Re: "The Elusive E-book"

I can't help thinking the furor over free ebooks is a tempest in a
teacup. Right now, most people don't care about ebooks at any price.
If free ebooks as promotion get more people interested in the format
for its own sake, that should be all to the good. I think people will
understand the need to pay when the time comes that ebooks are a more
dominant format. I read free ebooks but that doesn't keep me from
buying them too.

On 5/10/08, joseph harris <[email protected]> wrote:
> From: "Kent S. Larsen II"
>> At 8:17 PM +0000 5/8/08, you wrote:
> .........
>>>I don't know the exact figure of how much it cost to get a
>>>paper book
>>>physically produced and into the hands of a customer, but if
>>>the above is
>>>20% of the final cost of the book, then e-books should always
>>>be 20% less
>>>than a paper book with all other things being equal.
>>>
>>>Aaron J. WalkerPublisher
>>>http://www.walkbroadpublishing.com
>>
>> In the long run, prices are set by economics.
>>
>> They are a compromise between what the supplier is willing to
>> sell the item
>> for and what the public is willing to pay for the item.
>>
>> While publishers and many others in business often use markups
>> to estimate
>> proper prices, over the long run, the market tends to force
>> them to a price
>> that fits the above compromise.
>>
>> The supplier's cost is only relevant to the extent that it
>> influences at
>> what price the supplier is willing to sell its goods. If the
>> price is lower
>> than its costs plus some profit margin, the supplier isn't
>> likely to supply
>> anything.
>>
>> So, while we often talk about how ebooks have an effective
>> marginal cost of
>> almost zero, that doesn't necessarily have anything to do with
>> the price of
>> the ebook.
>>
>>
>>
>>
>> Having said that, you should know that the cost of producing a
>> book can
>> vary widely, from less than a dollar a copy for relatively
>> short mass
>> market paperbacks printed in large quantities, to more than $10
>> a copy for
>> hardcover textbooks. The above costs do not include author
>> royalties, nor
>> the publisher's costs for marketing the book.
>>
>> To cover those costs, the publisher usually makes sure that the
>> list price
>> is at least 5 times the production cost. Trade book publishers
>> give 50% to
>> 55% of the cover price to wholesalers and retailers, who make
>> sure that the
>> book is available to the public.
>>
>>
>> In the case of ebooks, the above doesn't exactly apply.
>> Retailers ask for a
>> variety of discounts/markups, so it is very hard to say what
>> the
>> relationship of list prices to production costs and other
>> book-related
>> costs should be.
>>
>>
>> Bottom line, I don't think you can say that ebooks should
>> always be 20%
>> cheaper. It is also not possible to say what the price should
>> be.
>>
>> The market for ebooks is still thin enough that it is very hard
>> to say what
>> the price for any ebook should be.
>>
>> Kent
>>
>
> That's a good summing up Kent.   And there is one other enormous
> fly in this ointment.
>
> That is the value of the content.   Even in novels there are
> great demand differences related to author, genre, and time of
> year and public mood.   Sales volumes are going to be affected by
> publicity and attractiveness.   Among publishers there has been a
> mindset which tries to classify and price books by the 'market'
> they are in.   I don't think that will apply so easily to ebooks.
>
> There are a number of balancing acts to be sorted out;  among
> them is the question of whether your best model is to sell at a
> high price to a few, or at a lower price to a mass - and whether
> either or both markets are open to the individual book .
>
> Joseph
>
>
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