Craziest Part Of Apple's Price Fixing Ruling: Publishers Knew They Were Encouraging Piracy, Didn't Care
from the because-of-course dept
For many years, despite claims from legacy copyright industry extremists who sought to blame everyone else for any piracy issues, we’ve pointed out that the reality is almost always that piracy is their own fault for failing to provide convenient, reasonably priced alternatives to the public. When they actually do that, piracy rates almost always drop significantly. And now we have even more proof that these legacy industry insiders know this and don’t care.
You may remember that, two years ago, Apple was found guilty of price fixing for ebooks, in an effort to break Amazon’s hold on the market and to artificially inflate the price of ebooks, creating significant consumer harm. Apple agreed to settle with the government last year, but dependent on how its appeals process went. Well, the Second Circuit appeals court was… unimpressed with Apple’s appeal and has upheld the original ruling. The ruling (and the dissent) are interesting reads, but perhaps most interesting is the tidbit in which the big publishers admit that what they’re doing will increase piracy, but they don’t care because they so badly want to raise prices from Amazon’s established $9.99 per ebook.
The most significant attack that the publishers considered and then undertook, however, was to withhold new and bestselling books from Amazon until the hardcover version had spent several months in stores, a practice known as ?windowing.? Members of the Big Six both kept one another abreast of their plans to window, and actively pushed others toward the strategy. By December 2009, the Wall Street Journal and New York Times were reporting that four of the Big Six had announced plans to delay ebook releases until after the print release, and the two holdouts ? Penguin and Random House ? faced pressure from their peers.
Ultimately, however, the publishers viewed even this strategy to save their business model as self?destructive. Employees inside the publishing companies noted that windowing encouraged piracy, punished ebook consumers, and harmed long?term sales. One author wrote to Sargent in December 2009 that the ?old model has to change? and that it would be better to ?embrace e?books,” publish them at the same time as the hardcovers, ?and pray to God they both sell like crazy.? …. Sargent agreed, but expressed the hope that ebooks could eventually be sold for between $12.95 and $14.95. ?The question is,? he mused, ?how to get there??
In other words, the publishers were so focused on wanting to raise the price of ebooks, they were willing to embrace a solution that they knew both encouraged piracy and harmed long-term sales.
It really makes you wonder what kind of boards of directors these legacy publishers have, that they’d allow their companies to purposely shoot themselves in the foot, so they could raise prices and put in place windowing, even while recognizing all the harm it causes long term.
Filed Under: antitrust, ebooks, piracy, price fixing, windowing
Companies: apple
Comments on “Craziest Part Of Apple's Price Fixing Ruling: Publishers Knew They Were Encouraging Piracy, Didn't Care”
This can only happen when you have a monopoly on your ‘product’. Copyright.
That’s why a monopoly has to be heavily regulated with prices being either fixed or equal for all resellers. Something like a ‘pool of copyrights’ could exist too where everyone can use what’s inside by paying defined fees and the ones contributing to it would get money based on defined formulas.
Of course, given how any IP system has been corrupted and defaced in favor of a few I’d argue that IP needs to be abolished for good to avoid such abuses. But alas if such system is needed at least make it sane and fair.
Sorry, Ninja, but this actually has nothing to do with copyright, but you are right in one regard: this can only happen when you have a monopoly.
By colluding with other publishers, this set the definition of monopoly, or rather, oligopoly, to force price points.
Apple set the ball rolling, but unfortunately, the Big 6 pretty much got away with their actions.
The group will try again. It’s inevitable. Of all the entertainment industries, the publishers seem to be the last of the holdouts. Even the movie industry is starting to make some progress, especially after Sony’s “oopsies” releasse of the Interview, and how much money was made, legitimately, online.
It wasn’t record-breaking, but it sure as hell wasn’t $0. It makes me wonder how well Jurassic World would have done if Universal released it online at the same time, even if said ticket price was the average $8/person.
One of these days, rather than fining these companies, Big Brother will slap the shit out of them, forcing them to break apart, and scrutinize their day-to-day activities to ensure it won’t happen again.
Sadly, Apple gets slapped with a fine that it’s still laughing at because it’ll only take a few weeks to make up the loss of it.
Pathetic.
Re: Re:
Nothing to do with copyright? What would happen if more publishers could offer the same thing?
Re: Re: Re:
Let’s get one thing out of the way: anyone who signs with a publisher no longer has distribution rights. They’re given up in exchange for the first check, often inflated to ensure poor decision making on the artist’s part (when actually, it’s a damn loan).
That is why you don’t see JK Rowling books by every publisher.
That, in itself, starts the monopoly chain.
Artists still retain the copyright of the book itself, but since publishers also have a strong hand in distribution, that’s what makes “best sellers”: getting the book out there.
This lawsuit stems from this. Because publishers were intentionally preventing distribution of ebooks, it harmed not only them, but the very authors who have no control to dictate distribution, as they no longer have those rights.
That’s why you rarely see artists suing fans, but rather, distributors, because they own that copyright under distribution.
There’s a reason for the entire section of copyright law solely dedication to the distribution of works.
The US is one of a few countries which allows for this. Most other countries make it 100% illegal to transfer any copyright, though these restrictions (such as in Japan) are under attack.
In short: copyright sucks for everyone, except the distributors.
Re: Re: Re: Re:
That, in itself, starts the monopoly chain.
Without copyright, there would be no monopoly – after the book was published, anyone else would be free to publish it as well and sell it for whatever price they wanted.
Why has everyone forgotten that they don’t set the price? Customers do. It’s doesn’t matter what you want to sell it for it matters what the customer wants to buy it for.
Re: Re:
Except because of a lack of price flexability and competition in the market, the publishers were capable of retaining a non-optimal price point above the stablization price for the books. This cost them sales, and overall probably cost them money, but likely lead to more sales then the price point would normally sustain. Because with many books, you have no other option. If your favorite author’s publisher is only publishing through Apple at the heavy markup, you only have one option to get that ebook. They hurt their sales, but not enough that it kills their business, and now the books are selling for “what they are worth”.
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Not quite true; you can always buy the hardcover/paperback and scan the book in yourself. Trade off convenience for price.
This is, of course how pirated copies get started as well — it only takes one person to scan a book and a couple of people to proofread the scan, and you’ve got an eBook that’s at least as good as anything the publisher could supply — likely better, as it doesn’t come with DRM.
Re: Re:
Dollar figures are arbitrary. If people think a book should cost $15, that’s what they’ll pay. If they think it should cost $10, or $5, or $2, they’ll never pay much more than that. There is no real dollar figure that book should cost – just what is perceived as the norm. The publishers were illegally colluding to raise the norm from what Amazon thought the norm should be.
Re: Re: Net-Dollar valuation
For decades it has been my practice to buy at paperback-publication, read the book, and then donate it to charity for a tax write-off. In my state, then, the net cost of a paperback is under $6.00. E-Books priced more than that are over-priced, in my opinion — and someone actually paying attention would observe that contrary practices are costing the publishers my business:
For only a very few authors (count them on the fingers without using thumbs:-) will I pay more than $6.00.
Re: Re: Re: Net-Dollar valuation
Well my practice is to get books from the library, so the average price of a book to me is $0.
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Amazon is the one who really should be sued. They’re undercutting the prices, selling at a loss and putting other ebook and B&M stores out of businesses to corner the market for ebooks!!! Amazon has done far more harm.
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However, when that price is set by the publishers higher than the consumer is willing to pay, the effective price becomes $0, because many will download it for nothing rather than pay what the publishers have selected. Unfortunately, the publishers haven’t figured that out yet. They’d rather charge more and make less money for some reason.
Meanwhile...
College textbooks are selling for half the price or cheaper in non-western countries. Typically in places where they’re being printed.
It comes as no surprise that they want to jack up the prices on ebooks…but, of course, they’ll blame the public when others start pirating for being far beyond a complete rip off.
Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one.
Those bastards. Not even end of year models at convenient price.
Logical corollary to piratey assertion that “piracy is their own fault for failing to provide…”
No, Pirate Masnick, no one is in any degree justified in stealing if don’t like the price. The ONLY morally acceptable signal is foregoing the product. I’ve been NOT consuming Coca-Cola for more than 20 years now because over 89 cents is too much for sugar water. Actually 89 cents is too much, but I drew the line there.
Advocating piracy is the payload of this piece, not the internal arguing over stragety.
So, glad to see you back to advocating piracy! Better than the dull dreck of late.
Re: Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one.
“Ford Motors fails to provide me with Crown Vic for $1…”
Actually they won’t provide you one at all. Your completely illogical “corollary” is as out of date as your arguments.
Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
Logical corollary to piratey assertion that “piracy is their own fault for failing to provide…”
No, Pirate Masnick, no one is in any degree justified in stealing if don’t like the price. The ONLY morally acceptable signal is foregoing the product. I’ve been NOT consuming Coca-Cola for more than 20 years now because over 89 cents is too much for sugar water. Actually 89 cents is too much, but I drew the line there.
Advocating piracy is the payload of this piece, not the internal arguing over stragety. They may be wrong, but that’s their problem! YOU advocating piracy is another problem!
So, glad to see you back to advocating piracy! Better than the dull dreck of late.
Re: Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
That isn’t what was said. What was said is that the publishers knew that the higher price point would lead to piracy, and rather then choose a more affordable price point the publishers chose to encourage piracy. No where did he say that piracy was ok, nor did he suggest anyone go out and pirate ebooks.
Re: Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
In traditional manufacturing, the marginal cost of production tends to increase as production increases.
In digital “manufacturing,” the marginal cost is essentially zero.
http://www.investopedia.com/terms/m/marginalcostofproduction.asp
Quite simply, the analogy between digital goods and physical goods (it doesn’t have to be cars, but that’s a popular trope; “you wouldn’t download a car”) is fundamentally flawed. The economics are flipped, but some people are so entrenched in the models of the past that they simply can’t imagine how the future could work.
Re: Re: Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
“In digital “manufacturing,” the marginal cost is essentially zero.”
It really is time that one was put to bed. Even if you put aside the cost of making something this equation always puts the cost of bandwidth at zero too, and we know that isn’t true.
Re: Re: Re: Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
Even if you put aside the cost of making something this equation always puts the cost of bandwidth at zero too, and we know that isn’t true.
In the US, the marginal cost of bandwidth is generally zero.
Re: Re: Re:2 Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
The US is not the world.
Re: Re: Re:3 Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
The US is not the world.
True, but this is a US site, and the blanket claim that “bandwidth doesn’t cost zero” is not correct.
Re: Re: Re: Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
You don’t understand “marginal cost.”
That’s the cost to produce ONE additional unit. For books or songs, that’s a few megabytes at most. Even if it’s not absolutely zero, it’s so small as to be essentially zero.
Plus, from the publishers end, it IS absolutely zero. They only have to send the original copy to Apple or Amazon or B&N or whoever. The cost of “producing” a new copy is borne entirely by the retailer.
Re: Re: Re:2 Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
And you’re ignoring the fixed cost. Which in this case would include advances to the author, and operating costs of the publisher and the sellers.
Which is not even close to zero, and given that books sell a finite amount, that is often quite small the fixed cost per book could run into the dollars.
Re: Re: Re:3 Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
And you’re ignoring the fixed cost.
I’ve lost track of what you’re disagreeing with…
Re: Re: Re:3 Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
“And you’re ignoring the fixed cost”
Are you actually not understanding the discussion, or are you just being wilfully ignorant?
There are 2 types of cost, both of which are considered whether the product is digital or physical. One is fixed cost (cost of producing the master copy, costs of lawyers and contracts and the like, and other overheads such as staff, power, etc.), the other marginal (cost of producing additional copies, cost of transporting & storing those copies, cost of dealing with unsold copies). You’ll notice that the latter examples either do not apply to digital goods at all, or are vastly lower (however you want to cut it, bandwidth for a 10Mb file is a far lower cost than shipping a hardback).
People are not saying the product should be SOLD for nothing, they are saying that the marginal cost of producing additional copies is virtually nothing. That is, whether you produce 1 copy or a million, there’s no significant raise in the marginal cost of a digital product. However, those costs are very significant when pricing a physical product. Since these costs are no longer a major part of the equation, they do not need to be factored into the retail price. Of course, you still factor in the fixed costs you have, and even give yourself a reasonable profit margin, but you don’t try to sell the copy with far lower overheads for the same as the one with high overheads.
Therefore, when the price of a product is ((fraction of fixed costs) + (marginal cost for that copy) + (profit margin)), the acceptable cost of that product is lower for the digital copy than the physical because a significant part of that equation is now virtually zero. On top of that, even when there are costs, they are now mostly covered by the retailer rather than the publisher. Do you get that?
Here’s the other thing you seem to not be getting. Let’s say you priced your hardcover at $15 and you expect to get $5 back from that after $5 marginal production costs and $5 retailer costs (not real figures, just an example for simple illustration). What you seem to be saying is that you need to keep the digital copy of that book at $15 to make back the initial costs. That’s not true – from the figures above you can charge just $10 and get the same return on your initial costs as you would have done with a $15 hardback. people aren’t saying that you shouldn’t be getting back your initial costs, they’re saying that trying to double your cut by not passing savings on to customers is not the right thing to do. Customer notice these things, which is why they don’t buy vastly overpriced eBooks as often as they buy more reasonably priced ones – and they don’t care how much you spent to make the first copy.
Re: Re: Re:4 Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
PaulT: the fixed costs of producing an ebook are huge. Almost all of them are exactly what they would be for a print book.
A content edit costs about $1200 to $2000 per manuscript.
A line edit costs about $12 to $16 per thousand words (and a book tends to run upwards of 80,000 words).
A copyedit tends to run $9 to $12 per thousand words
A decent cover image tends to go from $1500 to $5,000
And the list rolls on.
Yes, some of those things can be had, in a substandard way, for much less. But if you have a book that might sell 10,000 copies in a half baked version with $5,000 in fixed costs, and might sell 40,000 copies if you invest $15,000 in it, then you run the numbers and make your choices.
It’s a business. It’s run by hundreds of VERY smart people who love books, and who are not the luddites or dinosaurs that people here seem to see.
If you think they’re doing something incredibly stupid, then the chances are that you’re missing information.
Don’t be so contemptuous.
Re: Re: Re:5 Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
“Almost all of them are exactly what they would be for a print book.”
…which would be the fixed costs, which I don’t dent exist. What I do deny is that the huge savings made on the marginal costs are passed on to the consumer in any way. In fact, half the eBooks I look at are MORE expensive than physical copies, yet I don’t ever hear a reason why this should be so.
Thanks for supplying some figures, but you’re still not addressing what I said.
“Don’t be so contemptuous.”
You, too. You’ve ignored my central points and attacked me for not considering costs I actually agreed are still there. Since you’re apparently so familiar with publishing, reading the arguments in front of you shouldn’t be so hard, surely?
Re: Re: Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
AC: the marginal cost may be zero, but you can’t go to infinite volume.
Somewhere, somehow, the producer has to cover the fixed costs of production as well as the variable ones.
Books are low priced, low margin items, with very high fixed costs of production.
You need content editors, line editing, copyediting, cover design, file conversion for an ebook, and after the conversion, each ebook format has to be proofread. Soon, with greater sophistication in e-reading software, we’ll need text layout again, too.
Each of those things must be done by a human, who has to spend many hours on the book-to-be.
A solid book might sell 5,000 or 10,000 copies.
Publishers also get only a fraction of the sale price, and pay a hefty chunk of that to the author.
Somewhere, somehow, if you want books to continue to be high quality, you need to be willing to cover the costs.
Re: Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
In your example, said car would cost virtually zero and I could download and reproduce infinitely at home. So $1 is too much for something that can be copied at home for no cost. And I would download said car unless Ford offered me a service where I’d pay a premium to bypass the download step and have a different copy of a different car every week at my disposal, tank filled.
That would be a more accurate example.
Re: Re: Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
“In your example, said car would cost virtually zero “
LOL Someone needs to go back to school and learn the definition of cost.
Ah, you can only get this kind of comedy on Techdirt, folks!
Re: Re: Re: Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
Well then let’s talk about the costs of copying an electronic file, shall we? But since you brought entirely unrelated examples I took the liberty of using a poetic license to adjust the car to what the article is about.
Re: Re: Re:2 Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
“Well then let’s talk about the costs of copying an electronic file”
Why exactly would I want to discuss a small part of the cost of something?
Re: Re: Re:3 Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
Thanks for proving your idiocy yet again.
clicks report
Re: Re: Re:4 Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
LOL
Intellectually smoked for the thousandth time. Must censor!
Re: Re: Re:5 Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
You guys are definitely smoking something.
Re: Re: Re:5 Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
Smoked how? He offered to discuss costs, you refused. What point were you trying to make aside from the usual canned insults?
Re: Re: Re:5 Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
Yeah, right. Try again, genius.
Re: Re: Re:3 Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
Which provides the most income 25 sales at 25$ each, or 20,000 sales at 1$ each, and remember the price per copy of an ebook is essentially zero.
Re: Re: Re:4 Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
What makes you think that any book that only sells 25 copies at $25 (a very uncommon price for a consumer ebook) has any chance of selling 20,000 copies at any price, including free?
Re: Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
They haven’t even made Crown Victorias since 2011. Just how long have you been waiting to use this specific example?
Re: Ford Motors fails to provide me with Crown Vic for $1, therefore I'm justified in stealing one. Those bastards. Not even end of year models at convenient price.
You can STFU any time now.
It’s the same mindset that says the books are “worth” what they are priced at.
“Supply” is only half the equation, guys!
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Once an electronic product has been released for sale, Supply is infinite there. Instead you should call it by its true name artificial scarcity.
This is all 100% demand driven now, and they know is so they want to make sure that demand will conform to their wishes.
This is one of the reasons I like Brandon Sanderson so much: he pushes for every new book he writes to have ebook and audiobook versions available on day 1. This is significant to me, not so much for the technical aspect, but because a close friend of mine is blind and that’s the only way she can enjoy books.
Do publishers lump libraries and friends sharing books as piracy?
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shhh! Libraries don’t exist.
Re:
Pretty much. In the past, there have been concerted efforts to have libraries pay every time someone checks out a book.
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Friends sharing physical books are not committing piracy. But when a friend shares an ebook, another copy is created. That is an infringement. It’s a copyright.
Libraries are different. They’re very careful to see that the new copy is deleted after a certain time, and that they have no more copies on loan at any one time than the total they own.
On the other hand, it may well be an infringement for libraries to create an electronic copy of a book that they own in print. That is a subject of much legal wrangling, and different courts have taken different perspectives at different times.
"The publishers knew they were inducing copyright infringement."
Didn’t Big Content buy a law that makes inducing copyright infringement a crime? Why haven’t the publishers been indicted?
‘we have even more proof that these legacy industry insiders know this and don’t care’
that’s not true. they do care because if they were to do what customers have been crying out for for years and the industries (and the courts because they are as bad for backing the industries every time), ignore purposefully so as to be able to continue getting new laws introduced, getting court rulings in their favour, people bankrupted and imprisoned. they would rather do these things, on the way to getting complete control, than serve the people they totally rely on!
Oh, man! Now I don’t have any excuse for pirating ebooks from manybooks.net P)
I’ll just repeat what I’ve said previously in these discussions:
“Sargent agreed, but expressed the hope that ebooks could eventually be sold for between $12.95 and $14.95. “The question is,” he mused, “how to get there?””
By including a free print copy. Otherwise, eBooks are, by their very nature, far less intrinsically valuable than a physical object. But, that shouldn’t be a problem since you’ll be saving massive amounts of money from not needing to print, transport and deal with wastage from said physical products. Whichever way you try to spin it, an eBook saves you money.
Oh, you don’t want to pass those savings on to customers, and you think you should be able to just charge whatever the hell you want? I won’t buy your overpriced product then, congrats.
It’s amazing. Thankfully, not every publisher is a self-destructive idiot, and I can get plenty of reasonably-priced literature from less greedy folk. if every eBook was that price, i wouldn’t buy eBooks. Ever. I’d most likely return to perfectly legal *free* services such as secondhand and libraries, where your cut would be $0.
In fact, maybe that’s why this industry doesn’t care so much about “piracy”. They have decades of experience of making lots of money even though people can already get their products for free quite legally.
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I’d most likely return to perfectly legal free services such as secondhand and libraries, where your cut would be $0.
I have. I either purchase print books from charity shops or get ebooks from the site I mentioned above, which is a mirror of Project Gutenberg.
The "sweet" price
Actually, books in electronic form are way too expensive.
Because they somehow took the paper version as a price-model, which works completely different.
With E-books, there’s a (rather low) price where you can sell such a lot that your profits will be much higher than if you sold at the much higher price near the paper version. I’d guess this “sweet” price where you can make the most profit would be around $1-$4; depending a bit on the book. But it won’t be even NEAR $10, let alone $12 or $15, except for the most popular and anticipated new books.
I’ve written about this:
On Ebooks and pricing
Re: The "sweet" price
The stats are two years old, so they might have shifted some, but according so Smashwords, the ‘ideal’ price-point for an ebook is in the $3-3.99 range, which sells at a rate of 4.3x compared to a $10 ebook.
Re: Re: The "sweet" price
The sweet spot is partly a function of demand elasticity. Not all ebooks are created equal in this regard.
For example: the increase in sales for every dollar in reduced price is greater for a novel by an unknown author will be far, far greater than the increase in sales for every dollar the price is reduced for the book that just won the Booker Prize or a National Book Award, or the long-awaited sequel to a book that spent many months on the NYT list.
Those are extremes, but they’re illustrative.
There is no one sweet spot for all ebooks. There is no one strategy that works for all ebooks.
Re: The "sweet" price
Seegras: Pricing requires consideration of both what readers will pay, and what costs publishers must cover.
Obviously, if the only thing you have to do is push a button to convert a manuscript into an ebook, then yes, the price should be not much more than what publishers give authors.
But publishers do a lot more than that to a manuscript before it becomes a book, even an ebook. Most of the costs of any book are not in paper, printing and binding. That’s about 10% of the list price.
They’re also not in warehousing, shipping, and other similar expenses of handling a physical object. That’s about 15% of the list price.
75% of the costs of making a book are in other things, and about 65 to 70% don’t go away.
That would be why publishers would like to see ebooks priced at about 60% of the price of the print version out at the same time. (The 5 to 10% reduction is in order to try to improve volume and reduce piracy, and it’s about all that publishers can afford to do.)
Re: Re: The "sweet" price
That would be why publishers would like to see ebooks priced at about 60% of the price of the print version out at the same time.
It sounds like they would like them to be priced around 100% of print books, but haven’t figured out how to make that happen.
Re: Re: Re: The "sweet" price
Nasch: I think publishers are torn.
The factors in favor of higher prices:
— It does no publisher, author, or reader any good for Amazon to become a monopsony, as has already almost happened. If publishers make ebooks too inexpensive, they are in danger of killing off the competition for Amazon.
— If readers become accustomed to expecting prices that can be done if print editions carry most of the cost of preparing that edition, then when/if print dies, everyone in publishing and writing will have a hard time covering costs.
Factors favoring lower prices:
— Dropping the prices increases the sales volume to some extent, and for most books, the elasticity makes total revenues increase.
— Dropping prices makes piracy less attractive.
In the end, it’s a balancing act.
Re: Re: Re:2 The "sweet" price
“– It does no publisher, author, or reader any good for Amazon to become a monopsony, as has already almost happened. If publishers make ebooks too inexpensive, they are in danger of killing off the competition for Amazon. “
Rubbish. Amazon’s dominance has come largely because the publishing industry have been intent on making the same mistakes as the music industry and not learning from their mistakes.
The great example here is DRM. The music industry demanded DRM on recordings, and the result was that the market leader at the time could block their customers from using both competing stores and competing devices. It wasn’t until they dropped the requirement for DRM that customers had a real choice, and other services entered the market to challenge Apple’s dominance. But, that dominance didn’t just come because they had a better store or better device – it was because iPod owners couldn’t use any other store due to DRM, while customers of other stores bought less because of major compatibility problems.
So, it’s happened here. Kindle owners can’t use other stores as easily as they can Amazon, and while more devices can use Amazon than could use iTunes (though the various apps on offer), it’s far more difficult for others to cross-pollinate in the same way.
Removing DRM means that people can use whichever store they favour to buy whichever book they favour to read on whichever device they favour. I don’t see how that can reduce readership. Yeah, yeah, piracy, but that’s happening with the DRM.
“– If readers become accustomed to expecting prices that can be done if print editions carry most of the cost of preparing that edition, then when/if print dies, everyone in publishing and writing will have a hard time covering costs. “
I already buy far less new release eBooks than I did paperback, because the prices are much higher for a new release paperback equivalent (no supermarkets using them as loss leaders) and they’re a less valuable product (I can’t trade in at a second hand store when I’ve finished). I’m just asking for a price that can be done by a physical product with much higher marginal costs to get the product in my hand. I don’t think that’s too much to ask, but publishers insist on trying to make me pay more for less… so I don’t pay at all in many cases.
Re: Re: The "sweet" price
“75% of the costs of making a book are in other things, and about 65 to 70% don’t go away.”
Such as? Nobody ever seems to give examples of these costs, nor how they differ from physical copies. Nor citations for figures.
Publishers Knew They Were Encouraging Piracy, Didn't Care
I have a favorite author who has a book coming out in September, part of a long series.
I have already grabbed it off a torrent site and read it because I do not want to wait until SEPTEMBER.
Not the first time this has happened, either. The last ‘Robert Galbraith’ book was available online way before the publication date.
I spend a lot of money on ebooks and would pay for these but it pisses me off that the publishers insist on acting in a reasonable, forward thinking manner, that they continue to pretend the future has not happened.
Re: Publishers Knew They Were Encouraging Piracy, Didn't Care
Publishers are constrained by things you don’t know about, such as agreements with the important reviewers, like the PW, Library Journal and Kirkus, to see that the reviewers have the book a certain length of time before any format is released to the public.
Review journals need a couple of months to get the book, decide to review it, assign it to the reviewer, have them read it, and write the review, then to get the reviews into print and distributed.
Then their customers (librarians and bookstores) need a certain amount of time to read the reviews and decide which books to stock, and to get their orders in before the pub date, so that the books are available everywhere on the day of release.
So, no, they’re not being stupid and stubborn and ignoring the brave new world.
They’re dealing with something important, but invisible to you.