable font works just fine for me. And it sure is easier to lie in bed with a Kindle than a thousand page novel. I do wish it were easier to flip back and forth a few pages.
That sounds like you've chosen poor hardware. I've not had this problem in five years (with the three different devices I use for ebooks, one being an e-ink reader)
It's not really fast, but it's not a second, either. Just ran a quick test on a kindle paperwhite, repeatedly paging after I saw the page refreshed. 20 pages in under 14 seconds, and there was definitely lag time between the page being refreshed and my finger tapping again.
That said, the page turn lag bugs me, too. It's better on tablets/phone.
Sure but turning 200 pages looking for a specific illustration or caption in 2-3 seconds is something I very often do with physical books and is pretty useful for reference works.
i'd second that and add that having a physical book also makes annotating things a lot easier, at least than with my kobo. If I'm going to spend any significant time with a book, i prefer it being a physical copy.
I don't buy as many physical books as I used to; mostly fiction, and mostly used.
I buy a fair number of ebooks, mostly technical, and mostly from O'Reilly. I love that they're DRM-free; in my case I take the PDF version, but they have other formats.
Pakt has a very low-intrusiveness form of "DRM." They print your name on every page of the pdf that you buy, but it's otherwise unrestricted.
I don't think Pakt or O'Reilly is going to come after you for sharing an ebook with a family member, and I've given a few copies of O'Reilly books to colleagues, to evangelize both O'Reilly and the tech in question.
This. I categorize fiction anyway as "volatile" so I'm not too concerned when the book goes out of my reach (as long as I can read it once). Oreilly, Packt and Pragmatic's books in digital forms have little downsides, and the considerable upside that ever growing pile of physical books is no longer a stress factor (however minor) in a relationship :)
I will not rent anything that can be copied losslessly. (Among other things, this is the major reason I don't have netflix.) And I consider anything that can be (legally) taken from me without my consent, or that I cannot legally reencode, to be rented.
"Buying" an ebook currently is effectively renting it. If/when that changes, if/when I can actually buy an ebook, I will start buying ebooks.
The points you raised are all representative of the current sad stateof the eBook industry where a single platform dominates.
Readers like yourself should be free to buy , own and lend eBooks like you would a hardcover book.
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DISCLOSURE: Founder at BookFusion
Unless things have changed a lot in the last couple years, Calibre doesn't do anything with stripping DRM and actually tries to stay away from it. It's possible that there are plug-ins to do it, but if the Calibre devs curate the plug-ins I wouldn't expect to find those either.
Calibre is an ebook library manager. It's clunky in some ways, but I'm not sure what better options exist.
DeDRM Tools is a great software package which comes with a Calibre plugin that automatically removes the DRM of the ebooks you add (in addition to standalone DRM removing apps):
It's a great tool, but the problem with DRM to me is not the technical difficulty of removing it, it's the validation of a business model predicated on denying ownership of the books by the users.
It's like buying an iphone and then jailbreaking it: I'm all for it, but it does not change the reality that you have just financed apple practices to the tune of hundreds of dollars. For ebooks the sums are much smaller, and clearly compromising if there is no alternative more acceptable, but the problem remains.
What's wrong with Calibre? Works fine for me. Sure the UI is a little much, but once you figure out a routine, it just works. It could be better, but right now it does pretty much anything I could want to do with eBooks.
And, sorry, I think your argument about legal | not legal is bunk. If someone has bought an eBook, they help themselves to a pirated copy -- in some ways, that's best of both worlds. It would be quite nice if one could just buy a non-DRM from the get-go, but whatever.
It's a pretty huge piece of software, megabyte-wise. I've installed & uninstalled it a few times. The ebooks I own are scattered around my hard drive, so it would be smart to put them into some sort of library, but it hasn't happened yet.
The only ebooks that I buy are the very cheap ones (free to $3). Anything more than that and I will buy the printed book, because in my opinion e-readers are still not as easy to read as a real book.
Then I have to buy an extra Kindle while not getting a discount for buying the ebook, and I can only lend to one person at a time, and anyone I lend to has to be trustworthy not to make purchases on my account.
No, you do not have to trust the other person to not make purchases. You can simply set up the parental controls.
I understand why people are downvoting my original comment -- it is very easy to dislike Amazon, for many reasons -- but the fact remains that you can lend eBooks.
You just have to put them on a physical device first.
And you're allowed to put each eBook on up to 5 devices. That means you could, theoretically lend up to 5 copies at a time. Not just one.
I didn't realize that parental controls could restrict purchasing, but it makes sense.
It's true that you can lend ebooks, there are just a lot more hoops to jump through ;) I can't lend my ebooks, because I don't have a spare device, but that can be changed if I want. If I'm going to pay just as much for the paper book, though, I might as well buy that and skip the extra device management.
I absolutely hate that this comment is downvoted. This works, costs as much as a regular hard cover to setup -- $27, as someone pointed out. As the author pointed out - parental controls prevent any access or misuse. Hell, you can just not put your account on it, invite your friend to use his own amazon account and lend a book to him. Still, works just like a book. This fixes the only gotcha Kindle sharing has - you can only share with other Kindlers.
Just because it's not one's opinion, does not make a comment downvote-worthy.
That is not by design and there are numerous "gotchas" with that, like this third party using that Kindle to buy content on your account, changing your bookmarks, and so on.
It might work for "family sharing" (although Amazon actually supports that already), but for sharing with third parties it is risky in my opinion.
I've never done this (probably b/c it just feels weird to loan devices, while loaning books seems perfectly normal).
But you could be right, declining prices of gadgets and aggressive restrictions like DMCA, and in 20 years it might be the opposite, just far easier to trade devices rather than licenses.
This was about the publishers being able to set their own prices wasn't it? Maybe they tested out if people were willing to pay more. If they find out they don't they can always go back to the discounts.
Trouble was before Amazon had that power. Seems fair that publishers should be able to set their own price.
Personally I don't buy an ebook if it isn't in single digit price. Anything more and I might as well buy the hard copy if I need it badly, otherwise I am better off not buying it at all.
Surprise: higher prices do not mean higher profits, especially if most of your business relies on impulse buying and disposable income, and your goods are fundamentally intangible.
You didn't need to be a genius to see that coming. The more I see ebooks I'm vaguely interested in selling for £15 or more, the less I'm going to buy them.
It really baffles me that a company will still treat customers like this. Amazon has become bigger than wal-mart because they focus on the customer, maybe other companies will catch on and follow suit. Customers are not stupid, they understand that e-books are a lot cheaper to produce/distribute than a physical book, and they should be priced accordingly.
I wonder how long we're going to see these inflated e-book prices before the publishers drop the prices to what they previously were. If this sales trend continues they'd be dumb to not drop the prices of e-books.
"Customers are not stupid, they understand that e-books are a lot cheaper to produce/distribute than a physical book, and they should be priced accordingly."
If customers "understand" this, they mostly understand incorrectly. While it may make intuitive sense that printing and distributing a book should make up a lot of its cost, that's not actually true. I haven't looked at the details for a few years but this is something I wrote a while back on the topic: http://www.cnet.com/news/why-e-books-arent-cheaper/
(To summarize that post, printing plus the take of wholesalers who handle distribution is only about $5 for a hardcover.)
When a publisher sells an ebook, they receive wholesales not retail price. Wholesale prices in the book businss range from about 35% of list (if you use a full-service distributor) to about 5o% of list (if the publisher sells directly to the retailer). You present an example where the list price is about $28, which means the publisher will get at best $14. But your calculations are based on the supposition that the publisher would get the full list price.
Here's another huge cost you don't include for the publisher with print books -- they are returnable and often get returned. If a publisher gets 25% of the books sold returned, effectively the publisher is getting only about $10 for a list price of $28 / wholesale $14. (Return rates can be higher or lower, but there are always returns.) Using the cost figures you use on your referenced example, the publisher loses money on the print book. And, you omit other costs incurred by traditional print book publishing, including shipping, warehousing books and fulfilling orders.
With ebooks there are no returns (a huge factor in the analysis), no printing, no shipping, no warehousing. Wholesale prices are a higher percentage of the list price. We publish ebooks and get about 65% of list from Amazon, Apple and Barnes and Noble (it's a bit higher or lower depending on which vendor) So it's obvous that our costs are lower for ebooks and the share of revenue we get is higher. In other words, list price of ebooks indeed should be far less than print, and ours are.
>And, you omit other costs incurred by traditional print book publishing, including shipping, warehousing books and fulfilling orders.
In the figures that I quoted, I believe that those are rolled into the wholesalers cut.
Ebooks can certainly be priced so prices are lower to consumers than hardcovers (as well as PoD) while the author/publisher makes at least as much. My point with the figures--which seem to be surprisingly difficult to nail down authoritative sources for--was that printing/distribution isn't the lion's share of what someone is paying for when they buy a hardcover book.
It's much more than you are saying. If you start with the retail price of the book (which your referenced article does), there's 50% off the top generally for wholesale discount (that is, the retailer pays about 50% or so). There's an additional 15% for a distributor's share (this means a company that has a sales force, generates orders, etc.; if you don't use a distributor, you need your own internal sales department which will cost almost as much). You don't need a distributor for ebooks. You have returns -- at least another 20% or so of your revenue will be eaten up there for most titles.) No bookstore returns for ebooks. There is printing, shipping, warehousing. (Normally estimated at about 15% of the cost of print books) No printing, etc. for ebooks. There's capital costs associated with doing print runs -- you put money up front and then have to wait for return while books sell, and also you run the risk of printing books that never even ship to stores. Hard to estimate but another cost that doesn't apply to ebooks. If you add it up, 15% for distribution. 20% for returns. 15% for printing etc. These print book only costs come to about 50% of the wholesales price. It's just not so that ebooks cost almost the same as print books.
Traditional publishers still have a business model that depends upon bookstore sales. The real problem for traditional publishers is, if ebooks are priced much lower than print books, it's an obvious problem for an important part of their business model. So they struggle mightily to keep ebook prices high and to persuade people that the costs of ebooks and print books are the same. As the article indicates it's not working -- self publishers and non-traditional publishers can produce ebooks at a much lower price point, because the ebooks cost less to produce.
It's still a $5 difference. If you look at most recent books, there won't be that difference between prices. In some cases, the ebook is even more expensive. That's just greed.
Prices are not linked to costs but to what the market will bear; in an electronic media market where prices will always be anchored to zero at one end (thanks to piracy and intangible goods), what the market will bear is inevitably less than what it used to be.
Customers understand this more intuitively than media producers who grew up in very different times.
Particularly because it's the future of the whole market. It's the same sort of stupidity currently gripping certain BBC managers: they have to make cuts, so they'll cut their digital services first. You want to survive, so you kill your future? It's just madness.
You'd think if anybody knew how to wring the absolute maximum revenue from customers it would be Amazon. If the publishers end up getting squashed by the book version of Popcorn Time they'll have only themselves to blame.
Who knew, if you raise prices, through collusion or explicitly, you might just take in less money.
But part of it is probably just the same that is happening with music and TV. There are now very diverse sources to fuel media consumption, you are not bound to a specific "curated" collection. Hence the success of US series in Europe, where most of the time you can't even see them legally.
The posted article has some huge errors. It actually says, "Amazon was willing to buy a title for $14.99 and sell it for $9.99, taking a loss to grab market share and encourage adoption of its Kindle e-reader." That is complete poppycock. No retailer pays list price for books; they pay wholesale price, which in the book business is usually about 50% for print books; sometimes higher for ebooks. (It depends on the publisher/retailer deal) During the time when the lawsuit was pending, the standard wholesale price for big publishers was more like 50%. So when Amazon buys a book that lists for $14.99 they paid $7.50. Marginal cost of selling an ebook is not very large. If Amazon bought a product for $7.50 and sold it for $9.99, they marked up the product about 33%. This is not "selling at a loss"
Big publishers did not object to Amazon selling for below list because it would impact Apple. They objected because they thought selling books at a discount would cause consumers to expect a lower price and they would no longer be able to sell higher-priced books. This is just what's happening right now. Amazon prices books very effectively and even more signficantly, Amazon has opened the marketplace for book sales to self=published authors and to independent publishers who are trying new models. For example I'm CEO of Booktrope which has a new model that produces ebooks that can be sold in the range of $2.99 to $9.99. (We pay a higher percentage royalty of authors in view of the lower prices.)
Amazon primarily but also Apple and Nook have opened up huge markets to us and our books are available broadly to readers. It means that big publishers will face competition from us, publishers like us, and self-published authors, and it's not going away.
The only way for the big publishers to avoid that would be to somehow block out competition including self-published authors and smaller, more efficient publishers who can produce ebooks at a lower price point. It's not going to happen so big publishers are at a crossroads and we should expect them to adjust or they will face continuing decline in sales.
I think the book publishers were also scared amazon might replicate the ipod/itunes playbook, ie they might wake up one day and amazon kindles might be 90% of the ebook market at which point amazon has way more leverage over them than they would like. So I think for the publishers this is a way of leveling the playing field and trying to create competition in the book reader market.
> “If you have a good book, price isn’t an issue.”
Because if it's that good, it will show up on the various pirating sites quickly.
There is a new ceiling on media prices, books included, and these companies are just going to keep loosing money until they adjust their pricing to the new reality.
But is that really true. Piracy is so easy only an extremely deep discount will sway me.
Pirates are only a certain percent of the population.
The optimal revenue generation probably occurs when you just ignore pirates. If they dash prices 75% and double the number of sales, they still lose revenue. You'd need to quadroople sales to just break even.
I always check kindle prices, and if they are close to physical price of the book I will more often then not simply not buy. Overall I still prefer to buy hardcover versions of books I really really want, but if I'm on the fence and see a kindle book that has at least a decent markdown I will more easily make that purchase then give away precious bookshelf space to a book I'm not sure is a must have. I've forgone quite a few purchases I would have been likely to make for that very reason.
I'm pretty sure I read somewhere it depends on content: niche-domain knowledge and test-preparing e-books sell ok at $10-$15 even if pirated more than often; self-empowering fluff and cuisine titles sell nicely below $10; mainstream novels, essays and general prose sell below $5. If I'm able to trace down the report, will add a link for your reference.
> Publishers said the current pricing model involves some sacrifice but they felt it was worth it to keep Amazon in check.
> Before 2010, book publishers operated with a “wholesale” model for e-books in which they sold titles to retailers, which could discount as they saw fit. Amazon was willing to buy a title for $14.99 and sell it for $9.99, taking a loss to grab market share and encourage adoption of its Kindle e-reader.
> Publishers worried that such discounting kept Apple Inc. and Google Inc. from emerging as competitors, as those companies might not want to lose money on e-books.
The publishers want to keep ebook prices high to keep them from eating into their traditional print business, just as Kodak kept their digital camera prices high to keep them from eating into their traditional film business.
The problem is that the publishers aren't the only people who can produce ebooks, just as Kodak wasn't the only company that could produce digital cameras.
This is going to bite them in the butt in the long run.
Maybe, but their goal and rationale seem fairly reasonable, even if there are counter-arguments. If being rationally optimal were easy there would be far fewer divergent opinions in the world.
The headline of the article is that they have lost revenue because of their business decisions. I just wanted to emphasize that there's more to business than maximizing sales revenue of your product: The way you sell your product shapes the market downstream, and it is reasonable for publishers to think that Amazon's market share grabs were anti-competitive and that a lack of competition is worse for them.
Demand curves are not the only thing that go into pricing decisions.
There is an intermediate market between publishers and their ultimate consumers. They were selling their products at the same price as they are now to Amazon before, it's just that Amazon was allowed to take a loss on the sales to build marketshare which possibly prevented other players from entering the distribution market.
Are you unconvinced that allowing Amazon to absorb losses in order to dominate their distribution market is possibly bad for them? Or are you satisfied with treating them with contempt because it's so "obvious" to you that they're being boneheaded?
No, they did not. Perhaps a occasional loss-leader was marked down that much, but overall Amazon has always sold ebooks for more than the cost of acquisition.
I think publishers have good reasons to maintain the prices of printed books. It is just a mater of differentiating their product from the common kindle ebook sold on Amazon. In fact, my experience (as the experience of many others) as that the average self-published kindle ebook is a very low quality product. What is crazy is that Amazon wants publishers to price their product similarly to these low quality "books" just because they happen to share the same distribution model. I think this doesn't make any sense and it would be a race to the bottom for everyone involved.
Yes. There's some horrible, horrible work out there from "respectable" publishing houses. You don't get to claim "quality" when you've obviously been too cheap to pay someone to rekey the damned book.
Of course, the quality of paper books is also horrible nowadays. Crap paper, crap printing, crap binding.
The quote is on its face silly. The author of the article got mixed up. Publishers set a retail list price of $14.99. Of course Amazon doesn't pay retail list price for books it sells - it pays wholesale. (As do other retailers including Apple and Google) Amazon pays more like $7.50 for the book and then offered a discounted consumer price of $9.99. This was not selling below cost. It was aggressive discounting which is a common feature in retail markets.
Discounting is an especially good retailer strategy with overpriced ebooks. A retailer only pays list price for an ebook after it receives payment from the consumer, so the optimal price for a product like this is the one that generates the most gross profit basically (sales times margin). Amazon optimized. Apple and Google could certainly follow suit, and in fact, Google also aggressively discounted ebooks like Amazon during the time period in question. Apple's strategy seems to be to keep prices and margins very high on all products it sells, in my view, because most of those products are physical things that do have marginal cost.
In any event, it is completely unreasonable to say, publishers were concerned about Apple and Google losing money, because publishers knew that Amazon was making money on each sale, not losing money. Publishers wanted to keep retail prices high out of a short-sighted belief that this would protect print book sales and that it would keep their own margins high. They're now paying the price in lost sales, and it's their own outrageous pricing that's the problem.
Back at the point in time when Apple and the big six were talking about agency model pricing -- which the DoJ brought the price-fixing case over -- Amazon's penetration was around 90%. (I'm of the opinion that the DoJ case is therefore evidence that US anti-trust law is broken; Amazon were clearly operating a predatory monopoly, but the DoJ went after the much easier target because price fixing is easier to prove.)
Speaking as an author published by the major houses (Penguin Random House and Macmillan in the USA; Macmillan and Hachette in the UK) I'm not seeing my books hitting the ebook bestseller charts much -- but I'm not seeing my sales decline relative to where they were a few years ago, either. What seems to be happening is that the bestseller charts are being dogpiled by self-published titles on deep discount -- 99 cents to $2.99 seems to be typical. And the old joke "sell it at a loss, we'll make it up on volume" seems apposite at this point.
"Amazon were clearly operating a predatory monopoly"
Nonsense. You could maybe argue that they were a monopsony, but even that is a stretch.
"What seems to be happening is that the bestseller charts are being dogpiled by self-published titles on deep discount -- 99 cents to $2.99 seems to be typical."
Someone selling a product for less than your antiquated publisher sells it for is not "predatory". Those authors are almost certainly making more per copy than you are.
The consumers are paying less. The authors are making more. What is the problem with this?
Nope, not seeing it. (Seriously. You're telling my the sky in my work is green with pink polka-dots. Hint: I do this for a living. Yes, some self-pub authors make out like bandits. But you might want to look up what the average revenue is, and how big the gap between mean and median looks.)
What do you think the future is for professionals?
I've noticed that there is an awful lot of very-high-quality content being produced for free, Worm and Shadows of Limelight are better than most published fiction, but are free and the authors seem uninterested in anything more than Patreon donations. As making art is something people enjoy and there are no bottlenecks to distribution, maybe we should expect there to be fewer professional artists and vast entertainment niches filled by popular amateur or part-time artists.
I sort of imagine a world where one can have millions of readers and still can't be a pro - but probably Patreon would pay a living wage after that point.
Worm is an instructive example. It has some of the best speculative fiction worldbuilding, characters and plotting this decade, and it's amazing that somebody doing this in their spare time while having to work for a living could keep up that pace of writing for a couple of years. But it also suffers badly from the lack of professional editing and could do with major tightening up.
It's also not someone just doing it as a hobby, but someone really trying to make a living as an author. And it's not at all clear that it's been very successful. The $2200/month from Patreon is still a fairly pitiful wage for such highly creative work. And I think it's pretty sad if we end up with a world where that's how things work.
(I wrote a bit more on both the merits of Worm as a piece of fiction and on the business model last year here https://www.snellman.net/blog/archive/2014-05-24-book-review... . It's interesting to note that the Patreon campaign has not really made that much progress in 15 months, it was $1200/month then).
Do you know what happens to the money that would be spent on printing when an ebook is sold? For example, if someone buys your $15 ebook, do you get more money than if someone buys your $15 dead-tree book, or does that money go to your publisher or someone else?
If authors get more money for ebooks that would be an argument for buying ebooks despite their drawbacks.
Do you know what happens to the money that would be spent on printing when an ebook is sold?
The cost of printing is a very small component of the cover price of a book; for paperbacks you're talking around $0.5, and for hardbacks around $2-3.
The author and publisher get roughly equal shares of the profit from a traditional trade book sale; the lion's share of the profit goes to the retail distribution chain, i.e. Amazon. (And when I say "lion's share" I mean 30-70%, depending.)
The author's cut is a royalty percentage of net receipts. And yes, I get a much larger percentage cut of ebook sales than paper sales -- it comes from what would otherwise be the physical dead-tree printing costs.
Good to know, thanks. It's not a huge amount, but it looks like if you do fairly well on ebook vs. hardcover, and sell a decent number of books, it'll be a nice little bonus.
> Back at the point in time when Apple and the big six were talking about agency model pricing -- which the DoJ brought the price-fixing case over -- Amazon's penetration was around 90%.
Wrong, market share was less than 80%, Nook eat a lot of market before iPad
> Amazon were clearly operating a predatory monopoly
These publishers are absolute idiots. Ebooks for 12 to 16 dollars just to support their outdated business model of the hardcover to paperback cycle.
I have a whishlist of over 1000 books on Amazon. I can just go through that list and wait with the newer ebook titles until they drop down in prices. This will be my "customer buying pattern" from now on.
Winners: 2 to 3 year old books and Amazon. Loosers: New books and the publishers.
That's perhaps excessively terse, but there's probably quite a bit of that going on. EBooks remove the physical hints that differentiate between the latest doorstop from George R. R. Martin or Neal Stephenson and something that's 5 words over the novella/novel dividing line.
I believe consumers as a whole have an innate sense of fairness and it's this that drives a lot of piracy. Australia has had historically high amounts of TV piracy because Australia tends to get treated poorly. One of the country's largest ISPs admitted over half of traffic was BitTorrent [1].
I live in the US now. I don't have cable TV but I do pay for Netflix and HBO Now and will probably pay for the ad-free Hulu Plus now that it exists (I'd never pay for an ad-supported streaming service) and, what the hell, probably Showtime too. In part because I watch them but I don't really need all of them. I really want to put my money where my mouth is here and support such services.
I often now see novels on Amazon where the paperback is $8 for a book that's been out for years. The ebook is... $10.
Now in the case of print media like the NY Times and the WSJ, I get why they prefer the physical copy: it comes down to advertising. Advertisers will still pay more for print ads and certain advertisers will only buy print ads so they have to print physical copies a bunch of people won't read. It's why, just now in going to this page, you see the WSJ advertising print + online access and why print + online is usually cheaper than just online.
But I don't get this at all with ebooks. Paper books need to be typeset and printed, supplies for that bought and the physical products need to be boxed and shipped to various distributors and so on. The distributor, printer and retailer all need to take cuts.
The ebook is essentially direct to market with zero distribution costs.
Now ebooks offer a lot of advantages to the consumer: immediate access, searchability, more portable. But they also come with negatives: you can't as a general rule resell or even give away an ebook so it can only generally be read by the buyer and their immediate family.
Publishers should be loving this because publishers hate the preowned book market. It's why textbooks are often changed from year to year: just to devalue used previous editions and force students to buy new books.
Yet publishers are acting in a way that strongly suggests they just want to kill the ebook market. Could that be it? They just know how to print and sell paper books and want to keep on doing it? Could it be fear of piracy and the inability to adapt to this new business model?
My own sense of fairness kicks in here: when I see a $10 ebook for an $8 paper book I just don't buy either.
I'm reminded here of the cable TV industry. Cable TV is dying. It's why cable companies will essentially give you free Internet if you subscribe to TV services (and charge you $50-80/month if you don't). This artificially props up the number of TV subscribers, which is important because the price of content is driven by the number of consumers. The more consumers a provider has, the lower the pre-consumer cost of channels. This is also why Comcast was so desperate to merge with TWC and has since merged with Dish: to reduce content costs and increase their negotiating power with content providers.
But all of this is just seeking higher land in a flood: eventually you run out of land anyway so you're just delaying the inevitable.
We see the same thing in the music, TV and movie industries where direct-to-market versions are often more expensive than, say, buying a CD or DVD and having it shipped to your house.
Perhaps this really is the long game of setting price expectations.
Piracy seems to be the response of the market to "unfair" pricing and licensing practices and it does seem to eventually force change. The problem is that once you've taught a whole market to be pirates, only some of them will switch back to more legitimate channels.
It still astounds me that you can be forced to watch FBI disclaimers and the like on movies you legitimately buy and have incompatibilities that won't allow you to watch HD content (HDCP versions and the like) yet what has none of those problems is pirated content. It's a wholly better user experience.
I really wish these old world industries would just accept we live in a digital world and get over their anachronistic business models.
This idea that ebooks are dramatically cheaper for publishers to produce is the single biggest problem they have. Because the actual production and distribution of the paper books is not a huge cost component of the price of a book. With the deals they were previously getting with amazon the distribution channel of ebooks could frequently be more expensive than their traditional book distribution channels, which have had many years to become more efficient.
The vast majority of the cost of the book is not in the production of the paper product, but in the production of the content of the book and the marketing of it. This remains static regardless of the delivery vehicle, but is non-obvious to the consumer.
My big concern is that the consumers attitude about the price of books is going to lead to a world where it is impossible to maintain the current standards around content creation, and that the drive to the bottom in prices will mean much fewer opportunities for professional writers, editors and booksellers. I believe that will be worse for me as a book consumer.
> With the deals they were previously getting with amazon the distribution channel of ebooks could frequently be more expensive than their traditional book distribution channels
Not actually so. The canard that print books are not more expensive than ebooks comes from traditional publishers trying to justify high prices for ebooks, but it's not so. Costs for print books that are higher than ebooks: printing, shipping, warehousing, capital costs (sunk costs of a large print run meaning investment in books that might take years to sell or never sell). Another huge factor in the print book business is returns -- nearly all bookstores are consignment shops and regularly return up to 30% or more of the books shipped to them. It's the custom in the book business (to avoid shipping costs) that "return" means, the retailer actually destroys the books that aren't sold and gets a refund for them from the publisher. (Really!) Returns can add another 30% or more to the effective cost of print books sold in bookstores. (Returns are a smaller factor for bestsellers, one reason why traditional publishers are so focused on that corner of the business.) Remarkably, Amazon is one of the few retailers that tries to minimize returns -- they try to get smaller shipments from publishers so that they can avoid overstock.
So why do traditional publishers say that ebooks cost as much as print books? (Booktrope is an online publisher focused on ebooks and print-on-demand paper books, and we certainly do not say that ebooks cost as much as print!) For traditional publishers, low ebook prices can undermine print sales. A big part of their business model is selling print books at high prices through bookstores. Lower ebook prices obviously are a problem for that model. Also, traditional publishers are used to a world where they have great connections with tastemakers and can persuade people their product is "better" than the competition. If you can do that, you can keep your retail price high -- like Apple does in the phone/tablet/computer world. But it's not working -- there are lots of great books being self-published and coming from non-traditional publishers these days, so, as the article says, big publishers are really starting to suffer from their own pricing policy of trying to keep ebook prices artificially high.
I recently subscribed to Kindle Unlimited and it has definitely saved me money. And with the selection getting better and better, I envision this "Spotify for ebooks" business model as the new normal.
I own a Kobo too and hope Chapters / Indigo offers the same service.
In Canada, with a Kobo, buying from Chapters/Indigo, the trade paperback is often cheaper than the ebook. This is my situation, and it means that the only time I buy an ebook is if I'm extremely motivated to read a book right now and I can't get it digitally from the library. If I had a situation where I was travelling and extremely space-constrained I might pay the premium for an ebook, but that hasn't happened to me yet.
All that doesn't mean I don't read ebooks, but that I don't buy them. The ebooks I read come from the library, (I'm a member of two libraries with great ebook selections), or are classics from Project Gutenberg or similar.