Worth of Words

There is an interesting reader boycott going on over Kindle ebook prices. It brings up the issue of what is a fair price for the essence of a book, the words and ideas without the paper, printing and physical distribution costs. By trying to protect the current formats of hardcover in particular, are publishers making a mistake.

http://toc.oreilly.com/2009/04/readers-boycotting-kindle-titlles-above-999.html

I read the blog, blog comments and the kerfuffle at the Amazon boycott forum. I thought most of them were clueless, including the blogger. People "aren't paying for content, they're paying for convenience?" What?

The only thing I agreed with in the blog is that people don't care about what companies need to make, they just care what the product worth to them. That applies to everything, though, not just books. The Amazon comments showed that people were buying Kindle books because they wanted the books as soon as they came out, they were "too lazy" to go to the library, and other reasons. I see the Kindle as the iPod of books; people want to store their whole reading libraries for portability just as they store their whole music libraries.

Re price, the Amazon forumers can complain all they want, but $9.99 was arbitrary, and, IMO, people WILL pay more for the convenience of their content. A lot of iTunes music is now higher than the original (arbitrary) .99c, but people are still buying it.

The blogger said it was in publishers' interests to sell cheap because they'll sell more. No, that just starts the inevitable race to the bottom. A few of the Amazon commenters were wanting textbooks on Kindle for $9.99. If they got it, eventually they'd be complaining THAT was too much.

On a tangent, there's a new company that offers free, online textbooks. It was founded by ex-textbook publisher employees and seems to have a lot of venture capital funding, so I'm assuming that smart people are running it. But I guess I'm just not visionary enough to see their model as successful, because I can deconstruct everything they say at their link here:

http://www.flatworldknowledge.com/about

They offer printed versions of their texts for $30-$60. What do you want to bet students will be complaining about THAT real fast? In fact, I was discussing that site with some of my students, and when I said the cost was $30, they asked, "for all the books?" They were disappointed when I said no, $30 each.

And think of all the paper and toner used to print the downloadable verisions, which adds to the cost. Students will be trying to print them up at the college computer labs -see how well that goes over.

Their textbooks are open, meaning anyone can customize them for their own class. They tout this as an advantage, saying that teachers won't be "forced" to buy new editions on the publisher's timetable instead of their own. What they're missing is that new editions are printed not just to update material, but to enable the publishers to stay profitable, since used copies eat into profit margins so badly after a few years. What author is going to put all the work into writing a textbook if, after a couple of years, no one is buying it anymore due to all the used copies available? Because I have no doubt that the print-outs that students make will end up on the resale market just as regular textbooks do. I also wonder how they'll prevent the sharing of the book URL, since no registration is needed to access it.

Oh well, time will tell.

I agree with those unwillingly to pay $15 or more for an electronic copy of a book that could disappear into cyberspace. I'm not sure that comparing people buying books with those buying music is a good one.

I think Dick is right. $15!!! For something that you download. $1 - $2 is more than fair. After that it's profiteering, something we need to bring an end too.

Those readers griping about prices never care about the author who spent years of his life writing the book only to see readers demanding rock bottom e-book prices that guarantee he will earn little or nothing for his efforts. Basically, readers think stuff on the Internet ought to be free even though most of them think that wherever they work, they ought to be paid.

Malcolm

I agree, the writer should be paid. What I would object to if I used one of the things is paying a hefty price for something that could disappear. Things do go wrong all the time. I just paid $48 for a thumb drive that worked two days and quit. Now I have to go to the trouble of taking it back. Then I'll have to load the new one with stuff on the one that quit. Anything electrical or anything to do with the Internet or computers can fail. It isn't the same as laying out cash for a book printed on paper.

The problem that big publishers have is that ebooks reverse the cost advantage they enjoy with printed books. The ability of the majors to print tens of thousands of a title and drive the unit costs of each book into the low single dollar range would be gone. Include the cost advantages in distribution, shelf space and advertising, this adds up to a massive advantage for the majors to keep paper in the picture. Without paper and printing, the higher overhead of a big publisher becomes a problem. They still have to pay the authors, editors, executives and rent. Ebooks don't need a warehouse or print runs and can be created on any PC. If a big portion of book sales go to ebooks, the more level the playing field become for publishers of all types.

thehairymob wrote:

I think Dick is right. $15!!! For something that you download. $1 - $2 is more than fair. After that it's profiteering, something we need to bring an end too.

How do you come to the $1 - $2 figure? Although you do prove my point nicely about people eventually complaining about the $9.99 price.

Dick Stodghill wrote:

What I would object to if I used one of the things is paying a hefty price for something that could disappear. Things do go wrong all the time. I just paid $48 for a thumb drive that worked two days and quit. Now I have to go to the trouble of taking it back. Then I'll have to load the new one with stuff on the one that quit. Anything electrical or anything to do with the Internet or computers can fail. It isn't the same as laying out cash for a book printed on paper.

So by this reasoning, why should anyone pay high prices for software?

I don't see the medium being the issue. It's the content and how it serves you. If people aren't buying content, as the blogger in the OP stated, then we should be happy downloading pop-up ads.

dtpollard wrote:

Without paper and printing, the higher overhead of a big publisher becomes a problem. They still have to pay the authors, editors, executives and rent. Ebooks don't need a warehouse or print runs and can be created on any PC. If a big portion of book sales go to ebooks, the more level the playing field become for publishers of all types.

I'm not following -don't ebook pubs have to pay authors, editors, executives and rent, too? If all books were electronic, how would the playing field be leveled? There has to be some marketing/advertising mechanism to get the public to know about the books, and the big pubs will still have the advantage there.

If an author receives 12% of the price of a book that, in hardback, sells at $25 (discounted to $18 by Amazon), what advantage would there be to him/her in having the book issued as an e-book at $1 or $2? The royalty would be almost nonexistent.

Making it up on volume just isn't going to happen.

Malcolm

LC wrote:

dtpollard wrote:

Without paper and printing, the higher overhead of a big publisher becomes a problem. They still have to pay the authors, editors, executives and rent. Ebooks don't need a warehouse or print runs and can be created on any PC. If a big portion of book sales go to ebooks, the more level the playing field become for publishers of all types.

I'm not following -don't ebook pubs have to pay authors, editors, executives and rent, too? If all books were electronic, how would the playing field be leveled? There has to be some marketing/advertising mechanism to get the public to know about the books, and the big pubs will still have the advantage there.

LC, that is my point. The cost advantage that big publishers enjoy because they control the market, store access etc. with paper books is not there with ebooks. Their costs would not change from an overhead standpoint initially. A small publisher can't print in quantities to go the lowest unit price on a hardcover title and their profit margin is much smaller than a major publisher. If a major has a cost of $3 per book and a small guy is at $10, the major can come out at standard 55% wholesale on a $25 retail and profit $8.25. Throw $1 or so to the author and there is a $7 profit per book. With digital ebook the production costs for the major and small press if flat. The ebook is stored on a server for download. The large publisher still has a wholesale cost to distributors and payment to authors to deal with in addition to their higher overhead.

Amazon's standard deal is 35% to the publisher. Let's say the majors get a better deal at 50%. A $9 price at 50% brings in $4.50 before paying the author let's say $.75 and 3.75 is left. A $5 price leaves $2.50 - author etc. You can see how the margins become thin quickly and all of the promotion, salaries, etc. still have to be paid. A small publisher or epublisher is set up to survive on that model better than a traditional house moving in that direction.

What about publishers that print ebook, hard copy, paperback and audio at the same time - how do they price point them? Electronic media no longer has a medium, it's all downloadable. There's no material cost. Only the print has a material cost.

The author's time and effort has a value - but what is that value? Can it be priced by the page? So much for ebooks by the page; so much for audio by the page?

Are there really pages for electronic media? A page is something from the print era - electronic media can be continuous.

Charge by the word? By the character count? By the space?

Is a publisher needed for electronic media? Maybe that's the real issue. The writer, the editor and the publicist. No book stores. No publishers.

DT, I understand what you're saying, but I still don't buy it. Whether ebook or paper, word still has to get out to the reading public. You discount (ar ar) the big pubs' ability to do that. For instance, those banners on Amazon and B/N that advertise new books aren't cheap, and who will have the ability to buy them? Not small epubs. Ebooks with no marketing will languish in obscurity. I am not in the camp that believes that buyers will one day search thousands of little websites for their reading material.

dkchristi wrote:

Is a publisher needed for electronic media? Maybe that's the real issue. The writer, the editor and the publicist. No book stores. No publishers.

You are greatly minimizing the publisher's role. From my experience, it takes a lot more than me, one editor, and a publicist to get my books out and to keep a profitable publishing business running.

LC wrote:

DT, I understand what you're saying, but I still don't buy it. Whether ebook or paper, word still has to get out to the reading public. You discount (ar ar) the big pubs' ability to do that. For instance, those banners on Amazon and B/N that advertise new books aren't cheap, and who will have the ability to buy them? Not small epubs. Ebooks with no marketing will languish in obscurity. I am not in the camp that believes that buyers will one day search thousands of little websites for their reading material.

LC, you are proving my point. Controlling the price of ebooks at a higher point is going to be difficult. The big publishers want a smaller spread between ebooks and paper. If a $25 book is discounted 40%, as they often are, it will cost $15 to the customer. A $9 ebook is $6 difference. Many ebooks are out there at 5, 6 and 7 dollars. The promotion still has to come out of the profit. Is $6 enough of a difference not to have the physical book. No print cost, shipping, warehouse, etc., I think $9 is a tough sell. The ebook buyer might be more prone to try something new at a lower price point. There are ways to reach ebook buyers, who are computer savy to begin with, far easier than it is to get into a chain book store and gain attention.

The publisher's role is major for print books. I am only questioning their role for ebooks. I find that getting attention by the right reviewers is critical; and that can be handled by the quality of the work and a publicist. Who cares who publishes an ebook? They are a new media. Tradition and history don't apply. Old ways of doing business don't apply. Just ask those with the same issues regarding artistic value and the movie/dvd industry - it's a new awakening everywhere. How it will shake out - I wonder.

I receive emails from Tor Forge because I like the genre. Many of their offerings include free novels and ebooks by known authors to tantalize the buyer into purchasing other choices. That's a publisher who is moving with the new direction. I think it's Harper Collins that has authoronomy (may be spelled wrong) a place for new authors to post their writing for editors to review - talk about moving in a new direction. These are the times when the innovative, creative mind steps in, figures it out, and exploits the uncertainty into their own success.

dtpollard wrote:

Controlling the price of ebooks at a higher point is going to be difficult. ...Many ebooks are out there at 5, 6 and 7 dollars. The promotion still has to come out of the profit. Is $6 enough of a difference not to have the physical book. No print cost, shipping, warehouse, etc., I think $9 is a tough sell. The ebook buyer might be more prone to try something new at a lower price point. There are ways to reach ebook buyers, who are computer savy to begin with, far easier than it is to get into a chain book store and gain attention.

I guess I'm stuck on a few things (again, it may be my lack of visionary thinking).

1. I actually don't see "ebook" as radically different from print book. It's just a book delivered on a different medium. Is the Kindle version of my nonfic book an "ebook?" I merely see it as my book delivered electronically, for $9.99 instead of the $13-$15 Amazon fluctuates the print version at. The electronic version isn't that much cheaper. What forces would make it cheaper? I do not see self-published ebooks that sell for a few bucks as serious competition or a driving force to send prices downward.

2. What makes an "ebook buyer" different from a print book buyer? They're still buying content -a book on the subject of their choice- they're just choosing to have it delivered differently. Maybe B/N will eventually have ebook delivery kiosks available in their stores for their customers who see the book on the shelves and want it slightly cheaper on their Kindles.

3. I see retail and merchant discount prices as the same gimmick used in all other retailing. The pubs set the "retail" price at whatever they need to give merchants the discount they want, bottom line being the pubs get the wholesale price they're decided they needed in their original profit/loss calculations.

DK -again, I don't see the pub's role in the acquisition, development and publication of an ebook as signficantly differently than a print book. Far more goes into it than simply hiring a publicist and getting a reviewer to look at it. You've mentioned the movie/dvd industry -tell me how much easier it is for a starlet or aspiring musician to break into those industries just because customers download movies and music now. Sure, they can upload their homemade efforts to YouTube and their websites, pay SEO services to "optimize hits," they can press their music at CD baby cheaply, but come on ...we all know where most of that leads...

As for Authonomy, read some of the threads at Writers.net about it. It's basically a scam, and your chances of getting picked up by HarperCollins through it are as good as winning the Publisher's Clearinghouse Lottery.

I agree "who care who publishes an ebook" ... and who cares who publishes a paperback book? It's the product quality and accessibility that matters. Self-published efforts rarely have either, and customers only notice THAT.