Friday, April 22, 2016

Books: Are The Publishers Irrational?

(Drivebycuriosity) - I like ebooks. I can get almost any book published in a minute, I can carry a whole library with me without doing heavy weight lifting, I don´t have to rent an extra room for my vast book collection and ebooks used to be cheaper than the printed version. But, suddenly a major advantage disappeared: Many ebooks cost about the same as their paperback version and some are even more expensive (screenshots below), even that there are zero expenses for paper, printing, storing and distributing.

Amazon wanted to sell ebooks cheap, thanks to the lower costs, but Hachette, Macmillan and other publishers started a war (books), supported by New York Times, Atlantic Magazine, "The New Yorker". "Fortune", "The New Republic" and other media (economy). The publishers won the war. Now the publishers set the price for books sold on Amazon, not the online company. The victory of the publishers let to a price hike for many e-books.

I am reluctant to pay $2 extra for an ebook just because the publisher prices it higher than the paperback. So I often skip the overpriced books, usual from well known authors (like New York Times bestellers) and focus on books which are still cheap. As a result I buy less ebooks as I would have if they would have been reasonable priced ($9 and below). Obviously the majority of other book lovers respond the same. The sales of ebooks are shrinking (consumerist goodereader ). This response had to be expected, consumers alway reduce their purchases when prices are rising. Most customer have just a limited budget and expenses for books are competing with expenses for movies, traveling and other purposes. So, the publishers shot themselves into the foot.

The book culture - and the literacy of the general public - also got a dent. The New York Times and others, who had supported the publishers in the ebook war, had claimed that Amazon is destroying the book culture by selling books cheap! But the shrinking ebooks sales show quite the opposite: The publishers are destroying the book culture by overpricing their products and so are reducing the demand -  people are reading less and less people are buying books. It seems the book market is becoming elitist again. Books are for those who can afford the high prices, people with a tight budget read less.

Thank you publishers and thank you New York Times & Co.


  1. Wow. Really? Have you looked at Amazon/Barnes & Noble etc recently? Have you seen the amount of FREE ebooks and the amount of ebooks priced at 99p/book? The amount of books at 1.99? The site is flooded out by books that are next to nothing to buy or that are free. It ISN'T the publishers destroying the industry (in fact independent publishers are KEEPING the industry alive), it is Amazon driving prices down further and further so that no-one (except Amazon of course), is making a living out of publishing/books.
    I agree that pricing an ebook higher than a printed book is wrong, but please, take a look around you, those are really the exception than the rule.

    1. Thanks for your post. Yes, there a lot of cheap ebooks, including young adult novels from your Grimlock Press. But unfortunately the big publishers keep ebook prices often above $10 and many ebooks from the New York Times bestseller list still cost at least as much as the paperback edition.

      Producing a new ebook (marginal costs) costs nothing. Producing a new printed books costs paper, printing, storing & distributing. If these costs are subtracted from the ebook price the publisher still earns the same net-income from the ebook he earns from the costlier printed book. Cheaper books sell better, so the publisher gains.

      If no one makes a living by publishing books, as you say, why does Grimlock Press still publish?

  2. Hi Gerhard
    I'll try and answer your points in turn.

    Your first point - I'm not really qualified to answer as we are not a big publisher by any stretch of the imagination. But I would guess that the ‘big publishers’ would say: It does cost a lot of ‘up front’ money to produce the book before it even goes to print or is made into an ebook (e.g. editing, design, formatting etc.)
    In fact with printed book costs from China and the like, the actual print costs can be very small (if you’re prepared to take a chance/can take a chance and print 500+ books).

    Marketing costs are exactly the same for an ebook as they are for a printed book.

    Storage and distribution: yes, there is a cost for storage with printed matter no argument there, but for an ebook you are simply swapping storage/print/distribution costs for technology costs (the IP cost of the software used for storage/creating the environment, the DRM IP/management costs, bandwidth, server costs, the salaries of the skilled people to run these systems etc.). These costs are not insignificant, and unlike a printed book cost, which is a one off cost/book, they continue whether you sell a book or not (if you’re using your own technology that is).

    I do however agree with you that some ebooks are priced too high, but people should also be aware that there are significant costs involved in producing an ebook and it is not all pure profit.

    You ask why do we still publish? Good question and one we continuously ask ourselves. We do it partly out of a love for reading and for books. Partly out of the thrill of trying to find new undiscovered talent and making other people aware of that talent, and partly because we are asked to by authors. We obviously hope to at the very least break even and maybe even one day make a profit!

    1. Are you familiar with basic economics? I am talking about marginal cost, the cost to produce another (virtual) ebook - one more book. They are zero!
      Yes, there are basic cost for editing, design, formatting. But they are fixed cost, they don´t rise when you produce one book more. They are the same, whether you sell 10 books or 10,000. And the technology costs (the IP cost of the software used for storage/creating the environment, the DRM IP/management costs, bandwidth, server costs, the salaries of the skilled people to run these systems etc.) are covered by Amazon, the platform provider.

      When publishers sell one ebook more, they have no additional cost and the book`s proceeds will cover their basic cost, at least partly. Lower prices attract more buyers!

      Many publishers have already a dual pricing system and sell paperback versions much cheaper than hardcover, reflecting lower production costs. Why not have 3 price categories according to the production cost: Hardcover, paperback & ebook?