Thursday, May 21, 2009

E-Readers and Publishers

A New York Times article, titled Steal This Book (for $9.99), talks about the public push for publishers to lower the price of e-books.
For many readers, this may sound like sufficient reason. Buying music, after all, is so much cheaper now that there aren’t discs and plastic cases. Shouldn’t the same logic apply to books? …
Publishers are caught between authors who want to be paid high advances and consumers who believe they should pay less for a digital edition, largely because the publishers save on printing and shipping costs. But publishers argue that those costs, which generally run about 12.5 percent of the average hardcover retail list price, do not entirely disappear with e-books. What’s more, the costs of writing, editing and marketing remain the same.
Without going into how that “writing, editing and marketing” cost is falling more and more on the author to cover, what this article seemed to really be about is the publishers fear of Amazon.
For the moment, say some publishers, Amazon is effectively subsidizing the $9.99 price tag for new book titles in digital form by paying publishers the same $13 it pays them for a new hardcover title with a list price of $26. It’s a classic “loss leader” situation. Although Amazon won’t comment on the arrangement, the online bookseller is using low-price e-books as a lure to persuade consumers to pay $359 to buy a Kindle, or $489 for the new, larger Kindle DX.
But Amazon presumably won’t be willing to take those losses forever. And publishing executives say they fear that Amazon eventually will pressure them to accept lower payments for e-books.
Sure, there are other e-readers out there, but Amazon, for the moment, rules the roost.

Publishers are hoping that as more people begin to use e-readers, they may be buying books for less, but they’ll buy more of those books. And publishers hope to raise their bottom line through more sales. Let’s hope that scenario includes the authors’ bottom lines.
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  1. "Let’s hope that scenario includes the authors’ bottom lines."

    Amen to that. I don't make squat on the sales of ebook versions of my books right now. Talking about the "loss leader" business ploy, I see a kind of reverse of the "razor-razor blade" syndrome at work here with what Amazon is doing. In the razor-razor blade principle, you give the consumers the razor for free, then sell them the razor blades for life. Amazon is doing just the opposite - "giving away" the ebooks in order to sell them the pricey ebook reader. Interesting.

    The Old Silly from Free Spirit Blog

  2. Thanks Marvin. It helps to have an author give front line opinions.

  3. Thanks for the interesting and timely post, Helen.

  4. Thank you for stopping by, Alps. Love your avatar photo. So cute.

  5. I agree with Marvin, what's making it tough for authors of e-books is that all the emphasis is on purchasing the device and the content is practically given away. Publishers, authors, and Amazon need to attach more value to the content. Amazon should give the Kindle away--a free Kindle with every ten book purchases.

  6. Love Mark Troy's idea. You should spread it around.

  7. I completely agree with Mark - attach more value to the content! This is an interesting post, Helen.

  8. I've always appreciated a gift with purchase idea! And I agree about the content comment. The story is the real value no matter in what format you choose read it.


  9. Great idea, Mark. If they did that kind of deal, I would definitely buy the books and get a Kindle.

    Love this idea.

  10. If people only knew the cost of being a writer these days they'd be amazed.

    Morgan Mandel

  11. Very true, Morgan. Just the cost of trying to get published is high. Then, once you do get there, the costs still mount up.

  12. Wouldn't it be great if Amazon, publishers and Google kept authors best interests in mind when wheeling and dealing. Without us they wouldn't exist. Sigh.

    Jane Kennedy Sutton

  13. I have long been dismayed at the prices of e-books on Amazon. That is why I go directly to the smaller publishers and/or Fictonwise to purchase e-books. Not that I buy a lot of them, but now and then there is one that I am interested in.

    One of the advantages that was supposed to come with e-publishing was a lower price for books because they don't cost as much to produce as a printed book.

  14. I think it only makes sense that ebooks should cost less than physical books. Yes, "...those costs, which generally run about 12.5 percent of the average hardcover retail list price, do not entirely disappear with e-books." No, not entirely. But some of them do. There is no reason the publishers cannot reduce the costs of ebooks while at the same not cutting the payout to authors. Consumers recognize this and are therefore reluctant to pay what they consider unfairly high prices.

    And I had to scratch my head at this, "Buying music, after all, is so much cheaper now that there aren’t discs and plastic cases."

    Huh? Last time I checked songs at the iTunes stores cost from 69 cents to a buck twenty-nine. Multiply that out by the number of tracks on a CD and the cost is just about the same.

    The reason Apple can get away with this is that buying songs by title is so much more cost effective than buying a whole CD where you might only like two of the songs. So in the end the consumer pays two buck for two songs instead of $16 for, effectively, two songs.

    Not many people would want to buy their books that way.

  15. Amazon may rule the roost, but people love bargains and may well start looking elsewhere... and indie epubs are priced much lower.

    While mass market bestsellers will still have to be purchased where available, cost may lead ebook readers to seek out new favorite authors among the ranks of pubs who figured out competitive pricing long ago.


  16. I think we'll all in agreement. How often does that happen! Yay.

  17. E-readers, at least the big-boy readers, aren't available in Australia and the deals Amazon and co do are not valid here if I was to import one.

    The small ereaders we do have around, and there isn't many, are inferior to what we see Sony and Amazon marketing.

    In the end, I don't like reading PDF doco on monitor screens (and I do a lot of reviews), but I'm not about to pay out huge amounts on a device, and then pittance for books.

    The only way an independent with a quality ebook will trump the big-boys, is to take Mark's idea and run with it - like Microsoft did so many years ago - give it (DOS) away and then charge for the content (software applications).

    Seriously looking forward to Australia being included in the rest of the world...

  18. Hi, Helen!

    The way the e-book market is set up, does appear to devalue the previously high value of a well-written book. By selling them all for $9.99 (for example), they appear to be worth "a dime a dozen," when we all know that's not the case. (am I looking at it wrong?)

    I think that Amazon is sticking it to our faithful readers by charging an arm and a leg for those reading devices! They know they have a captive audience, and they're taking advantage of the situation. I don't think that we, as writers, should allow them to do it! We should demand that they lower the price to a reasonable rate or offer a deal, like Mark Troy suggested.

    Also, I'm all for e-books and everything, but I can't help it--I just prefer having a real book in my hand to read from. In addition to that, my eyes start bothering me if I read from a computer for too long.

    I haven't read from a Kindle. Is that any easier on the eyes?



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