For comparison,
Of note: $10 is between the average price of a paperback and hardcover.
(Edit: apparently I need to change this post more to edit it. I only wanted to add a forgotten line break.)
My thought on this is that delivering bits is much much cheaper than cutting down trees, milling them, turning that into paper, mining ore, turning that into ink, applying the ink to the paper, slaughtering cattle, turning that into glue, using the glue to bind the paper together, shipping it to a warehouse, shipping it to a store, paying people at every step of the wayâŚ
If itâs cheaper for the publisher, why shouldnât they pass the savings on to us? The âyou should pay more because itâs betterâ is the same bullshit the music industry tried to pull when they switched to CD. It doesnât matter that the quality is higher, the delivery costs are lower and I should be seeing those savings, especially if I had to pay up-front for a device to read them and am trying to recoup that upfront cost in cheaper per-unit costs.
This smells to me of protectionism for their other business model. âWe canât price them cheaper, they would cannibalize our dead tree sales!â This is incumbent thinking, and in a proper market would result in the incumbent being eaten by smaller upstarts not chained to the outdated business model.
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I really like having both for technical and academic books. The reading experience is much better with the paper text: no glare, bookmarks on your own terms, it doesnât monopolize my computer/other device, and other reasons. However, having a pdf is also really useful. It is easier to take my reference material to the coffee shop. Searching â indices almost always miss the thing that you want to find.
I really wish this was more common. Most of the paper+pdf combos I have are a result of knowing the author (or one of their students) and just asking them for it.
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The price you pay for something generally has no relationship to how much the inputs cost. The cost of the raw materials only sets a price floor.
It does if there is proper competition. You canât set arbitrary prices if there is a danger of being undercut. Of course copyright grants inherent monopolies, but there are millions of other books out there and for the most part people can choose alternatives if your price goes too high.
The publishers tried to collude to raise prices over $10, to $14 or $15. According to this data, had they succeeded they would have reduced ebook profits.
The data here supports the idea that the company doing the most to maximize ebook profits was â brace yourself â Amazon.
Think about it, Amazon tried to make $10 the standard price for an e-book, the price which this article suggests maximizes author profit. And ironically, many authors excoriated them, and sided with the publishers who wanted to damage their income.
As I wrote back in 2010, I suspect Amazon did the market research and discovered for themselves where the peak on the profit curve was and set their standard e-book price accordingly. Theyâre not dumb.
But the article also says for the UK: âThe most revenue was earned in the <= ÂŁ1 price range.â So why the difference?
More of the money goes to the author at the $10 price point.
I think youâre missing the point where $10 seemed to be where the supply and demand curves crossed for US customers. It crossed in a different spot for customers in the UK. American consumers being willing to pay more has nothing to do with a higher cost of paper or glue.
I think what you are saying about proper competition squeezing out profit is only true for commodities.
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Maybe English people are just cheapskates when it comes to books? Maybe there are lots of heavily discounted books in the big supermarket chains, leading to a perception that books should be cheap? I donât know, and I donât think itâs possible to come to any conclusion based simply on pricing data.
Nevertheless, Amazonâs pricing seems like itâs pretty appropriate for the US market.
Thatâs only true with a unique product or a noncompetitive market. Apple products? True. Commodities: False. Most products sold are priced by cost (material & labor) + competitive markup. In a real market, if you markup more than your competitors you lose business.
My guess is the $10 bubble is more a product of the fact thereâs far more product offered at that point due to price fixing than there being a consumer driven reason for it. And a major reason for that pricing is still the publishers being afraid of fully committing to ebooks and cannibalizing the paper book market. It doesnât take a marketing genius to figure their bottom line profits would be higher selling twice as many of a title for 60% of the former price.
Or maybe, the price point Amazon sets defines what people think an ebook is worth?
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I donât disagree with that at all. But it does beg the question: âwhat was
passing through Appleâs mind?â
Because the production cost is much smaller percentage of the price than you think it is, Particularly for hardcover/first run books.
A decent laser printer can print a double sided text page for 5c/p. Assuming one double sided A4 is roughly equivalent to 4 pages of a book (double sided and folded in half) that means I can print a 400 page book equivalent for $5 on my own. A big publisher can do it cheaper.
The cost of a $40 hardcover doesnât reflect the cost of printing it. It reflects the cost of a writer and editor and layout people and a whole bunch of other people spending a bunch of time creating a book. Those costs are exactly the same (or even higher for the layout people) for digital.
Thereâs something thatâs hard to measure yet has a huge impact on US ebook prices. One group of avid readers that jumped on the ebook bandwagon right at the beginning (remember when the original Kindle was $399? When Palm Pilots were used as readers?) were foreigners who lived in countries with high English book prices + low selection. As rules developed, these people have ended up spoofing US addresses to maintain their access. They are often willing to pay a high price because the equivalent paperbook is either not available or even more expensive where they live. That may be why $10 is so profitable. Itâs what Amazon capped a lot of their bestsellers and $10 is cheap when shopping from another country.
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