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Publishers Warned On Ebook Prices

timothy posted more than 2 years ago | from the some-people-hate-free-markets dept.

Books 352

An anonymous reader writes "The DoJ says Simon and Schuster, Hachette, Penguin, Macmillan and HarperCollins conspired to raise the prices of ebooks. The report originates from the WSJ, but the BBC adds comments from an analyst bizarrely claiming increased prices are somehow a good thing and thinking otherwise is the result of 'confusion'. I'd like to see an explanation of why the wholesale model, while continuing to work fine (presumably) for physical books, somehow didn't work for ebooks and why the agency model is better despite increasing costs for consumers."

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Market Analysis (5, Insightful)

slashgrim (1247284) | more than 2 years ago | (#39290359)

Sounds like these publishers don't know their market. I only buy ebooks because they are inexpensive. At relatively close prices I'd prefer a physical book (where at least I won't be restricted by the publisher's "loan" policy!).

Re:Market Analysis (4, Interesting)

mws1066 (1057218) | more than 2 years ago | (#39290433)

Exactly. Who would pay $18 or more for a book on iTunes that you can't even LOAN to a friend?

Re:Market Analysis (5, Insightful)

clodney (778910) | more than 2 years ago | (#39290617)

One time bought I book on my Kindle that I had sitting on my bookshelf, just because I wanted to reread it before starting on the sequel, and didn't want to carry the physical hardcover with me on a trip.

So I paid for the extra copy purely for my convenience. Given a choice between a physical book and an ebook at the same price, in most cases I will buy the ebook, because that is the format I prefer.

Re:Market Analysis (5, Insightful)

ultranova (717540) | more than 2 years ago | (#39290991)

Given a choice between a physical book and an ebook at the same price, in most cases I will buy the ebook, because that is the format I prefer.

I would too, if that was actually possible. Unfortunately it isn't. Nobody sells e-goods, they're "licensed", which means that I may use them as long as the publisher lets me in ways they like (which they may change at any time they like), or as long as the publisher or some unrelated third party who happens to own them at the time doesn't mismanage its finances and disappear. Assuming, of course, that some other entity doesn't assert that they own the e-good instead, in which case it gets un-published and disappears like it never was.

But yeah, it would sure be nice to be able to buy e-books.

Re:Market Analysis (3, Interesting)

Obfuscant (592200) | more than 2 years ago | (#39291241)

Nobody sells e-goods, they're "licensed",

Really? So all those DRM-free books I've been buying in multiple formats from Fictionwise are ... ummm. Huh?

which means that I may use them as long as the publisher lets me in ways they like (which they may change at any time they like), or as long as the publisher or some unrelated third party who happens to own them at the time doesn't mismanage its finances and disappear.

Dell Magazines is going to have a real hard time finding all the copies of the magazines I've "licensed" from them should they ever go out of business and want to stop me from reading them, much less just change their mind about my being able to read them.

If you are paying money to people who can take things back from you at their whim, that's your problem.

But yeah, it would sure be nice to be able to buy e-books.

Yes, it is. On the other hand, there are so many free ones available, why do you need to buy any at all?

Selling vs. Licensing (5, Informative)

Anonymous Coward | more than 2 years ago | (#39291283)

Try Baen Books or Smashwords. They sell DRM free titles.

Baen has mostly top notch, mainstream authors, albeit only SciFi and Fantasy. Smashwords is a little more of a mixed bag, but some well established authors (like Kristine Kathryn Rusch) are publishing on Smashwords.

Re:Market Analysis (5, Informative)

Anonymous Coward | more than 2 years ago | (#39291393)

After your purchase, use Calibre & dedrm plugins to put them into a form where you have control. See http://apprenticealf.wordpress.com/2010/02/11/hello-world/ [wordpress.com] for dedrm info.
Calibre is a great piece of open source software which makes managing ebooks on multiple devices easy.

Re:Market Analysis (3, Interesting)

NatasRevol (731260) | more than 2 years ago | (#39290995)

You probably should have checked your library to see if they loan ebooks.

Re:Market Analysis (4, Informative)

Cinder6 (894572) | more than 2 years ago | (#39290457)

Looking at Amazon, too many of the books I would want to buy are priced identically between eBooks and print books. Besides this making absolutely no sense from a cost standpoint, I still view paper books as superior: no batteries required, no DRM, I will always be able to read it if I take decent care of it, and I can do whatever I want with it.

At the very most, eBooks should cost $(price of print book - cost of printing and shipping said book).

Re:Market Analysis (0)

Anonymous Coward | more than 2 years ago | (#39290551)

But then the price of the eBook would be about 1/16th the price of a paperback. Publishers can't have that, because then they'd have no PROFITS! with which to buy more books/publish (read, give to shareholders)

Re:Market Analysis (4, Insightful)

meerling (1487879) | more than 2 years ago | (#39290715)

If you reduce the price of an ebook by the cost of the printing and shipping of a dead-tree book, you still have the same profit margin.
Also, a much lower cost for consumers, which will allow them to buy more books, which increases your profit.
Books are a luxury, not a necessity, as such, increasing or decreasing the price has a more drastic effect on sales than it does for a staple like food.

You don't have to deal with return inventory cost (1)

Anonymous Coward | more than 2 years ago | (#39290873)

with an 'unsold' ebook

Re:Market Analysis (4, Insightful)

NatasRevol (731260) | more than 2 years ago | (#39291021)

Not the same profit margin (percentage), but the same profit. And with a lower cost, it's a much higher margin. Your numbers will actually look better without a huge printing facility in your costs.

Re:Market Analysis (4, Insightful)

clodney (778910) | more than 2 years ago | (#39290721)

But then the price of the eBook would be about 1/16th the price of a paperback. Publishers can't have that, because then they'd have no PROFITS! with which to buy more books/publish (read, give to shareholders)

Paperbacks are cheap to produce - this site (http://michaelhyatt.com/why-do-ebooks-cost-so-much.html) says production and distribution accounts for 12% of the price. Even if he is cherrypicking data and it is 25%, you aren't going to see huge price breaks.

And pricing doesn't have to be reflective of costs. I might pay more for an ebook based on the fact that I can start reading it right now, vs. getting it shipped or going to a store. Or I might pay more because I have bad eyesight and like the fact that I can make the type bigger.

The rule for rational actors is that they set the price so as to maximize their total profit - production costs only enter into it as a constraint upon profitability.

Re:Market Analysis (2)

rtb61 (674572) | more than 2 years ago | (#39291189)

That is one crappy article, utterly meaningless plucked from the sky 12% value. Lets see some hard data. Cost to prepare digital proof (the electronic copy to be converted to the printed copy). Printing, packing, warehousing, picking, distribution, unpacking, stocking, retail. Lets see the costs, not a make believe percentage. Plus unlike the unreality of the article author, company generate a profit on all their costs.

So total up all cost then add a profit margin. Not take one cost, add profit, then add in all other costs, that's B$.

Basically they are currently trying to maximise profit margin by the good old corporate stand bys lie, cheat and steal and guess who is at the centre of it all 'APPLE'. Nothing but a pure greed play.

Re:Market Analysis (0)

Anonymous Coward | more than 2 years ago | (#39290569)

Besides this making absolutely no sense from a cost standpoint, I still view paper books as superior: no batteries required, no DRM, I will always be able to read it if I take decent care of it, and I can do whatever I want with it.

And I've never broken a book by dropping it.

Re:Market Analysis (1)

meerling (1487879) | more than 2 years ago | (#39290743)

I have. An old book, or one with cheap binding, the pages will just pop right out.

Re:Market Analysis (1)

ixidor (996844) | more than 2 years ago | (#39290835)

but even then, assuming you could still make sense of the ordering of the pages, and kept them all, you could still 'use'/'read' said book. a dropped/broken e-reader is e-waste.

Re:Market Analysis (1)

spire3661 (1038968) | more than 2 years ago | (#39290849)

Hmmm one book that lasts forever or ALL BOOKS i could possibly have an interest in, on a relatively fragile but ultimately low maintenance device? thats a toughie......

Your post also presumes that if your e-reader is broken you cant use another capable computing device to view the material. EVERY book I have is on my dropbox and readily accesible from pretty much any internet connected personal computing device on the planet or in orbit. Luddite.

P.S. Ive ruined physical books in the field too, dropped it in the creek, too close to the campfire, need the paper in the book to start the fire etc etc.

Re:Market Analysis (2)

ColdWetDog (752185) | more than 2 years ago | (#39290629)

I actually think that ebooks are more 'robust' than print. Once the DRM is stripped (yeah, that's dumb, guys), you can store them forever in essentially no space at all. You can read them on multiple devices. You can lend them and not worry about getting the original back (I'm looking at you, Terry). You can bend, fold, mutilate and staple.

Of course, the publishers don't want you doing those sort of things so they try to cripple it, but that seems to be the way information publishers of all stripes are going.

Re:Market Analysis (5, Insightful)

ColdWetDog (752185) | more than 2 years ago | (#39290653)

Oh, and forgot my current major beef. If you're going to charge nearly as much for an eBook as a physical copy, please pay for a copy editor to review the damn thing. I'm tired of gratuitous typos and pagination errors. Yeah, you, Amazon.

Re:Market Analysis (1)

notmyusualnickname (1221732) | more than 2 years ago | (#39290959)

Apparently, Amazon scan and OCR printed books, then convert them to AZW, with little to no human intervention.

Proper proofreading works out at something like 35-40 hours per book.

What about crowdsourced copy editing? I'm sure Amazon could push updated versions to kindles, and probably work out some sort of incentive system to get readers involved...

Re:Market Analysis (4, Insightful)

CastrTroy (595695) | more than 2 years ago | (#39291129)

You could probably build the technology right into the kindle. Highlight a word, and have an option to send it for review. Some real person looks over the problem, and corrects as necessary. Fixes are automatically distributed to people who have the book.

Re:Market Analysis (1)

the eric conspiracy (20178) | more than 2 years ago | (#39290767)

More robust than print? What could more ephemeral than a thin layer of rust with some magnetic fields recorded on it?

Paper can last thousands of years if cared for. Let me know when e-anything looks like it will archive that well.

Re:Market Analysis (4, Insightful)

Obfuscant (592200) | more than 2 years ago | (#39291121)

What could more ephemeral than a thin layer of rust with some magnetic fields recorded on it?

A thin layer of organic material with small amounts of organic material deposited on the surface.

I don't see any "thin layer of rust" in the flash chip that is currently storing one copy of Foundation I own, nor the USB stick that has another copy. There might be a "thin layer of rust" in the hard disk that stores a couple more copies, and the backups.

Tried making a backup of a physical book lately? I can back my "ephemeral rust" copies of books up at about 100 per minute (not 100 pages per minute, 100 books per) on a whim and without getting out of my chair.

Paper can last thousands of years if cared for.

"If cared for", when talking about paper, means initial printing on acid-free paper, and then storage of the material in an environmentally controlled facility. It does not include "reading", and certainly not "carry on the train to read while commuting".

Let me know when e-anything looks like it will archive that well.

Every ebook that I carry on a daily basis has survived for the last several years of doing so, while there are few, if any, paper books that have survived that kind of use. I'd say e-anything looks pretty good compared to paper when one is actually using the products and not just trying to keep an archive of comic books for one's great grandchildren to look at through the plastic bags.

Re:Market Analysis (0)

Anonymous Coward | more than 2 years ago | (#39291301)

More robust than print? What could more ephemeral than a thin layer of rust with some magnetic fields recorded on it?

Paper can last thousands of years if cared for. Let me know when e-anything looks like it will archive that well.

Paper degrades with use, and being analog can't be copied with perfect fidelity. Digital does not degrade with use, and can be copied with perfect fidelity.

In fact the more I use an ebook, the less likely it is to degrade (as I copy it onto more devices each one being a potential backup if the others are lost/damaged).

If I take my paper book camping and it gets rained on it suffers damage, and may need to be replaced. if I take my kindle camping and it gets rained on the reader may need to be replaced, but the books can be re-downloaded from Amazon, or recopied from my home computer.

Re:Market Analysis (3, Interesting)

nedlohs (1335013) | more than 2 years ago | (#39290883)

Why?

Why should a publisher/author/whatever not be able to charge whatever they want for an eBook? If they want to charge more than the printed copy that's their choice surely? If they want to charge less that's also their choice.

Why does cost of production of some other thing matter to the price of an ebook? Heck what does cost of production of the ebook matter to the price of an ebook? Value pricing isn't exactly a new idea (http://en.wikipedia.org/wiki/Value-based_pricing).

Now collusion amongst the publishers is a different story - that's illegal without even considering the existance of physical books.

Re:Market Analysis (0)

Anonymous Coward | more than 2 years ago | (#39291369)

The whole point is to stop the Agency model, where the distributor can't set the price. Let them charge the distributor whatever they want but let the distributor determine what to sell them for. Let them even *gasp* have sales or other discounts (something that is verboten in the Agency model.)

Re:Market Analysis (1)

nedlohs (1335013) | more than 2 years ago | (#39291395)

Which has exactly nothing to do with what I replied to and hence what I was talking about.

Re:Market Analysis (1)

Charliemopps (1157495) | more than 2 years ago | (#39290999)

what you're talking about is socialist economics. The problem with that system is, who determines how much it costs to produce and ship it? If you let the business decide, they'll obviously lie. So then the government has to set a price and.. well... we all know where that leads. Instead we have a capitalist system. In capitalism, the price of something is based on how much the consumer is willing to pay. If the consumer is willing to pay less, then the buisness need to find a cheaper way to produce and ship the item. The unfortunate fact in capitalism is that if most people are willing to pay more for something than you are... you are also going to pay more. Even worse, if bushiness' collude to fix prices, they in-effect, trick people into believing the value of something is higher than it really is. "If everyone is selling this for $20, it must be worth $20"

Re:Market Analysis (2)

the eric conspiracy (20178) | more than 2 years ago | (#39291205)

You are talking about an economy that has free and open competition.

Obviously that isn't the publishing industry. THAT is an oligarchy with a few large entrenched businesses that have obviously colluded to set prices.

Re:Market Analysis (2)

Anonymous Coward | more than 2 years ago | (#39290483)

Maybe they understand exactly and wish to perpetuate the physical book model since there is a higher barrier to entry for competitors and they have more control. If ebooks become the dominant medium (which they may already be, or are rapidly approaching) then it is much easier for individuals to self publish a work on Amazon and cut out the publishers entirely.

So bad pricing is likely intentional, since they either push you to the physical book (a win for them) or you buy at an inflated price (another win for them).

Re:Market Analysis (4, Insightful)

MightyMartian (840721) | more than 2 years ago | (#39290509)

And what they'll get is a high level of piracy of eBooks. Fucking idiots.

Re:Market Analysis (0)

Anonymous Coward | more than 2 years ago | (#39291019)

I've never come close to paying for an eBook that I already have a physical copy of and I have THOUSANDS of books. Fuck those trolls if they think I'm buying a DRM'd inferior copy of something that I have already bought once.

Re:Market Analysis (1)

Desler (1608317) | more than 2 years ago | (#39291387)

You're not cutting anyone out. Amazon is going to demand their cut which is going to be nearly as much as any other publisher.

Re:Market Analysis (3, Informative)

AliasMarlowe (1042386) | more than 2 years ago | (#39290585)

At relatively close prices I'd prefer a physical book (where at least I won't be restricted by the publisher's "loan" policy!).

Exactly. I don't buy ebooks. Actually, I bought two about 7 years ago, and was rapidly disgusted at both the price and the insane restrictions (especially the "no copy & paste" lunacy, but also the "can't copy to another device" and "can't print more than X pages per month" stupidity).

Amazon gets a lot of business from us, and so do several local bookstores, but only for real books - ink on paper. Real books can be shared with other family members (occurs very often - we have shared interests), loaned to friends (uncommon, but it happens occasionally), and sold on at second-hand stores (also uncommon, but does happen when kids' books are outgrown). We're all bookworms, and none of us really enjoys reading on a screen.

Re:Market Analysis (1)

hughJ (1343331) | more than 2 years ago | (#39290669)

Yep, and it's tough to put equal value to something that you know is costing the publisher virtually $0 (after ebook publishing costs are divided up among many tens of thousands of copies sold.) I was ready to purchase my first couple e-books from Amazon about a month ago, had my wallet out and everything, and then saw that they were $3 *more* than the hard covers. I didn't want to buy and wait a week for a hard covers, and I didn't want to feel ripped off by buying the e-books. Ended up buying neither. Great books, btw.

Re:Market Analysis (1)

Rogue Haggis Landing (1230830) | more than 2 years ago | (#39290937)

The key to the whole thing is the following, from the BBC article:

The shift to agency pricing was also seen as a protective measure to head off attempts by Amazon to corner the market in ebooks. It had been aggressively cutting prices to win customers over to its Kindle ebook reader.

The publishers are afraid that Amazon, in an effort to kill off their competitors and corner the ebook market, will set prices extremely low and sell ebooks at no profit or at a loss. I don't blame the publishers for being paranoid about it.

Re:Market Analysis (1)

0123456 (636235) | more than 2 years ago | (#39291039)

The publishers are afraid that Amazon, in an effort to kill off their competitors and corner the ebook market, will set prices extremely low and sell ebooks at no profit or at a loss. I don't blame the publishers for being paranoid about it.

So publishers are upset that they might make more money?

If Amazon buys e-books from you for $5, why would you want them to sell for $10 rather than $1? At $1 you'd make a heck of a lot more sales, and Amazon would have to swallow the $4 loss on each one.

Re:Market Analysis (1)

nedlohs (1335013) | more than 2 years ago | (#39291045)

How does that indicate they don't know their market.

They get your money if you buy the physical book too - so losing an ebook sale to a physical book sale isn't a complete loss.

Sure there's likely more profit margin in an ebook sale, but if lowering the ebook sale results in lots of people skipping the more expensive (higher dollar profit even at the same margin) physcial book and buying the ebook they might make less money than with a higher ebook price.

Of course I know nothing about the inside details of the industry and I know nothing about your involvement in it.

Still, I'd pick that the major book publishers have done more research into the effects of various price levels on sales and know more about their contractual agreements to buy X units of paper over the next Y years at Z price (well that I guess isn't so likely, but there'll be a bunch of similar things) than you do.

Why does an e-book need a publisher? (4, Insightful)

TheMathemagician (2515102) | more than 2 years ago | (#39290425)

Well he got one thing right: "All the costs are the people in the publisher's HQ..." Exactly. So why don't authors just upload their e-books and cut out publishers all together?

Re:Why does an e-book need a publisher? (1)

Cinder6 (894572) | more than 2 years ago | (#39290495)

Inertia, for one thing. There's prestige/image, too. Also, much like the RIAA, the publishers in theory provide marketing and such that individuals can't (easily) duplicate. There's also a social stigma against indie stuff (though that scene has been growing of late).

Re:Why does an e-book need a publisher? (5, Insightful)

Registered Coward v2 (447531) | more than 2 years ago | (#39290517)

Well he got one thing right: "All the costs are the people in the publisher's HQ..." Exactly. So why don't authors just upload their e-books and cut out publishers all together?

Probably because some of those cost are for editors, proof readers, illustrators, cover designers; all of whom play a crucial role in producing an outstanding or even good, for that matter, book. There may be a lot of extra costs that can be cut, but a writer alone, except in rare cases, can't produce a work nearly as good, or even good, without the help of others. Witness the proliferation of garbage titles now that the cost of entry is nearly zero.

Re:Why does an e-book need a publisher? (0)

Anonymous Coward | more than 2 years ago | (#39290659)

Probably because some of those cost are for editors, proof readers,...

You haven't read many ebooks, have you?

Re:Why does an e-book need a publisher? (4, Insightful)

the eric conspiracy (20178) | more than 2 years ago | (#39290711)

Knowing the book industry, the people you have listed are paid a pittance. I used to work with Steven Hawking's ghost writer, and for him it was strictly part time pay for a lot of work.

Where the money goes is to management and marketing.

Re:Why does an e-book need a publisher? (4, Interesting)

ColdWetDog (752185) | more than 2 years ago | (#39290745)

Except that, at least with Amazon eBooks, they appear to have left out the copy editor and the graphics editor. Typos up the wazoo. Horridly compressed jpegs for graphics. Pagination that makes little Johnny cry.

Maybe Amazon could crowd source those problems and give people a discount or something - but it gripes me to pay nearly full paper price for a substandard product.

I won't even mention the DRM since it's conveniently so easy to crack.

Re:Why does an e-book need a publisher? (1)

0123456 (636235) | more than 2 years ago | (#39290807)

Probably because some of those cost are for editors, proof readers, illustrators, cover designers; all of whom play a crucial role in producing an outstanding or even good, for that matter, book.

And if your book is any good, you can hire them for a lot less than 75% of all future royalties.

Publishers only make sense in the ebook market for people who are going to sell millions of copies and can therefore negotiate better deals, and people whose books won't sell, so an advance of a few thousand dollars is more than they'd make themselves.

Otherwise, if your book sells 10,000 copies at $9.99, you've just paid $52,000 for those services while receiving $15,000 yourself.

Re:Why does an e-book need a publisher? (1)

owlnation (858981) | more than 2 years ago | (#39291027)

And if your book is any good, you can hire them for a lot less than 75% of all future royalties.

Exactly. There's plenty of people doing these jobs freelance. Their rates are not beyond the range of most people. To go to them directly and cut out the wholly unnecessary middlemen is good for you, good for them, and good for the consumer.

In addition, if you are going to sell millions, then you can do that just as easily with an agent or manager -- who works for you. There's no reason for publishers to be involved in digital media at all.

Re:Why does an e-book need a publisher? (0)

Anonymous Coward | more than 2 years ago | (#39290837)

What makes no sense in the publisher's contention that production is a small part of a book's price is this: new authors are often advised by industry people to keep their first novel to about 80,000 words, because the publisher won't risk the higher production costs of a longer book on an unknown author. If those costs are small--- and presumably the incremental cost between publishing say, 80,000 words vs. 100,000 words is even smaller--- who would care?

Could it possibly be that the publisher's argument about negligible production costs is self-serving? Oh, heavens! Dishonesty in the media industry? Imagine that!

Re:Why does an e-book need a publisher? (1)

0123456 (636235) | more than 2 years ago | (#39290951)

To be fair, I believe it's hardbacks that cost a lot to print; that's why publishers expect stores to return them if they don't sell, rather than destroy them as they would with a paperback.

Of course that also means that you have to take account of the number of copies that are destroyed when looking at paperback costs. If your paperback costs $1 to print but 50% don't sell, you're effectively paying $2 for every copy that does sell.

Re:Why does an e-book need a publisher? (2, Informative)

Anonymous Coward | more than 2 years ago | (#39290993)

What gets me is there are plenty of books by authors who are DEAD that are priced as if they were new best sellers.

Dashiell Hammet and Raymond Chandler, for instance. I'm sure royalties are still being paid to various parties, but not enough to warrant those prices. Don't get me started on academic books where the "price" involved for "new" editions is simply moving chapters around so that you can't purchase used books. Baen manages to sell NEW e-books for $6, even for its best selling authors. I understand that they may not be doing as much editing and promoting as some publishers, but c'mon, the electronic revolution should be making things less expensive, and has done nothing but, and it has nothing to do with actual costs for things.

Re:Why does an e-book need a publisher? (1)

jd (1658) | more than 2 years ago | (#39291109)

Agreed, but most of those will already have been hired for the regular books (you can't bill twice for what you've already paid for and already have), it is only reasonable to charge for new costs. I've already looked up the costs of editors ($80,000 seems average) - link elsewhere as a reply to the post that started this thread - and it shouldn't be hard to look up the costs of the other positions.

http://www.publishers.org/bookstats/formats/ [publishers.org]

This link gives you the net income from e-books. From that, it should be possible to figure the total number of -extra- e-book staff that can be afforded across all publishers whilst maintaining a respectable profit margin AND paying reasonable royalties to authors.

Re:Why does an e-book need a publisher? (0)

Anonymous Coward | more than 2 years ago | (#39291165)

Those sorts of costs are one time costs.

Do not confuse one time costs with recurring. Recurring costs are the ones that eat you alive.

For example buy a 1 dollar cup of coffee every day (its cheap) but over 10 years that is ~3652 dollars. If you make min wage that is about 1.5% of your gross or about 2% of your net if you never take a day off and get min wage. You work for ~57 days of those 10 years just to pay for your coffee. A recurring cost is one that slowly eats at your profit. A one time fixed fee cost you can save up for or finance it.

This sort of market is changing. Eventually some bright spark will come up with a '0 cost publishing' yet charge a bunch for the editing...

Re:Why does an e-book need a publisher? (0)

Anonymous Coward | more than 2 years ago | (#39290603)

There are still publishers. Rather than traditional publishers, you have e-publishers like Amazon, Apple, and Barnes & Noble. The author will still need a publisher to upload to if they want access to that publishers e-reader infrastructure.

But yes, you do not need both the traditional hard copy publisher, and e-publisher.

Maybe if Amazon, Apple, and Barnes & Noble would offer editing services of the traditional publishers, they'd have an easier time getting authors to switch.

Re:Why does an e-book need a publisher? (1)

Anonymous Coward | more than 2 years ago | (#39290609)

Upload where?

See, the upload part is easy, you could host your e-books for twenty bucks and some time to set up your site. But if you want people to know about your e-book and if you want to make money off your books and so on, it gets a lot more troublesome - troublesome enough to just hand it over to a publisher.

Re:Why does an e-book need a publisher? (0)

Anonymous Coward | more than 2 years ago | (#39290725)

Have you seen how shitty most self-published e-books are? There is a real need to have an editor. To make money, most of them (who make money) also need some marketing.

Re:Why does an e-book need a publisher? (0)

Anonymous Coward | more than 2 years ago | (#39290799)

Because if nobody knows an author nobody will read his/her book.

Publishers advertise books where people can see the ads and they can somewhat transfer their previous customers to the books of completely unknown authors.

Starting with a publisher is a shortcut. When you're rich and famous you can do whatever you want, hire your editorial staff and produce your books alone.

Re:Why does an e-book need a publisher? (1)

0123456 (636235) | more than 2 years ago | (#39290891)

Because if nobody knows an author nobody will read his/her book.

That'll explain how previously unknown authors have sold millions of self-published e-books on Amazon.

Publishers advertise books where people can see the ads and they can somewhat transfer their previous customers to the books of completely unknown authors.

No, they don't. A new book by an unknown author will be extremely lucky to see any marketing money aimed at readers rather than book store buyers. All a publisher will do for most first novels by new authors are try to get them on the book store shelf. After that, they're on to the next book.

What he got wrong (0)

Anonymous Coward | more than 2 years ago | (#39290819)

People pay what they think a product is worth, they don't care how much it costs. For the right kind of widget, you can make them at $2 a widget and sell them at $100 each, if people are prepared to pay that much for it. Another widget may cost $10 to make but people aren't prepared to pay more than $12 for it... It doesn't matter how much ebooks cost to produce versus physical books, the average reader thinks ebooks should cost less, and the producers need to adjust their prices, budgets, life-styles to reflect the market.

Re:Why does an e-book need a publisher? (1)

jd (1658) | more than 2 years ago | (#39291023)

Perhaps, but people generally buy their HQ once. Unless the analyst can find a publisher that relocates every time they publish (other than ones on terror hit lists), the cost of the building is covered. The employees - ok, that's a reasonable claim, but you obviously don't need to hire any more printers, just editors, to cover e-books. How many new editors do they need to hire? Let's say 10 to cover all the additional books they're publishing. How much does an editor earn?

http://www.indeed.com/q-Editor-jobs.html [indeed.com]

I'd say $80,000 is a good estimate. That means 10 will cost $800,000 per year. Allowing for taxes, and the limitations of my brain, I'll increase the cost to the company to a round million.

http://www.publishers.org/bookstats/formats/ [publishers.org]

114 million e-books were sold in 2010. How much does that actually equate to, given the current costs of e-books? From the publishers.org link above, we can see that publishers earned $878 million from e-book sales (net).

This means you'd need to have 878 publishers of e-books at 2010 level of sales before you eliminate all the profits, assuming each publisher has 10 editors.

I will leave it as an exercise for the reader to figure out how many publishers the market can support without ANY increase in costs AND with reasonable profit margins being maintained for publisher and author.

What is "agency model"? (0)

Anonymous Coward | more than 2 years ago | (#39290441)

If you are going to add commentary you will need to explain some things. What is agency model? I'm a tech guy not a book publishing guy. A definition would be helpful.

More misinformation from the publishers (2, Interesting)

Anonymous Coward | more than 2 years ago | (#39290449)

From TFA:

"The perception is that publishers are saving a fortune because they are not physically printing a book," he said. Actually, said Mr Evans, printing costs were a small fraction of the total outlay required to produce a book.

"All the costs are the people in the publisher's HQ and the writer's mortgage," he said, adding that these had not changed significantly with the rise of ebooks.

The move to agency pricing could mean that publishers made less from each book because of the percentage they handed over to the agents selling their titles, he said.

The DoJ dictating lower ebook prices might have unforeseen consequences, said Mr Evans.

How are the DoJ dictating lower ebook prices? Aren't they just investigating whether there is price fixing going on in a collusion between publishers? Is this admitting that they are artificially inflating prices?

And I've gotten it that there are more costs than printing a book. But, how does that translate into forcing ebook sellers to use the Agency model? I used to buy all my ebooks from Fictionwise but have had to switch to Amazon because Fictionwise was unable to agree to the Agency model. They have definitely hurt competition with this.

Average Price (1)

Anonymous Coward | more than 2 years ago | (#39290451)

Previously, companies made bank on hardware e-readers and sometimes commissions on book sales. Those companies would buy some books that were popular and sell them at a loss in order to get people locked onto their hardware platform/store. Apple upset this somewhat by allowing publishers to set prices directly (but also forcing them to set prices equal to any loss leader so Apple was no undercut). This left no incentive for loss leaders, but those same publishers also did not care about vendor lock in.

The whole situation is a trade off.

"Confusion" (1)

stevegee58 (1179505) | more than 2 years ago | (#39290463)

Interesting. I recall Bill Gates saying something about consumer confusion. In Microsoft's case it was seen as good that there was no real competition, since that would confuse consumers.

The arrogance of large companies never ceases to amaze.

ahhh, that's why... (2)

lsolano (398432) | more than 2 years ago | (#39290469)

eBooks prices are too high.

I've never understood why eBooks prices are too high, sometimes almost the same price of a paper book, bearing in mind all the manufacture, paper, ink etc. that the eBook does not have at all.

Re:ahhh, that's why... (1)

Cinder6 (894572) | more than 2 years ago | (#39290573)

Sometimes? Almost? Try "often", and "exactly". New hardcovers are usually cheaper (often considerably so) than list price (though not much cheaper than Amazon's price), but mass market paperbacks seem to always cost the same as their eBook counterparts.

Re:ahhh, that's why... (1)

StatureOfLiberty (1333335) | more than 2 years ago | (#39290635)

Almost same price? I often see books where the electronic version is more than the physical version. So, I stopped buying them. I bought the whole 'Dune' saga used on Ebay for less than I could buy just the first novel in the series as an E-Book. I would have gladly paid a reasonable price for the eBook.

Re:ahhh, that's why... (0)

Anonymous Coward | more than 2 years ago | (#39290771)

A fool and his money are soon parted?

Re:ahhh, that's why... (1)

CastrTroy (595695) | more than 2 years ago | (#39291383)

eBook prices are high because they don't want to screw over the sellers of dead tree books. They could sell eBooks for $2-$5 and make huge profits. But the stores selling physical books would get quite angry that their business was disappearing. It's the same reason you don't see HP selling machines on their website cheaper than the retailers sell them (even though there is less overhead). Because they don't want to screw over their channel partners. If they started selling computers for cheaper than the resellers did, the resellers would stop pushing HPs products. If the publishers offer people an alternative way of getting the books at a huge discount, then the books stores will stop pushing books from that advertiser.

Publishers Shot Themselves in the Foot (3, Interesting)

sehlat (180760) | more than 2 years ago | (#39290527)

That was even before the so-called "agency" model. There were ebooks available at Fictionwise for $20 years after the paperback had been released at $6.99.

Then they opened up on their feet with a fully automatic weapon, "agency," which attempted to raise eBook prices, banned things like discounts and rebates, and generally attempted to kill eBooks by overpricing them.

They also canceled existing pre-orders at the lower prices. I had a book on order at Fictionwise I had pre-ordered at $8. They forced FW to cancel the deal and refund my money, removed the book and a lot of other ones from fictionwise, and "generously" offered me the book at $12 at either Amazon or Barnes and Noble. My eBook buying, which included buying books at ridiculous prices but getting store credit as a rebate, dropped from over $2000/year to less than $200.

When publishers start acting sane (I'm NOT counting on it) I may go back to them. In the meantime, I've never stopped buying everything Baen brings out, and loving it and them.

Agency? LOL (1)

Anonymous Coward | more than 2 years ago | (#39290561)

The Agency model appears to be more of a piracy creation model. You pay $14 for a movie you walk out on before it is over. You watch broadcast TV and then they want to sell you the episode you missed. And, you see $7.95 for the paperback or Kindle versions. The bad taste becomes resentment and that encourages piracy rationalization that it is your due.

*yawn* (1)

Anonymous Coward | more than 2 years ago | (#39290563)

Technology drives prices downward, entrenched market players conspire to try to keep prices high.

You remember all those books that would get written and not published? They would be sent to publishers or agents and rejected, usually without anyone taking a second glance at them. Those books are now all on amazon.com. For 99c. The publishers don't like it. If they don't feel a book is worth publishing, then no one should be allowed to read it! Or at the very least, they should have to charge full price, just like the noble publishers do.

Send the publishers a message (4, Interesting)

ed1park (100777) | more than 2 years ago | (#39290579)

Why not paypal the author a few bucks and torrent the ebooks? No trees getting cut nor used books getting shipped around and the author makes money. Keep doing this until publishers realize their short sighted stupidity and change their ways.

Re:Send the publishers a message (2, Insightful)

Anonymous Coward | more than 2 years ago | (#39290655)

You do realize more goes into make a book then just the author typing it up. Assuming it's just a novel, you have the editor, proofreader, designer. Then there is the marketing of the book which requires more people still.

Re:Send the publishers a message (3, Insightful)

Cinder6 (894572) | more than 2 years ago | (#39290677)

Problem is, that doesn't pay the editors, copy editors, typesetters, etc. that all played a part in getting that book in your hands (or on your device). The author doesn't live in a vacuum.

Re-make the publisher then (3, Informative)

Ollabelle (980205) | more than 2 years ago | (#39291119)

So let's start up eBook only publisher, containing only the staff needed to assist the Ebook author. No typesetting, warehouses, printers, or distribution chains to the mortar shops. Then we can price the book to cover our costs and profits for both us and the author.

The author can then negotiate two separate publication deals, one for the ebook version and one for the paper version.

Most likely, a third person will be required, who will be paid to shill the book and get the book tour going.

Re:Re-make the publisher then (2)

0123456 (636235) | more than 2 years ago | (#39291341)

And the best part is that you can set it up in a small town somewhere with a low cost of living rather than a fancy New York office where you have to pay high wages so those employees can afford to eat...

Re:Send the publishers a message (1)

jduhls (1666325) | more than 2 years ago | (#39290689)

Better yet - authors should abandon publishers and let them die now that authors and artists of all kinds can reach their fans directly and instantly via the interwebs. Welcome to Changetown - population: all of us.

Re:Send the publishers a message (1)

Twinbee (767046) | more than 2 years ago | (#39290769)

No, keep doing this until we can buy directly from the authors all the time. There isn't much need for a middleman with digital goods.

Re:Send the publishers a message (2)

Richard_at_work (517087) | more than 2 years ago | (#39291167)

Boy oh boy, it really shows that you haven't seen a book in its raw, straight-from-the-author form. Even with digital goods, there's still plenty of requirement for editing and other things that a publisher currently does.

I know Slashdotters like to go on about buggy whip makers trying to force their extinct product on a society that no longer needs it, but this really isn't one of those cases - a publisher does more than take the final product from the author, slap a markup on it, and sell it to you.

Re:Send the publishers a message (1)

0123456 (636235) | more than 2 years ago | (#39291363)

I know Slashdotters like to go on about buggy whip makers trying to force their extinct product on a society that no longer needs it, but this really isn't one of those cases - a publisher does more than take the final product from the author, slap a markup on it, and sell it to you.

That's odd, because plenty of mid-list authors have complained that their publishers do just that. No editing, some proof reading, if they're lucky a cover that bears some resemblance to the story, then straight out the door to the book store.

Re:Send the publishers a message (0)

Anonymous Coward | more than 2 years ago | (#39290915)

You are spot on. This is the future. Hopefully, not just for books but all manner of things.

The CD price scam all over again. (0)

Anonymous Coward | more than 2 years ago | (#39290611)

CDs costs were kept high because they were digital and better and the technology was new, right? Funny that the price never declined as the technology matured.

Duh (5, Informative)

Daetrin (576516) | more than 2 years ago | (#39290645)

This is why at least three quarters of my ebook purchases are from Baen [baenebooks.com] . They price their regular books fairly reasonably, "hardback" books are about $10 than list price, and when they come out in paperback they're about $2-3 off the list price. And for a lot of books if you're willing to pay a small premium they'll let you get the ARC version ("Advance Reader Copy") before the publication date. They also do monthly bundles of books, five or more books packaged together for the price of two or three books, well worth it if you know you really want at least two of the books in the bundle. Plus they have a free library [baenebooks.com] that will let you try out a large number of books for free (in the hopes that you'll buy more books from that author later of course) and their books are DRM free, because they understand that piracy isn't a real problem. [baen.com]

Hopefully if Baen continues to do well eventually the big publishers will learn from their example.

Re:Duh (3, Interesting)

jandrese (485) | more than 2 years ago | (#39290847)

Baen has been doing well with that model for over a decade now, the other publishers don't care. Even when Baen was literally the only company making any money on ebooks none of the other publishers would even give that model a second look. If it's not loaded down with DRM and badly overpriced, they just don't see the advantage.

Baen is awesome (0)

Anonymous Coward | more than 2 years ago | (#39291113)

Oh man I love Baen. I buy most of my books from them.

The biggest problem I'm running into now is that I've bought everything they have that I want to read (It doesn't help that I already had a massive library of Baen books in paperback).

I just hope they keep growing and adding authors.

Don't Need? (1, Redundant)

jimmerz28 (1928616) | more than 2 years ago | (#39290665)

Could someone explain exactly why an author (which I am not) of a written work is unable to release his/her content to the masses without the need of a publisher?

I imagine I can publish a document to an ebook store (which I am assuming is not considered a "publisher" since it is a "store") or even a website for purchase and bypass the need for these publishing companies.

Of course my imagination can be rather wild so maybe this ease is out of the scope of reality.

Advertising (3, Insightful)

mx+b (2078162) | more than 2 years ago | (#39290773)

You can have the best book in existence, but if no one hears about it, no one will ever buy it. It's entirely possible to publish on your own, on a personal website, with a paypal or visa shopping cart or something attached to take orders. What publishers do is get exposure. Even just on amazon.com, maybe they don't directly advertise you, but if someone searches for books, yours will pop up in there somewhere. How do people know to go to your personal website if you are a new unknown author?

It is feasible to do entirely on your own when you are a popular author, but someone starting out new still needs an advertising boost of some sort, or at least listed in a catalog most people know about to make it somewhat easier to discover. However, ebooks should be incredibly cheaper, given that as you pointed out, "publishers" don't really have to publish (or even edit, in some cases) anything. They simply add you to the catalog and handle the sales, and send you royalties. Their cut for something that is essentially automatic (handled by servers) should be much lower than the companies seem to think they deserve.

Re:Don't Need? (1)

Cinder6 (894572) | more than 2 years ago | (#39290855)

Nothing prevents it. But publishers have access to resources (editors, marketing, etc.) that can all prove critical to a book's success, which an aspiring author might not have.

Publisher Fools (2)

retroworks (652802) | more than 2 years ago | (#39290701)

Just dramatically increased the value of "rip" and "burn" software development, same as they did with CD prices creating the MP3 market. Invest in "Writers" and "Burners", the Chinese will be happy to make the hardware.

This world keeps shitting in my soup (0)

Anonymous Coward | more than 2 years ago | (#39290703)

"It comes down to what kind of books you want to continue to be available."

Why? What the fuck does it cost you to publish an electronic book? Ignore advertising, marketing and the rest of that crap.
The only cost is the time it takes you to make it and how much the publisher can rape you for.

A Good Thing (1)

Mansing (42708) | more than 2 years ago | (#39290731)

... increased prices are somehow a good thing and is the result of 'collusion'.

There, fixed that for ya.

Apple gets off scot free, as usual (2)

Pinky's Brain (1158667) | more than 2 years ago | (#39290809)

Conspiring to break the law is legal for Apple ... they are like Microsoft++, just as evil but without any trouble from government.

The publishers would appear to have fucked up... (4, Insightful)

fuzzyfuzzyfungus (1223518) | more than 2 years ago | (#39290889)

According to TFA, the publishers went 'agency' in order to try to stop Amazon from 'cornering the market' by selling books cheaply. Now they are under DoJ fire for what was essentially an attempt to set an artificial price floor across the industry.

Squeeze. Crunch.

Y'know what might have been a better plan? Not Insisting on the DRM that makes it possible, and easy, for an incumbent seller to lock in large numbers of buyers and obtain the market power needed to then put the publishers on the rack... It's not as though the story of iTunes went exactly that way with team RIAA or anything...

If DRM actually magically worked, there might be some business case for accepting a smaller slice of an impregnable walled garden; but the present state of it is trivially weak for all the common book formats. Good work on stopping no pirates and giving large retailers the power to cut your throat, guys...

If I'm typical... (5, Insightful)

Oswald McWeany (2428506) | more than 2 years ago | (#39290897)

If I'm typical, (and I probaly am not) Amazon, et al, would get more money from me by LOWERING the price.

90% of the ebooks I "buy" are free- either from Amazon, or Gutenberg, or elsewhere. The other 10% I will only buy if they are cheap. If eBooks were in the $2.99/3.99 range (for books I wanted) - I wouldn't hesitate- and the vast majority of books I read would be eBooks.

Instead of making $7 profit on me once or twice a year- they could be getting $1 profit from me 20 or so times a year. Multiply me by a few hundred thousand and that profit margain goes up.

I don't know that I am typical though- in fact I probably am not- because I actually enjoy reading HG Wells, Oscar Wilde, etc- and I don't consider it too much a hassel to not be buying the latest-pop ficiton mega-release.

Re:If I'm typical... (1)

mx+b (2078162) | more than 2 years ago | (#39291005)

I believe that is pretty typical -- again somewhat anecdotal, based on me and my family/friends. But especially in the current job climate, it is hard to pay the bills, I don't have 100s of dollars to throw around at a few new books, no matter how much I like them. I wouldn't mind tossing $3-5 at a book here and there though. So that's 0 books to several a year if they dropped ebook prices a good $10 (or more, depending on title of course).

A price-fixing conspiracy by corporations? (1)

ThatsNotPudding (1045640) | more than 2 years ago | (#39290961)

Zounds! Next, you'll be showing me an ebook about Gambling in Casablanca (for an exorbitant fee)!

isn't it obvious? (1)

sribe (304414) | more than 2 years ago | (#39291271)

...why the agency model is better despite increasing costs for consumers...

I'm pretty sure you just answered your own question ;-)

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