Slashdot Mirror
On the Economics of e-Books?
way0utwest asks: "I was searching on Amazon today for Lawrence Lessig's 'The Future of Ideas'. While browsing, I noticed that there was also an e-book version of the same title. What was amazing was that the hardcover copy of the book is $21 and the e-book, which is downloaded, is $24!
Now I may be just a simple computer programmer, but it seems to me that there is less overall 'cost' involved with the e-book and it should be cheaper. There's very little 'inventory' to store (how much disk space and electricity cost can there be?). There's no risk of having to 'return' the book to the publisher. There's no labor needed to 'ship' me the book. How can it cost more? Is Adobe charging that much for the licensing of the e-book?
Now I'm not sold on the idea of e-books, or electronic books in general (though I am looking forward to electronic paper), however it seems that either the industry is not interested in pushing e-books, or Amazon is not really paying attention (though the list price of the hardcover is $30) OR the publishers are trying to overcharge for the e-book to make up for potential piracy. Am I way off base? Is there anther explanation? Anyone?" It's frustrating to find digital media that is priced higher than the corresponding title in dead-tree form. way0utwest makes a good point in that one reason for the increased pricing is due to piracy, but one has to wonder how often e-Books get pirated? Are such prices justified or are eBooks doomed to failure because they have effectively priced themselves out of the market?
First, Amazon has a set list of discounts, which the hardcover version probably falls into, and the electronic version does not.
Second, Amazon's gross margin on a hardcover version may be higher, so they have more room to discount. For instance, if the suggested list price of the HC is $30, and the electronic is $24, and they both are "sold" to Amazon by the publisher for $20, Amazon has more room to come down on the HC version.
Third, Amazon may just not care all that much!
That said, there is someone out there who will say, "I'd much rather have it in electronic form, and I'm willing to shell out the extra bucks for it." They've already shown their willingness to shell out a whole lot of bucks for the reader, so what's a couple extra? Having already purchased a questionably useful device, they would feel stupid for not using it (especially after spending so much); they feel compelled to justify their purchase, and if that means having to pay a little more than a dead tree book, well, so be it.
Also, the first law of capitalism applies here. In a nutshell: people are stupid, and successful companies exploit stupid people.
The rate of piracy varies on quite a few factors:
1) Type of book
2) Cost of book
3) Usefulness of book
But in the end, if it's offered digitally, it will be pirated. even if it's not published digitally, someone will likely scan it in and distrobute it.
Personally, I like ebooks, at least some (I have issues with PDF's, mainly because of the difficulty I have reading them). Have I purchased many? No, far too few selection, and the price is still a touch too high for my likeing. So I browse through the free books. Baen Books ( http://www.baen.com/ ) , a science fiction and fantasy publisher offers quite a few of books formerly released as "loss leaders" in multiple formats (HTML, RTF, LIT, Palm/Psion/Win CE, Rocket Ebook) for free. http://www.baen.com/library/ for anyone that's interested.
Of course there's other repositories of literature, Project Gutenberg ( http://promo.net/pg/ ) being the foremost... the others I can't remember off hand.
Basically, for me free is good, but I'm willing to pay up to around 1/2 the dead tree price if the books good... haven't found any that are that good that I'm willing to hand limbs over though.
I've been curious about ebooks but not enough to actually investigate them further. Are many people using them?
Maybe I have the wrong impression but I can't imagine them being better to read from than paper.
they don't want to sell any. If they did they would undercut paper book sales. An e book shouldn't cost more than a dollar. BC
Retailers dont want to be seen my the public as being stodgy and old-fashioned, so supporting things like eBooks has some PR and convenience value.
As people are mentioning though, There is the competition with the traditional paper format. Add to that, I think, no business enters a risky new business unless there is profit to be made. Atleast if some profit is made, even if the format dies, they havent wasted their entire investment, an investment they are pushed to make, because if they dont, and the format takes off, they will be overtaken by their competitors.
Like a lot of other commodity products, early adopters of new technology pay a premium. Wether it is worthwhile, all depends on how much the product is worth to you. (Or your business.)
Anyone who considers arithmetical methods of producing random numbers is, of course, in a state of sin.-John von Neumann
Although I agree with a previous poster that there is probably some gross margin shenanigans going on with the pricing of this individual item, this does raise an interesting issue.
As far as I can tell a technical e-book's only appeal is that you could (in theory) dump a bunch on your laptop hard drive, on cdr's, or into your palmpilot, and carry them around as reference material. Much better than lugging around 80lbs of books to client sites. Of course with all of the digital rights junk floating around this may or may not be practical, and your ability to read the book 5 years from now under such a system is highly questionable.
Without such DRM type controls, the publishers fears that the books will get freely distributed over the Internet are well justified -- but it's happening anyway as people scan in books and OCR them, or simply crack the DRM schemes.
Reading a book on a laptop or palmpilot screen is a fundamentally different experience than curling up with a paper book. Although my preference is paper, it is nice to have my Palmpilot loaded up with a good Heinlein novel during boring meetings.
E-books seem to be stopgap measure driven by short-term profit potential. IMO the publishing industry faces fundamental changes over the next few years as their primary value-add transitions to making nice printed versions of works already freely (although perhaps illegally) available.
"But actually trying to use m4 as a general-purpose langage would be deeply perverse" --ESR
I think that more people wants to buy the dead tree book!
I'm from Argentina: Tango, Asado, Mate, Gaucho, Maradona, YPF
however, before eBooks were this popular, similar methods unearthed 'digital' copies of the books - many titles are nowadays proofed, and transported between editors, in electronic form making 'leaks' from this media as easy and common as being able to get the latest MS windows finals before the official release dates.
you have to look at the volume of ebooks sold versus paper. It may take less to publish and ebook, but how many people actually buy one. I have an REB 100 ebook reader (I love this little toy) and I also read books on my palm phone. But, I have yet to actually buy an ebook. Other than the obvious shady ways of obtaining an ebook, there are thousands available for free. http://promo.net/pg/ for one. These are, of course, public domain books. They are also classics. If you want an ebook cheaper than paper...buy the paper and scan it. I don't think we'll see ebooks cheaper than paper books. I mean how much does the paper for the book really cost....$.50, $1.00? Its the story your paying for. Those damned authors and publishers actually expect to get payed for what the do. how dare them!
When the word "e-Book" is used, everyone automatically thinks of reading books on a computer or PDA screen, probably because that's all most people have seen. There are numerous disadvantages to both approaches, but they all really boil down to "Those devices weren't designed for that." I think many people's preference for paper is just because they haven't seen a really good e-Book.
There are some devices out there that were designed to be electronic book readers, and they are *far* superior to PCs, Laptops and PDAs for this function. IMO, they're far superior to paper books as well in many ways (though not every way).
I have a Rocket e-Book, for example. It's a device that is just slightly larger than a paperback book, with a screen that is almost exactly the size of a paperback page. The screen is a very high resolution LCD with a backlight that can be turned on and off. It has 16MB of flash memory for storage of books and the (tiny) operating system. It connects to a computer via either a cable or infrared to download books, which are written in a simplified version of HTML and then run through a tool that packages and compresses them for download. The e-Book reader also has a high-capacity battery that allows it to run for as much as 18 hours on a charge. The UI is well-designed, with thin progress bar down the side to give you an idea of where in the book you're at, support for different font sizes, different orientations, etc., easy-to-use menus (which you almost never touch, other than to switch books).
This is a superb way to read. What do I like about it, as compared to paper?
What I don't like:
As you can see, the upsides are more numerous and more compelling than the downsides. The biggest downsides really have more to do with the fact that publishers haven't decided how to approach this e-Book thing. Here's to hoping they get it. soon.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
I tend to scour the bookshelves at the secondhand store whenever I go there, and get most of my pleasure reading for pennies. The material has been read before, sometimes by several people, and it's all completely legal.
Try that with an ebook.
- Freed
"Coffee should be black as hell, strong as death, and sweet as love." -Turkish Proverb
I'm sorry to burst the collective slashdot bubble but the price of books is NOT entirely dependent on the cost of the medium. The actual physical putting of ink on paper and binding and all that jazz is about 17% of the net amount received from a particular publication. In a business you've got alot of costs before you get to the profit. There's the cost of goods which in the case of a book includes editorial and production costs (books need spell checking, formatting, proof reading, ect), design work needs to be done, and then finally the pesky cost of paying the author for their work. Then comes cost of sales which covers advertising and promotion which suprisingly can be fairly expensive for some books (think about all the cardboard displays you see when a novel comes out from a popular writer those aren't free). Then finally overhead which includes the actual cost of operating a business. Then FINALLY you get to profit but then it is still tricky. When you talk percentages you're talking the net of what you actually make off a product, not the list price. If a particular book sells a thousand copies little to no profit is made. Reducing the cost of goods price by making a book electronic saves you a couple bucks but not so much than you can wipe your ass with a hundred dollar bill. Getting the same content on a different medium doesn't make the cost of that content go down. Suprise suprise this is how most content producers do business whether they print books, CDs, or DVDs.
I'm a loner Dottie, a Rebel.
Sometimes I think they just screw up on pricing. It happens in paper formats, too: I bought a relatively specialized journalism text last year from Barnes & Noble that was available in hardcover and paperback, and the Web site showed the cost of the the paperback as twice the cost of the hardcover version. There was a discount on the hardcover book, but miniscule compared to the price difference; they were just priced that far apart. At the store, that disparity was confirmed and met with the same puzzled look I had. So I smiled and bought the hardcover.
Why can't I have copies of e-books for free if I've already bought the dead-tree version.
I'm not trying to get out of paying for anything here, I have no problem paying for dead-tree books, but why should I have to pay for something that I already own?
Actually, very few people are paying for eBooks. This is not a market-driven phenomenon. It is quasi-collusive behavior among major publishers to keep one foot in the game of ePublishing while not doing anything to encourage its growth.
I could go on about middlemen like Baker and Taylor and how they take the majority of the risk and most of the reward, but there is a whole chain of people who get paid before the publisher or the writer. Shit, the publisher sees this as an opportunity to make their share, yet are afraid of pissing off the middlemen.
And since you had to snipe at software pricing...
With software you *do* have ongoing costs. You have salaries, utilities, office space, etc. And all that buys you is the opportunity to get the software written. If you want to sell it to anybody you have sales and marketing costs that can be small or enormous depending on size of the market. Sure, software bits are infinitly copyable, but I've never heard anyone in the software industry complaining about duplication or manufacturing costs.
So you get so far and you have a product and people trying to sell it. How do you determine the price? Well, how many can we realistically sell this year? What are our competitors charging? Are people buying from them at that price?
Sure software has not tangable market value since it is infinitely copyable. Call John Carmack and tell him you want a custom one-off game from ID and you will pay the fair market price of $39.99.
You always have the option of writing your own book or writing your own software.
The crucial distinction between the hard-cover and the e-book versions of any work drive from the permitted copyright uses. Both works are subject to exceptions for fair use/fair dealing. Where the examples e-book pricing structure falls down is in that it provides less functionality at a higher price.
Most e-book readers are "locked" to a single device (Microsoft's Reader is trying to fix this... but let's be reasonable... it's crude at best). The hard-cover while physically limited to one form factor, can be both portable and stationary. You can have it on the shelf next to your computer but just as easily take it with you (like a portable). E-books tend to lack this versatility (generally).
Also, the traditional books generally don't restrict your ability to (a) copy text from them, (b) scribble or mark-up passages or (c) "loan" a book to another person, inter alia. The e-books typically restrict all of those activities to the extreme (with the exception of perhaps post-it style mark-ups).
These are only a few examples of where you have less "REAL" utility than traditional books when using e-books. Besides the fact that reading from a screen still is less a less than ideal experience, functional utility is one of the fundamental drivers of price from an economics point of view... same content @ less functionality = lower market price.
Wait and see... but I bet that e-books will take a long time to really catch on... and only when the price is closer to that of a soft-cover will people be willing to pony up the dough for a functionally deficient product.
CRCates