iBook pricing - what are publishers thinking?

[2002cbr600f4i]

Ok, let's take a generic book, we'll say it costs $15 new hardcover.


Some of the costs are the same - advertising, production + editing, etc. Every copy sold contributes back to paying for this (and other books that don't fare as well.) These represent the bulk share of the costs of PRODUCING the book.

As an author, and tech editor on a couple technical books, I can tell you that as an editor, I got paid a fee per page reviewed. As an author I get VERY little per copy sold, but I was advanced a couple $K each time (which comes out of your royalties until the book sells enough to cover the advance.) In between, the Senior editor of the book had to coordinate between the two groups, make sure that the author was following the style and layout requirements, coordinate with the printers, the financials group, the marketing group, etc. All that costs money.

Some cost are different - yes, while they don't have to pay for the physical printing, binding, and distribution, they DO have to consider apple's cut, they DO have to process the electronic copy to convert it into the correct format and (Hopefully) perform some checking to ensure conversion quality. If any additional features (multimedia) are added, that's even more cost.

So, I'd say that 80-90% of the costs are identical between printed and electronic versions, and of the remaining amount, the costs offset each other.

What do I think a fair price for electronic version of that hypothetical $15 hardcover should be? $13 minimum... Probably more like $13.99.

 

[cderalow]

As someone who has worked in publishing for 20 years I get frustrated at comments like an eBook doesn't cost the same as a physical book to produce.

It's faulty logic.

The same marketing, publicity and staff are required to get a book published no matter what format it's in. The argument that it costs nothing to produce an eBook only applies to books ONLY released as eBooks.

But, for example - the latest Stephen King novel. Whether you're buying an eBook or hard copy - the overall cost is the same. It's not like publishers just say - ok - we need to make money to earn back our printing costs - so hard copies we'll charge for and eBooks we won't. How is that fair to the people buying hard copies - to supplement your eBook?

A book is a book is a book. You're not getting any more or any less than someone buying a hard copy other than convenience.

Now - I'm not advocating they should be charging MORE for an eBook. But if publishers charge the same or even a LITTLE less than a hard copy, I don't see where all the complaints are coming from.

There's a underlying "theme" in today's society of "entitlement."

You aren't entitled to a cheaper book because you have decided to read it in a particular format.

It would be better to think of the value of what you're getting instead of what format it's in.

As I said - a book is a book is a book. You're paying for the book and getting the book.

I'd have to argue on one point of this.

The background and legwork to create the book for printing is the same. the physical delivery of the media is totally different.

I'd have an extremely hard time believing in today's digital world that it costs just as much to produce a copy protected media file from something that's all ready in a digital form, costs as much as the paper, ink and materials necessary to produce a physical item. let alone the upkeep of the printing presses etc.

Remove the costs for the actual physical book from the price, and it makes sense to me.

It'd be an easy calculation, take all of the background development overhead costs, profits etc, and deduct the production cost.

a $27 hard cover, becomes $22 because you no longer use $5 of physical material, but you still have $22 of overhead and profit for the artistic creation.

knowing what printers like O'reilly pay their authors v what they charge per book, it's hard to swallow some of the costs for an ebook.

for instance, Running Mac OS X Tiger, is a $40 soft cover book. Authors received less than 10% of that cost for their efforts. I can't imagine printing costs to be much more than $5/book. which leaves in excess of $30 for "overhead" and profit in it's development.

seems a bit skewed.

 

[2002cbr600f4i]

for instance, Running Mac OS X Tiger, is a $40 soft cover book. Authors received less than 10% of that cost for their efforts. I can't imagine printing costs to be much more than $5/book. which leaves in excess of $30 for "overhead" and profit in it's development.

seems a bit skewed.

10%? Believe me, unless you're an established author with multiple books under your belt, you don't get anywhere even CLOSE to that...

With my book, I was a co-author, wrote about 25% of the book... AFTER it had sold 10k+ copies I got bumped up to a whopping 2.5%. Once it got to 15K copies I got bumped to 2.75%...

The margins aren't great. Especially for technical books. While the prices start out high, they don't stay on the shelf for long because the content gets outdated so quickly.

For several months worth of effort, and >250 pages written (much of it included source code for example programs) I've made about $1600 total, $1K of that upfront. That's for a book that was published in 2002!

Why do NYTimes bestsellers get marked down so much? Because they sell a TON of them and can afford to make less profit per book because the numbers are staggering.



Don't forget the distribution/shipping costs in the cost of the physical books, plus the margin that companies like Barnes and Noble add in to get their cut as well.

 

[samcraig]

I'd have to argue on one point of this.

The background and legwork to create the book for printing is the same. the physical delivery of the media is totally different.

I'd have an extremely hard time believing in today's digital world that it costs just as much to produce a copy protected media file from something that's all ready in a digital form, costs as much as the paper, ink and materials necessary to produce a physical item. let alone the upkeep of the printing presses etc.

Remove the costs for the actual physical book from the price, and it makes sense to me.

As I said - if you ONLY create an eBook and not a physical book, costs will be different.

But in today's world - publishers are printing AND offering eBooks. So cost is the same or negligibly different on a per book bases.

There's more to it than just simply scanning the pages to make it electronic. There are additional licensing agreements, lawyer's time, etc to get a book published in a different format.

And also consider that if more books are bought electronically, there's (right now) more waste and "dead" books that were printed raising overhead. "Sendbacks" from bookstores increase.

So again - I don't think eBooks should be more. They should be the same or slightly less. But people saying that it should be SIGNIFICANTLY less because there's no costs involved are speaking from ignorance about how publishing works.

 

[vini-vidi-vici]

As someone who has worked in publishing for 20 years I get frustrated at comments like an eBook doesn't cost the same as a physical book to produce.

It's faulty logic.

The same marketing, publicity and staff are required to get a book published no matter what format it's in. The argument that it costs nothing to produce an eBook only applies to books ONLY released as eBooks.

But, for example - the latest Stephen King novel. Whether you're buying an eBook or hard copy - the overall cost is the same. It's not like publishers just say - ok - we need to make money to earn back our printing costs - so hard copies we'll charge for and eBooks we won't. How is that fair to the people buying hard copies - to supplement your eBook?

A book is a book is a book. You're not getting any more or any less than someone buying a hard copy other than convenience.

Now - I'm not advocating they should be charging MORE for an eBook. But if publishers charge the same or even a LITTLE less than a hard copy, I don't see where all the complaints are coming from.

There's a underlying "theme" in today's society of "entitlement."

You aren't entitled to a cheaper book because you have decided to read it in a particular format.

It would be better to think of the value of what you're getting instead of what format it's in.

As I said - a book is a book is a book. You're paying for the book and getting the book.

Not sure what part of the publishing business you worked in, but thats just not true. You're saying that the cost of printing, and distribution is zero? Nobody is demanding free books, only that they discount appropriately. Maybe that discount is only 10%, maybe it's more... But they should be up front about it. Everyone knows the bulk of costs are in development, editing, etc. Whats happening now, is they're making a very poor first impression... And that's going to cause more damage in the long term. Plus, for a book like atlas shrugged (which i've read, and found to be silly fiction.. But that's another story) the development and promotional costs are long ago history... The book has been in print for like 50 years.

 

[samcraig]

Not sure what part of the publishing business you worked in, but thats just not true. You're saying that the cost of printing, and distribution is zero? Nobody is demanding free books, only that they discount appropriately. Maybe that discount is only 10%, maybe it's more... But they should be up front about it. Everyone knows the bulk of costs are in development, editing, etc. Whats happening now, is they're making a very poor first impression... And that's going to cause more damage in the long term. Plus, for a book like atlas shrugged (which i've read, and found to be silly fiction.. But that's another story) the development and promotional costs are long ago history... The book has been in print for like 50 years.

I never said that the cost of printing and distribution is zero. But in the scheme of things - it's peanuts compared to the other costs. So if you remove printing and distribution, you're still left with a bulk of the costs.

Why should they be upfront about it? Is ATT upfront about how much it actually costs them to give you txt or mms? Is your cable company upfront on how much it costs them to bring you their channels? Why is the publishing industry different?

The publishing industry is under scrutiny because people feel entitled. They don't understand what I've been saying in these posts. And that's unfortunate. Having worked on newspapers for years, I can bet that most of the people who get a morning paper have no idea how complicated and what a well oiled machine it is to get a paper delivered to your door every morning before you go to work.

The fact is - people are ignorant (I am not calling them stupid - there's a BIG difference) to what is involved.

Poor first impression? For what - treating their product with respect? If they offered their books much less, that's devaluing their product. That would, it could be argued, an ever worse thing.

Finally - your copy of atlas shrugged might have recouped/handled the "back end" costs from the past 50 years. Guess what though - to get the rights to put it in electronic for required lawyers, new agreements and a slew of other things to get to your iPad.

 

[jmor]

As someone who has worked in publishing for 20 years I get frustrated at comments like an eBook doesn't cost the same as a physical book to produce.

It's faulty logic.

The same marketing, publicity and staff are required to get a book published no matter what format it's in. The argument that it costs nothing to produce an eBook only applies to books ONLY released as eBooks.

But, for example - the latest Stephen King novel. Whether you're buying an eBook or hard copy - the overall cost is the same. It's not like publishers just say - ok - we need to make money to earn back our printing costs - so hard copies we'll charge for and eBooks we won't. How is that fair to the people buying hard copies - to supplement your eBook?

A book is a book is a book. You're not getting any more or any less than someone buying a hard copy other than convenience.

Now - I'm not advocating they should be charging MORE for an eBook. But if publishers charge the same or even a LITTLE less than a hard copy, I don't see where all the complaints are coming from.

There's a underlying "theme" in today's society of "entitlement."

You aren't entitled to a cheaper book because you have decided to read it in a particular format.

It would be better to think of the value of what you're getting instead of what format it's in.

As I said - a book is a book is a book. You're paying for the book and getting the book.

Okay the problem I find is by what your saying we should pay the same price for hardcover as the ebook version. Fine okay then with that logic we should pay the same for hardcover and paperback as we're not paying for materials and a book is a book no matter what, is that the logic we're applying here? That's the problem I see, you can't say a book is the same no matter what and expect people to pay hardcover prices for an ebook but pay less for a paperback, its not our fault we prefer ebooks. Then, the cost of the physical book and distribution is where an ebook should be less, and that should be the discount passed on to the customer, in my opinion.

 

[samcraig]

Okay the problem I find is by what your saying we should pay the same price for hardcover as the ebook version. Fine okay then with that logic we should pay the same for hardcover and paperback as we're not paying for materials and a book is a book no matter what, is that the logic we're applying here? That's the problem I see, you can't say a book is the same no matter what and expect people to pay hardcover prices for an ebook but pay less for a paperback, its not our fault we prefer ebooks. Then, the cost of the physical book and distribution is where an ebook should be less, and that should be the discount passed on to the customer, in my opinion.

Consider ALL books a law of averages. Lowering the eBook price beyond the paperbook price lowers the average price per unit for all three versions of the book.

I see and value your point on hardback vs paperback. My discussion was biased towards paperback pricing vs ebook in this scenario.

Hardbacks are where publishers make the most money. They sell for more. They don't cost ALL that much more to physically produce. Paperbacks cost about the same to produce - a little less. The law of averages between sales of the two "works." Publishers still don't make a ton of money per book though (and VERY little for paperbacks).

 

[rdrr]

The publishing industry is under scrutiny because people feel entitled. They don't understand what I've been saying in these posts. And that's unfortunate. Having worked on newspapers for years, I can bet that most of the people who get a morning paper have no idea how complicated and what a well oiled machine it is to get a paper delivered to your door every morning before you go to work.

No... The publishing industry is under scrutiny because they failed to adapt to today's world of digital, and instant information. No one wants to pay for yesterday's news when I can read about it online in a matter of minutes.

Look at the whole digital music industry. The price for a song? $.99, perfect price in my opinion. Rarely do I question buying a song or an application for that matter at less than a dollar. The publishing industry needs to either adapt or get out of the way. Every industry is making cuts and changing the way they do business. If publishing doesn't get their heads out the sand then they will wake up one day to find the world has passed them by.

 

[vini-vidi-vici]

I never said that the cost of printing and distribution is zero. But in the scheme of things - it's peanuts compared to the other costs. So if you remove printing and distribution, you're still left with a bulk of the costs.

Why should they be upfront about it? Is ATT upfront about how much it actually costs them to give you txt or mms? Is your cable company upfront on how much it costs them to bring you their channels? Why is the publishing industry different?

The publishing industry is under scrutiny because people feel entitled. They don't understand what I've been saying in these posts. And that's unfortunate. Having worked on newspapers for years, I can bet that most of the people who get a morning paper have no idea how complicated and what a well oiled machine it is to get a paper delivered to your door every morning before you go to work.

The fact is - people are ignorant (I am not calling them stupid - there's a BIG difference) to what is involved.

Poor first impression? For what - treating their product with respect? If they offered their books much less, that's devaluing their product. That would, it could be argued, an ever worse thing.

Finally - your copy of atlas shrugged might have recouped/handled the "back end" costs from the past 50 years. Guess what though - to get the rights to put it in electronic for required lawyers, new agreements and a slew of other things to get to your iPad.

True, you didn't say it was zero. You and I might not be as far off as some others think. However, I still think publishers are risking screwing this up because they're worried about leaving money on the table. Plus, my sense is that there are a lot of costs in the publishing business that are simply fat - left over from decades of doing things "the way we've always done them". For example, paying for a new york city headquarters - and the salaries that come with it - is just crazy. Electronic delivery is going to bring a lot more power to authors. Right now publishers are trying to assert their relevance... I think it's a losing battle.

The future is going to be smaller publishers, who can still offer the same quality editing and promotional abilities, but don't need the distribution might of the big publishing houses. Sales is all about distribution, and electronic distribution levels the playing field. If I'm an author, why would I want to sign with a big publisher, if I can get a better deal at a smaller publisher, similar promotion, and the same distribution?

Speaking of books, ever heard of "who moved my cheese"? That's what's happening.

 

[samcraig]

No... The publishing industry is under scrutiny because they failed to adapt to today's world of digital, and instant information. No one wants to pay for yesterday's news when I can read about it online in a matter of minutes.

Look at the whole digital music industry. The price for a song? $.99, perfect price in my opinion. Rarely do I question buying a song or an application for that matter at less than a dollar. The publishing industry needs to either adapt or get out of the way. Every industry is making cuts and changing the way they do business. If publishing doesn't get their heads out the sand then they will wake up one day to find the world has passed them by.

sorry - are you talking BOOKS or Periodicals. Because I'm talking BOOKS. Books can't be read online like "yesterday's news."

 

[samcraig]

True, you didn't say it was zero. You and I might not be as far off as some others think. However, I still think publishers are risking screwing this up because they're worried about leaving money on the table. Plus, my sense is that there are a lot of costs in the publishing business that are simply fat - left over from decades of doing things "the way we've always done them". For example, paying for a new york city headquarters - and the salaries that come with it - is just crazy. Electronic delivery is going to bring a lot more power to authors. Right now publishers are trying to assert their relevance... I think it's a losing battle.

The future is going to be smaller publishers, who can still offer the same quality editing and promotional abilities, but don't need the distribution might of the big publishing houses. Sales is all about distribution, and electronic distribution levels the playing field. If I'm an author, why would I want to sign with a big publisher, if I can get a better deal at a smaller publisher, similar promotion, and the same distribution?

Speaking of books, ever heard of "who moved my cheese"? That's what's happening.

Yes - great book - and I agree with you. My "arguments" are using today's model - not the future model of how it will/should/could be.

Right now the big publishers are relevant. Those bloated salaries/expenses do exist. It's going to take time.

 

[rdrr]

sorry - are you talking BOOKS or Periodicals. Because I'm talking BOOKS. Books can't be read online like "yesterday's news."

Either way... Look to adapt and change like every other industry out there, or demand that I pay the same as a printed books. It won't fly...

Even though you can make an argument that it will cost the same to publish the book, electronic or printed, the shipping and handling can be subtracted... even if it is just a few cents. You have to make the consumer feel that they are getting a good deal. Its not entitlement, its being a smart consumer, and lately the economy doesn't allow one to be frivolous with their hard earned dollars.

 

[samcraig]

Either way... Look to adapt and change like every other industry out there, or demand that I pay the same as a printed books. It won't fly...

Even though you can make an argument that it will cost the same to publish the book, electronic or printed, the shipping and handling can be subtracted... even if it is just a few cents. You have to make the consumer feel that they are getting a good deal. Its not entitlement, its being a smart consumer, and lately the economy doesn't allow one to be frivolous with their hard earned dollars.

I don't disagree - and haven't about a "similar" price. I think people are expecting huge discounts. That seems to be the "voice" pervading the air.

That being said - I agree about the economy - but it's a chicken/egg argument too. If publishers take hits they can't afford, then they can't keep their expenses the same - meaning potential layoffs = more people out of work or going out of business. Yes - I'm over-simplifying and being "dramatic" - but look at it this way. If people are trying to NOT be frivolous with their hard earned dollars - perhaps they shouldn't be buying an iPad to begin with...

 

[Ibjr]

My guess is they are trying to save readers from subjecting themselves to an ideological polemic that masquerades as poorly written fiction If you want to read about objectivism, fine, but you don't need to spend money on trash fiction to do it.

 

[IronLogik]

I don't disagree - and haven't about a "similar" price. I think people are expecting huge discounts. That seems to be the "voice" pervading the air.

That being said - I agree about the economy - but it's a chicken/egg argument too. If publishers take hits they can't afford, then they can't keep their expenses the same - meaning potential layoffs = more people out of work or going out of business. Yes - I'm over-simplifying and being "dramatic" - but look at it this way. If people are trying to NOT be frivolous with their hard earned dollars - perhaps they shouldn't be buying an iPad to begin with...

An iPad is a potentially useful device. It doesn't mean you shouldn't still speak with your wallet.

To me it's going to be healthier. The ability to move out of my office and be able to visit family in the living room and read my news websites and RSS feeds is worth the cost of the iPad. That doesn't mean that because I spent $700 on an iPad that I should then subject myself to very expensive books and apps.

There's clearly pros and cons. But just because you bought an iPad doesn't imply that you don't value your money.

 

[JonboyDC]

Digital delivery shoiuld be the same price as print, minus the cost of printing and delivering the print copy... Plus a little for the extra work required, and apple's cut as the distributor. In the end, it should come out as a discount for the reader. Anything else, and people know they're getting screwed.

As a point of reference, bookstores traditionally get a 40% cut of the price of a book. (That is, if a book is priced by the publisher at $10, the bookstore gets $4). That's one reason big chains have been able to undercut small bookstores -- they'll often cut their margin down to 30% or 35% and sell at a discount from the publisher's suggested price.

What I don't know is what percentage of a book's price represents the cost of physically producing the book. Because that's the only thing saved by switching from hardcopy to digital -- the other costs remain the same. (And some publishers are probably increasing some of their own internal costs for publishing digital books as they work to add interactive features.)