Slog Comments
DOJ's E-book Pricing Lawsuit: What's at Stake?
1
"because $14.99 and $15.99 e-books are the only way they can sustain the business model that they've lived under for the last century"
This is utter, unsubstantiated, industry bullshit.
How lazy are you?
This is utter, unsubstantiated, industry bullshit.
How lazy are you?
2
Can someone explain to me how a paperback can be sold, theoretically, profitably at $7.99, but eBooks need to sell at $9.99? You know, the cost of distributing and 'printing' eBooks is clearly extremely expensive..
I'll buy eBooks when they're half the price of printed versions. Until then, I'd rather have paper.
I'll buy eBooks when they're half the price of printed versions. Until then, I'd rather have paper.
3
Speaking as someone who buys a lot of used and remaindered books (though with some twinges of conscience at the writers I'm not helping), I'm intrigued at the lack of discounting for older copyrighted works in e-books. There are books published dozens of years ago, widely available as used paper copies for a couple of bucks, but the ebook is still ten or fifteen dollars.
4
It will be a big deal for Apple if they are found guilty of conspiracy to fix prices. We have all known for years that the Apple business model depends on price fixing (iTunes, iPhone, iPad, Macs and software). They have been able to get away with it with impunity because Jobs was special and entitled to deference that no other business executive could command. If the verdict in this trial goes against Apple, not only will they be exposed to a variety of potential penalties. their sleazy business practices will be widely exposed and become open to legal attack by competitors and regulators.
5
These guys.
Goldy gets all "Attica! Attica!" standing up against Costo, with no thought at all for his daily blowjobs to Big Beer.
And here, Paul Constant. Mr. Populist when it comes to Amazon or Apple. Corporate Tool repackaging press releases and PR-tested talking points when it comes to Big Publishing.
Where do you find a fucker who thinks like that? It's got to be some rare form of brain damage.
Goldy gets all "Attica! Attica!" standing up against Costo, with no thought at all for his daily blowjobs to Big Beer.
And here, Paul Constant. Mr. Populist when it comes to Amazon or Apple. Corporate Tool repackaging press releases and PR-tested talking points when it comes to Big Publishing.
Where do you find a fucker who thinks like that? It's got to be some rare form of brain damage.
6
I also do not understand why the publishing industry can survive by selling me a paperback at $7.99 but will tank if they sell me an E-book at $9.99 instead of $14.99 or $15.99. The only way it would make sense is if it cost them more money to make a digital copy and sell it than to make a physical book and sell it, and I don't see how that is possible.
So! Who is going to explain it to me?
So! Who is going to explain it to me?
7
What do we need these massive publishers for now that we can easily distribute books without their help?
9
@6 - My understanding of their position is that $9.99 eBooks cut into hardcover sales. Which I can understand. But I don't understand how they can't be making that up on the bazillion other $9.99 titles that have been in paperback for years. Additionally, it is my understanding, which may be mistaken, that a major cost to publishing is forecasting print runs. As in, if you print 10k copies and sell 5k copies, that's a bad thing. However, with eBooks you never pay for printing more than you sell, so why can't books that are no longer first run be $4.99 (or less) in eBooks?
10
I have to say, I didn't get the impression Paul was stating it was ok to inflate book prices to keep an outdated business model going, merely reporting on the fact that this business model can only survive now with illegally inflated prices.
I can't shed tears over an industry that has been inflating prices and illegally colluding to fix them for years gets a smackdown from the good old DOJ. I still hurt from paying over a hundred bucks each for fucking textbooks in college. Someone needs to bust up those thieves.
I can't shed tears over an industry that has been inflating prices and illegally colluding to fix them for years gets a smackdown from the good old DOJ. I still hurt from paying over a hundred bucks each for fucking textbooks in college. Someone needs to bust up those thieves.
11
I work in publishing and I agree with Paul's statement that higher eBook prices are likely the only way to sustain the existing model. Publishing has VERY high overhead. There are offices and editors and all kinds of people who earn salaries that don't change based on how many books are sold. The variable costs of the three Ps (printing, paper, and postage) are obviously an issue, but they amount to only a few bucks a book. So that's why the costs to publishers of printed books vs. ebooks is not all that different. Also, popular best-selling titles subsidize a lot of titles that do not sell well. Most titles on a trade publisher's yearly listing are money losers. It's the rare hit, such as Harry Potter, and the classic books, such as Catcher in the Rye, that are profitable. These books pay for the development of other books that may or may not ever be profitable. So the trick is to sell enough books to cover your overhead, and then every single book you sell over that is almost pure profit. The airlines have a similar cost structure. They need to sell 80 percent of their seats (or something like that) to break even. If they sell 79 percent, they lose money. If they sell 81 percent, they make money. If they sell 90 percent, they make a lot of money. Obviously this is a simplified way of looking at it because airlines change the price of tickets as well based on demand. In any event, I agree that with the current model publishers need to get about $10-$15 of revenue per title. If it goes below that, which is what publishers feared would eventually happen when Amazon was selling ebooks at below cost, then a different model will need to come into being, and the existing publishers will probably go out of business, and other different firms would publish books, or writers could publish directly to readers and a yelplike rating system might start driving success. Sort of like you see in Youtube. That world might be very good for consumers, but it would be very bad for existing publishers and bookstores.
More...
12
@10 My comment was about the economics of trade publishing. Higher Ed publishing is a whole other ballgame, and those guys made some major pricing mistakes. I think it's generally acknowledged that higher ed publishers wound up losing sales by pricing books so high, because 2 or 3 students would split the cost of one book instead of all buying their own. Basically, they had a monopoly pricing situation (which is always good from the firm's viewpoint), and they blew it by pricing above the optimal price, which cost them more in the end. Dumbasses.
13
Example #9315 of an industry trying to block the next evolution of their industry instead of adapting to it.
"then a different model will need to come into being, and the existing publishers will probably go out of business, and other different firms would publish books"
So why can't the former evolve into the latter?
"then a different model will need to come into being, and the existing publishers will probably go out of business, and other different firms would publish books"
So why can't the former evolve into the latter?
14
@13 That's a great question. The sad answer is that most firms have enough invested in the status quo that it's too difficult to reinvent the company. Unions are a typical example. Union rules make it very hard for a company to adapt to changing times, and a great example is the meat packer unions that put existing meat companies out of business back when they used to ship carcasses by train to butchers. They got outcompeted by new companies that sliced up the cattle and shipped it with new trucks in flat boxes. The old companies wanted to change their model, but couldn't do it fast enough, and they are now gone. But it goes way beyond just unions. Encyclopedia Britannica had a whole workforce of sales reps who got paid commissions. Back when I was a freelance writer, I took a lot of trips to the library to do research in EB. I decided that it made sense for me to buy EB on disk, which had just been released. The disk costs $1000, and yet I was prepared to buy it. The full set of books costs $2000. So I looked for a 1-800 number to call to drop $1000 on a disk, and I was told that I couldn't buy it that way. Instead I had to make an appointment with a salesman to come to my apartment. The last thing I wanted to deal with was an encyclopedia salesman, so I said screw it. A year later, EB was offering $9/month online subscriptions. A year after that, EB was free online. Then came wikipedia.
15
@11 - sorry I don't buy it. "Publishers need to get $10-15 of revenue per title" (I'm assuming you mean per book). That might be true for first run hardcovers. However, I'm talking about paperbacks. If you sell a paperback at $8.99 where each paperback costs you $3 in distribution (printing, shipping..etc.), let's say you pay $1 to the author, (probably high) and $2 to the seller (possibly low), you net $3 and that's assuming you sell your entire run of books. The likelihood is that you didn't forecast exactly and you print extra, bringing your printing costs up. So, really you net $2.
So, let's say you have an eBook - priced at $5, your publishing costs are 0. You pay $1 to the author (more likely $.50), you pay $1.50 to Amazon/Apple/Google/BN, you net $2.50, which A) is more than you did with the paperback and B) you probably sell more because the eBook market doesn't necessarily cannibalize your paperback sales.
You want to charge $15-20-whatever for first run hardcover eBook editions, fine - pioneers get scalped. If I'm really really excited about an author, I'll be happy to pay the extra so that I can have it a year early. But when a book is out in paperback and a digital copy A) has no residual value and will never become a collector's item and B) has great restrictions on who I can loan it to, and C) could, in theory, be deleted, or changed by your seller (Amazon), there's no way I can see any justification for charging MORE for an eBook than a paperback.
So, let's say you have an eBook - priced at $5, your publishing costs are 0. You pay $1 to the author (more likely $.50), you pay $1.50 to Amazon/Apple/Google/BN, you net $2.50, which A) is more than you did with the paperback and B) you probably sell more because the eBook market doesn't necessarily cannibalize your paperback sales.
You want to charge $15-20-whatever for first run hardcover eBook editions, fine - pioneers get scalped. If I'm really really excited about an author, I'll be happy to pay the extra so that I can have it a year early. But when a book is out in paperback and a digital copy A) has no residual value and will never become a collector's item and B) has great restrictions on who I can loan it to, and C) could, in theory, be deleted, or changed by your seller (Amazon), there's no way I can see any justification for charging MORE for an eBook than a paperback.
16
What many people don't seem to understand is that bestsellers -- i.e. the majority of e-books that you see people reading -- are usually recent releases. That means hardcover. So normally the publisher would get a big chunk of money from the hardcover sales. Even after a year when the bestseller comes out in paperback, it's usually not a small "mass market" format; it's a larger $16 paperback. Some genres like mystery or sci-fi / fantasy will come out 1 1/2 to 2 years later in mass market form for $8 but what people download for their e-readers is the stuff that would normally be selling in hardcover.
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