On the Economics of e-Books? 30
way0utwest asks: "I was searching on Amazon today for Lawrence Lessig's 'The Future of Ideas'. While browsing, I noticed that there was also an e-book version of the same title. What was amazing was that the hardcover copy of the book is $21 and the e-book, which is downloaded, is $24!
Now I may be just a simple computer programmer, but it seems to me that there is less overall 'cost' involved with the e-book and it should be cheaper. There's very little 'inventory' to store (how much disk space and electricity cost can there be?). There's no risk of having to 'return' the book to the publisher. There's no labor needed to 'ship' me the book. How can it cost more? Is Adobe charging that much for the licensing of the e-book?
Now I'm not sold on the idea of e-books, or electronic books in general (though I am looking forward to electronic paper), however it seems that either the industry is not interested in pushing e-books, or Amazon is not really paying attention (though the list price of the hardcover is $30) OR the publishers are trying to overcharge for the e-book to make up for potential piracy. Am I way off base? Is there anther explanation? Anyone?" It's frustrating to find digital media that is priced higher than the corresponding title in dead-tree form. way0utwest makes a good point in that one reason for the increased pricing is due to piracy, but one has to wonder how often e-Books get pirated? Are such prices justified or are eBooks doomed to failure because they have effectively priced themselves out of the market?
Gross margin? (Score:3, Informative)
Second, Amazon's gross margin on a hardcover version may be higher, so they have more room to discount. For instance, if the suggested list price of the HC is $30, and the electronic is $24, and they both are "sold" to Amazon by the publisher for $20, Amazon has more room to come down on the HC version.
Third, Amazon may just not care all that much!
Re:Gross margin? (Score:2)
Seems accurate to me. Amazon choses to use low margins only where there is competition, and then only if they want to "win" in that marketplace.
The high price ebook business model isn't on a firm foundation, so there's little business reason to try and capture that market.
Ebooks will take off when the books get much cheaper, and the authors get to keep most of the "cover" price. Textbook authors often get less than 10% of the cover price on paper books.
Imagine if the author got $4 royalty and the editor got $1 on a $6 e-textbook, they'd both make more money per book, and the students would spend less per book. The intellectual property creators and consumers would win, and the middlemen, the publishers, printers, and distributors would need to find new jobs.
Alas, the publishers have lots of lawyers and are delaying this as long as they can.
Because someone will pay for it (Score:2, Interesting)
That said, there is someone out there who will say, "I'd much rather have it in electronic form, and I'm willing to shell out the extra bucks for it." They've already shown their willingness to shell out a whole lot of bucks for the reader, so what's a couple extra? Having already purchased a questionably useful device, they would feel stupid for not using it (especially after spending so much); they feel compelled to justify their purchase, and if that means having to pay a little more than a dead tree book, well, so be it.
Also, the first law of capitalism applies here. In a nutshell: people are stupid, and successful companies exploit stupid people.
On piracy of ebooks. (Score:1)
1) Type of book
2) Cost of book
3) Usefulness of book
But in the end, if it's offered digitally, it will be pirated. even if it's not published digitally, someone will likely scan it in and distrobute it.
Personally, I like ebooks, at least some (I have issues with PDF's, mainly because of the difficulty I have reading them). Have I purchased many? No, far too few selection, and the price is still a touch too high for my likeing. So I browse through the free books. Baen Books ( http://www.baen.com/ ) , a science fiction and fantasy publisher offers quite a few of books formerly released as "loss leaders" in multiple formats (HTML, RTF, LIT, Palm/Psion/Win CE, Rocket Ebook) for free. http://www.baen.com/library/ for anyone that's interested.
Of course there's other repositories of literature, Project Gutenberg ( http://promo.net/pg/ ) being the foremost... the others I can't remember off hand.
Basically, for me free is good, but I'm willing to pay up to around 1/2 the dead tree price if the books good... haven't found any that are that good that I'm willing to hand limbs over though.
Re:On piracy of ebooks. (Score:1)
I know, I know.. I'm going to Hell, but what can I do?
Re:On piracy of ebooks. (Score:2)
Yes it is true, I suffer from this same malady.
What is even more amazing, I have found a secret government program that aids and abets this cursed addiction. Because so few people will be reading this (this is a discussion about reading, after all.), I will pass on to you the name of this institution in special Roman Swine code:
ethay ibrarylay
ebooks? (Score:1)
Maybe I have the wrong impression but I can't imagine them being better to read from than paper.
Re:ebooks? (Score:2)
When my Palm III died, I replaced it with a Sony Clié specifically because the screen is sweet for reading books. I wouldn't really want it for reference books, but I love reading novels and the like on it. I always have my Clié with me, so I always have an assortment of reading material with me as well -- for no extra cost in space or weight. Plus, I can read it under any lighting conditions.
But I must admit, I'm really disappointed with most ebook offerings. They're either way overpriced (More expensive than the hardback? Give me a break!), or in some dippy "digital rights management" format, or both. No, I'm not going to pay $24 for a book in a format that may not survive in two years.
The absolute best publisher I've seen for ebooks has got to be Baen. They have a great ebook collection [webscription.net] which includes just about everything they currently publish. The ebooks hit the street the same time as the paperbacks, and they're priced about the same. To me, that's a fair price. Sure, they're making some extra dough on the ebook version (no printing or distribution fees), but on the other hand I'm getting the product in a format that I prefer. I'm willing to encourage that!
But Baen's best decision was to release the books in plain ol' HTML format. They also have a few other formats, but HTML works best for me. And, even if someday HTML is dead and forgotten, I'll still be able to open these things up in a plain text editor and read them.
Baen also has a library of freebie books. Granted, many of them are the first books of one series or another, just to get you hooked. But the freebies are a great way to check out an author you've heard about, or just to play with the ebook format a little before making a commitment to it.
Hedging their Bets. (Score:2)
As people are mentioning though, There is the competition with the traditional paper format. Add to that, I think, no business enters a risky new business unless there is profit to be made. Atleast if some profit is made, even if the format dies, they havent wasted their entire investment, an investment they are pushed to make, because if they dont, and the format takes off, they will be overtaken by their competitors.
Like a lot of other commodity products, early adopters of new technology pay a premium. Wether it is worthwhile, all depends on how much the product is worth to you. (Or your business.)
What is the value of ebooks? (Score:2)
As far as I can tell a technical e-book's only appeal is that you could (in theory) dump a bunch on your laptop hard drive, on cdr's, or into your palmpilot, and carry them around as reference material. Much better than lugging around 80lbs of books to client sites. Of course with all of the digital rights junk floating around this may or may not be practical, and your ability to read the book 5 years from now under such a system is highly questionable.
Without such DRM type controls, the publishers fears that the books will get freely distributed over the Internet are well justified -- but it's happening anyway as people scan in books and OCR them, or simply crack the DRM schemes.
Reading a book on a laptop or palmpilot screen is a fundamentally different experience than curling up with a paper book. Although my preference is paper, it is nice to have my Palmpilot loaded up with a good Heinlein novel during boring meetings.
E-books seem to be stopgap measure driven by short-term profit potential. IMO the publishing industry faces fundamental changes over the next few years as their primary value-add transitions to making nice printed versions of works already freely (although perhaps illegally) available.
oferta y demanda (Score:1)
eBook piracy, etc (Score:2, Interesting)
however, before eBooks were this popular, similar methods unearthed 'digital' copies of the books - many titles are nowadays proofed, and transported between editors, in electronic form making 'leaks' from this media as easy and common as being able to get the latest MS windows finals before the official release dates.
I think that... (Score:1)
e-Books and e-Books (Score:4, Insightful)
When the word "e-Book" is used, everyone automatically thinks of reading books on a computer or PDA screen, probably because that's all most people have seen. There are numerous disadvantages to both approaches, but they all really boil down to "Those devices weren't designed for that." I think many people's preference for paper is just because they haven't seen a really good e-Book.
There are some devices out there that were designed to be electronic book readers, and they are *far* superior to PCs, Laptops and PDAs for this function. IMO, they're far superior to paper books as well in many ways (though not every way).
I have a Rocket e-Book, for example. It's a device that is just slightly larger than a paperback book, with a screen that is almost exactly the size of a paperback page. The screen is a very high resolution LCD with a backlight that can be turned on and off. It has 16MB of flash memory for storage of books and the (tiny) operating system. It connects to a computer via either a cable or infrared to download books, which are written in a simplified version of HTML and then run through a tool that packages and compresses them for download. The e-Book reader also has a high-capacity battery that allows it to run for as much as 18 hours on a charge. The UI is well-designed, with thin progress bar down the side to give you an idea of where in the book you're at, support for different font sizes, different orientations, etc., easy-to-use menus (which you almost never touch, other than to switch books).
This is a superb way to read. What do I like about it, as compared to paper?
What I don't like:
As you can see, the upsides are more numerous and more compelling than the downsides. The biggest downsides really have more to do with the fact that publishers haven't decided how to approach this e-Book thing. Here's to hoping they get it. soon.
Re:e-Books and e-Books (Score:2)
More information at http://www.gemstar-ebook.com/ [gemstar-ebook.com] You'll notice that their models still are labeled as REB #### and that all urls such as www.rocketbook.com/ point to Gemstar now.
Re:e-Books and e-Books (Score:2)
Re:e-Books and e-Books (Score:2)
- Gemstar royally sucks, and has ruined the market. They killed the free library. They try to determine who can publish for their device. Go to fictionwise.com and count the number of new titles coming out that say "Available in every format known to man except Rocket."
- I've taken to reading more stuff on the Palm. Why? Because the Palm fits in a pocket and I always have it with me. I have to consciously say "Ok, I'm taking the Rocket with me so I can read" which does not fly well in a corporate meeting, or the men's room. But the PDA is always there and I can choose to check my calendar, take notes, or read Larry Niven's Crashlander at the push of a button.
Poormojo.org is a great source for free stuff in Palm doc format. There are enough tools out there to convert back to text/html, and then down to rb format, that one of these days I should really write a converter.I buy used books (Score:1)
Try that with an ebook.
- Freed
Re:I buy used books (Score:2)
Rocket science (Score:3, Interesting)
Re:Rocket science (Score:2)
You mentioned physical costs, but not distribution costs. Distribution costs, while not eliminated, should be drastically reduced with e-Books. Consumer has paid for the transport already via isp fees. Amazon (ie) would have to front a little bit. But there is little or no fee between Amazon and (again, ie) Doubleday. Doubleday emails the pdf/e-book file, and is done with it, except for some monthly accounting/sales reports from Amazon.
I won't profess to know how much all of this costs, so won't discuss the actual number or percent savings it should engender.
Then, let's look at paperbacks. Don't have any within reach, but about $7.99 seems about right. And I assume that Borders/Amazon makes a buck (+/-) on them. And that includes a more expensive supply chain (printing and shipping) than e-Books.
I'm sure the margin on a paperback is less than that on a hardcover. I'm also sure that many of the costs (editing) are paid for by the hardcover sales. So let's assume no hardcover, and all sales need to be covered by paperback and ebook. We still don't get to $21 in costs.
There is value added beyond the production. You are absolutely correct to reference editing costs. But spellchecking is likely done very automatically. There is not as much need for typesetting an ebook.
And one final point about editing: some of that time/money is spent weeding out unpublishable/unprofitable books. Because they need to pay for transport, advertising, etc. But I would argue that if you don't need those costs (ie, do a strict ebook edition) you can again cut the costs.
It is somewhat ironic that you mention CDs and DVDs. It has been shown by those with more knowledge than myself, that CD's, for example, cost less to bring to market than a tape (this is currently. There were costs in the beginning to set up plants, distribution, etc., but these have long since been amortized). IOW, there is more profiteering today with music than in the past. I suspect the same thing of the print publishing industry.
My mother gave up on her eBook. She had a bazillion restrictions (how to use it, where to use it, blah, blah, blah) and the books cost nearly the same as a hardcover, and 9/10 times cost much more than the paperback.
IMNSHO, there is no reason for an eBook to cost more than a paperback, and there is no reason for an eBook to cost only 10% less than a hardcover.
Re:Rocket science (Score:2)
Advertising electronically is a joke. Books in stores get advertising just being on shelves. Books on Amazon don't get a dozen people a day looking at the covers. Cover art is advertising in itself, a big name in bold gothic letters like Tom Clancy or Stephen King in big Impact letters draws a far amount of attention on a shelf. On Amazon you can't make a badass cover to draw the eyes of store patrons. Sale for Amazon are generally high but many specific prints sell few to no copies at all. The publisher still has to pay the production cost but then doesn't make anything back on it.
Limiting yourself to thinking about paperbacks is a joke. They don't make much money. Go to a book store soon and wander over to the paperback fiction section. You'll see a handful of books with several copies on the shelf and the rest of them there will be one or two copies at the most. The small percentage of titles with multiple copies available are the big sellers. The rest sell one copy a month if they are lucky (from that particular store mind you). Books that didn't hit hardcover before going to softcover don't make much money for publishers or authors. Margins on paperbacks are horrible. The cost of sales takes up a sizable percentage of their cover price while the cost of goods being recudes by making them electronic isn't nearly enough to drop the price by a signifigant fraction. The 10% discount on a eBook PB over a physical PB is pretty much the production savings by not having to print and ship the book. The savings on the hard cover is pretty similar. There is a reason eBooks don't cost the dime they cost you transfer to you. The costs of their production is usually far higher than the returns they make. Don't admit to not knowing how books are priced only to make an argument that books ought to be cheaper because they aren't printed on paper.
a screwup? (Score:1)
Fair Use (Score:1)
Why can't I have copies of e-books for free if I've already bought the dead-tree version.
I'm not trying to get out of paying for anything here, I have no problem paying for dead-tree books, but why should I have to pay for something that I already own?
e-book Pricing (Score:1)
Most e-book readers are "locked" to a single device (Microsoft's Reader is trying to fix this... but let's be reasonable... it's crude at best). The hard-cover while physically limited to one form factor, can be both portable and stationary. You can have it on the shelf next to your computer but just as easily take it with you (like a portable). E-books tend to lack this versatility (generally).
Also, the traditional books generally don't restrict your ability to (a) copy text from them, (b) scribble or mark-up passages or (c) "loan" a book to another person, inter alia. The e-books typically restrict all of those activities to the extreme (with the exception of perhaps post-it style mark-ups).
These are only a few examples of where you have less "REAL" utility than traditional books when using e-books. Besides the fact that reading from a screen still is less a less than ideal experience, functional utility is one of the fundamental drivers of price from an economics point of view... same content @ less functionality = lower market price.
Wait and see... but I bet that e-books will take a long time to really catch on... and only when the price is closer to that of a soft-cover will people be willing to pony up the dough for a functionally deficient product.
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