Amazon Surrenders To Macmillan On eBook Pricing

CuteSteveJobs writes with a followup to news we discussed on Saturday of a disagreement between Amazon and Macmillan Publishers over ebook pricing: "Amazon has thrown in the towel and announced it will now sell books at Macmillan's increased prices; up to $14.99 from $9.99. Said Amazon in a statement: 'We will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books.' Macmillan has sensed Apple's iBooks opens the way for higher prices. Perhaps the question should be: do we even need publishers like Macmillian? Publishers have long managed to keep their old business model chugging along nicely despite the Internet; Academics are still forced to give up copyright (PDF) of their work in exchange for publication. Textbook publishers have a history of unethical practices like frequent edition changes, unjustifiable price increases and bribing teachers. For that matter, why do the RIAA's members still control the music business? Why do these dinosaur publishing businesses still manage to thrive despite the Internet?"

Comments

Monopoly?

[Anonymous Coward]

"monopoly over their own titles" That word does not mean what you think it means...

Re:Monopoly?

[sopssa]

Yeah that sounds a little bit stupid. Of course they have "monopoly" over their own titles. Duh.

For that matter, why do the RIAA's members still control the music business? Why do these dinosaur publishing businesses still manage to thrive despite the Internet?"

Because they
1) Provide money and pay the big costs while artists are producing their album
2) Provide marketing
3) Find the promising artists and writers
4) Have the distribution channels

You can say anything you want about the internet as a marketing channel and cheap personal computers being capable of producing albums, but they really aren't. You need a good studio. I'm not going to listen to something that sound like demo tracks. They're horrible if you've ever listened to any other than your favorite band's. They also filter out the crap.

This might be a little bit different with books, but you still need those distribution channels and marketing. Books don't just magically show up in book stores, libraries or have articles in magazines, nor do people just accidentally hear about it. And eBooks aren't going to replace paperback books yet.

Re:Monopoly?

[InsaneProcessor]

1) Provide money and pay the big costs while artists are producing their album

I have heard many quality recordings from basement studios built on a shoestring budget. This cost has dropped significantly.

2) Provide marketing

This can be done cheaply on the internet. It is done all of the time.

3) Find the promising artists and writers

They know who they are.

4) Have the distribution channels

Yea, like the internet doesn't work.

Re:Monopoly?

[eudaemon]

Agreed about decent production values on an album and the need for a studio. *BUT* let's face it
the compression that happens in post-production these days makes modern music just as unlistenable
as if it were recorded in a truck stop bathroom. As a volunteer front of the house (read: live music)
and studio (broadcast) board monkey, I can't claim to have experience cranking out studio albums.
But the theory's widely known, and despite the black art elements of getting all the performers and instruments
properly mic'd and isolated in a studio setting, maybe it's time for StudioWiki? Great things have come out
of the collective wisdom and efforts of those passionate enough to contribute their time and knowledge.

You won't see a major label backing things cranked out in someone's garage studio, but it's about the music
and not about the money, I think your average band is just fine with Myspace, iTunes and the other internet-based
distribution channels. And frankly I'd rather listen a McGyvered album with no COMPRESSION FUCKING UP ALL THE MUSIC
taped in a stupid garage than a perfectly recorded / mastered / mixed AND THEN COMPRESSED TO FUCKING SHIT ANYWAY
taped at Abbey Road. Wouldn't you?

Re:Monopoly?

[Chrisq]

3) Find the promising artists and writers

They know who they are.

The problem is sorting them out from the 10,000 other useless artists and writers who "know for certain" that they are the next big thing and are waiting to be discovered.

Re:Monopoly?

[psychodelicacy]

Agreed - and it's the same in publishing.

The question of reputation is central in academic publishing. The same book will be at an advantage if it is published by Macmillan rather than brought out by an unknown press, or published online. The large and respected presses carry an automatic sense that their books are likely to be well-written and worth reading. Once an author has a good reputation, maybe they can start publishing under Creative Commons licences or the like. Lawrence Lessig and Jonathan Zittrain have both done this - but only after spending a long time building up their reputations and writing a lot of other books under - presumably - the usual contracts. And their books come out with "big-name" publishers like Penguin and Yale alongside being freely available to download.

You just can't ignore the cachet of the publisher when it comes to books. It's one of the factors that academics use to evaluate whether a new book is worth their time or not, and that in itself often reflects the fact that the good publishers provide invaluable services in reviewing and editing.

I'm not defending Macmillan's move, btw - just pointing out that it's not quite as easy as it might seem to write the publishers out of the process.

Re:Monopoly?

[Anonymous Coward]

This is one failure of a prediction.

Re:Monopoly?

[mmarlett]

Yeah, cause that can't be done by a widely accessable moderation system. Just imagine the anarchy that would happen if anyone could create anything and the only way people would know if it was any good is to look at how other people just like them ranked the work. Terrible.

Re:Monopoly?

[Yvan256]

No mod points at the moment, but can those with some mod this guy up to +5 insightful?

Also, see loudness war for a better description.

Re:Monopoly?

[CrackedButter]

Sparrow Orange makes all his own music in the safety of his home and sells them on iTunes of all places. I have all his albums and as far a I know has signed with a minor label. Word of mouth made me aware of him.

Re:Monopoly?

[ajs]

I wrote a longish reply and somehow Slashdot ate it. It just disappeared from the page... sigh.

Anyway, the short of it is that it's a poor choice of words, but the fundamental issue is that you have a middle man in a relationship that no longer needs one. Artists could just go to online retailers now, but the retailers need to take on more of the tasks that publishers and labels have traditionally filled. I just bought myself a pile of Amazon stock because I believe that they understand this. We shall see....

Re:Monopoly?

[Anonymous Coward]

Seems pretty accurate to me. Looks like you're the failure here.

Re:Monopoly?

[ottothecow]

I have heard many quality recordings from basement studios built on a shoestring budget. This cost has dropped significantly.

I have also heard many awful recordings from basement studios. The basement studio is not for everyone and not suited for all forms of music (what do you do when you decide you want some background sounds from a symphony orchestra? Use a synth? the record labels would pay out for the real thing if you wanted it). Small labels and independent artists simply can't fork over the cash to provide living expenses, studio, and expensive producers/engineers for a band that needs to take a month in the studio to get an entire album right. Even established bands need help meeting these costs.

This can be done cheaply on the internet. It is done all of the time.

But that doesn't get you a billboard or an opportunity to play on a late night talk show. Music is consumed much more widely than the internet--even if people get most of their music from internet sources, it doesn't mean that internet banner ads are where they find out about it.

They know who they are. Yeah, but we don't. The RIAA have abused this power and shoved lots and lots of shit down our throats but there are still people from record labels going to every show and checking out every EP, sorting through the bad stuff so I don't have to. My preferred provider of this service is not the RIAA, but some people's tastes are more in line with the major labels.

Yea, like the internet doesn't work. It works, but I bet it is a whole lot easier if you have a guy that you give your album to and it immediately pops up in itunes, amazon, and whatever other online source you want. Oh yeah...and how about CDs showing up in every store across the country and tracks showing up in radio station libraries (even if they don't chose to play them regularly...they will have a copy).

The RIAA have been a bunch of backward jackasses the last few years...but there is definitely a place for a large body that can take risks and provide services on behalf of the artists.

Re:Monopoly?

[ajs]

Agreed about decent production values on an album and the need for a studio. *BUT* let's face it the compression that happens in post-production these days makes modern music just as unlistenable as if it were recorded in a truck stop bathroom.

I disagree in the strongest possible terms. When I was young we listened to media that had far, far less fidelity than the music that I have access to today. There are lyrics that I can make out that I never could when I was young (and my hearing was better then).

This is the age-old debate that springs up whenever something new comes along. There's always the crowd that will claim they can "tell the difference" and then proceed to confuse that with the new product being inferior. As I pointed out to a friend who was arguing that vinyl was superior to digital music: of course you can tell the difference. The digital music doesn't skip or hiss. Everything else is colored by the fact that you know which one you're "supposed to like." It's like having a blind taste test between coke and orange juice.

Re:Monopoly?

[Skreems]

Because they
1) Provide money and pay the big costs while artists are producing their album
2) Provide marketing
3) Find the promising artists and writers
4) Have the distribution channels

Those are rapidly being replaced. Costs are associated with rare equipment, but recording and mastering software is now widespread. You can do amazing stuff in your home, with a couple thousand dollars, that you could only do in a million dollar studio a couple decades back. Marketing is becoming much easier as well, since you can now do marketing in small increments through any number of services. Distribution channels, too, are much easier for small publishers to get their work inserted into. And as for finding the authors in the first place... I think it's pretty obvious that the RIAA and Publishing industries don't add a damn thing to that process.

You may not become a breakout sensation overnight without the old media marketing tactics behind you, but if you create something worthwhile it's quite easy to get an audience. Then it's just a question of word of mouth, which is how most really good stuff spreads anyway.

Re:Monopoly?

[Draek]

You can say anything you want about the internet as a marketing channel and cheap personal computers being capable of producing albums, but they really aren't. You need a good studio.

Not really, you don't. Specially to compete against the horribly mutilated shit the RIAA puts out.

Best-sounding non-classical album I've ever heard? Jade Leary's Fossildawn, courtesy of Magnatune. Of course, given that the artist in question is a pro musician his 'home studio' is far better than what you'd find at your average 17-years-old's bedroom, but it does show you don't necessarily need RIAA-levels of spending to make a good album either.

They also filter out the crap.

Ohh, yeah. They do *such* a good job at it... I mean, where would the world *be* without Lady GaGa and My Chemical Romance!

No, the RIAA filters out anything that's not easily marketable and sold to the masses. Unfortunately, the masses' tastes *SUCK* which is why there's so many "idiot bimbo singing about sex to electro-pop" and so very little creativity coming from them.

Re:Monopoly?

[Adrian Lopez]

"monopoly over their own titles" That word does not mean what you think it means...

Perhaps it doesn't mean what you think it means?

Macmillan has a government-granted monopoly over the production and initial distribution of its own titles, otherwise known as copyright. Not that I agree with Amazon's behavior here, but calling it a monopoly is accurate -- though of course not unique to Macmillan.

Re:Monopoly?

[Aladrin]

It's hilarious for them to throw the word Monopoly at the publisher when Amazon themselves has DRM'd their books to the hilt and they have a 'monopoly' over what reader(s) can read them.

People in glass houses...

Re:Monopoly?

[loupgarou21]

The problem with your prediction is that his arguments are actually fairly well stated. He isn't just pandering to the RIAA and its members, he is stating simple facts (and some opinions that not everyone is going to agree with.)

This is nice because it promotes discussion.

Re:Monopoly?

[kimvette]

You need a good studio.

Well, the equipment is the easy part nowadays. Mics are cheap, multitrack recorders (be it appliance or PC/Mac card) is cheap, and multitrack recording software is even free. You don't need to worry about saturating tape or wearing it out any more. Need another track? You don't have to downmix. Just record the new tracks and add them to your sound editing suite.

What is not so easy is knowing how to mic a drum kit, the singer, and so forth. Recording at a decent level without clipping, and without losing dynamic range. Engineering the record so it sounds good (if you've blown your inner ears out with your iPod, you won't get the highs right, and no, distorted bass does NOT sound good!). Of course, talent is a requirement as well. It helps if you can actually compose a piece, and actually play an instrument or two.

Because they
(bullshit list followed, no need to copy & paste)

Now, let's counter the points one by one:

1) You mean LEND money to the artist (the big advance check) the money they need for your in-house studio, where you pay almost nothing for studio and sound engineer time while overbilling your signed artist. Your artist is better off doing a few gigs or working at Starbucks to save up a couple grand and going to the studio on their own. Studio time is NOT all that expensive now.

2. You bill your artist for the marketing of the material, and over-bill the artist for for the service. Your artist is better off marketing through local clubs and battle of the band contests and the like, or approaching college station DJs to get airtime. Oh, and why do you still charge your artists for breakage? First of all, breakage pretty much became a non-issue when acetate discs went the way of the dodo, and secondly, why should the artist be billed for any single thing when the way your standard contracts work, their work becomes work for hire and owned in entirety by you, and they get MAYBE 3 points (minus the bullshit "breakage" charge) on their second or third album? Hey, maybe you can even bankrupt them in the process through creative accounting and call it a loss, and keep them touring forever to work off the debt! It's a bullshit deal.

3. "Find the promising artists and writers" - oh you mean every little skank and ho who will wear a thong and little else on stage, and knows how to sort of dance and sing through voice processors (or willing to lip sync) to make her voice not sound like nails screeching across a blackboard, while singing (or lip syncing to) stuff written by Neil Diamond and other actual song writers? Gotcha. Well, I'd rather hear a band that made it the hard way through gaining popularity playing gigs. Pink Floyd, The Who, or if you want someone more recent, Phish (you wouldn't believe the places they played at when they started out), No Doubt, and so forth.

4. Distribution channels: why, so all of the members of the band can be in debt and be forced to go on long gruelling tours to pay off that debt, when they could instead slowly but steadily build a following, be debt-free and hopefully gain air time on independent and college radio stations and distribute recordings on their own, or use channels such as the iTunes store? Then, they remain debt free, and not only do they get 75+% (basically the entire sale price minus actual cost of media or hosting and merchant account fees) for their recordings, but they retain full ownership of their work.

Re:Monopoly?

[amplt1337]

There's a reasonable argument to be made that within popular music, most big hits are made, not born.

I.E. there isn't that much difference between J. Random Indy Band and the Next Big Thing, it's just the latter had the tremendous marketing arm of the studio pushing them into the glories of one-hit-wonderdom.

The same can't really be said for books, surprisingly. Mainly because you aren't exposed to the contents of a book unless you specifically try to be, while [generic crappy pop] music gets blasted at your ears anywhere you go, and even when its presence is under your control, its content may not be (like with the radio).

Re:Monopoly?

[Sockatume]

You seem to be confusing data compression with audio compression. For years now, going back to the analogue days but increasingly over the past decade, audio has been "dynanic-range compressed" to increase the loudness of the song. Imagine you have a song which goes from "0" to "10" in loudness over the track. In aggregate the song's going to be about 5. That's no good at turning heads on a jukebox or on the radio, so you bump up the quiet parts so the song goes from "4" to "10" in loudness. That means that the song, as a whole, is now about "7". It's louder, it's more noticable, it sells the brand more.*

However it has nowhere to go from there before it hits the loudness limit of the audio format. If you turn down the dial so that thequiet parts are at their original, low level of "0", then the loud parts of the song are actually down at "6", far quieter than it was before you compressed it.

*The technique is widely used by advertisers to make their particular ad louder without breaking volume level regulations or normalisation.

Re:Monopoly?

[raddan]

(I work for Macmillan, so I am not a disinterested party)

Macmillan's president held our annual company meeting just the other day (before the Amazon dispute) and he explained that the pricing for e-books was probably about to get a little rough. Apple had been courting the publishers for several weeks. Apple carries a lot of clout, and was offering terms that were very attractive to publishers, as it lets them set their own prices, within a flexible window. Amazon, on the other hand, was pushing publishers to sell books at a flat rate: $9.99.

Amazon has been angling to set themselves up as the "Wal-Mart of the web", and with that comes a lot of what Wal-Mart is know for: good and bad. Steep discounts are good for the customer, but generally, not so good for the manufacturer. Now, as someone who writes software to help ensure the quality of our books, I am a bit biased, but books are not the same things as widgets. You can't just churn them out. Even good, reputable authors give you something that needs a lot of polishing. We publish textbooks in my division, so this means that in addition to the standard copy-editing, you also need to do fact-checking, course integration, and lots of design work. It is a labor-intensive process, and each book requires the attention of dozens of people, and tens of thousands of man-hours. Often, these books also come with software. I don't think I need to explain to people here how hard it is to write good software.

Amazon is hard to say no to, because they move a lot of books. But they are cutting profit margins dangerously low for us. At what point do you say no? People like to do their work, but they also like to be paid. Macmillan, so far, has balked at Amazon's price-fixing, and (if I understand correctly) Amazon has been selling e-book versions of Macmillan titles at a loss. Amazon, however, sees the iPad terms as very dangerous, because publishers can sell some books higher, but more importantly, they can sell some lower. Apple can do this, because they're not taking as big a cut as Amazon does. Unlike Amazon, Apple's goal is to sell the platform; Amazon wants to sell the books. So Amazon makes a ton on books, but loses a little on hardware. Apple makes money on hardware, but not much else.

I don't know exactly how it will shake out, but it looks like the Macmillan deal will probably be a turning point for e-books. Amazon is now a sub-licensor of those books, and that means that the quality and success of those books is going to be important to them. We'll see how this turns out. For more on this, I recommend this and this.

I hear that Amazon's customers are "boycotting" books priced higher than $9.99. Ok, I hate "teh big bad corp" as much as anyone else, but come on-- it's not like we find these things laying around and just dust them off and hand them to you. There's no magic. Get real. We have to make these things, and that takes time and money, and hey, we like to get paid, too. I suspect the "$9.99 boycott" is Amazon astroturfing.

FWIW, Macmillan is a privately-held company, so that's why you see them taking a stand, and not one of our competitors. I'm fortunate to work for a private company, because we can actually focus on doing a good job. From my perspective, working here has been far from being a cog in some evil empire.

Re:Monopoly?

[Yvan256]

The guy is talking about loudness, i.e. audio levels compression not audio data compression.

Re:Monopoly?

[BemoanAndMoan]

I'm not sure who you are calling the middle men ... the publisher? Isn't Amazon/Apple just the new conjoined distributor/marketer/wholesaler middle man?

With this new model many authors are going to miss the work of the middle men. For instance, the first big sell is from book rep. to bookstore purchaser. I used to buy books for an independent bookshop and let me tell you, for anything that wasn't Oprah-popular, we were the gatekeepers as to quantity and shelf space. Without the hard sell of the book rep it would be "two/next" and a they'd be a spine amidst many other spines. And let me tell you, authoring is not music writing ... you don't have the luxury of having only 1 out of 15 being a commercial success in order to pay the bills.

What I'm hoping for is actually a huge increase in the number of publisher "middle men", and growth of the smaller independents. They now have the tools to compete where once distribution power was reserved for the kings. And authors still need somebody out there hawking and flogging ... they're mostly too eclectic a crowd to do it themselves.

Re:Monopoly?

[Exitar]

"The problem is sorting them out from the 10,000 other useless artists"

Useless as in "not making good music" or as in "not making profit"?
Surely is the latter, or no boy band would have ever seen the light.

And I'm pretty sure who, between Leonard Cohen and Beyonce', a major that could make only one contract would choose.

Re:Monopoly?

[Tharsman]

Because they 1) Provide money and pay the big costs while artists are producing their album 2) Provide marketing 3) Find the promising artists and writers 4) Have the distribution channels

The only valid point you make is marketing. These days almost anyone can rent a studio for a day to do their recording themselves, can be very professionally done, if you work with people with talent (and there are a lot of people with talent in the editing field, they tend to be stuck in club-DJ jobs because of lack of opportunities, not saying all DJs can, though.)

Marketing, though, is a big one. You need big money to sell big, but given how the artist is ripped off they may actually make more money by selling to a smaller audience without any middle man. Even these days, the best form of marketing for many famous artists is to go on tour, and thats how they actually make money, via ticket sales, not album sales. If an artist gives up fame for profit, they can actually have a higher chance self-publishing. They just need to find some friends that are into music editing to tag along.

BTW, just to explain why the other two points don't mean anything:

1) Recording and producing can be very low cost. You can rent a recording studio or even outfit a room in your home to serve as one (bit more expensive at first but worth it as in worst case you can rent for others.)

3) You dont care if they find other promising artists, because you are the artist.

4) In this age, you can deal directly with the biggest e-distribution channels, end with a bigger cut, and retain all rights to your work.

Even if you dislike apple, just browse their indies section. Listen to the demos, there is some junk there, but you may find even some of these junk is rather well edited. You may even discover some artist you like while at it.

Books are worse. The only thing they used to do was the distribution channel. They did little for marketing (compared to the music industry.) The best they did used to be editing. And if you are an avid reader you may notice the horrible amount of books that get published without even running a spellchecker on them. These days "editing" simply means spending a lot of money on a pretty cover, billing it out of your royalties, stamp the rest of the book in some template and printing it. You may as well just self publish. You can say anything you want about the internet as a marketing channel and cheap personal computers being capable of producing albums, but they really aren't. You need a good studio. I'm not going to listen to something that sound like demo tracks. They're horrible if you've ever listened to any other than your favorite band's. They also filter out the crap.

This might be a little bit different with books, but you still need those distribution channels and marketing. Books don't just magically show up in book stores, libraries or have articles in magazines, nor do people just accidentally hear about it. And eBooks aren't going to replace paperback books yet.

Re:Monopoly?

[conspirator57]

while it's clearly tangential from the case at hand (textbooks, etc. which do require a lot of work on the part of the publisher), I find Knuth's writings on the avarice and economic insanity of remaining with Elsevier as a journal publisher to be particularly destructive to the sorts of arguments of alleged publisher value-add that are normally presented.

http://boscoh.com/science/how-the-scientific-publishing-industry-began-to-eat-itself
http://www-cs-faculty.stanford.edu/~uno/joalet.pdf

Re:Monopoly?

[flitty]

We have to make these things,

From someone outside the industry, Macmillan's job needs to be educating the public on why a book, that no longer needs to be printed, and distribution costs have been cut 10-50 fold, why are these books still as expensive?

I'm still confused on why I can get a CD at my local music store for $10, when online it's the same price. I know there's a bunch of front end costs in there, but you've cut out almost all of the physical costs, why isn't the book cheaper? Especially when you're locked into a proprietary DRM laiden format, and cannot pass the book off to anyone else? Electronic books are Less valuable, and should be priced as such.

Re:Monopoly?

[Tharsman]

There's a reasonable argument to be made that within popular music, most big hits are made, not born.

I.E. there isn't that much difference between J. Random Indy Band and the Next Big Thing, it's just the latter had the tremendous marketing arm of the studio pushing them into the glories of one-hit-wonderdom.

The same can't really be said for books, surprisingly. Mainly because you aren't exposed to the contents of a book unless you specifically try to be, while [generic crappy pop] music gets blasted at your ears anywhere you go, and even when its presence is under your control, its content may not be (like with the radio).

I still find it funny how the RIAA gets away with charging radio stations to advertise their music all day long. "You pay me for the privilege of playing advertisement for my CDs, so I can sell more!" Whoever came up with that business model was a capitalistic double dipping genius! Thriple dipping when you consider they also take money from the artists they represent!

Re:Monopoly?

[Low Ranked Craig]

These must be the same idiots that claim that Apple and a monopoly on iPods and OS X. I swear that the world becomes increasingly stupid with each passing day...

Re:Monopoly?

[Sheik Yerbouti]

But why should bits honestly cost that much. I mean the fact that people are even willing to pay 9.99 for bits is a amazing to me. It is not a physical object it's completely imaginary property at this point and that does mean the value is less. I think what peaves customers is that the publishers want to give you DRM restricted conent that they have MORE CONTROL OF and the want to charge similar prices to before when it was a physical object that WE HAVE MORE CONTROL OF. You may not get it but this is what makes people see red and want you all to just go away. Because fundamentally you want your cake and to eat it to. In essence your just being greedy as hell as per the norm.

Now I get that there are writers, editors and designers involved and they all need to get paid. But a digital only copy of a book especially with restrictive DRM is just not worth any where near what even a second or third run paperback is worth in my opinion. If you try and charge me first run hardback pricing than I would just as soon see you all out on the street than buy ANYTHING at all from you.

Re:Monopoly?

[Tharsman]

I have also heard many awful recordings from basement studios.

I also heard many awful recordings from professional studios. Fail to see how that is a point. Besides, if you dont like how it sounds, well... don't buy it?

what do you do when you decide you want some background sounds from a symphony orchestra?

Yea, we know that indie symphony orchestras are all the rage these days. My neighbor kids don't let me sleep at night with all those expensive violins, flutes, and whatnot... I'd figure if they can pay for all those instruments they may be able to at least afford a proper place to record but noooooo. ...ponder how they fit all those people in that garage too... /end sarcasm

Use a synth? the record labels would pay out for the real thing if you wanted it.

Wake up little sleeping beauty! Dream time is over! No they would not, best they would do is record an actual orchestra in the same facilities they already perform at, using their own instruments, not publisher provided ones.

It works, but I bet it is a whole lot easier if you have a guy that you give your album to and it immediately pops up in itunes, amazon, and whatever other online source you want. Oh yeah...and how about CDs showing up in every store across the country and tracks showing up in radio station libraries (even if they don't chose to play them regularly...they will have a copy).

You realize that's the biggest scam in the book? You get charged full premium price for each copy the broadcasters get. In other words: they send all broadcasters a copy or two of your CD, and charge you 15 bucks for each copy, then they call that "promotional costs" and is deducted from your royalties, if any. In the end, you may end owing money to the publisher because they never gave you the "premium treatment" where they also get million of fake fans to request your songs and brainwash audiences. At this point you become a failure but still they hold all your publishing rights for years to come, now even if you wanted you cant go out there and publish on your own because they locked you down to make sure you can't compete. THAT is the beauty of the RIAA and THAT is how they make sure you "get sorted through the garbage", by eliminating potential good quality distractions from what they truly want to sell.

Re:Monopoly?

[Runaway1956]

Speaking of titles, look at the title of this discussion again. Pretend that you don't know what the story is really about. Just read the title.

"Amazon surrenders to McMillan"

Sounds like a porno flick, doesn't it?

Re:Monopoly?

[Anonymous Coward]

Couldn't you just increase the loud parts to 11?

Re:Monopoly?

[man_of_mr_e]

I have heard many quality recordings from basement studios built on a shoestring budget. This cost has dropped significantly.

Yes, it's possible, with certain kinds of recordings. Frank Zappa used to record all his stuff in his basement.

However, and this is a big however, most musicians are simply not capable of doing that. They need a producer and decent equipment, and someone that knows how to use Protools or its equivelents. A producer does more than yell "More Cowbell!".

You also need the Radio play, you need the magazine ads and interviews, you need the concerts... Making money in music is a lot more than just putting your songs in an online music catalog and hoping people will buy them. Advertising on the internet only markets you to people that are on the internet, and looking for music on the internet, which is a huge market, but not where near (yet) the market of traditional music stores.

The internet doesn't work, at least not yet. You can't get the kind of exposure you want with only the internet.

Re:Monopoly?

[russotto]

"monopoly over their own titles" That word does not mean what you think it means...

Actually, it does. The monopoly Amazon refers to is precisely the monopoly created by copyright law.

Re:Monopoly?

[Reason58]

Amazon is hard to say no to, because they move a lot of books. But they are cutting profit margins dangerously low for us.

Let me make sure I'm understanding you correctly. If the original price of $9.99 was "cutting profit margins dangerously low", then that means you were barely breaking even. An increase to $14.99 would mean that your company is now reaping a profit margin of more than 33%. Is that what you intended to say? In what way should we feel badly for your company?

Re:Monopoly?

[JAlexoi]

I though scientific community's main feature was that scientists tend to be open minded about things... And yet, saying that "Since it's not published by a respected publisher, it's worthless"(I inferred that from your statement "large and respected presses carry an automatic sense that their books are likely to be well-written and worth reading").
People who actually are closed minded read either the one book(The Bible) or don't read at all(I'll wait for the movie approach).
And when was the last time you looked who published the book when buying it?!?!?!?!?! I have never even though about it. I don't care who published it, I care who wrote it and what the contents are about. And I bet most people don't care about the publisher either.

Re:Monopoly?

[man_of_mr_e]

Moderation is a terrible system for Music, because musical tastes vary so much. Something that sounds like moose singing to me might sound wonderful to you. The *ONLY* way to know good music is to listen to it yourself, which is why Radio's have been very popular marketing tools for so many years.

I don't know about you, but I don't want to entrust the selection of my music to anyone but myself.

Re:Monopoly?

[mmarlett]

Tru dat.

Re:Monopoly?

[saider]

2) Provide marketing

This can be done cheaply on the internet. It is done all of the time.

There is a difference between doing it cheaply and doing it well. Internet-only campaigns will only get to a limited number of people. If you want to present your goods in front of more people in a targeted way (TV, radio and print ads), that takes more talent and money. Without targeted ads, you will not intersect with people who do things other than endlessly browse the internet in search of content (which you may be surprised to find out is most people ).

3) Find the promising artists and writers

They know who they are.

I recall a study where people often overestimated their capabilities and thought that they were better than they really were. I guarantee you there are more hacks who think they are God's gift to literature than there are of truly talented writers being ignored by the publishing cabal.

Re:Monopoly?

[mmarlett]

Yes, that's why iTunes is such an epic fail, costing Apple billions. Oh, wait...

Radio's strength is that DJs can repeatedly play crappy songs until you think you like them. Repetition, repetition, repetition. Ask any radio DJ. It's why payola is illegal in the U.S. -- record companies would pay radio stations to play the music which would in turn sell the albums. There was no gate keeper going on. There was no quality control, unless you consider "quality" to be the milquetoast slop that record companies want to sell.

If record companies built houses, they would build beige houses. Is beige a bad color for a house? No, it's neutral. It's not good and it's not bad. It's not challenging or interesting -- it's safe.

People are smart enough to look to a genre they like and start asking the crowds of people in that genre what is good.

Of course, how you're going to stop record companies from creating thousands of dummy accounts and flooding the ranking systems with bogus recommendations is a whole different problem.

Re:Monopoly?

[Anonymous Coward]

Btw, how exactly did you discover Slashdot was a useful source of information on the net? Did you have some publishers over at your house marketing it to you? Or did you just "find it"?

The internet has basically solved that problem for over a decade now.

Re:Monopoly?

[Anonymous Coward]

Because people just don't read books. They listen to lots of music. Music can get by on volume, books can't.

Furthermore, people have a higher capacity for music than they do for books. Reading a book takes a lot of *dedicated* time. Listening to music doesn't require any dedicated time. Time is a finite and rare resource.

The result: a lot of different authors would like to publish books, publishers don't make very much money on books. Margins are extremely thin. There is no room to discount electronic books.

Re:Monopoly?

[TJamieson]

But why should bits honestly cost that much.

My understanding is the price on bits needs to be high because those buying the bits are not buying the dead-wood editions; in other words, they have to (try to) make up the lost money from paper books on the electronic side.

Re:Monopoly?

[man_of_mr_e]

Record companies may not be able to pay DJ's to play their music anymore, but they get around that problem by owning most of the radio stations, and controlling their playlists.

You didn't really address my system. Your argument was that iTunes is successful, so moderation must work is kind of stupid. First, I never read the moderations of anything i buy on iTunes. I know what i'm looking for, and buy it. iTunes provides no market to me, it's merely a distribution channel.

I'm sure some people use it for such, and maybe it contributes a sizable percentage of sales, but there are still lots of people like me that prefer to make my own choices in music.

Re:Monopoly?

[ifrag]

Radio's strength is that DJs can repeatedly play crappy songs until you think you like them. Repetition, repetition, repetition.

Yeah... Um... OK. Maybe it works like that for you but I just turn the station off and plug in my iPod or play a CD. Hearing the same crap repeatedly does not in any way increase my appreciation of any song.

The first time I hear a song, I can usually tell if I like it or not, it's not much of an acquired taste and hearing it again usually changes nothing. Even songs I really like can get worn out through repetition to the point I'd rather put it at the back of the shelf for a while. If anything playing it more makes it worse not better.

Re:Monopoly?

[BrokenHalo]

This is nice because it promotes discussion.

Indeed. Amazon over-reacted when Macmillan decided it wanted more money for its publications than Amazon had been offering, and they must have known it.

I'm not really in the habit of defending publishers, but Macmillan's profile of publications covers a range of non-fiction, academic and textbook material that is way more expensive to produce than your average scheissdreck from Dan Brown and his ilk. To ask a higher price for these publications isn't exactly being unreasonable.

The fact that Macmillan is prepared to offer digital editions of its publications at all, rather than insisting that everybody pay ten times as much for a dead-tree edition is to be commended. Here's just one example of what I'm talking about. I would have loved to have a digital version of this bulky and heavy tome to carry around on a lightweight device while I was an undergrad, but neither the option nor the technology existed. In fact, Amazon's Kindle still doesn't offer the technology, since it is still stuck on monochrome displays.

Re:Monopoly?

[manicb]

(what do you do when you decide you want some background sounds from a symphony orchestra? Use a synth? the record labels would pay out for the real thing if you wanted it).

Easy. You'd use this or this or this or even this. If it's just "background sounds" what makes you so sure you could tell the difference? Good arrangement is much more important than virtuous playing. More professionals are using this stuff than you think. A sensible producer would certainly think twice before booking an orchestra if it isn't going to add anything.

Re:Monopoly?

[Havok3114]

A company is fully entitled to make money, that includes being compensated for everything you do. An ebook should be considerably less than a physical book, and usually is. Your thoughts on how this works is only valid if after the capital costs of producing the item are paid for, you see a drastic price drop. Like from 14.99 to 4.99 for an ebook, simply because it is pure profit for the company at that point. A physical book on the other hand you tend not to see such a drastic price drop over time because the cost of producing the book is always there. There are always capital costs associated with it. On digital media that simply isn't the case. So, either they have a bigger price then drop to a considerably lower price, or smaller price and stable. Over pricing something is the fastest way for it not to be used at all. $15 for an ebook is simply to much simply because you can't read it without having to buy something else to allow it.

Re:Monopoly?

[Wizard Drongo]

I can respect everything you say, and agree with most of it.
But e-book should and *does* cost less than deadtree. Why? Because after you've done all that hard work (and I admit it is a lot of hard work to take even a *good* manuscript and turn it into a passable book), your costs are almost zero. You don't have to print the book, you don't need to bind. You don't need to distribute the book, and take back anything on sale-or-return. You just have to send a 9 cent CD to Amazon and whomever else is selling your e-book. That's the lot.

Ergo, books and e-books should be *almost* the same price as each other, with dead-tree being that little bit more since it costs money to print, buy the paper, distribute the product etc. and it is a bit more luxurious to read a hard-copy book than on a screen
Also, the deadtree is worth more actual value, since it's readable whenever, wherever, and it doesn't have any DRM stopping you from loaning it to a friend etc.
So why is it nine times out of ten, dead tree costs less?
Seems to me the publishers are getting greedy here. If the deadtree costs $10, the DRM'd eBook should cost $5. Not $15.

Just my uninformed 2 cents...

Re:Monopoly?

[raddan]

Well, "value" is a funny thing. It really depends on who you're talking to. For you, yes, it is less valuable. Maybe we lose you as a customer. But for every one of you, there may be two other people who are willing to pay more, for the convenience. I don't handle any of the financial stuff, but I can tell which customers our financial people will be paying attention to. Suffice it to say, paper books aren't going away anytime soon. Maybe in 15-20 years that will be different. But convenience is really the driver here, as with many other markets.

Have a look at this post. There's a nice PDF there that will break down costs for you. The short answer to your question is that printing and distribution aren't a large part of the cost of a book to begin with, and e-books have new costs associated with them. Also given that e-books don't gain us any market-share (rather, it displaces market share we already had), and that we still have to do all of the traditional production alongside the new stuff, e-books really cost us more to make, at least at the moment. Oh, and it should be reiterated-- Amazon takes a huge cut. That ads a lot of cost to a book. To make a $20 paper book into a $9.99 e-book isn't so simple as cutting out the printing and distribution part and then selling the book without those costs. Maybe if we had our own platform.

Moving into e-books is risky at the moment, but the higher-ups tell me that they're looking very carefully at the failure of both the music and movie industries to get digital distribution done the right way. The reason why we got this short respite was that, until very recently, turning a paper book into an e-book at home was a gigantic pain in the ass, and not very useful. That's changing fast.

Re:Monopoly?

[Dragonslicer]

I know there's a bunch of front end costs in there, but you've cut out almost all of the physical costs, why isn't the book cheaper?

My guess would be that the physical costs are a small part of the overall cost. If a music CD only costs $0.25 to manufacture, why do you pay $10 for one? If the silicon in that CPU is only worth $5, why do you pay $200 for one?

Re:Monopoly?

[digitig]

You mean LEND money to the artist (the big advance check) the money [snip] You bill your artist for the marketing of the material, and over-bill the artist for for the service. [snip] Hey, maybe you can even bankrupt them in the process through creative accounting and call it a loss, and keep them touring forever to work off the debt! It's a bullshit deal.

It used to be the case that such costs were repayable but not recoverable. Is that no longet the case? On "repayable but not recoverable" the band could at least enjoy the high life for a while, and although they come out of it with nothing more than damaged nostrils and a trashed liver (not even ownership of their back catalog) the record company can't come after them for anything else but has to recover what's owed through exploitation of the back catalog.

Re:Monopoly?

[BrokenHalo]

Something that sounds like moose singing to me might sound wonderful to you.

I hope you realise that now you have mentioned this, you will have forced someone to start a new musical genre of moose vocals. And I thought Lady Gaga was bad...

Re:Monopoly?

[srealm]

For the record, I don't boycott books that are higher than $9.99. I boycott books that have DRM on them. Because I have several different platforms (my desktop PC, my laptop, other portable reader, etc) - and most DRM stops me copying the stuff freely between them. The reason I buy an ebook is for convenience - and if it's no more convenient than a regular paperback or hardback (ie. I am REQUIRED to carry around the one and only container it works in - even if it's lighter than the paperback and can hold many more books) then I don't see the point in it, after all, I still find paper much easier to read from.

Not to mention, after the debacle a little while back with the publishers being able to force amazon to hit the kill switch on purchased content, I just don't trust DRM, especially when it is in the hands of publishers to decide the fate of any content that has already been sold!

Re:Monopoly?

[nine-times]

Not only that, but if publishers (music, text, movies, whatever) want to justify expensive prices by claiming that otherwise they can't recoup their investment, then it only follows that the price should drop to almost nothing once their costs are recouped. After all, distribution costs are dropping and production costs (of the actual copy) are zero.

But in fact, that's not how these prices are being set. They're not trying to drive up the prices to $15 to reflect the cost of producing the book; they want to increase the price because they think people will pay that price and they'll make more money. I'm not blaming them for it. That's just the reality. If these companies thought they could increase their overall profits by charging $200 per book, they'd do it.

Re:Monopoly?

[Anonymous Coward]

Nice speech BUT there are some points that are conveniently left out. A "real" book is something tangible, that needs paper, covers, binding, materials, storage, distribution, etc. And I, as its owner, can read it, lend it, inherit to my kids, it even can make my bookcase look nice if I want to be a showoff, and in some cases, it will even gain an additional money value as years go by.
But an e-book is an intangible that is not totally mine. It is locked to a device (a book is not locked to my coach or my lamp!!), I have to spend money to buy that device, I cannot lend it or put it on display on my bookcase, I had to use MY resources to download it and store it. The publisher and intermediaries use a fraction of the costs to sell it to me, since they do not need storage or transport so I get my copy. So you are charging the same amount *just "cuz you say so"*. You are spending less money and materials to "manufacture" a book, yet I am being charged as if it were made of paper. All the other costs (editing, royalties, etc) are the same used for any other book. In the end, what do we have? the eternal fight between publishers and sellers, and the only ones that loose ar us, the buyers/readers.

Re:Monopoly?

[raddan]

I am not one of the bean counters, but I do know that trade publishing is highly volatile. Some books make tons of money; some make none or lose money. Publishing is largely a gamble on what you think people might like.

The price in any market is not set on what the consumer thinks is fair, it's based on what they'll pay. If it makes you mad, don't buy it. When the manufacturer sees that they could be making more money by charging a lower price, they'll lower the price.

Re:Monopoly?

[sourcerror]

"*The technique is widely used by advertisers to make their particular ad louder without breaking volume level regulations or normalisation."

As far as I know the volume regulation says that all frequency components bust be under a certain ampitude, so if you "normalise" with an equalizer, you get a higher average loudness (energy per area).

Re:Monopoly?

[The Archon V2.0]

The problem is sorting them out from the 10,000 other useless artists and writers who "know for certain" that they are the next big thing and are waiting to be discovered.

(Looks at Billboard Top 10.) I've yet to see proof that the industry knows how to do this better than anyone else.

Re:Monopoly?

[Necron69]

Ok, Mr. MacMillan,

What is the actual cost, per copy, of printing and shipping a physical textbook to a store, vs supplying one to Amazon or another e-tailer? Personally, I'd be shocked if it isn't at LEAST 50% of the cost of a book. Books are heavy, bits are light. :)

Until I see ebook pricing that reflects what I think is a fair discount from a paper book (or proof that I'm wrong), I'm no way in HELL paying $15 for an ebook.

Necron69

Re:Monopoly?

[Anonymous Coward]

Isn't one of the key reasons for this that physical retail outlets have said that if electronic copies are sold for less than shelf price, then those outlets will not stock them any more?

Re:Monopoly?

[mmarlett]

Uh, yeah. So. How did you hear about that music that you want to buy? Pick it up from signals hitting your teeth? You heard about it from your friends, probably. Which is really all we're talking about. A ranking system is just a way to get information from people whom you may or may not know, but it's not that different than word-of-mouth.

Record companies do not own radio stations. Not in America, anyway. For a while they got around the law by paying third party companies ("independent music promoters") to create playlists for radio stations, and the radio stations then don't have to have a program manager. After a few multi-million dollar lawsuits in New York, the record labels stopped doing that and the radio stations stopped buying playlists from independent music promoters.

But what you have now is seriously homogenized music choices that lean towards hits of the past (safe bets to keep listeners) instead of challenging listeners with new music. So radio does very, very little to introduce new music. Less than it used to under the payola system, which was ridiculously weighted towards the established record labels instead of independent record labels or the actual musicians.

Re:Monopoly?

[BrokenHalo]

...the Next Big Thing...while [generic crappy pop] music gets blasted at your ears anywhere you go...
The same can't really be said for books, surprisingly.

No reason to be surprised. You very rarely hear any really good music on commercial radio, and you will almost never find a good book by reading reviews in the tabloid media. Good literature or good music - it makes no difference. You have to go looking for it.

Re:Monopoly?

[Chryana]

Often, these books also come with software. I don't think I need to explain to people here how hard it is to write good software.

I'm not pretending to speak for anyone here, but I've bought a few books which came with software, mostly for school, and I can't remember any single time where I found the software that came with the book to be of much use. The only times I ever thought the software included with a book was useful at all was when
- the book came with a copy of some well know commercial software package (i.e. Maple);
- the book came with some source code, which was probably written by the author, and not by the publisher.
So, as far as I am concerned, you might as well make the book a bit cheaper and not bother writing any software for your books at all.

As another poster mentioned, the costs of publishing ebooks are vastly lower than the cost of publishing an equivalent paper copy. Your post completely sidesteps this issue.

I don't know exactly how it will shake out, but it looks like the Macmillan deal will probably be a turning point for e-books.

Neither do I, but I think the most likely turning point will be for MacMillan if they want to make significant sales in the emerging market for ebooks.

Re:Monopoly?

[manicb]

Excellent point. Independent producers often develop their own sound, which may sound lifeless until you TURN IT UP on a reasonable system. Just because something doesn't sound commercial doesn't have to mean it doesn't sound good - just might take getting used to!

Re:Monopoly?

[Anonymous Coward]

Really everything started because differents mediums have different dynamic ranges. So dynamic compression, works as a way to transfer the original recording to a different medium without lose sounds in the process.

Take for example, if you are going to broadcast a concert of classic music on FM, you had to compress the dynamic range or many instruments are going to dissapear literally "in the air". On a CD it's not necesary use that much of dynamic compression.

If't its well applied, dynamic compression can be a great tool to transfer music to mediums with a narrow dynamic range.

However, advertisers learned that dynamic compression was a cheap way to make their AD's sound louder.

P.D.: Sorry for my bad english ;)

Re:Monopoly?

[marga]

Setting a higher price for the ebook might make sense when the ebook was cheaper than the paper edition. If the ebook is more expensive than the paper edition, raising the price is only being greedy.

I understand that producing a book, either digital or physical, costs money. But printing it definitely costs more than copying it, and thus it makes absolutely no sense to charge more for the digital edition.

I know that there are books in both situations (cheaper ebook or cheaper paper book), I guess that most people here are complaining about the case where the paper edition costs less than the digital one.

The only possible explanation I find to charging extra for the digital form is that after buying it, people can copy it without paying. However, that is illegal in most cases and thus charging extra is only a way of pushing people to do something illegal, cause they paid for it anyway.

Re:Monopoly?

[Dzimas]

You're forgetting that the distributor takes a huge percentage of the sale price. Amazon's current price structure only gives 35% of the sale price to the publisher. A $4.99 increase will only net the publisher an extra $1.75. That's set to change this summer, when Amazon's new pricing structure sees roughly 70% going to the publisher -- if they're willing to sell for less than $9.99. Of course, the MacMillan spat and the arrival of the iPad just tossed a spanner into the works, so things could change quickly.

Re:Monopoly?

[amplt1337]

What's surprising is that it isn't possible to manufacture a hit book the way you can manufacture a hit pop band. Not that marketing can turn crap into gold in the music business; but that it can't in the book industry.

Re:Monopoly?

[Necron69]

Your referenced post conveniently lumps together printing in with other editing and overhead costs. In an ebook model, there IS no warehouse and massive overhead. I'm sorry, but that diagram is massively self-serving, and clearly a new ebook only competitor without your 100 years of bureaucratic crap weighing them down could eat your lunch.

I look forward to it, because they are going to get my money for their ebooks, and you aren't.

I repeat, I WILL NEVER PAY $15 FOR AN EBOOK, MacMillan.

Necron69

Re:Monopoly?

[flitty]

Makes sense, but you have points in there I didn't know, which seems to be the publisher's problem. Most people aren't going to know that e-books cost more to make than a printed book. It's so counterintuitive to think that the analogue version is cheaper than a digital version, that this is really a marketing problem. The temporary appeal of digital versions of books without a common format and without assurance that your book will still be readable on the next generation of e-readers seems to be a big issue with me to.

Also, if digitial versions of books aren't getting you new customers, something is wrong.

Re:Monopoly?

[N0Man74]

My guess would be that the physical costs are a small part of the overall cost. If a music CD only costs $0.25 to manufacture, why do you pay $10 for one? If the silicon in that CPU is only worth $5, why do you pay $200 for one?

I think you are assuming that by "physical costs", he just means the materials to make the CD. I think that it's reasonable to interpret "physical costs" as including everything from raw goods to make the product, to the fuel, materials, and man hours and all of the other normal costs of doing business that are involved with physical production, physical distributing, and selling of physical goods.

Re:Monopoly?

[BrokenHalo]

For years now, going back to the analogue days but increasingly over the past decade, audio has been "dynanic-range compressed" to increase the loudness of the song.

Not to increase the loudness, in the case of analogue recordings. Those black vinyl LPs were/are recorded with what is known as as an RIAA equalisation technique in order to reduce excessive movement (and resulting audio distortion) from a needle driven by a moving groove on a disc. This also allowed manufacturers to produce discs with longer playing times, since the grooves could be more closely spaced.

Re:Monopoly?

[mmarlett]

Nothing draws a crowd like a crowd. A song repeated on the radio implies that a lot of people want to hear it. That implies to a listener that it must be important. When it becomes important, it becomes ingrained. When it becomes ingrained, it becomes actually popular.

It works like this for you, for me, and for everybody. It is the basis of advertising and marketing of everything.

It is why book publishers will buy back unsold copies of books from bookstores -- if they can get the bookstores to believe that people will buy a book, then the bookstores will buy it in bulk -- much easier to do when there is no risk. Those bulk sales are what "bestseller" lists are based on. So then you have some Sarah "Can't Write" Steele with a national best seller, even though there are huge piles of the books still on the shelf two weeks later. But it's a best seller, so some people will think maybe it has some merit and will wonder in and see the end-cap display, deeply discounted already, and buy it. That guy -- the guy who wanders in two weeks later -- is the guy they go through all the trouble for. He sees "bestseller" and buys it just to see what the fuss is about. Of course, there was no fuss. He was the first one to actually buy the book.

Coca-Cola actually tastes like sweet battery acid, but I love it. Why? Have a Coke. I'd like to buy the world a Coke. Coke is it. Repetition, repetition, repetition. Soft drink companies pay millions for the right to be the product sold in fast food chains and stadiums. They pay so they look like a popular choice. They pay to have a crowd. They pay so you'll buy.

If you hear a song and don't like it, that just means that you either 1) actually don't like it or 2) are unfamiliar with it. If 1), then there's not much repetition will do for you but annoy you. If 2), then repetition will make it grow on you. But if it doesn't drive you crazy, it will grow on you. Or maybe it will do both. But record companies don't care as long as you buy it.

Re:Monopoly?

[raddan]

Also, if digitial versions of books aren't getting you new customers, something is wrong.

Yeah, like market saturation. There's not much you can do about that. But when your competitors sell their versions as e-books, and customers show a preference for e-books, you sell them too, to maintain market share.

Re:Monopoly?

[Dragonslicer]

I was only using those as examples. The point I was trying to make is that the majority of the cost in producing a book isn't printing and distribution, it's the original writing, editing, and, more in the case of textbooks than normal fiction or nonfiction, layout and artwork. If the printing and distribution are only 5% of the cost of a book, eliminating printing and distribution won't reduce the price by more than 5%.

Re:Monopoly?

[raddan]

Why all the hate? Sorry, I'd gladly post a better breakdown, but I don't have one. Also, I don't speak for Macmillan. I'm just am employee. I dislike DRM and the non-tangibility of e-books as much as any other geek. My dead-tree collection is huge, and aside from maybe not having to throw heavy CS books into my backpack, I don't really like e-books.

The whole point here is to learn from the music industry's mistakes. Get the whole supply-chain on the same page, early on, and everybody benefits, including the customer. Macmillan is saying that Amazon's price structure is a losing proposition. Does it really benefit the customer if Macmillan sells books at a loss and then goes out of business? Maybe, in the short term, but definitely not in the long term.

Re:Monopoly?

[c_jonescc]

You cannot simultaneously claim that ebooks should not be cheaper than physical books because they cost just as much to produce as paper books, AND that ebooks should not be cheaper because there is value added convenience. That simply reeks of arguing that ebooks should cost the same not matter how you have to frame the argument, ie. desperate. You would be better off arguing that your net profit should be the same in both worlds.

Convenience is not what your job is. Your job is to find authors, hone works, publish them, distribute them. Not trying to charge me more at the bookstore next to my house because it took less of my time to get there than the bookstore across town. That's a self-serving and absurd argument that you're making. Amazon found a way to make it convenient for me to read your books - YOU did not. But you want extra money for that convenience?

And I don't believe you one bit about ebooks costing so much to publish. You're not paying a whole line of people from lumberjack to printer to truck driver all of the sudden. There may be a larger upfront cost, due to whatever hardware/software growth, but suddenly your books are available indefinitely and don't need second printings. You can profit off of small sales books forever without risk of excess overhead and storage. And you NEVER sell out and miss on sales. Frankly, you are lying.

And it's ridiculous to classify text books in with all literature. Yes, what you work on requires fact checking, layout, et cetera for small numbers of sales. That's why textbooks cost $100 instead of $10, like the paperback novel. The latest airport novel needs none of that extra effort that is specific to your particular division.

Re:Monopoly?

[dewarrn1]

Yes, I see a minimum of $ 0.242 wiped out or changed by ebook distribution, plus some unknown fraction of $ 0.321. My math: $0.047 college store income + $ 0.068 college store operation + $ 0.114 college store personnel + $0.013 freight = $0.242. A 25-50% change in costs seems substantial.

Re:Monopoly?

[Anonymous Coward]

Radio's strength is that DJs can repeatedly play crappy songs until you think you like them. Repetition, repetition, repetition. Ask any radio DJ.

Dale a tu cuerpo alegria Macarena
Que tu cuerpo es pa' darle alegria y cosa buena
Dale a tu cuerpo alegria, Macarena
Heeeeey Macarena
AAAhAA!

Oh wait ... you were saying something?

Re:Monopoly?

[bugi]

Your own platform? Excellent idea! Every ebook reader supports *plain text*. I for one would be quite happy with plain text for novels. I suppose you'll need a bit more for text books for the images, equations, footnotes and tables -- maybe there's some standard xml document type for mixing text and image?

Oh, wait. You said your *own platform*. Silly me, I thought you had an issue with Amazon's lock-in.

Re:Monopoly?

[Anonymous Coward]

Well, "value" is a funny thing. It really depends on who you're talking to. For you, yes, it is less valuable. Maybe we lose you as a customer. But for every one of you, there may be two other people who are willing to pay more, for the convenience.

So what you're saying is that there are more people with money then brains? Really, paying more for the ebook then for a paperback version is stupid. For starters: The publisher does not have to rent warehouse space, publish the book, take back unsold copies, and do whatever it is that they need to do to keep a physical book intact until it gets sold. So the storage costs and transportation costs need to be taken out of the equation. Not being in the industry, I don't know what those costs are, but I would guess they are about a third of the cost of the average book. So, if a paperback costs $9, then the ebook should cost $6. But wait, there's more!

Moving into e-books is risky at the moment

The risk is that publishers do not want to alienate their biggest customers: National Book Chains. They are afraid that if they make the price of the ebook to low, they will begin to lose sells to their big customers. If that happens before ebooks can sustain the business, then they will go out of business. It is not that publishers love the National Book Chains, in fact they hate them, they are taking away apart of their profit. Remember where we were on the price of the book? We were at $6 after transportation and storage, but the book seller needs to make a profit as well, so they might get the $9 book for $6. Well, that $6 includes the cost of printing, transportation and storage, so the book publisher only makes $3 on that book, therefore the cost of an ebook should be about 2/3rds the cost of the paperback. Or $3.

But wait! Why should the publisher make $3 on a sale direct to the customer when they can cut out the middle man and make $9 or even $15!!! So selling an ebook at $15 makes their National Book Chain stores happy, and it makes the publisher happy, and it conditions the buyer into thinking that ebooks really should be that expensive. That way, when the ebook sells make more money then the dead trees, and the publishers tell the National Book Chains that they aren't needed anymore, well, they don't need to cut the price back either because the public has shown that they like being screwed.

Re:Monopoly?

[2obvious4u]

Sounds like MacMillan needs to diverge into two new companies. You need a publishing company that sells physical books and then you need a new company that sells ebooks. The overhead of the paper book business shouldn't affect the cost of the paper book business. A lot of the overhead from the pdf you linked to only applies to the old fashioned paper books. I don't want to pay for that overhead.

Here is a summary of the pdf:
32.1% Publisher's Paper/Printing
15.3% Publisher's Marketing Costs
11.5% Authors Income
11.4% Book Store Employees
9.9% Publisher's Administrative Costs
7.0% Publisher's Income
6.8% Store Operations Costs
4.7% Store Income
1.3% Freight Expense


Of which nearly 50% of the cost is not there for an e-book.
The first 32.1 percent can be reduced and outsourced to a distributor like Amazon.
The next 15% is a justified expense of a publisher.
We want our authors to get paid.
Why is a store getting 11.4 percent? This rolls into the outsourcing to a distributor like Amazon, this cost should be gone.
In the electronic age the publishers administrative costs should be declining, but if they aren't this 9% is justified.
7% to publishers income, well if thats what you need fine.
6.8 to the store, I don't think so.
4.7 to the store? No thanks.
1.3 for shipping? Not anymore.

Expected discount for an e-book between 24.2 and 56.3 depending on how much printing costs can be reduced.

Re:Monopoly?

[Oligonicella]

"It works like this for you, for me, and for everybody."

Do not project. Advertising doesn't work on everybody. All you're saying is it works on you and therefore you think it must work on everybody. Untrue.

Re:Monopoly?

[sourcerror]

As far as I know with encoding used in CD you lose phase difference. I'm not claiming I can hear phase difference. But theoretically it should be possible to retain that information, I wouldn't be surprised if FLAC would do that.

Re:Monopoly?

[Oligonicella]

Agreed. I once had a man who restored old Victrolas tell me that they actually produced a more accurate sound.

Re:Monopoly?

[srmalloy]

Have a look at this post. There's a nice PDF there that will break down costs for you. The short answer to your question is that printing and distribution aren't a large part of the cost of a book to begin with, and e-books have new costs associated with them. Also given that e-books don't gain us any market-share (rather, it displaces market share we already had), and that we still have to do all of the traditional production alongside the new stuff, e-books really cost us more to make, at least at the moment. Oh, and it should be reiterated-- Amazon takes a huge cut. That ads a lot of cost to a book. To make a $20 paper book into a $9.99 e-book isn't so simple as cutting out the printing and distribution part and then selling the book without those costs. Maybe if we had our own platform.

Looking at "printing and distribution aren't a large part of the cost of a book to begin with", the PDF linked to in the posting gives $0.321, the single biggest piece, as "all manufacturing costs from editing to paper costs to distribution, as well as storage, record keeping, billing, publisher's offices, employee's salaries and benefits." So basically the linked PDF tells us nothing about how much of the costs will go down by eliminating a) paper costs, b) printing, c) storage, and d) distribution; the only quantifiable reduction is the elimination of the $.013 shipping costs. We have no way to tell what the printing and distribution costs are, except for your unsupported assertion, and the documentation you cite provides no actual information to support your claim.

As for "we still have to do all the traditional production alongside the new stuff", consider that, unless you're still seriously mired in decades-old typesetting, the books you are publishing are edited electronically and sent to the printing machines electronically; the "new stuff" consists of a single conversion program that takes the electronic format you use for editing and proofing and converts it to the e-book format you're going to be distributing; dragging the file icon to copy the final edited version to the fileserver where a batch process will automatically read new files, convert them, and send them to whoever is responsible for emailing a single file per book to the end seller is, after all, such a massive investment of time and effort. But, looking at the trail from the finished electronic version to the end product, an e-book exists only as a data file, whereas a DTE book still has to be printed and bound, then boxed, and stored until shipped to a bookstore.

And don't forget returns. In a piece on NPR last year, Mr. Jed Lyons, President and Chief Operating Officer at Rowman & Littlefield Publishing, part of the National Book Network, stated that roughly 25% of what they ship comes back as unsold. Now, this excludes paperbacks, which are stripped by the store and destroyed because they're not worth shipping back to be redistributed, but this whole flap with MacMillan is over new titles, which would presumably be hardback. All your costs for returns disappear for e-books; since the seller only gets one 'master', and that's electronic, there is nothing to return; the bigger the fraction of e-books a publisher sells, the smaller the number of employees they have to hire to handle returns; another cost that isn't broken out in the PDF you cite -- there is a cost on the part of the store for personnel costs for various functions, some of which (shelving, returns, pricing) go away or are severely reduced by e-books, but nothing broken out on the publisher's side.

'Moving into e-books is risky'. I think that you're greatly mistaken; e-books is perhaps the biggest opportunity for publishers that has come along in decades; adopting e-books means that the compression of the midlist, where authors whos

Re:Monopoly?

[anyGould]

I agree with you on 1 (recording equipment and studio space is getting cheaper all the time) and 3 (ease of entry means bands can "discover" themselves), the studios still hold an advantage on 2 and 4. An independent band will have far more trouble getting radio play, not to mention shelf space at the HMV or Walmart.

Digital distribution is eroding that advantage, but it's still there.

Re:Monopoly?

[PopeRatzo]

1) Provide money and pay the big costs while artists are producing their album
2) Provide marketing
3) Find the promising artists and writers
4) Have the distribution channels

Not a single one of those things is necessary any more.

The cost of producing albums is only artificially inflated by the labels themselves. The only music that requires the kind of "marketing" that major labels do is crappy, "industry-created hype-machine" music like Lady Gaga or the 2010 equivalent of Pat Boone known as "American Idol". How many of you have found your favorite artists through "marketing"? The mechanisms that the labels used in the past to find promising artists and writers just isn't required any more. There are still record execs out there soaking up fat expense accounts going around to L.A. clubs listening to bands, but they don't really find anybody that way any more.

The last item, the "distribution channels" are the biggest lie of all. The most effective model for a "distribution channel" for music is TPB. If it were up to the music industry, we'd all still have to line up in the old "superstore" record departments and be paying $25 for records that cost about $3.00 to make (including the $1.50 for the artists, songwriter, engineers and producer). Only shitty music sold to the rubes requires a "distribution channel", which basically means having the radio stations (which are owned by the same conglomerate) play it over and over and over and having the television networks (which are owned by the same conglomerate) put the shitty artists on at every opportunity and having an army of P.R. flaks working round the clock to get bullshit "news stories" about the shitty artist into the newspapers and magazines (owned by the same conglomerate) until the general public just starts to assume that this must be a successful and wonderful artist because they've heard her fucking name a thousand times just this week. A great rule of thumb is this: if the music requires press releases and a huge marketing machine to sell, it almost certainly sucks. I'm trying to think of an exception to this rule, but can't come up with any. I'll leave the door open to the possibility though. This is how the miserable drek from "American Idol" ends up on the Billboard charts. It's music for people who don't care about music.

You need a good studio.

Another whopper. Maybe the big mega-hype artists do all their work in high-priced studios, but you'd be surprised how many really successful artists do the bulk of their work in project studios and other small, inexpensive facilities. Look at the top-ten lists of really good music critics from 2009, and you'll see lots of great records that were produced in home or project studios. Groups like Air's Love 2, Wolfgang Amadeus Phoenix, St.Vincent's Actor and Moby's Wait for Me were made at home yet made a lot of top 10 lists.

Don't get suckered by the propaganda put out by the music industry. They're a hugely top-heavy industry that is way past its expiration date. Don't trust the entertainment/industrial complex to "guide" your musical tastes. The people they put forth as "artists" aren't even real people, but rather vat-grown mutants. Everything you need to find and hear great music is at your fingertips. Have a little respect for yourself and for the art form known as "Music".

Re:Monopoly?

[mmarlett]

No, it works on everybody. Scientific fact. Even misanthropes are a market. A niche market, but a market. You may not respond well to mass marketing, but you do respond to some sort of marketing.

We learn language and life skills through repetition. Advertising and marketing just build on those hooks in the human psyche.

You may use the brand of deodorant that your mother bought for you when you were a kid, but some day that brand won't be made anymore. Then you're going to have to make a choice. When you go to make that choice, you'll be open to advertising. You'll be assessing brands on how you feel about them based on their past advertisements. Oh, you might go to Consumer Reports or do weeks of comparisons from trial-size samples, but even in doing those things you've still been exposed to and influenced by advertising.

I'm not saying that we're all unthinking blobs who gesticulate to the biggest billboard. I am saying that advertising (or marketing) influences everyone. I don't care if you're buying a banana, a song or health insurance -- advertising influences people. (Do you like bananas? They only exist in American markets because of heavy advertising.)

Re:Monopoly?

[sjames]

Nevertheless, it strongly suggests that market dynamics cannot play their proper role in this sort of situation. Market theory requires that multiple producers provide interchangeable goods.

Re:Monopoly?

[ajs]

You seem to be confusing data compression with audio compression.

I'm not confused at all, but there was no way for me to be sure which was being discussed, so I responded to the one that seemed to make the most sense.

For years now, going back to the analogue days but increasingly over the past decade, audio has been "dynanic-range compressed" to increase the loudness of the song.

Correct.

Interestingly, however, dynamic range compression doesn't actually cause the problems the OP was suggesting. Thus, I turned to data compression which does, when over- or mis-used.

Re:Monopoly?

[ajs]

The guy is talking about loudness, i.e. audio levels compression not audio data compression.

No, I don't think he is unless he was confused about what range compression does to audio. When someone says "compressed to shit," I don't think they're talking about dynamic range compression.

Re:Monopoly?

[raddan]

"all manufacturing costs from editing to paper costs to distribution, as well as storage, record keeping, billing, publisher's offices, employee's salaries and benefits."

You're right, I don't have access to all the cost information. It's not my job. But let's break it down:

editing cost-- still there
paper cost-- gone
distribution cost-- smaller, but still there (oh wait, servers run on teh magic of the Internets! I forgot!)
storage-- mostly gone (no returns anymore), but still no magic Internet dust to run your data center
record keeping-- still there
billing-- still there, and more complex; books are often a large collection of sub-licensed works (this is the part that I write software to manage); you have to have permissions agreements for those copyrights, separate from print agreements, which means you need to pay people to negotiate those agreements
publisher's offices-- yes, we still have offices employee's salary and benefits-- yes, we still pay our employees, and we need to pay the people who pay the employees (HR, A/P, and HR systems we subcontract) You can see that there isn't much to trim.

the books you are publishing are edited electronically and sent to the printing machines electronically; the "new stuff" consists of a single conversion program that takes the electronic format you use for editing and proofing and converts it to the e-book format you're going to be distributing

It is much more complicated than this. The author hands us a manuscript in something (anything really). Editorial works on this in a word processor, usually Word. This is handed to Production, which typesets using page-layout software. This could be anything from LaTeX to Quark or InDesign, depending on the title. Mostly, this part is making the book readable, inserting art, etc. This produces print-ready PDFs that go to the printer. Digital typesetting is faster than moveable type, sure, but it still takes weeks to months. Don't think about the $4.99 paperback at Wal-Mart; think about the 4-color coffee table book, or the 4-color chemistry textbook. Making these things is hard.

The e-book process goes all the way back to the handoff between Editorial and Production. Why? Because the output of a traditional Production department is a PDF for print. e-readers are a completely different beast. For one, artwork is tricky. Does it look good? Do we have rights to distribute it electronically? Same goes for other poems, short stories, essays, maps, etc, that we sub-license. Every single page of every single e-book must run past at least one production person. The end-result is an e-book that is mostly similar, but almost always different than the printed version. And we'll have to do that for every platform the e-book goes to, dealing with all the little quirks of each one. Production is QA. We still have to do QA, regardless of the medium.

All your costs for returns disappear for e-books; since the seller only gets one 'master', and that's electronic, there is nothing to return

This is true, and getting returns right is very difficult. I don't know what our actual return rate is, but we're always trying to keep it low. FWIW, the guys operating the shredders make minimum wage. Processing is not the huge cost-- it's taking unsold books back and having to recalculate our earnings.

I think that you're greatly mistaken; e-books is perhaps the biggest opportunity for publishers that has come along in decades

I completely agree with you here. By "risky" I mean: it takes a lot of startup capital to move into e-books. In order to make money, the process has to be efficient. If we make a mistake, we end up wasting a lot of money. And, I know Slashdotters hate to hear this, but, if people are sharing our books via Bittorrent, that can have a huge negative effect on our bottom line. How much? We don't know yet, because this industry is new. Digital versions are easy to copy; if we don't get the incentives right, people pirate our books instead of buying them. That may be great for you, but it ain't good for a publisher.

Re:Monopoly?

[Zerth]

The same can't really be said for books, surprisingly

One word: Opra

Other than book reviews or bookstore newsletters, and perhaps the rare internet ad, she's the only radio-like form of book marketing that comes to mind. People buy those books because she makes them popular, not because they are good.

I wonder if somebody can make another "hitmaker" personality for books, or if this was a fluke.

Re:Monopoly?

[7Prime]

Sorry, but the poster is right. Humans and animals alike are hard-wired to enjoy things that are familliar to them. There may be the paripheral fascination with exploring new territory, but by-and-large, humans are very slow to accept new things, and are much more likely to choose the familliar over the unfamilliar. In the right setting, with the right mindset, people can be willing to branch out a little, but for the most part, it's contrary to our nature. Playing a song over and over again, in the background (as radio usually is), is a good way to build familliarity, and thus, a comfortable center for individuals. So, when people go down to the record store to buy some music to listen to on a regular basis, they buy the things they've heard, that being the stuff that DJs have shoved down their throats.

Even those of us who claim to enjoy exploration only do so because the act of exploration itself has become familliar and comfortable with us, but we all have our self-imposed limits.

Re:Monopoly?

[stdarg]

Coca-Cola actually tastes like sweet battery acid, but I love it. Why? Have a Coke. I'd like to buy the world a Coke. Coke is it. Repetition, repetition, repetition.

You're exaggerating quite a bit. Repetition in advertising is important, but doesn't by itself explain why Pepsi still exists if Coca-Cola out-repeats them (which they certainly do). Some people just like Pepsi more than Coke. Also, most people who like Coke genuinely like it, they don't think of it as a sweet battery acid.

There's another type of person who likes things specifically because they are unknown which makes them feel more artistic or whatever. I remember a website called audiogalaxy.com that let you join groups and share songs within that group. I quite enjoyed songs I was sent that I had never heard of and in genres that were totally unfamiliar. And last.fm was very similar, at least a few years ago before they were bought out.. nowadays they seem to play much more mainstream stuff.

Re:Monopoly?

[stdarg]

Even with classics there's a tendency for that to happen. Experts publish lists of classics, which get picked up by school systems and people who want to experience the classics, and it kind of self perpetuates after that. For instance, you'll see James Joyce at the top of many lists of modern classics even though many people who read him don't enjoy it.

Re:Monopoly?

[Zerth]

Indeed. I'm not going to boycott MacMillan because they charge $15. Some books cost more, some less, and I think that they should have the freedom to adjust pricing however they like.

If it is a hardback that costs $25 and the ebook is $15, I'll happily pay $15 for it. I'll gripe about the rising costs since I was a kid, but I won't begrudge the publisher his bit.

However, if it is a paperback that costs 8$ or $10 or even $15, I'm not paying $15 for the ebook. I'll buy the print version and warez the ebook.

If the publisher isn't will to share some of the savings, on printing costs and if they get a better split from Amazon than brick & mortar stores, they can get bent.

Re:Monopoly?

[infinitelink]

Coca-Cola actually tastes like sweet battery acid

Actually the idea is that it tastes like Cocaine, which you can still get legally (in the form of the leaves) in Columbia for altitude sickness. (They're sold quite openly and tourists chew them while ascending in altitude.) I believe the original taste has not been preserved but modified--they had a special not too long ago where the original taste (though not formula, of course!) was bottled so people could try, but nonetheless it's not so different as to have totally rejected that idea.

When I say "the idea is that it tastes like Cocaine" I don't mean to imply they want people drinking it of curiosity to sell drugs, as one might psychologically assume, either; when Coke first became available Cocaine use was still a rather individual choice and substances much less regulated, neither glamorous nor exactly frowned upon: just another substance for various uses and purposes. The point of drinking Coke? People liked it. Sure they were "nudged" by advertising (and hooked by its addictive properties), "probably" more than "nudged", but people did like it, and still do; in fact as unbelievable as this may be, people like many other substances' tastes that we would think nobody should or would, from commonly known ones like antifreeze (was often used in Wines, is still found in BBQ sauces and other goos needing thickening) to dangerous "trade secret" chemicals (chemicals that are not subject to EPA regulation because of the claim they are secrets for trade purposes--perhaps some are even in coke, and many are probably in the various popularly flavored chips: read the back of Doritos bags indicating secret ingredients not available upon request except by physicians for treatment and diagnostic purposes, who must sign in aggreement to nondisclosures), that if listed (or in the case of the secret ones, if known) would be just as baggage-loaded with nefarious implications as your statement above is by injecting "battery acid" in near proximity to "Coco-Cola".

Should we be consuming all this stuff? It's arguable, and it depends; depends on form; depends on a person's genes (Swedes can slam pots of coffee no problemo, whereas those of other genetic ethnicities may get heart attacks, murmurs, and other issues drinking that much or even any amount of coffee; eggs are good, eggs are bad, cholesterol intake is good no bad, milk intake after maturity is good no bad, etc. etc.--the un-PC decisive factor here is we are all NOT the same with regards many qualities, and it can be or usually is sex, race, ethnic, genetic -u/ally or individually based.

On a side note, I'm no advocate of mistreating anyone based on these factors, and affirm that we are to affirm and protect the rights granted under law without regards these or these sorts of things or distinguishing factors. And relatedly, it's this sort of stuff, i.e. whether something is good or bad, dangerous or not, etc., which in reporting betrays how unscientific our society has become, surrendering the discovery and confirmation of mechanism and causation (through repeated testing under wide and various conditions implementing controls while mitigating confounding and other variables) in favor of the pragmatic methods like finding statistical connections and despite not further experimenting, heralding new such connections as important and advance of science, rather than mere fodder in need of testing where true and where inapplicable. Everyone wants to proclaim "but wider sampling and accounting for variables means it becomes scientific", but that rather means it becomes less and less individually applicable and more generally observed, and all the more reason for beginning testing such connections with regards all the things denied or forbidden by egalitarianism taken to the absurdities it demands.

Re:Monopoly?

[Anonymous Coward]

From someone outside the industry, Macmillan's job needs to be educating the public on why a book, that no longer needs to be printed, and distribution costs have been cut 10-50 fold, why are these books still as expensive?

From someone else outside the industry, Macmillan's job needs to be making ebooks. Good ones. Preferably cheap. And if you don't make 'em good enough, or make 'em too expensive, we'll find someone who does.

That's what capitalism is about, right?
At least that is how I understood it. I never understood it to mean you're entitled to an explanation.

Note: I'm not necessarily a fan of capitalism. But Macmillan is a private company, out to make a profit, and you can "vote with your dollars". They shouldn't have to explain their reasons to the public, they should just make good stuff. If they have to explain their reasons to the public, they need to pay someone to do that. Meaning they either produce less good stuff, or stuff of lesser quality, or that the price of their good stuff increases. The dollar-voters will probably not go for the latter, and the first will cut into their margins, so quality is the most likely victim.

So please. Stop explaining, get your ass off slashdot and get us some quality in your products.

I'm still confused on why I can get a CD at my local music store for $10, when online it's the same price. I know there's a bunch of front end costs in there, but you've cut out almost all of the physical costs, why isn't the book cheaper? Especially when you're locked into a proprietary DRM laiden format, and cannot pass the book off to anyone else? Electronic books are Less valuable, and should be priced as such.

Re:Monopoly?

[ifrag]

You may not respond well to mass marketing

Really? So turning the radio off is not responding well? Who would have thought...

Maybe you have a point, but on a personal level I just don't accept that everyone is vulnerable to this crap we are exposed to, especially if an active effort is made to reduce exposure to a minimum. Especially in this group, if there are people who go outside the bounds of your normality this is certainly a place to find it. And to address your implication, I suppose on some level I dislike humans, but not all of them, just most.

Perhaps if I exposed myself to more opportunities of allowing advertising to be rammed down my throat there might be some vulnerability but I try not to take those chances. When the radio doesn't sound like I want it gets turned off, I surf with ad-block plus or privoxy (or both) of course, and I never watch live TV on a station which uses commercials (or on the extreme time I do then I channel surf during them). I suppose you can continue to contend that I'm responding by some other means of advertising because even the cereal box itself is advertising in a way. And there are even the stealth product endorsements seen by the product placement in TV shows and movies. Product exposure is pervasive and goes as far as simply being around people who are using them.

The blanket statement that it works on everyone is just too simple minded to be true. Perhaps it takes an active effort to reject it, but I think if you can consciously analyze what is trying to be done through marketing then you stand a far greater chance at being able to make independent decisions. I'll admit many are probably tricked into it without realizing, but for someone who is actively looking for it (or even ignoring it intentionally) the effect must be greatly diminished if not eliminated.

It may take a lot of thinking, but mass marketing is not an inevitable success. It might work on most people, but there's no way this blanket statement can be made about everyone unless your sample size really is everyone. Even a single person fitting outside of your "scientific facts" means they are wrong.

Re:Monopoly?

[Patch86]

Record companies may not be able to pay DJ's to play their music anymore, but they get around that problem by owning most of the radio stations, and controlling their playlists.

Record companies do not own radio stations....But what you have now is seriously homogenized music choices that lean towards hits of the past (safe bets to keep listeners) instead of challenging listeners with new music. So radio does very, very little to introduce new music. Less than it used to under the payola system, which was ridiculously weighted towards the established record labels instead of independent record labels or the actual musicians.

Just another way on just another day that I'm thankful for the BBC. Bless you, Auntie.

Re:Monopoly?

[biryokumaru]

Despite its etymology, schizophrenia is not the same as dissociative identity disorder, previously known as multiple personality disorder or split personality, with which it has been erroneously confused.

- Wikipedia, Source of All Knowledge

Re:Monopoly?

[Spykk]

Amazon has been selling e-book versions of Macmillan titles at a loss

Apple can do this, because they're not taking as big a cut as Amazon does

*head asplodes*

Re:Monopoly?

[dangitman]

For years now, going back to the analogue days but increasingly over the past decade, audio has been "dynanic-range compressed" to increase the loudness of the song.

Got any evidence for that? From my experience, this trend has been declining, and is almost non-existent today. Of course, I don't listen to "pop" music, but why would anybody expect quality recordings in that realm? The stuff I'm buying has decent dynamic range, and sometimes extraordinary dynamic range.

Re:Monopoly?

[lennier]

Uh, yeah. So. How did you hear about that music that you want to buy?

I never did, because it was illegal for my friends to share their music with me.

I'm sure the Internet and social media can become a much more efficient distribution channel - but in order to to that, it has to allow pervasive quoting. Creative Commons could enable this - but how many bands yet release cc-by-sa licensed tracks? Or even cc-by-nc?

Youtube and Facebook have become the de facto social media channels - some of my favourite bands release Youtube videos ( eg http://www.youtube.com/watch?v=7wKhrEFzLfM ) which I can happily promote via Facebook - but this doesn't really seem optimal. It's still strictly speaking illegal for me to upload a track to Youtube to promote a band, and I could get hurt bad if I try.

Whatever happened to the various early-2000s Open Music sharing initiatives? Any of 'em still around?

Re:Monopoly?

[Lunzo]

Dynamic range compression is only used by songs that are expecting to get on the charts: pop, rock, rap etc. Also some "digitally remastered" albums of old bands will be compressed so they sound as loud as the newer stuff.

Re:Monopoly?

[Anonymous Coward]

"monopoly over their own titles" That word does not mean what you think it means...

That's exactly what it means. Copyright grants the author a limited-term monopoly on the reproduction of their work. This shouldn't be hard to understand...

Re:Monopoly?

[electrons_are_brave]

Moderation is a terrible system for Music, because musical tastes vary so much. Something that sounds like moose singing to me might sound wonderful to you. The *ONLY* way to know good music is to listen to it yourself, which is why Radio's have been very popular marketing tools for so many years.

I don't know about you, but I don't want to entrust the selection of my music to anyone but myself.

"Good" versus "Bad" comes down to personal taste in the end for creative products (music, art, fiction etc).

But when it comes to books with technical and scientific content, publishers play a big role in ensuring some degree of credibility. This has always been true of peer-reviewed journals and texbooks.

Imagine you have just been diagnosed with an illness. If you wanted additional credible information (apart from what a doctor told you),and had exhausted the "factsheets" on the internet, you would be wise to check a book published by a credible publisher over a self-published book.

Anyone can decide on what artistic products they want - but with expert information, you need a trustworthy source to tell you what's good or bad.

Re:Monopoly?

[Anonymous Coward]

The price in any free market is based on what it costs to produce. If a manufacturer raising their price causes them to make more money, rather than lose all their market share to their competitors, then something's wrong with the market.

Re:Monopoly?

[electrons_are_brave]

CDs aren't really a going concern anymore amongst certain cross-sections of society. Books, however, are still mostly distributed in bookshops and libraries.

If there was a device on the market that was cheap and highly readable (i.e. the equivilant of what MP3 players were to music files) then online distribution would become a big deal.

Untill then, I think the comparison with music is a little bit overdrawn.

Re:Monopoly?

[mmarlett]

Hey, I'm all for ending the war on drugs, but Coca-Cola was not trying to taste like cocaine, it was made with cocaine -- 9 mg per glass until 1909. Coca leaves, kola nut extract, carbonated water and sugar. I can understand why they'd drink it.

But what we have now is worthless to consume and not even that pleasant. The reason we consume it is because we're told we should. By advertising. Mmmm... Slurm!

Re:Monopoly?

[man_of_mr_e]

No, I do not hear about new music from my friends. In fact, my friends don't have the same musical tastes as I do.

I find music via 1) listening to the radio 2) by buying random music, which has it's ups and downs and 3) Pandora, which presents music based on it's similarity to other music I like. I do not use rating systems to buy music. Ever.

And yes, Record companies do own radio stations. Not directly, but via parent companies. As an example, Columbia Records, Epic, etc.. are part of CBS (and Sony BMG), and CBS owned (until recently) ClearChannel which owned a ton of stations.

It's all very messy, but the record labels are all part of larger conglomerates that all have their fingers in various pies, including radio stations.

Re:Monopoly?

[dangitman]

So, where's the evidence that this practice is increasing?

Re:Monopoly?

[Kartu]

editing cost-- still there

If the book isn't illustrated, it's hard to understand what is there to edit specifically for ebooks.

distribution cost-- smaller, but still there (oh wait, servers run on teh magic of the Internets! I forgot!)

Not "smaller", but "gone". You can't seriously compare price of sending tons of books to stores to sending a file to amazon and the likes.

storage-- mostly gone (no returns anymore), but still no magic Internet dust to run your data center

You don't create any additional data centers for ebooks, do you? You already store all books in digital format, don't you?

And, I know Slashdotters hate to hear this, but, if people are sharing our books via Bittorrent, that can have a huge negative effect on our bottom line.

Then, logically, you should stop selling ebooks altogether.

Re:Monopoly?

[jecblackpepper]

More to the point, why are e-books MORE expensive than printed ones. From the small sample of books I've looked at, Macmillan's books shows that ebooks are often priced up around the hard cover recommended retail price, let alone the hard cover street price, and certainly not near the paperback price even when a book has been out in paperback for months or years. Here's an example of a two year old book: Off Armageddon Reef by David Weber. When I can get the paperback for $8, why is the DRM'd ebook $14?

If Macmillan were to price their ebooks at the street price of the current edition being sold then I'd be happy for them to set whatever price they want for the book. They'd still make more money than the printed edition since they have none of the physical distribution costs. But while they have this crazy pricing scheme I just cannot support them. They clearly wish that ebooks didn't exist and want to price them out of the market so that they can stick with their comfortable printed world.

Re:Monopoly?

[psychodelicacy]

I'm not necessarily talking about the sciences. I'm an academic in the humanities, and it's an accepted fact that some publishers have better editing and proofreading than others, some are better at procuring good-quality research than others, and some just turn out any old crap in order to meet some kind of quota. So I definitely take the publisher into account when deciding whether or not to spend a hundred dollars or more on a book for work. When it comes to books for leisure, I would tend to avoid self-published works unless they look wildly interesting or I have a recommendation from someone I trust. This doesn't apply to anything published on the internet, of course - if I'm not paying for it, I don't really mind if it turns out to be rubbish!

Re:Monopoly?

[Anonymous Coward]

If the book isn't illustrated, it's hard to understand what is there to edit specifically for ebooks.

He said 'still there', as in nothing *specifically* for ebooks, but the same as for physical books.

Re:Monopoly?

[lennier]

The price in any market is not set on what the consumer thinks is fair, it's based on what they'll pay.

This is a very good point. Why does it turn out that people seem to often pay more than what they think is fair?

Re:Monopoly?

[s0l1dsnak3123]

So you've never walked into a library and "discovered" a book you've never heard of before that turned out to be an amazing read? Wow...

Re:Monopoly?

[mmarlett]

Everyone short of those suffering from very, very serious mental defects, but especially those suffering from simply serious mental defects. I mean, if you're not drooling, you're responding to advertising and marketing.

Re:Monopoly?

[hendrikboom]

I've been told that the encoding used on CDs *can* preserve phase difference, but that it's extraordinarily easy to mess it up, and that it usually is messed up. One of the ways you hear phase difference is in the direction you hear sound coming from.

Re:Monopoly?

[Seriousity]

I can't believe you managed to say all that in only eleven sentences. Some of those were tiny sentences, the others were Huge.

Cool story though bro.

Re:Monopoly?

[Seriousity]

Also, did you know Coca-Cola still uses Coca leaves?

In the United States, Stepan Company is the only manufacturing plant authorized by the Federal Government to import and process the coca plant, which it obtains mainly from Peru and, to a lesser extent, Bolivia. Besides producing the coca flavoring agent for Coca-Cola, Stepan Company extracts cocaine from the coca leaves, which it sells to Mallinckrodt, a St. Louis, Missouri pharmaceutical manufacturer that is the only company in the United States licensed to purify cocaine for medicinal use. Stepan Company buys about 100 metric tons of dried Peruvian coca leaves each year, according to Marco Castillo, spokesman for Peru's state-owned National Coca Co.

-- Wikipedia article on Coca-cola

Re:Monopoly?

[Seriousity]

The banana market is flourishing here in New Zealand, they are hardly advertised at all.
(USA has refused to trade with New Zealand since 1984, due to the anti-nuclear policy; although there are talks of a free trade agreement in the works... To be honest, I don't want my country to be americanized any more than it has already been, but our leaders are sold out to the same people your leaders are)

Ugh.

[Pojut]

$14.99 for a freaking E-BOOK?!?!?!? No. No no no, and no.

Why would I pay twice the cost of a paperback version just so I could have a digital version? I realize there are costs associated with OCR services, but most writers use computers now anyways. What gives with the exorbitant prices?

Re:Ugh.

[Nerdfest]

Because they think they can get away with it, especially with what they see as a larger market opportunity in the iPad.

Re:Ugh.

[bb5ch39t]

Have you read an OCR'ed e-book? I have for some very old books by a dead SciFi author that I like (H. Beam Piper). The quality absolutely SUCKED! Yes, I could read the story. But the OCR was only about 90% accurate. And kerned letters almost guaranteed errors. Obviously nobody even bothered to proof read this thing. But, then again, it was only about $9.00 for 32 books. So it was worth it.

I like ebooks. I am hoping that they will enable authors to directly publish (self publish). That way, I know that the author is getting the majority of the money. The main problem in this case would be __finding__ the books on the Web. The main use of publishers today is advertising that the book exists and where it can be gotten.

Re:Ugh.

[netsavior]

riiiight, because they are going to charge $14.99 for an eBook that has a 4 year old discount paperback out..:eyeroll:

They want the option for the new $36 hardcover big author titles to at least make half the money on an eBook format.

If they want to control their pricing then they should be able to... If that prices them out of the market then that is their business.

Re:Ugh.

[elizabethje]

You are correct. The whole idea of buying e-books is because they are easy to carry and store and is less expensive. So an increase in price is not going to help the publishing industry in the right way. Expensive books are also encouraging people to acquire books by piracy as common man is unable to pay the high cost of getting books. http://softwareengineerspeaking.blogspot.com/

Re:Ugh.

[SatanicPuppy]

They're greedy. Even more than with CDs, the bulk of the costs with books are primarily in the printing/distribution model. The writer doesn't get that kind of money per book, I promise you that.

I think it's only a very short matter of time before independent authors skip the traditional publishing approach altogether. Once a viable digital book format takes off, the only thing they have left is an editing staff, and I'd happily split some of my book profits with a quality editor (they really do help) as opposed to a bunch of worthless executives.

Re:Ugh.

[JohnFluxx]

Did you get your books from Gutenberg? They have lots of H. Beam Piper: http://www.gutenberg.org/browse/authors/p#a8301

Re:Ugh.

[Pojut]

I'm not questioning their right to charge what they want for their products...I'm just saying that their products are horrendously overpriced.

Yes yes, IMO and all that

Re:Ugh.

[daveime]

Yup, in the same way they fuck over the general public with Hardback first and Paperback later versions.

Here in PH, we've been waiting over six months for the paperback version of Dan Brown's latest work, and all the time a massive pile of unsold hardbacks is gathering dust in the bookshop.

Re:Ugh.

[fastest fascist]

It's competition bringing the prices ... up, apparently.

Re:Ugh.

[whisper_jeff]

Read this post from one of Macmillan's authors (Tobias Buckell). An excellent explanation for why tiered pricing is a good business practice.

http://www.sfwa.org/2010/01/why-my-books-are-no-longer-available-on-amazon-com/

Re:Ugh.

[Pastis]

Don't you think that new books are directly converted into digital, instead of being printed and OCRed ?

Where are the costs ? Some trillion computer cycles ?

Re:Ugh.

[sopssa]

First of all, we don't spam our links in the post here on slashdot. Anyone can click your Homepage button.

Secondly, where did you get the idea that eBooks are supposed to be cheaper so the publishing industry goes to the "right" direction? Frankly if I buy a book, I want it as hardcover/paperback. Sure, music I want to download digitally, but books just aren't the same thing.

Thirdly, this thing most likely isn't about eBooks being $14.99 while paperbacks are $5. The $14.99 eBooks are for books that cost $30 or more as a hardcover.

Re:Ugh.

[jellomizer]

That and they want to kill the technology without looking like they are trying to kill the technology. They always save they will pass the savings onto the consumer but what usually is the case is that they wont raise prices for a longer period of time. And take in the extra profit as long as they can.

Re:Ugh.

[Pojut]

I know the genre isn't for everyone, but I personally LOVE the books Eraserhead Press puts out (note: Eraserhead Press is SFW, however many of the books they sell are NSFW. Visit them at your own discretion.) They are a bit on the expensive side, but in this case you are supporting an Independent publisher run by thee authors...and the authors get the bulk of your money when you buy a copy of their stuff.

Like I said, the genre of books they sell (bizzaro) isn't for everyone...but I don't mind paying that money when it goes to the people who do the actual work.

A big publisher though, with a huge staff and a large amount of money to work with? No. Sorry, nope. They don't get my money.

Re:Ugh.

[Pojut]

Elizabethje: a little hint for you.

I can fully understand wanting to advertise a link to your website, but I highly suggest just putting a link in your signature. That way, it doesn't intefere with your post, and people can ignore it if they want. It's still KINDA frowned upon, but I get so much traffic from mine that I don't care ;-)

Still, highly recommended you leave it out of your actual post.

Re:Ugh.

[Pojut]

Exactly. I could understand if they had to OCR and then verify the books they sell, but most if not all writers use a computer nowadays...their shit is already digital!

Re:Ugh.

[DudeTheMath]

I wish I had mod points. Pick your favorite books, and in the acknowledgements, see how often the author thanks his or her editor.

Re:Ugh.

[Anonymous Coward]

First of all, I found the blog informative.

Secondly, I don't see why e-books shouldn't be cheaper. The publisher isn't paying for Paper, ink, transportation of physical product, etc... It's a bunch of bits that you download over a line and store using space that you've pay for, not the publisher.

Frankly if I buy a book, I want it as hardcover/paperback.

good for you the rest of us don't care. This is a discussion about distribution of electronic books. Go post in a form where people like stuff printed on papyrus.

Thirdly,

The $14.99 eBooks are for books that cost $30 or more as a hardcover.

put some evidence where you're mouth is.

You completely fit the stereotype that makes the rest of the world hate us Americans.

Re:Ugh.

[MuChild]

Exactly. I don't see how publishers are the bad guy here. Everyone seems to think that every form of intellectual property should be free or what they perceive as low-cost regardless of the costs to produce it. That's why the music industry shrank by 2/3 in the wake of the MP3 "revolution." What people don't see is all the amazing music that they could be enjoying but there's no one to sign the band, record and promote them so they languish in their hometown and you never know they exist.

If it's too expensive, don't buy it. Just like any other product. I could buy $150 balsamic vinegar, but I don't think it's worth it even though it is tasty.

As far as the textbook industry is concerned, I know a thing or two about it's inner workings and, let me tell you, there is a big difference between a free textbook and a $80-$130. There are a lot of people working behind the scenes to make sure that it's useful to you, well written, up-to-date and error-free.

Re:Ugh.

[Lord Ender]

I would pay extra for ebooks if I have to. I want all my books on one device. I want to be able to search. I want all the other advantages of ebooks.

The pricing of media has nothing to do with distribution costs, and everything to do with "how much will people pay?"

Re:Ugh.

[Anonymous Coward]

Don't you think that new books are directly converted into digital, instead of being printed and OCRed ?

Exactly. Even back in the days of PageMaker, no one would have printed out a newsletter or book, and then OCR'd it to get it into electronic format! Good Lord....

For print-on-demand books (e.g., via LightningSource), you simply supply a "camera-ready" PDF to the printshop; the books are printed directly from that file. Given that eBooks are consistently sold in PDF format, I'd be very surprised if printing plates for web-offset presses weren't likewise being created directly from PDF files, across the industry.

Re:Ugh.

[masmullin]

Yeah I've read OCRd books. Sometimes its like reading 1337.

Re:Ugh.

[Anonymous Coward]

I got my Dan Brown eBook for $10 (A little higher priced than a trade-paperback for a new release). It was even released on the same day, that is the nice thing about eBooks.

Re:Ugh.

[Skreems]

They're gathering dust because they're terrible, terrible books that shouldn't be read by retarded 5th graders, let alone adults. At least I hope that's why.

Re:Ugh.

[ajs]

More importantly, why not lower the price? The economics, I suppose, come down to how much books compete on price rather than on marketing. I honestly don't know what drives the book market these days. Most of my fiction comes from TV or audio (like the tor.com short fiction podcast) and most of my non-fiction comes from Google Reader or technical sources, so I'm totally out of touch with how people shop for a book. Sure, I'll buy the occasional book at the recommendation of a friend, but I'm not the core demographic anymore. The real question is: who is?

Once that question is answered the price tag question should answer itself, and perhaps $15 is the right price-point. Who knows.

Re:Ugh.

[Thoreauly Nuts]

$14.99 for a freaking E-BOOK?!?!?!?

The market decides the price, not the publishers, and if people refused to pay those prices they would drop down to affordable levels.

The fact is that people are spineless consumers who never take a stand on anything. They are happy to take it in the ass no matter how loudly they proclaim otherwise. They create all their own problems and then blame the companies whose power they've created through their own pusillanimity. They're basically slaves, but have convinced themselves otherwise.

I swear Nike could come out with manacles with their iconic swoosh on them, push it with a catchy commercial and a celebrity sponsor and people would line up to buy them and brag to their friends about how awesome their $200 Air Chains are. Isn't hyperbole fun?

Re:Ugh.

[kaizendojo]

In most cases OCR isn't even involved. Today's books are all typeset, printed and in most cases composed via computer. These new books are already digital to begin with. So it's merely an excuse to price eBooks out of existence because publishers are afraid of losing revenue to the vague spectre of "pirating".

Re:Ugh.

[Anonymous Coward]

OCR Scanning?

You do know that it is common just to send an .pdf file to the print shop that prints the books.
So why print it and the scan it in again, when you allready have the book digital.
They just convert it to some E-Book format and sell it.

Re:Ugh.

[Ephemeriis]

The whole idea of buying e-books is because they are easy to carry and store and is less expensive.

Says who?

Sure, it's nice to get things for less... But I didn't pay $400 for an ebook reader because I was too cheap to buy paper books. I bought it largely for the convenience of being able to carry my whole library around with me, and being able to purchase/download new titles without having to find a bookstore.

So an increase in price is not going to help the publishing industry in the right way.

First of all, what is the right way? Perhaps the publishing industry thinks the right way is to kill off ebooks so they can keep using paper?

Further, I don't think we've been told precisely how this price increase is going to work out... I somehow doubt that they're going to charge $15 for an ebook that's available as a $5 paperback. I assume we're talking about the larger volumes... Things that would normally cost $15+ in stores.

Expensive books are also encouraging people to acquire books by piracy as common man is unable to pay the high cost of getting books.

I don't know about this common man... But the average US citizen doesn't really buy books. Most folks don't read any more than they have to.

And $15 certainly isn't a lot for a book... Maybe it's a bit high for a trade paperback... But $15 is nothing compared to a lot of the books out there.

And keep in mind we're talking about ebooks, which require a certain amount of infrastructure. You really aren't going to see somebody with a computer, iPad, or Kindle absolutely unable to purchase an ebook because it costs $15 instead of $10.

Re:Ugh.

[Darkstorm]

Publishers do more than just market a book, they filter. The cost of the book isn't the real concern for most people buying a book. (assuming there are reasonable prices for those books) My time is worth way more than the $6 paperback, or even $15 hardcover (Yes, I get most hardcovers for $15 to $20 the day it comes out because no one is selling it at the cover price). A book is an investment of my time to read it, and for that I want something well written and not a steamy pile of crud. The publisher wades through the 85% crap sent in to find the 1% of the remaining 15% that is worth publishing. Do a search on slushpiles and you can see some interesting pictures of what a publisher has to wade through. When I buy a book I'm paying the author for the story, but more the publisher for their time to filter out the crap that isn't worth reading so I don't have to. Yes, there are some books that are great that publishers turn down, but in comparison to the tons of worthless garbage that isn't deserving of the few k of space they take up, that is a good trade off for most people.

I do think if you cut out the cost of publishing a paper book, then that cost cutting should filter down to the ebook as well. Not many people pay full price for even a hard cover, why is the e version (bound with drm and the inability to loan or resell it) at $15 realistic? So they pay the author a buck or two and pocket the rest? (I am estimating high on the author payout). I'm more inclined to feel the publisher is against ebooks and would prefer them to fail when they price them high above a non drm'd paper version...which is cheaper in most cases.

Re:Ugh.

[RKThoadan]

I consider 99% of sigs a waste of space and have changed my settings to not show them, so I appreciate a link when it's appropriate.

Re:Ugh.

[TheRaven64]

I'm not sure what Amazon's platform is like, but eBooks do have some advantages over printed books. If you buy the eBook edition of my book from InformIT, you can download new copies (of the DRM-free PDF) whenever you want, so if you want to access it while you are away form wherever you store the book, you can. You can also get updated versions. I found some errors (mostly typos that the proofreader missed) after the first printing. These will be corrected with the next printing, but people with the printed edition still have them. People with the eBook version can download a version with those errors fixed at no extra charge.

Re:Ugh.

[Dare nMc]

I doubt they care about the technology, they care about who is controlling the technology. IE Amazon is taking control of the technology and is to offer a 70 percent royalty rate for books while the current publishers give out less than a $1 a book (more like 3-6%) if they are allowed to cut out the publishers. I am sure the publishers would be willing to pass on the savings, they don't want to pass on the control. B&N is doing similar at 35% payout rate and with google's book settlement google will scan you book, format it as a e-book, and sell it while giving authors 63%.

Re:Ugh.

[bobby22]

No Spamming, even for girls.

Re:Ugh.

[shawn(at)fsu]

The pricing of media has nothing to do with distribution costs, and everything to do with "how much will people pay?"
I doubt truer words were ever spoken. It's not about recouping your costs. it's about making as much money as possible while keeping your costs as low as possible. And it's not just for media, it's pretty much anything people buy. The price of something isn't fair or unfair. It's what people will pay or won't pay. It goes along with people saying how much something is worth. It's only worth as much as someone else is willing to pay for it.

I also like Amazon throwing in the statement "They have a monopoly on their titles.", stay classy.

Re:Ugh.

[amplt1337]

Okay, #1 -- Dan Brown? Save your money. And your time. Seriously, just go watch some tv or something.

#2 -- Most books never get released in mass market. You only get a mass market printing if you have a successful hardcover release. It just costs too much otherwise. Hardcovers are priced so that the particular book won't lose the publisher too much money. Mass market sales are gravy, and are priced as such.

Re:Ugh.

[GooberToo]

A book is an investment of my time to read it, and for that I want something well written and not a steamy pile of crud. The publisher wades through the 85% crap sent in to find the 1% of the remaining 15% that is worth publishing.

That's true for general stories, but not true for text books, trade manuals, technical how tos, education series, etc. That's because they generally approach authors they believe are capable for authoring the material. They then require samples, gratis, up front. So their investment is nearly zero up front and they have a sense of what the material will look like. They provide high level feedback to redirect as needed; so as to better target the intended audience. They then carrot the author to complete the material on a deadline in exchange for a very small payment (third world hourly rates) and a pittance of a royalty over time.

Now as for the 1% argument, they generally use interns and other extremely cheap labor to go though the bulk to find interesting material which is then provided upstream. The people capable of making a decision actually see a tiny percept of the overall noise. As such, their costs are extremely low here too.

As was originally stated, the bulk of their costs are in advertising and printing.

Re:Ugh.

[jollyreaper]

riiiight, because they are going to charge $14.99 for an eBook that has a 4 year old discount paperback out..:eyeroll:

Yes, they do. And rolling your eyes like that makes you look like Marty Feldman and not in a good way.

Re:Ugh.

[Anonymous Coward]

Does Macmillan control pricing at mom and pop physical book stores? Or do they just sell them copies and have the retailers set the end prices however they see fit?
If its the latter, why the sudden desire to control prices?

Re:Ugh.

[a42]

How is that screwing over the public? You want to wait, wait.

FYI, the authors make much, much more on the hardback version -- a higher percentage of a higher price.

Re:Ugh.

[Anonymous Coward]

Mass market hard cover books, including new Dan Brown or Stephen King, sell for approx $15 on amazon, the trade paperbacks that come out within a year sell for around $13 and the trade paperbacks sell for between $8 and $10.

The thing is the ebook version never really changes price. It is almost always at $9.99 until the trade version comes out then it is the same price.

Book publishers are making many of the same mistakes music labels did and trying to price a physical and digital product at the same price.

Many people view a digital copies as worth less and that is what drives their price threshold. There are ways to get people to spend $15 on an ebook. Change the reading expirence by including expandable author's notes in certain sections, include web-links to background information in non-fiction books. Or include video links for interesting content.

Re:Ugh.

[russotto]

Read this post from one of Macmillan's authors (Tobias Buckell). An excellent explanation for why tiered pricing is a good business practice.

Looks reasonable until you get a third of the way into it... where he implies that an eBook should be priced such that eBook sales make up all the production costs of a book, despite the fact that the book is being sold in other editions as well. Then he backs off and handwaves, claiming a few hundred sales (at $9.99) won't even cover the additional cost of making an eBook edition.

I agree Macmillan has the right to put obnoxiously high prices on eBooks (though next time they raise paper book prices, I don't want to hear the often-heard claim about paper and ink prices, since by pricing eBooks sky-high they've already established that production costs don't matter). Personally I think all it will do is price them out of the market; to most people an eBook is a lower-value item than a paper book, and they just aren't going to pay as much for it.

Personally I prefer eBooks to paper books, but with the caveat that the eBook has to be DRM-free. A DRM-encumbered eBook is worth on close order of $0.

Re:Ugh.

[jvkjvk]

First, let me say that it will always be hard for an unknown artist to create something and get large numbers of people to experience it, whether or not a publishing house is used. As you stated, most submitted works go nowhere.

Publishers do more than just market a book, they filter.

And now, there are people out there who will do the same thing, for ad revenue. Lots of them. The best already have a following of sorts. Just like Oprah (used purely as an example).

The publisher wades through the 85% crap sent in to find the 1% of the remaining 15% that is worth publishing

Why is not everything "worth" publishing, these days? It was "worth" it for the individual to write. With cheap digital publishing/self published material, it seeems it can be. It still may not be "worh" reading, but who cares? Just like the majority of web pages out there, all of which are 'published'.

You still don't have to personally wade through all that crap - you just hook yourself to a gatekeeper you trust instead of trusting publishing houses, that's all. Although why you would ever trust a publisher is beyond me -- many times making a book with those guys is akin to making sausage (especially as a new author who has little power, never mind the 'selection process').

Every service that publishing houses used to provide to a writer can be done for less money and more efficiently outside the gates - oh, except that one special service - refusing to publish it. However, if your work is good enough for them to publish, it is probably good enough to go another route. Especially since you get to keep copyright that way.

It seems natural that artists should begin to choose cheaper alternatives and more effective methods to be heard. (and before anyone goes into the efficacy of the Houses, 100% of self published works/digitally distributed works get published, what's the % probability that *your* work will be published if submitted to a House?) I also think a major draw for artists is that they would still be in control of their works.

These service model for business imparied artists already exists, although many of them are a bit sketchy. Given another ten years, though and the network effect will begin to rear it's head. The ecosystem will have evolved, we will have well established review sites that review self/digitally published works in addition to traditional publishers, we'll have some reputable service providers for the business and fine tuning aspects (editors, marketers) and 'self' publishing will be more respected (as opposed to being labeled a vanity). A buy recommendation of an unknown author is likely to generate major sales, especially if reviewed positively on multiple sites. /end rant on publishing...

 

Re:Ugh.

[centuren]

Secondly, where did you get the idea that eBooks are supposed to be cheaper so the publishing industry goes to the "right" direction? Frankly if I buy a book, I want it as hardcover/paperback. Sure, music I want to download digitally, but books just aren't the same thing.

I agree with this sentiment, and as such, I don't own an ebook reader. However, there is more to books not being the same thing as music. While I want the books I buy to be physical books, hardcover or paperback, there are many books that I don't want to buy, I just want to read. In most cases, my interest in reading the book doesn't coincide with it being available through the regional public & university library network (or the book isn't likely to end up in the library at all). Presently, I don't buy those books. I have no desire to own them. I would pay to read them, however, at a price that reflects my evaluation of it's lower, does-not-warrant-purchase, value.

We have seen such a model before in home movies, be they VHS, DVD, or Bluray. I can buy movies I wanted for my collection for $10-20, or I can rent a title I'd never consider buying for a single viewing on movie night, etc. Books are similar, in the sense that they are varied in taste and quality, and I can still be in the mood to read a book that isn't worth owning. Right now, authors and publishers just don't get any money from me for those titles, but they could if they found a model that allowed for it (and ebook readers seem like the most viable path to one).

Digital music downloads are definitely different than digital book downloads, if only due to the nature of what we consume them with. I would never have bought an MP3 player if I wasn't able to move music onto it from my CD collection. At the same time, having my CD collection moved onto a single, convenient device made me more reliant on the MP3 format, and more open to paying for song downloads rather than going out and buying a CD (since the music would end up on the MP3 player anyway).

Ebooks, on the other hand, aren't something I see replacing physical books. The convenience is there if I'm travelling and don't have to fill an extra bag with books to read, but at home I like having the physical books I've bought, and I'm certainly not going to get the urge to make "chapter playlists" with them.

Re:Ugh.

[digitig]

riiiight, because they are going to charge $14.99 for an eBook that has a 4 year old discount paperback out..:eyeroll:

Based on current pricing, yes they are. I have a Sony eReader, and all the books I've actually wanted so far have either not been available at all or have been more expensive than dead tree versions, even after P&P. Sometimes a lot more expensive. Publisher's are already charging $14.99 and more for eBooks that have 4-year old discount paperbacks out. It seems that they figure that people who buy eReaders have more money than sense, and they can sting us again. Well, it looks like I'm caught bang to rights on the first point, but I'm not getting caught on the second. The eReader is languishing in a drawer until it becomes cost effective to buy eBooks.

Re:Ugh.

[digitig]

And when you pay the dead tree price for a badly OCR'd eBook version? Because in my experience that's often what you'll get.

Re:Ugh.

[centuren]

Sure, it's nice to get things for less... But I didn't pay $400 for an ebook reader because I was too cheap to buy paper books. I bought it largely for the convenience of being able to carry my whole library around with me, and being able to purchase/download new titles without having to find a bookstore.

You've nailed exactly where the value of ebooks is. It obvious to anyone who's invested the $400 and buys ebooks, but still seems to elude many participating in the discussion who haven't. I have not bought an ebook reader for exactly the same line of reasoning that you did; I just (reluctantly) came to the conclusion that I didn't "read on the go" enough for the convenience to out-weigh the cost. If the price of ebooks went way down, or if I got a new job that required a train commute, I'd re-evaluate.

Re:Ugh.

[Anonymous Coward]

Very interesting read, thanks.

Re:Ugh.

[Alinabi]

riiiight, because they are going to charge $14.99 for an eBook that has a 4 year old discount paperback out..:eyeroll:

Actually, that is exactly what they are doing.

Re:Ugh.

[Darkstorm]

Why is not everything "worth" publishing, these days? It was "worth" it for the individual to write. With cheap digital publishing/self published material, it seeems it can be. It still may not be "worh" reading, but who cares? Just like the majority of web pages out there, all of which are 'published'.

I see this on POD (Print on Demand) commercials for companies who produce the POD machines, but while I agree that anyone can produce any type of dribble they desire, once you remove the separation of published and vanity press, you now force people to like me to wade through the various new "reviewers" to figure out which ones I might believe. A publisher has a financial stake in the books they publish, while a reviewer does not. Why do trust a publisher over simple reviews? I've seen self published books on amazon, I've actually read the initial (and probably final) version of a book that looks legit, and even has glowing reviews (from personal friends and family) that would make it seem a good book. Other than it was self published by the author's own publishing company, that publishes nothing but their own crud...but it has a five star review on amazon. That isn't a publisher, but self created vanity press in disguise.

I have a couple hundred (maybe more) books on my bookshelves from ace and tor and some of the other large scifi/fantasy publishers, which speak a great deal about the quality of books they publish.

Does everyone who chooses to throw a hundred thousand words or so in a document deserve to call themselves an author? Maybe, but it would be like everyone who can copy a hello world app and compile it be called a programmer.

I don't subscribe to the concept that everything someone does deserves to be praised. Things that are done well and have value should get praise. Otherwise, what is the point of doing anything at all? Having participated and finished two novels for National writers novel month...I could say I'm an author. Being that I'd be ashamed to have anyone read that raw garbage, I believe they can wait until they get rewritten in a form that is worth reading first. Then, maybe I might be worthy of such a title. Actually, I'll feel the title is justified the day one of the publishers, that I trust to publish good books, accepts and publishes one of my own. Then it won't be me applying that title, but someone else who found my work good enough to invest in.

Re:Ugh.

[Anonymous Coward]

$14.99 for a freaking E-BOOK?!?!?!? No. No no no, and no.

Why would I pay twice the cost of a paperback version just so I could have a digital version? I realize there are costs associated with OCR services, but most writers use computers now anyways. What gives with the exorbitant prices?

I have bought ebboks for $15 from Baen.com. Because I wanted the book right now, and the Advanced Reader copy is a good way of doing it. It may have tragic production errors waiting to be fixed, but it can come a lot earlier than even the hardcover.

Re:Ugh.

[HiThere]

Traditional publishers don't LIKE e-books. They wish they'd just go away. So they aren't about to do anything to make them attractive.

N.B.: Part of the reason that they don't like the e-book is that they don't get much money out of it. Never think that $14.99 is what Amazon pays them.

P.S.: This same reason is why lots of authors don't like e-books either. They don't get very much of the publishers share, which is already pretty small.

  ------
P.P.S.: Ever hear of the luddites? Guess why they were anti-technology? Right! That technology was being used to put them out of a job and throw them out to starve in the streets. It wasn't about technology at all. It was about money. But the technology story makes the guys who pay to have the histories written sound nicer. (And it's not exactly false. The luddites *did* smash machinery. But it was because they didn't want to starve to death.)

Re:Ugh.

[Zerth]

Not only are they charging $15 for the ebook, they want $15 for the trade paperback when Amazon sells the same print version for $10!

Re:Ugh.

[Zerth]

I don't buy the trade format if the same book is available as a standard paperback. Nor will I buy an ebook if it costs more than a standard paperback. Heck, if a book is only available in trade format, I'd rather buy the hardback or not buy it at all.

I'm buying the words, not the container. If I wanted to buy the container, I'd buy in hardback and get them recovered in leather.

And just because I dropped $250 on a reader doesn't mean I'm willing to pay more for ebooks. If anything, it means I'd rather pay less for ebooks because I'm amortizing the hardware over all the books I buy. If the hardware was free(e.g. I used my phone or laptop), then I'd at best pay the same as paper should I consider the convenience equal to what I think the publisher is saving by not printing/storing/etc the hardcopy.

But, despite what I said above, I like hardcopy, so my convenience "cost" isn't very large.

Re:Ugh.

[IICV]

Or: you could pirate the books. There's several torrent-libraries floating around on the various sites, and it would be trivial to format-shift your library by downloading them piecemeal. Comcast wouldn't even care; in this day and age of legal multi-gigabyte Steam downloads, who's going to notice ten, twenty megabytes of information? I chew through that much bandwidth looking at videos of silly cats on Youtube.

Re:Ugh.

[jvkjvk]

once you remove the separation of published and vanity press, you now force people to like me to wade through the various new "reviewers" to figure out which ones I might believe.

Yes, as I said, the network is not there quite yet. There is no one stop shop for book reviews. You have not found any reviewers that you trust. That is partially your own fault and partially the fault of the Publishers who you seem to trust.

There are quite a few reviewers out there. I am not just talking about (semi) anonymous reviews a la Amazon. I'm talking about people who review books and their reputation is at stake when they do so.

Why do trust a publisher over simple reviews?

It's interesting that you seem to believe that a book is "good" just because it was published by a 'reputable' firm. Or that these 'reputable' firms have never engaged in astroturf. Do you just go, Ok, that's from Random House, so it must be good? And the reviews on the back or inside jacket... If you trust those I have a moon to sell you. Cheap.

A publisher has a financial stake in the books they publish, while a reviewer does not.

So therefore, the thought process goes, one cannot trust reviewers. Of course a slightly different thought process is: so therefore, one cannot trust the people with the financial stake (because the end product is designed to sell, not to be good, and they have an incentive to make sure it sells, whether it is good or not).

However if I have a website that reviews books, I want accurate and entertaining reviews for my audience. If I don't provide this they will not come back. I will lose money and eventually fold. My reputation as a "trusted source" is at stake - that is the reason people come back. If I burn them with a fake review of a horrible book I can bet they will burn my link too.

Even if it is just a hobby and I don't even have ads my reputation is still set by the books I have reviewed and how that agrees/disagrees with a reader. This type of service is one of the things that I was talking about as part of the overall changing landscape of the publishing business.

The funny thing is, most of the books they are going to be reviewing (currently) are from established publishers! And not all of those will be good. Quite the dilemna for your POV. Here you have a Real Publisher who has Real Money on the line. And the book gets good reviews on Amazon. So the book has to be good, right? Right?

Then why do so many horrible books come out of "reputable" firms?

I have a couple hundred (maybe more) books on my bookshelves from ace and tor and some of the other large scifi/fantasy publishers, which speak a great deal about the quality of books they publish.

And what about the thousands of books they have published that are crap? Don't tell me they don't - I bought, umm, a lot of SF/fantasy in my misspent youth and believe me they aren't all good. In fact, I got tired of moving all of them and came up with about 2K paperbacks that I could part with (which is saying something - I like to keep books). However, it was over a ton less stuff to haul. :)

Regards.

Re:Ugh.

[digitig]

Or: you could pirate the books. There's several torrent-libraries floating around on the various sites, and it would be trivial to format-shift your library by downloading them piecemeal.

I've looked. My tastes are clearly obscure.

Re:Ugh.

[Winckle]

Email me your email address I'll give you an invite to a private site.

Re:Ugh.

[gmhowell]

Wow, one person with a 7 digit uid telling another with a 7 digit id "how we do things 'round here".

Re:Ugh.

[elizabethje]

Well, I buy and read lot of books unlike most people. Hence I am very much concerned about the money I invest. I prefer to read e-books only when the paperback or hardcover is not available or is too expensive to afford. I think the the publishing cost of e-books is much less than paperbacks and hardcovers considering the paper and printing costs. What is the point in bringing out high priced e-books which most people in the world can't afford when they can conveniently get the same in a paperback at the same cost without buying an e-book reader?

Re:Ugh.

[elizabethje]

Thanks a lot. Will take care of it.

Re:Ugh.

[digitig]

If I could find your email address...

Re:Ugh.

[Winckle]

It's under my username on every slashdot post I make. You just have to work out how to unobscure it from how slashdot shows it to prevent it being taken by bots.

Re:Ugh.

[digitig]

Ok, I saw that but didn't spot how to de-obfusticate it. I think I've got it now.

What's the marginal cost of production on an ebook

[Phyrexicaid]

Oh that's right, zero.

One word

[MadHakish]

Why do the RIAA's members still control the music business? Why do these dinosaur publishing businesses still manage to thrive despite the Internet?

Lawyers..

Re:One word

[visualight]

What about 'Lobbyists' or 'Bribes'?

Re:One word

[sopssa]

I really doubt it's the lawyers who find artists and get them to sign up with the labels.

You do know no one forces them to join a big music label, do you? But new artists want to. They want to make music, not worry about distribution or marketing. Nor do they even have experience in that.

And no, putting your album to The Pirate Bay and just hoping people will find it isn't proper method.

Re:One word

[Nerdfest]

Don't forget lobbyists.

Re:One word

[MadHakish]

The RIAA are lawyers..

But new artists want to. They want to make music, not worry about distribution or marketing. Nor do they even have experience in that.

Have you met the "artists" you claim are seeking out labels? One could easily argue the opposite is true, that real musicians do not seek out labels and record contracts, that in fact those activities are reserved for the untalented whose prowess as a musician is not great enough to earn them deserved recognition. The "real" talent cares not for contracts, marketing, market penetration, audience share, etc. etc.. They "just want to dance".

Re:One word

[MadHakish]

Certainly not forgetting them, but it's worth noting that the lawyers (remember, the RIAA are lawyers), are typically the ones that hire (see "bribe") the lobbyists who, again, are typically lawyers themselves..

Why?

[foo fighter]

"Why do these dinosaur publishing businesses still manage to thrive despite the Internet?"

Because development, editing, and marketing--and even distribution--have value and take skill to do well.

Less than the publishers believe or would like, perhaps, but more than the /. crowd gives them credit.

Re:Why?

[2obvious4u]

They are just using supply and demand to set the optimum price. To the publishers (if they did their research properly) they may have found that $15 will give them the largest ROI. A book may only have a limited audience and that audience would be willing to pay $15, the audience may not grow even if the price were $0 because nobody else is interested in the topic. What this means is that publishers are just getting more bang for their buck.

What is wrong with the way they are doing it is that consumers feel like they are getting screwed. They see the costs of manufacturing plummeting yet prices are rising. From the business side they are seeing costs of manufacturing going down and an opportunity to increase profit margins. They aren't passing on cost savings to the consumers, they are instead lining their pockets; which they are in their right to do. It just isn't going to endear them to me and I won't be buying any books any time soon - paper, digital, or otherwise.

Re:Why?

[mpapet]

They are just using supply and demand to set the optimum price.

Demand/Supply equilibrium models don't work when you are attempting to describe a market at the author-level. This situation is a profit-seeking activity. In order to maximize profits, some demand goes unfilled or shifts to a similar author.

Re:Why?

[amplt1337]

They see the costs of manufacturing plummeting yet prices are rising.

Costs of manufacturing are not really changing any in the book market. The price of physically manufacturing a hardcover is around $2, max. So if you're saying that customers are expecting $30 hardcovers to be sold for $28... I'd imagine Macmillian and everybody would accommodate that.

Re:Why?

[SnarfQuest]

"Why do these dinosaur publishing businesses still manage to thrive despite the Internet?"

Because development, editing, and marketing--and even distribution--have value and take skill to do well.

Less than the publishers believe or would like, perhaps, but more than the /. crowd gives them credit.

Ok, what part of this makes these e-books cost more than the paper version? Most of these are common between the two versions.

Is it the labor and material costs associated with printing? I don't think that the e-book will require more paper and labor than the print version. Is it distribution? Trucking boxloads of paper around is less expensive than spitting electrons down a wire? Advertising? I don't remember seeing special ads for the e-book versions.

Why should the e-book cost more than a paperback?

Re:Why?

[2obvious4u]

I seriously doubt that $2 is the cost to get the book from the press to the store. If it is then all the outrage about digital media is unjustified.

The way I've assumed the price breakdown to look like for a $10 paperback:
$2 promoting the book.
$1 author.
$1 editor.
$3 publishing company.
$3 manufacturing and distribution.

I've though that same book as an ebook should look like:
$2 promoting the book.
$1 author.
$1 editor.
$1 IT costs.

Where the increased volume makes up for the lower price.

Re:Why?

[amplt1337]

You are mistaken here, and the outrage about digital media (at least as regards ebooks) is indeed unjustified. I know people who work at Macmillan who have verified that the per-unit manufacturing/shipping costs for a single hardcover are around $2/book. Less for mass markets. (I've seen online figures suggesting it's more like $3, e.g. here, but that's a different company.)

I suppose one could make the argument that ebooks should be discounted the warehousing costs, too, but that's only true if you expect that publishers will release ebook-only in the future. That is not the case now, because people who want to read ebooks in preference to regular books are a very, very small proportion of the market; but ebook sales at the date of release are lost hardcover sales. So long as you want to sell hardcovers, you're in trouble if you're selling an ebook for a greatly reduced price. IF you're willing to wait for ebooks to be released along with mass markets, then you can expect mass market prices; frankly that's the only point at which I'd be willing to take an ebook offering.

Keep in mind the relevant comparison is not with the $10 paperback but with the $30 hardcover. The paperback is a bit of gravy if the hardcover sells well; most fiction does not get a mass market release. And publishing is operating on a razor-thin margin already (maybe 10% on a book that sells pretty well -- and most don't). These aren't greedy fat-cats with swarms of lawyers (with the exception of specialty market segments, like textbooks, test prep, and medical, all of which I have worked in).

The vast majority of the cost difference between a mass market and a hardcover is that with the hardcover, the book's already been promoted, edited, marketed to booksellers (who've agreed to carry it), etc. The mass market release is just trying to squeeze those last drops out of the orange, and hopefully get you to buy the author's next book in hardcover.

Incidentally, most of that marketing budget is not for advertisements to the consumer, but to book-buyers, at book fairs, and such. Trying to market the book -- i.e. put it into the right market segment and get it onto the shelves in bookstores. That's work that has to be done regardless of the venue of sale (but has already been done for mass-market paperbacks). The only way ebooks would change that is if Amazon agreed to carry everything under the sun; and then you'd probably still have to spend more to help customers find out about books they want to read.

Re:Why?

[amplt1337]

Oh, forgot to add -- why do you assume that volume will increase just because a book's being sold in ebook format? If people don't like the current price of books, they can just get them from the library. Price is not the limiting factor in sales for this market; actual demand is.

That's different from music, where you can consume as much as you could possibly want, even while you're doing other things. With books, you have to sit down and read it, and that time is a very limited resource.

Re:Why?

[2obvious4u]

why do you assume that volume will increase just because a book's being sold in ebook format?

I didn't. If you read my first post I made the exact same point. My second post referenced consumer frustration, not an increase in sales.

If people don't like the current price of books, they can just get them from the library. Price is not the limiting factor in sales for this market; actual demand is.

However, checking the book out at the library is also a lost sale. If you are going to make the effort to go to the library to read a book instead of buying it, I bet you'd be willing to spend some money for convenience.

Amazon bows, I won't. Boycott greedy publishers.

[GuerreroDelInterfaz]

The solution is easy: don't buy ebooks from extremely greedy publisher like this one. Even if you can afford it. Just say no. I don't.

--
El Guerrero del Interfaz

confused..

[MickyTheIdiot]

I am not sure I get this press release. Does this mean Amazon is going to raise the price of just MacMillan books? The beginning seems to imply yes and the end seems to say no.

If it's all new titles that would be collusion. If not it actually looks like an opportunity the market could actually work for once. Other vendors could keep down their prices for big parts of the book market that don't work on big author names and MacMillan could get hurt in end.

Re:confused..

[Remus Shepherd]

They're allowing Macmillan (and apparently only Macmillan, for now) to set their prices on their own books. This allows Macmillan to do things like release new books for $15 and slowly drop the price over time until the best price point is found. You know, just like every other consumer good. Amazon also agreed to reduce their outrageous 70% markup to 30%, the standard for a retail distributor.

This is a *good* thing. It allows more market flexibility and keeps Macmillan from going bankrupt or screwing their authors.

Re:What's the marginal cost of production on an eb

[dhovis]

The marginal cost of printing a book is pretty close to zero too. That isn't why they cost as much as they do.

Macmillan has a monopoly over their own titles?

[Anonymous Coward]

Seriously. It's their product. Waah, Coke won't let me make Coca Cola.

Re:Macmillan has a monopoly over their own titles?

[Auxis]

But that has nothing to do with this discussion. Unless they somehow made digital Coke and distributed it online.

Re:Macmillan has a monopoly over their own titles?

[Anonymous Coward]

This is a ploy by the major publishers to force Amazon back to the negotiation table. They push them to raise the prices to make ebooks look unattractive, and having customers either buy the dead tree version or go to another ebook distributor who has a more favorable deal with Macmillan. Macmillan wants a bigger cut of the sales and perhaps more restrictive DRM and other publishers will smell blood and jump all over this after watching how Macmillan plays it. Don't under estimate old media and their infinitely copyright cheat codes. They have the money, the lawyers, and the right sons of bitches running these places.

Re:Macmillan has a monopoly over their own titles?

[Neil Hodges]

As far as I know, OpenCola is as close as they've gotten to that.

Re:Macmillan has a monopoly over their own titles?

[ukyoCE]

What does online have to do with it?

This is no different than if Wal-mart stopped selling Coke products because Coke wanted to charge $2 for a 2-liter when Wal-mart wants to charge $1. Both parties are making legitimate business decisions.

But it would be entirely disingenuous for Wal-mart to pretend they're taking some higher moral ground for "sticking it to the Coca-cola monopoly". Same goes for Amazon and Macmillian.

Re:Macmillan has a monopoly over their own titles?

[Anonymous Coward]

Seriously. It's their product. Waah, Coke won't let me make Coca Cola.

You picked a bad example. Pepsi makes coca cola, they just call it pepsi cola. You can get grocery-store branded blah-cola. The equivalent there would be if other publishers were allowed to print DaVinci code by changing the name of the book and the names of the character (to allow for the fact that pepsi tastes slightly different than coke, we can make the text of the book slightly different by changing the character names as well). Obviously, nobody is allowed to do that.

Re:Macmillan has a monopoly over their own titles?

[Anonymous Coward]

Coke won't let me make Coca Cola.

You can. You can make a cola drink as similar as you like to Coke, provided that you use the name of your own manufacturer rather than theirs (ie, 'Coca Cola'). But if you make a book as similar as possible to, say, Harry Potter - and, unlike drinks, it's possible to reproduce a book word-for-word - and (correctly) include the name of your publisher rather than theirs, then you run up against copyright.

Yes, copyright is a monopoly on a particular product. It's a market distortion that we deliberately introduce to compensate for the fact that free markets don't deal well with items that are expensive to make the first time, but easy to copy afterwards.

Re:What's the marginal cost of production on an eb

[keithpreston]

Oh that's right, zero.

You are under the false assumption that items are priced based on marginal cost. They aren't in practically any market, they are priced at what consumers will pay and what the competition is selling at. Fortunately for them consumers are still willing to pay extra for the digital "convenience" and the competition doesn't sell the same books.

There's a difference between books and music...

[Fished]

At least for me... I invest a lot more in the books I read than in the music I listen to, and I care very much about reading *one* *particular* book. This means that there's not a lot of competition. I think part of the reason is that, for all the categories of books, the purchase price is the smallest part of the investment I make in the book. My major investment in the book is the time and energy I spend reading it. Ideas are not really fungible when they're new--and even when they're old, there's a lot to be said for getting the ideas from the source instead of from the imitators. In fiction, I'd much rather read Heinlein than an imitator of Heinlein. And if it costs a couple of bukcs more? Oh well.

I certainly recognize that some might be just as passionate about one particular song or one particular album. But it still seems to me, intuitively, that the music market is a little bit more competitive and dynamic than the book market is.

Re:There's a difference between books and music...

[dnahelicase]

There is a difference, but that also means I am less interested in ebooks than e-music. I want my music digital because I don't carry a CD/cassette/record player. E-books are nice to carry and read, but the filesystem on my paperback isn't ever going to get corrupted, and the format won't change. If it gets torn, spilled on, left in the sun, or bent in half - it has more character. Digital music I can maintain/convert to keep them forever. My kindle/iPhone/iPad will die in 2-5 years, but my paperbacks won't.

Re:There's a difference between books and music...

[Anonymous Coward]

In fiction, I'd much rather read Heinlein than an imitator of Heinlein.

I'd say it depends on the imitator. Would you shun Neverwhere just because it resembles Glory Road? But otherwise yes, you have a point.

Re:There's a difference between books and music...

[dangitman]

and I care very much about reading *one* *particular* book.

The Very Hungry Caterpillar?

Re:Amazon bows, I won't. Boycott greedy publishers

[sopssa]

Why? If they have a book I want and I think the $14.99 price is worth it, why wouldn't I buy it?

It's a little more complicated

[BigSlowTarget]

Do we still need publishers? The question should really be 'what function that publishers perform do we still need and how should those functions be provided?' Perhaps also 'Can a startup provide these functions and replace the entrenched companies?' We still need someone to plan the path from manuscript to finished book including content editing, grammar editing, artwork (inside figures and on the cover), legal issues (in every country where it's released), promotion/advertising, marketing (advising when a release will be available, how it will be different from last edition, etc). Should the publishers profit from owning relationships with the distributors, bookshops and retailers even when they're selling electronically? No, they shouldn't be able to gain from a monopoly in what should be a competitive market, but we still need some functions.

When a internet enabled solution for those issues starts to take off the publishers will start to lose their grasp on the book market and we all will be better off for it.

Re:It's a little more complicated

[rochrist]

Exactly why will the book market be better off if publishers lose their grip? Sounds to me as though you're replacing the publisher with ....a publisher. I suspect that there aren't that many people working in the publishing industry because they're greedy bastards trying to get rich.

Re:It's a little more complicated

[HiThere]

Yes, we seill need publishers. I'm not totally clear about how publishers should change. (Optimality from the views of the author, publisher, and reader are very different!)

I'm much less sure we need Amazon. Amazon is like a large department store, but if you've been watching, that kind of store is either doing poorly or depending on what is essentially slave labor.) They could be replaced by a combination of Google and the publishers/vendors. Currently their existence is subsidized by the trust they people put in them to handle credit cards honestly. (My personal perspective + projection of my views onto others. I could easily be wrong here.) It's also subsidized by the credit card companies charging big companies lower rates.

There's a lot of inertia in the market, but I suspect that Amazon is obsolete. I give them 10-15 years unless they radically re-invent themselves. (That may be a part of what this bit about the Kindle and monopolization of e-book sales is about. But it could just be greed.)

P.S.: I also think the publishers need to radically re-invent themselves. Or perhaps the author's agents could become micro-publishers. They don't need to handle the printing, that could be done by Lulu or some such, with a deal so that to a visitor over the web, or ordering or receiving the merchandise it looks like an old-style publisher.

N.B.: These are wild proposals as to how things should change. Just options of the top of my head. But some kind of change is mandatory.

Why Publishers Exist

[bsDaemon]

Publishers still exist largely because of their editorial and "filtering" services. Editorially, they help to ensure that the best possible version of a text makes it to market -- that it is as technically (grammar, spelling, etc) correct and engaging as possible. As for filtering, they are meant to ensure that only works that have a reasonable degree of merit actually make it to market -- this is why people tend to believe printed word over that which they find on the internet, and why for those who create content, being accepted by a publisher for print production is highly valued. Anyone can put whatever crap they like on the internet, but the publishing industry exists to make sure that random crap doesn't flood the actual shelves.

For certain types of content, such as text books and works of history, philosophy, and journalism the effect this has can go either way in how people, including myself, are willing to weigh benefits vs detractions. Certainly, it would be better if this content was more democratically available -- however, facts still need to be checked for correctness, copy edited etc. For works of literature, the potentially stifling affect on discourse is much more limited and even though I've almost always been on the losing side of the submission, I'm willing to accept the judgement of poetry and fiction editors as far as to what's actually worth something and what isn't, as they deal in literature every day and see submissions from all kinds of sources -- and when you finally do get a piece accepted then the fact that you had to try so hard to get through the filter makes the joy of it all the greater. That's not really a feeling one can get on the internet where the cost of reproduction approaches zero and so there is no real reason not accept a piece, or when one can stick whatever crap they would like on their own site and eventually someone will see it.

However, for music -- where the bands mostly exist to play live and have fun, where the record itself is really just a form of marketing of their live performance, and where the technical ability to produce recordings of quality and distribute them directly to fans who will then come to their shows is now within the reach of just about everyone, then direct distribution without much filter makes more sense. However, poets and authors tend not make their money from live recitation but from the printed book itself, and the services of the publishers and distributers there are therefor more necessary and valuable. As someone who writes a lot, submits a lot, gets accepted rarely, and who has been in a few bands, played shows and cut a couple of demos I can see the difference, it is what it is, and I'm totally cool with it.

Re:Why Publishers Exist

[Trepidity]

In the fields I'm familiar with at least, my impression is that large publishers like Macmillan filter for expected popularity rather than quality; they're in the book-selling business after all, not academics. As a result, an appalling proportion of Macmillan books on academic subjects contain factual errors, gross exaggerations, popular myths presented as fact, sloppy conflations, etc. It's one reason many academic departments give little career credit for publishing popular press books: if you got your history book placed with a respected academic press, people are willing to believe you made a contribution, but if you got it placed with Macmillan, who knows what nonsense history you wrote.

Re:Why Publishers Exist

[Anonymous Coward]

I have no doubt that for particular sections of their demographic, popularity is the qualitive measurement being used. Perceived originality and adequacy of prose aren't always the measuring stick. :)

Re:Why Publishers Exist

[bsDaemon]

Yes, and that's why I draw a distinction between academic type work and literary work. However, in general the idea that a publisher is meant to serve as a filter that the internet cannot provide still stands in the situation you mention -- its just that in this case, the validity of your work to others is going to be judged by the validity of the filter it passed through, but I don't see it as any different than saying that getting a piece accepted in The New Times is better than having it accepted in Pravda.

Re:Why Publishers Exist

[bsDaemon]

that should have been The New York Times, although I'm sure our Republican friends won't see what's different between it and Pravda anyway.

Re:Why Publishers Exist

[onepoint]

I do believe everything you wrote is correct.
Now let me ask, Is there not independent publishing houses that have very high standards and only deal in specific niches? I recently spoke to a young lady that was ecstatic that she was published by some publishing house because they only choose children works ( which she wrote ) that were highly illustrated. her print run was 5000 books ( which she explained to me in great detail was a lot for that publishing house )

So I would think that there must be small niche firms that do support amazing creative writers, writers that know the in's and outs of there niche

Re:Why Publishers Exist

[jollyreaper]

Publishers still exist largely because of their editorial and "filtering" services. Editorially, they help to ensure that the best possible version of a text makes it to market -- that it is as technically (grammar, spelling, etc) correct and engaging as possible. As for filtering, they are meant to ensure that only works that have a reasonable degree of merit actually make it to market -- this is why people tend to believe printed word over that which they find on the internet, and why for those who create content, being accepted by a publisher for print production is highly valued. Anyone can put whatever crap they like on the internet, but the publishing industry exists to make sure that random crap doesn't flood the actual shelves.

WRONG. The publishers are in it for the money. They are no different from anyone else in this regard. The editors and literary professionals may see their mission as you describe it but if a publisher thinks they can make a buck off a Sarah Palin biography, it'll be ghoswritten and printed faster than you can say "remainder."

I do like your ideal world, though. Publishers are in the printing and book distribution business only because that's a necessary step towards getting paid. But if they can handle most of the distribution electronically, all of those costs go down and the books should be cheaper.

If California wine had to be shipped cross-country by wagon or mule, it would be thousands of dollars a bottle. That sort of shipping is costly and inefficient Shipping by train and truck reduces the cost a great deal. Any winery that tries to charge mule-shipped prices for something that came by train is just trying to scam us.

It's all about setting ridiculous price points. Netflix can blow Blockbuster away with depth of selection and avoiding the cost of physical stores. Renting from blockbuster is I think still $4 a movie. (haven't been in years.) They have dollar dvd kiosks in the grocery store now. Buck a day for a first-run movie. Meanwhile, Microsoft is still charging $4 for the same movies on Xbox. That has to be even cheaper than the kiosk stores and there's far less physical infrastructure compared with Netflix and their shipping facilities. Microsoft prices at what they think they can get away with, not cost plus 30. I think it's too much and thus have never rented from them.

Re:Why Publishers Exist

[Anonymous Coward]

Have you taken a look at "actual shelves" recently? If that is not the definition of "random crap" I dont know what is.

Re:Why Publishers Exist

[Anonymous Coward]

Regurgitating Clay Shirky presentations...

Re:Why Publishers Exist

[raddan]

Macmillan is in academic the publishing market, but does not advertise those books under their "trade" label ("Macmillan", formerly "St. Martin's Press" and "Holtzbrinck"). They publish academic stuff under their "college" imprints: "Freeman & Worth", "Bedford/St. Martin's", "Nature", etc. Trade-side publishing is indeed as fickle as you say, but college side is emphatically not. Reputation is important in academics, and so the college side can't afford to be careless. Mistakes happen now and then, but every attempt is made to correct them (e.g., MLA updates).

Re:Why Publishers Exist

[Areyoukiddingme]

I don't have much to say about academic book press, but as far as literature goes, your other respondents are correct and more than correct - the publishers are choosing by popularity, and failing miserably in several of the duties that are ostensibly theirs.

I just read a recent Terry Brooks trilogy, Armageddon's Children. It was sad. Brooks wasn't a good author to begin with, going all the way back to The Sword of Shannara, but if his publisher, and in particular his editor, had been doing a job worthy of the name, Sword would have been better than it was and the sequels still better. They weren't. His writing hasn't improved in 30 years, and if anything, it has declined. Armageddon's Children could have been one book. He padded it enormously, and poorly. He was immensely repetitive, not very imaginative, and downright unlikely in his descriptions. I was disappointed. John W. Campbell, Jr. lived in vain.

It's true I'm getting older, and possibly more critical in consequence, but I remember thinking that Sword of Shannara was a pretty poor Tolkein imitation even when I first read it, at 15. So what, really, have the publishers done for me? I'm really starting to wonder. I very rarely read fan fiction, but I remember reading two that were creditable competition. I don't remember who wrote them, and probably nobody has heard of the authors, but there you go. Publishers are good for plastering New York Times Bestselling Author! on the cover of books and not much else.

Re:What's the marginal cost of production on an eb

[netsavior]

That's right, because nobody markets books, or pays authors, or runs press tours, or edits books...

It seems to me that was what Amazon was saying.

[Shivetya]

as in, we want to still offer their products even though we know they are overpriced. We give you the choice, choose correctly.

Honestly, the iPad was designed to bring Apple and their publishing buddies more money. After Steve got us off the 99cent model anything was possible. There was too much money on the table. Books presented a new avenue for increasing revenue as their is no such thing as "per chapter". They can charge you more and make you feel as if your getting something special in the experience.

Kudo's to Amazon for calling it like it is. I understand why they gave in, it really does come down to the public making the choice. Unfortunately far too many will make the wrong choice

Re:It seems to me that was what Amazon was saying.

[alvinrod]

I think you're off the mark.

Apple doesn't have the same clout with publishers as they do with the music industry. Until their announcement, Apple wasn't selling books and there were already several established players in the market. The same wasn't true with the music industry where Apple was one of the first operators of a legal digital music store. When the dust settled, Apple was the dominant party and could dictate terms or at least put a lot of weight behind them. They were also more interested in selling high-margin iPods than selling low-margin music, but low cost music would definitely help to sell a lot more iPods than high cost music, even if that high-cost music would get them a better profit on music.

Apple isn't an established player in the e-book business so they're more at the mercy of the publishers than the other way around. It's likely that the publishers want to drive up their profits by selling at a higher price. Amazon doesn't want to do that. Their plan was to take a smaller profit for each individual sale, but to make up for that with a larger volume. They also wanted a larger share of the profits of their sale, which they adjusted to be more favorable to the publishers just before Apple's announcement. Apple just wants to get into the game at this point so they're more likely to agree to whatever terms allow them to get into the game, even if it puts them at a disadvantage in terms of price when compared to a competitor.

Amazon didn't want to cave in because it would lessen their dominance. Now that they've caved, it's likely that other publishers will be able to dictate the terms of the relationship instead of Amazon. That's not something that Amazon wanted to happen, but the alternative was not having a major publishers titles available. Until Apple came along, the publishers didn't have anyone else to use as leverage against Amazon. Now they do. Odds are Apple doesn't give two shits whether the books cost $9.99 or $14.99. They just want to have all of them in their store so that people have a compelling reason to purchase their hardware, which is where they make their money.

Until we get to a point where authors are directly selling to consumers, there is going to be some number of middlemen that are all self-interested. Their interests may take different shapes, but they all want to maximize their benefits compared to one and other. Apple isn't necessarily evil and Amazon isn't necessarily good, or vice versa. They just want different things, which are different from what the publishers want. It's also different from what consumers want. I don't think that this is the best solution (for consumers), but this is new ground and different companies need to test out different ideas in the market. In the end, the idea which fares best in the market will tend to win out. Usually this works out well for consumers, but it's not a guarantee.

Re:It seems to me that was what Amazon was saying.

[dangitman]

So, Amazon are the good guys for pulling a massive number of products from their store, unannounced? No explanation to either customers or suppliers, they just delete titles? That's a total dick move. I don't see how this can be justified as a good thing.

anyone can publish

[alen]

the trick is getting noticed and having someone find your content. and if you want access to a professional recording studio you need to have a lot of cash upfront that a record company normally pays for. in exchange for tiny royalties on your CD's the record company takes a big risk on you and invests a lot of money to produce an album and market it. same goes for touring. it takes so much upfront cash to go on tour that you need someone like LiveNation to take a risk.

Look at Lady Gaga. very talented. she got into Juliard but had to go to another music school. but then got into the NYU music school. playing music since she was 4. Took Akon to get her noticed and invest the money to produce her music professionally. she could have uploaded something she recorded herself to iTunes without any marketing but then she wouldn't be singing at the Grammy's with Elton John.

Re:What's the marginal cost of production on an eb

[jedidiah]

Press tours?

Unless you are Stephen King, you have to do your own press tour on your own dime.

Books are a lot like Music in this respect.

Re: No More!

[netsavior]

I have a new idea: Copyright is a lousy idea and we need to banish the notion of copyright completely. Patents need a kick in the head as well. I am probably the first person ever to say that. My opinions are so valuable.

Surrenders?

[proxima]

While I certainly think that $15 is overpriced for an ebook, I say let Macmillan potentially shoot themselves in the foot with their pricing. Amazon should be focused on making everything possible available in ebook form and letting the consumer decide what's a good deal. Amazon can always go back to Macmillan with sales stats to show them what they're losing (or not...perhaps $15 really does maximize profit for them). With sample chapters and the possibility of very low prices from smaller publishers, ebooks provide a great way for lesser-known stuff to be widely available. The same thing happened in music; it's far easier to get fairly obscure stuff via the internet than in CD form at a store.

What's a little strange about the ebook market is the fixed breakdown for the retailer (seems to be moving to 70 publisher 30 retailer), while in the hardcover world Walmart, Target, and Amazon are falling over each other to bring you the books with little or no markup over wholesale. Still, Amazon is offering the 70-30 split only if you priced your book under $10 (otherwise it seems to be 65-35).

Print Vs Online

[smitty777]

I'm intrigued by the NTY article's reporting of the trend towards free online books. It sounds great to me - the only drawback I could see is that I really like my textbooks from college. I still have bookcases of them even after...er...well a number of years in the workforce. I would be worried about the sustainability of the online versions. Plus, it's pretty hard to use a highlighter on them. I tried it, and my monitor hasn't worked the same since.

Re:Print Vs Online

[Anonymous Coward]

You will be able to highlight on a iPad.

Oh, wait, No. That would be MULTITASKING. Unsupported.

AND was that even possible, it would have been illegal modification of a copyrighted work, all those yellow and orange stripes.

Newer versions of the iPad will make sure that even if you ever managed to jailbreak to run an innocuous highlighting task, your ID will immediately be sent over the equivalent of RIAA for books and they will come arrest you immediately.

Re:Print Vs Online

[Anonymous Coward]

My 2 sources for ebooks, ereader and safarionline, let me highlight and annotate. What's even better is that I can find the page I'm looking for by looking at my list of notes rather than the other way around.

Re:Amazon bows, I won't. Boycott greedy publishers

[Nerdfest]

Just say no. I don't.

You're not female, are you?

Re:What's the marginal cost of production on an eb

[SatanicPuppy]

It's not quite zero. You've still got the initial work for layout and editing, as well as the author to compensate.

Let's say 5 bucks for a "hardcover" and 2 bucks for a "paperback". Far more than they're making from Barnes and Nobel, and then Amazon could tack on a dollar to actually make a profit instead of a loss on selling these things.

Re:Amazon bows, I won't. Boycott greedy publishers

[jedidiah]

If I am going to waste money paying far too much for a book than I really need to, then I'm going to at least get a version that I can pass on to someone else.

Re:What's the marginal cost of production on an eb

[floodo1]

in other words there is no direct competition.

Amazon attempts to use their monopoly power

[Geoffrey.landis]

In fact, Amazon was the one who was trying to use their market dominance as a tool to set prices, which is what we call monopolistic behavior. Note that what they did was not merely decide not to sell those books that they thought were overpriced-- they attempted to force the publisher by pulling all Macmillan titles from their store, including the physical (paper) ones-- saying "either you accept our prices for e-books, or else we will not sell any of your books." (And, of course, also all the imprints of Macmillan, such as Tor.)

That only works, though, if Amazon were enough of a monopoly that people wouldn't just go elsewhere... and it turns out that Amazon isn't. Yet.

In the long run, it benefits consumers that Amazon backed down-- it's never good for one vendor to have the power to set prices, even if (initially) they claim that they are only using that power to lower prices to the consumer.

As Charlie Stoss commented, Amazon was fighting this one because if the publisher wins, it hurts their profitability because it pushes prices down.

Re:Amazon attempts to use their monopoly power

[DebianDog]

Right... Get a huge potion of business for a large established company. Cultivate this over a few years. Then, tell them what their prices are going to be. When they refuse to budge. Stop selling their products. I mean it is almost the Wal-Mart business model what was hell was Amazon thinking? Oh yeah... It works! Remember Rubbermaid?

Re:Amazon attempts to use their monopoly power

[Fizzol]

"Amazon was fighting this one because if the publisher wins, it hurts their profitability because it pushes prices down."

It's pushing prices up not down.

Re:Amazon attempts to use their monopoly power

[Anonymous Coward]

It's letting the publisher set wholesale prices rather than Amazon. Macmillan wants to have a variable pricing structure where the ebooks are more expensive at first release (coinciding with the hardcover release) and becomes cheaper over time (reaching about ~$5 when the paperback is out). This may mean that some titles are more expensive in the short term but is beneficial to the consumer in the longer term.

Re:Amazon attempts to use their monopoly power

[Anonymous Coward]

There is only one company in this story with a monopoly -which is protected by law- and it's not Amazon.

Even if you consider both Amazon and Macmillan monopolies then you have a market with one buyer (Amazon) and one seller (Macmillan). These types of markets in economics generally do not operate efficiently for anyone involved which is why this decision isn't necessarily good or bad for the consumer.

Re:Amazon attempts to use their monopoly power

[VShael]

Charlie writes an interesting article.

"Amazon are going to fight this one ruthlessly because if the publishers win, it destroys the profitability of their business and pushes prices down."

But it just doesn't stand up to the facts.

If he had attempted to say that their profits will be decreased, I might have been convinced. But it *demonstrably* won't push prices down.

Re:Amazon attempts to use their monopoly power

[JAlexoi]

You don't need to be the effective monopolist, or even a dominant palyer in the market. Just have enough of a market share... Not like WalMart is the only store people go to...

Re:Amazon attempts to use their monopoly power

[Qwavel]

Amazon wanted to sell e-books for less then their competitors (e.g. Apple and Google soon).

I'm not clear on how Amazon is going to have a monopoly or about why it is bad for them to try to sell products for less then Apple.

Apple & MacMillan wanted the books sold for a higher price, and more importantly, they wanted to force all of the e-book retailers to sell for the same price. How do you think that it is good for customers that their is now an agreed upon price for selling books and no one is allowed to undercut (i.e. compete with) that price?

This is great for Apple - their customers aren't price sensitive so they will keep buying - and they have maintained their high margins.

Re:Amazon attempts to use their monopoly power

[Geoffrey.landis]

"Amazon was fighting this one because if the publisher wins, it hurts their profitability because it pushes prices down."

It's pushing prices up not down.

That's always the argument of monopolists-- "we can sell the product cheaper -- even if it means we have to actually lose money on each product sold!"

(Which, by the way, is what Amazon is doing-- they are losing something like two to four dollars on every e-book they sell, in order to capture market share.) The footnote here is "* cheaper, until the point where we have finally driven our competitors out of the market."

Do you really, truly believe that Amazon is fighting this because if Macmillan gets their way Amazon will make more profits, and they don't want that? Does this make economic sense to you?

Amazon using their large market share on paper books to allow them to apply muscle dictate the price of e-books is not a good thing.

Re:Amazon attempts to use their monopoly power

[boilednut]

You seem to be missing a degree of freedom inherent in the relationship: the publisher is free to sell their books to Amazon at any price they choose, or not sell them to Amazon at all. So, the publisher has the prerogative to set the whole sale price which makes the most business sense for it. All amazon is doing here is attempting to exercise the same right: the ability to sell its previously purchased merchandise at the price that makes the most business sense for it.

Re:Amazon attempts to use their monopoly power

[Geoffrey.landis]

Unfortunately, you're wrong. That's not what Amazon was doing.

What Amazon was saying was: either you sell us e-books at the price we tell you to, or else we won't carry any of your books, electronic or paper.

Re:Amazon attempts to use their monopoly power

[zerobytes]

I guess I don't understand why this argument can't be decided in the free market. Let Macmillan charge a higher price - I just won't buy the books until they come down in price. That's what I do with physical books, why not ebooks? I own a kindle and read plenty of e-books. If I think the story is worth the price then I pay for it. I appreciate that there are companies out there editing books, cleaning them up, and pushing them to the public. I'll buy that. I've read enough e-crap literature to know that digging through hack sites to find the gem among the dross is not worth my time.

Having said that, I rarely purchased (or purchase) any book in hardback and try to keep my book buying below $10 a pop. Yes, every now and then there will be a book I HAVE to have before it drops below that price but I don't mind the additional cost.

I, personally, get frustrated by all the people who insist that they deserve more money in their job and every possible life amenity while whining that other people should make less (bloated, overpaid execs excluded, of course). Let the free market decide and pay for what you patron. Otherwise, be willing to give up your paycheck in the name of "free information".

Re:Amazon attempts to use their monopoly power

[Geoffrey.landis]

I guess I don't understand why this argument can't be decided in the free market. Let Macmillan charge a higher price - I just won't buy the books until they come down in price.

Exactly.

Perception of unreliability in self-publishing

[tepples]

The question should really be 'what function that publishers perform do we still need and how should those functions be provided?'

One function of a publisher, as opposed to a vanity press, is to have a reputation for checking the facts in what it publishes. There's a perception that works self-published through a vanity press can't be counted on as reliable sources of information.

Re:Perception of unreliability in self-publishing

[HiThere]

That's not a function that they've been performing very well. Just last year Elesevier was found to be publishing what can only be called fake science journals, where the editorial staff and most of the contributors worked for major drug companies. (Possibly only one. I forget the details.) They aren't the first, but they're the most reputable company to have published this kind of thing under their own name.

Trusting authority hasn't become only a logical fallacy. It's become a statistical one. Authorities lie too often to place much trust in someone merely because he's a well known authority.

(The difference:
A logical fallacy: That's not proven.
A statistical fallacy: That not the way to bet.)

Re:Perception of unreliability in self-publishing

[tepples]

Trusting authority hasn't become only a logical fallacy. It's become a statistical one. Authorities lie too often to place much trust in someone merely because he's a well known authority.

But one of the top 10 web sites on the Internet has the explicit mission of summarizing authority. A source such as the fake Elsevier journal can show itself to be unreliable, but a new journal published by Elsevier can rise to a perception of reliability based on those journals published by Elsevier that aren't fake. But a source needs a publisher to take a chance on it in the first place. It's like a credit history: you have to have a bank take a chance on you in order to build up a reputation of reliability.

Re:Perception of unreliability in self-publishing

[HiThere]

When those journals were outed it turned out that they'd been published for several years (I want to say decades, but I'd need to research). And the articles in them had been used to justify governmental decisions on what drugs to allow to be used, etc.

So why should a trust a new journal that Elsevier publishes? They've proven that they are seriously corruptible. I may trust some particular author that they publish, but can I trust that the article published in their journal hasn't been "edited" to conform with some hidden agenda? That would seem to be a rather iffy decision for me to make.

In particular, in the case of a reputable publisher, one can be fairly certain that they will only lie either by accident or for fairly substantial gains. Like changing government regulations. Blogs are much more likely to reveal their reliability (or lack of same) at times with trusting them has a much lower cost when they deceive.

Re:Perception of unreliability in self-publishing

[tepples]

So why should a trust a new journal that Elsevier publishes?

How else would you determine whether a source is reliable enough to cite in your own work?

Re:Perception of unreliability in self-publishing

[HiThere]

That is, indeed a problem. And trustworthy sources of information are needed. It's just that the journals have betrayed their trust. (Not all of them, but how can one tell. Being authoritative doesn't seem to work.)

Probably the only solution is multiple sources and experiments being repeated to validate the results (and published in a DIFFERENT journal) before they can be accepted as reliable. This was, if you'll recall, approximately the original procedure for validating results.

Why, you ask?

[jimicus]

Why do these dinosaur publishing businesses still manage to thrive despite the Internet?

Because nobody has yet invented the book equivalent of "a ubiquitous drive which will read the raw data at high speed with 100% accuracy (or as near as makes no difference) without damaging the storage medium".

Are you guys defending AMAZON?!?!wtf

[Anonymous Coward]

All you guys seem to have forgotten that those e-book devices are riddled with DRM and other junk. Remember what happened to the e-book edition of 1984? With e-books, one person can instantly erase books that do not conform to the view of the government. Try to do that with paperbacks!

Sure, keep defending Amazon, or Apple... They're paving the way for global censorship.

Re:What's the marginal cost of production on an eb

[whisper_jeff]

Do you work for free? Why should people - you know, editors, typesetters, designers, copyeditors, etc. - in the publishing industry? And, even if the ebook is a digital translation of the print product, somebody still needs to make that digital translation and check it over to make sure all the i's stayed dotted and t's stayed crossed. Until you're willing to work for free, don't expect other people to do so.

Re:What's the marginal cost of production on an eb

[Trepidity]

If the free market works, though, prevailing prices should relate to cost in the long run, since the equilibrium price of a competitive market is cost plus a reasonable profit ("reasonable profit" being the minimum profit needed to keep suppliers from exiting the business).

From that bastion of Right Wing Capitalism

[wiredog]

Salon.com

Most consumers believe that e-books should be a lot cheaper than print books because the publisher has been spared the expense of paper, printing, binding and shipping/distribution. However, only about 20 percent of the cover price of a new hardcover goes to those costs: about $5 out of $25. Retailers take from 40 to 50 percent, and after that, the majority of the cost of a new book goes to author royalties, editing, design, marketing, publicity, overhead and so on.

Re:From that bastion of Right Wing Capitalism

[mrjatsun]

What your missing is that the book is ~ 100% markup... So yes, the retailer takes ~ 50%
if they don't offer a discount..

So in your case above, the retailer takes $12.50.. The publisher takes $12.50. The publisher
then subtracts the $5 for printing/distribution. Then has $7.50 left to pay for the publishing
costs, take a profit, and pay the author.

If there wasn't a printing/distribution cost, the book would list @ $15.00.

I am perfectly fine if they want to charge $15 for an e-book. They will drop the price as time goes
on.. If your patient, wait and pay less.. If your not, pay more.

The real cost saving will come if e-book retailers make it easier to publish (ala the apple app store).
That will make a lot more content available and drive down prices. It will of course allow a lot more
crap in.. But that's where the breakdown in capitalism is.. The artificial throttling of what gets
published.

Re:From that bastion of Right Wing Capitalism

[Anonymous Coward]

The retail profit margin is another place where we should look for price reductions. Those 40 to 50 per cent markups are interest on the retailer’s investment for financing and stocking their inventory, and occasionally taking a bath on bad choices. This cost would not appertain to stocking ebooks.

Re:From that bastion of Right Wing Capitalism

[Anonymous Coward]

As noted by others, publishers serve some very important functions - primarily editing and legal vetting. As to the braying about the excessive cost of text books - I'll agree the needless changes to editions is bad practice. However, most text books do not sell in numbers like Eco 101 or Calc 101 do. The more advanced the class, the fewer the participants. Factor in that there are usually several adequate titles to chose from and you get very low sales figures for each but as publisher you are stuck with the same, if not higher, overhead of producing and distributing one of those titles. Thus cost per unit goes up quite a bit. Those costs also do not go away with an electronic version.

Re:From that bastion of Right Wing Capitalism

[cdrguru]

What you're missing is the "artificial throttling" is called editing. The publisher rejects the crap and edits the hell out of the nearly crap. The end result is a book that is readable and sells.

OK, so maybe Isaac Asimov didn't require a lot of editing. But here we are talking about a professional that was in the business of writing books and turned out maybe 20 a year for 50 years. Or more.

Stephen King probably has the book-writing game down pretty solid as well. Not a lot of editing required.

Just about every other author out there is going to need a lot of editing. And probably a lot of rejections. There's that throttling you were talking about. Without it, the book market would look like YouTube. Or worse, American Idol - everyone thinks they are the finest author ever to put words on page and even their friends can't tell them otherwise.

Re:From that bastion of Right Wing Capitalism

[Anonymous Coward]

That quote manages to destroy itself. Run through the math, and, yeah, of COURSE people think the ebook should be cheaper. Fully half the 'expense' was retailer markup, which goes away when you go electronic. Another big chunk was the physical part, which also goes away.

Some publishers that were selling $10 worth of work for $12.50 seem to think they can get away with selling $4 worth of work for $15...

Additionally, they try to use the hardcover numbers even when talking about the ebook version of something that has a paperback version. Something that retails for $7-$10 and makes all parties involved a profit.

Re:From that bastion of Right Wing Capitalism

[Phyrexicaid]

Salon.com

Most consumers believe that e-books should be a lot cheaper than print books because the publisher has been spared the expense of paper, printing, binding and shipping/distribution. However, only about 20 percent of the cover price of a new hardcover goes to those costs: about $5 out of $25. Retailers take from 40 to 50 percent, and after that, the majority of the cost of a new book goes to author royalties, editing, design, marketing, publicity, overhead and so on.

So, the question is, does Amazon take 40 to 50 percent of the ebook price? I would hope not, as that 40 to 50 percent would cover the costs of running a physical store (floor space rental, back office and front office staff).

Re:Amazon bows, I won't. Boycott greedy publishers

[Anonymous Coward]

Because you are the primary cause of the problem ... this attitude of "I can still afford it, so fuck everyone who can't". When they hike the price to $25, then $35, then $50, will you still be happy ? And then of course, when a purchase is deemed "too expensive" even by you, you will jump on the "publishers are ezploiting the masses" bandwagon, you hypocrite.

Re:What's the marginal cost of production on an eb

[chord.wav]

Is that your definition of "marginal cost of production"?

Re:What's the marginal cost of production on an eb

[vxice]

Ok very important, price to produce has very little to do with final price to consumer, it will influence the minimum price the publisher will accept but that is about it. Books are valuable and thus can be sold as if they are valuable because well they are. With low barrier to entry costs more publishers should enter the market but that is a slightly different issue. If the publisher has no right to unreasonable profit from his work why do you? Imagine a book is free to produce, no cost what so ever, does that mean the publisher should give you the book? Even if you gain say $20 from the book either directly or indirectly your enjoyment etc? If he should then you are making $20 with no effort and if the book is sold for $20 you make no profit and the publisher makes $20 of profit you get the book for what you valued it at. The real problem here is that amazon is a nationwide retailer allowing for everyone to go there and get the book for bare minimum price lowering the price and profit to publisher, who does do some work and same goes for movie and music industry, and in the end more people buy the product for less than what they value it at.

Why RIAA? [Re:Monopoly?]

[Geoffrey.landis]

For that matter, why do the RIAA's members still control the music business? Why do these dinosaur publishing businesses still manage to thrive despite the Internet?"

Because they
1) Provide money and pay the big costs while artists are producing their album
2) Provide marketing
3) Find the promising artists and writers
4) Have the distribution channels

Actually, from what I hear of the music business, they don't really do any of these for new artists (unless, maybe, you just won American Idol or something).

The reason RIAA is still thriving is because they have a huge backlist of stuff that people still listen to, from artists who had signed contracts back when big studios really were the only way you could get airplay or distribution.

Re:What's the marginal cost of production on an eb

[BobMcD]

I am Stephen King, you insensitive clod!

Okay, not really.

Re:Amazon bows, I won't. Boycott greedy publishers

[Vanderhoth]

I glad you'll pay, you deserve to. Enjoy paying high prices for a bunch of bits you can't transfer to anyone else, oh and also enjoy paying for the method used to deliver those bits to you, oh and enjoy paying for the storage space for those bits... I wonder what the publisher is paying for? Sounds to me like you've been had.

Re:What's the marginal cost of production on an eb

[Anonymous Coward]

If the free market works, though, prevailing prices should relate to cost in the long run

sheesh, you sound like a 14 year old who has just come out of an economics class.

3 digit uid? listen kid, it's not cool to post using your dad's account.

Re:What's the marginal cost of production on an eb

[hayd]

If you watched Californication, Mia's (who stole the transcript from Hank) press tour was fully paid by the publishing agency, so yes, publishers do cover the press tour costs.

It happens because we let them

[chord.wav]

Pirate their books until they are broke. They've "earned" so much already. Free the knowledge.

unfortunately, recently permitted in the U.S.

[Trepidity]

This kind of vertical price setting was illegal in the U.S. for about 100 years, considered a form of price-fixing under the Sherman Act. Macmillan was free to choose whatever wholesale price they wanted to sell books and ebooks to Amazon for, but once they sold them, they had no control over what retail price Amazon set. Unfortunately, that was overturned in 2007 in a 5-4 U.S. Supreme Court decision.

Re:unfortunately, recently permitted in the U.S.

[dummondwhu]

That is rather unfortunate (I wasn't even aware of that decision) because the way you describe is the way it should work. Amazon should pay a publisher whatever they ask as the wholesale price. But they should, in turn, be free to turn around and sell the books at whatever price they wish. Prices would be kept in check by market competition. And Amazon should also be able to sell at a loss if they wish. It might seem nuts to do that, but one place where it makes sense is if they want to subsidize lower priced e-books to spur growth of the Kindle.

Re:unfortunately, recently permitted in the U.S.

[masmullin]

Wow, if there was ever a post that deserved +5 informative....

Well, in lieu of mod points... all I have is a thank you, your post was most... informative.

Re:unfortunately, recently permitted in the U.S.

[butlerm]

Even if Macmillan had no direct control over what price their books retailed at, the wholesale price they offer would certainly force Amazon to sell Macmillan's books at some reasonable markup over that, if they sold them at all. Amazon certainly cannot sell a $12 wholesale book for $9.99 - not if they expect to make a profit, at any rate.

Now if Macmillan was prohibiting retailers like Amazon from selling their e-books for less than $15.99 that would be a more serious issue. I am not sure that is the case here though.

Re:unfortunately, recently permitted in the U.S.

[Trepidity]

The latter is what they're doing. Macmillan previously sold ebooks wholesale to Amazon for $9.99, and Amazon chose to sell them with no markup to promote the Kindle platform. Macmillan demanded a move to "agency pricing", where Macmillan sets the price, and Macmillan and Amazon split the revenue according to a fixed percentage. It's not really about money per book for Macmillan---they'll get about the same $9.99 per book either way---but about control over pricing.

Re:unfortunately, recently permitted in the U.S.

[CavemanKiwi]

Wow that sucks bigtime. I am not sure how this limitation of freedom benefits the majority of Americans :(

Re:unfortunately, recently permitted in the U.S.

[amplt1337]

This is a tad different, because the books are sold in partnership with a revenue split. I'm sure Macmillian would be happy to sell ebooks to Amazon at hardcover wholesale and let Amazon do whatever they want with the price, but the Kindle store has a fixed split between publisher and Amazon.

Re:unfortunately, recently permitted in the U.S.

[Trepidity]

This article claims the opposite: that Macmillan isn't willing to sell at hardcover wholesale anymore, but is demanding a switch to the fixed-split model that lets Macmillan set the prices. Amazon wanted to stay with the hardcover-wholesale pricing model.

Re:unfortunately, recently permitted in the U.S.

[amplt1337]

Oh, duh. Yes. Of course. It's about long-term setting of market expectations, not immediate profitability.

Amazon is selling ebooks at a loss in the hope of squelching all other e-readers. Macmillan isn't going to be profitable in a world where ebooks are a fraction of the cost of hardcovers, due to cannibalizing their own sales.

I had that one wrong. Sorry!

Re:unfortunately, recently permitted in the U.S.

[Qwavel]

No, this is not about Amazon "selling ebooks at a loss in the hope of squelching all other e-readers."

Amazon is making their e-books available on all possible platforms (including iPhones, PC's, and iPad if Apple lets them). Consumers will not need to buy a Kindle to take advantage of Amazon's pricing.

They are cheaper and DRM free ....

[GNUALMAFUERTE]

On BitTorrent. So, who cares about Amazon?

Re:They are cheaper and DRM free ....

[masmullin]

much wider selection on Amazon, properly formatted etc. No searching through those stupid evony ads, no spending 2 hours/book with Sed to get the formatting proper. No entire pages missing from the books, no OCR.

However, I get your point. for all of the above, it doesn't make up for free (as in both beer and freedom).

Re:Amazon bows, I won't. Boycott greedy publishers

[Xest]

Because then when people like you buy it they'll say "Hey, this is obviously priced too low" and up future books to $19.99 and so on. That's a 25% price increase, the previous being a 50% price increase, they'll figure as long as they don't lose 25% or 50% in this case of buyers then it's worth it. The problem is, through the population in general less people have access to the text, which depending on the books, is bad to society. If it means less students being able to afford the books they need for example, it's a bad thing.

It seems silly to encourage them. I can afford the price hike too, but from a common sense and moral standpoint I wont. It even effects me personally even then- sure it's not too big a price jump, but what about over time also? If I stick to my guns, I can buy 3 eBooks for the price it costs you for two, I can buy 9 eBooks for the amount you pay for 6 and so on.

Having better access to books is nearly always a good thing personally, and for society in general. Artificial price hikes don't help that goal.

Re: No More!

[langelgjm]

As b4upoo's counsel, I am taking this opportunity to inform you that you will shortly be receiving notice of copyright infringement. Your blatant and willful distribution of his copyrighted comment has harmed its marketability, and we intend to sue you for statutory damages in the amount of eleventy billion dollars.

All I needed to read...

[geekmux]

"We will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly..."

Yup, that's about all I needed to read to realize the greed and corruption going on here. And yeah, publishers have been chugging along quite nicely even in this economy, but is that by choice or by force? I'm FORCED to buy a $140 book for my class this semester to obtain the authorization code to grant me access to the cheesy course website, only to find that the website has the whole damn book is in electronic form. On top of that, the physical "book" didn't even come bound. Yes, that's correct, a stack of 200 pages shrink-wrapped and 3-hole punched, what a bargain at $140.

Hopefully good competition will at least keep e-book prices at a sane level, because I'm getting rather fed up paying as much in book fees as I do tuition. Since when did paying extortion to publishers become a requirement for a degree? Just yet another example of their Monopoly, all the way from the publishers to the paper mills who are printing what could easily be left in electronic form.

Re:All I needed to read...

[rochrist]

Yup, that's about all I needed to read to realize the greed and corruption going on here. And yeah, publishers have been chugging along quite nicely even in this economy, but is that by choice or by force?

Cite? Because I'm pretty sure you're pulling this out of your ass.

Re:All I needed to read...

[geekmux]

Yup, that's about all I needed to read to realize the greed and corruption going on here. And yeah, publishers have been chugging along quite nicely even in this economy, but is that by choice or by force?

Cite? Because I'm pretty sure you're pulling this out of your ass.

When I say "by force", I'm speaking of the broke college student who is FORCED to purchase a $250 textbook for a $250 course.

I'm speaking of that same college student attempting to sell back that same $250 textbook three months later and is informed that a "new" edition has been released, and the "old" 2009 edition is now worthless, which in turn FORCES new students to spend another $250(or more) on the "new and improved" edition.

Do you honestly believe that a publisher NEEDS to release a new edition of Early American History every other fucking year? It's not like the content has changed much since 1950, and the physical book sure as hell isn't worn out after 3 semesters worth of use.

That shit goes on across hundreds of college campuses every single semester, year after year. Most large publishers usually have a HUGE financial stake in the EDU realm. With this level of "accepted" extortionist pricing, I can see why.

Re:What's the marginal cost of production on an eb

[maeka]

There is an important word missing in your post, and therefore likely missing in your thoughts.
"If the free and competitive market works, though, ..."
Publishing is not a fully competitive market because of imperfect substitution.
Macro 101 axioms are too simplistic to describe such a market.

Re:What's the marginal cost of production on an eb

[0123456]

If the free market works, though, prevailing prices should relate to cost in the long run, since the equilibrium price of a competitive market is cost plus a reasonable profit ("reasonable profit" being the minimum profit needed to keep suppliers from exiting the business).

And a government-mandated monopoly on distribution (aka 'copyright') is about as far from a free market as you can get short of having the government itself distribute all the books. The whole point of copyright is to maintain profits above free market levels.

Re:What's the marginal cost of production on an eb

[Trepidity]

You can take it as sarcasm if you prefer. The main point is that libertarians can't really have it both ways. If someone's arguing that it's fine for prices to be set at "whatever the market will bear" and this need have no relation to cost, then they can't really also argue that "the market works", with the usual invisible-hand arguments, because the idealized invisible-hand arguments imply that market prices should be closely connected to cost.

Paper and Ink are not free

[sjbe]

The marginal cost of printing a book is pretty close to zero too. That isn't why they cost as much as they do.

I've worked in publishing as an accountant and this statement is completely wrong. The marginal cost of production of even the highest volume books or newspapers is no where near zero. It's not the dominant cost (those would be marketing and distribution in most cases) but the marginal cost isn't zero or anywhere near zero.

Re:Paper and Ink are not free

[nine-times]

It's not the dominant cost (those would be marketing and distribution in most cases) but the marginal cost isn't zero or anywhere near zero.

Relative to what? If the list price of a best-seller book is $30, what percentage of that is actual materials and production costs of printing that book?

Re:What's the marginal cost of production on an eb

[dummondwhu]

Ah, yes, the old "I saw it in a TV show, so it must be true" routine. In fairness, I have no idea how the system works, but citing a TV show as proof of fact is a little thin.

Re:What's the marginal cost of production on an eb

[Trepidity]

That's true, but I suspect that substitution is actually better than you might think, and the root problem is collusion and a small group of dominant producers, rather than imperfect substitution. Macmillan can get away with this because they're huge and singlehandedly control a significant swathe of the book market (and a majority in some genres), but a publisher with 1% market share who faced competition in every genre segment would have a much harder time raising ebook prices and still maintaining sales.

Re:What's the marginal cost of production on an eb

[Phyrexicaid]

It's not quite zero. You've still got the initial work for layout and editing, as well as the author to compensate.

Let's say 5 bucks for a "hardcover" and 2 bucks for a "paperback". Far more than they're making from Barnes and Nobel, and then Amazon could tack on a dollar to actually make a profit instead of a loss on selling these things.

That's not what marginal cost of production means. http://en.wikipedia.org/wiki/Marginal_cost

Re:What's the marginal cost of production on an eb

[Trepidity]

Indeed. I was replying to his more general claim that item prices shouldn't reflect marginal cost in virtually any market. In the special case of government-mandated monopolies, clearly free-market pricing doesn't happen.

Re:What's the marginal cost of production on an eb

[Phyrexicaid]

Do you work for free? Why should people - you know, editors, typesetters, designers, copyeditors, etc. - in the publishing industry? And, even if the ebook is a digital translation of the print product, somebody still needs to make that digital translation and check it over to make sure all the i's stayed dotted and t's stayed crossed. Until you're willing to work for free, don't expect other people to do so.

I don't, but none of this has any bearing on the marginal cost of production of an ebook. The fixed costs are just that, fixed. The marginal cost associated with selling an ebook is *zero* (Amazon covers the cost of sending you the ones and zeroes)

Users surrender to Pirate Bay for ebooks

[harmonise]

Story at 11.

Re:What's the marginal cost of production on an eb

[Phyrexicaid]

That's right, because nobody markets books, or pays authors, or runs press tours, or edits books...

... and none of that has any bearing on the marginal cost of production of an ebook. The fixed costs are just that, fixed. The marginal cost associated with selling an ebook is *zero* (Amazon covers the cost of sending you the ones and zeroes)

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:What's the marginal cost of production on an eb

[maxume]

Those are fixed costs.

I do agree that there needs to be compensation for them though. There are lots of worthwhile books that are the result of financial compensation rather than passion.

Data centers and bandwidth aren't free either

[dhovis]

I was exaggerating a bit, but my point was just that the cost of printing was not what sets the price of a book. You agree, I think, since you say it is not the dominant cost.

Re:Data centers and bandwidth aren't free either

[sjbe]

I was exaggerating a bit, but my point was just that the cost of printing was not what sets the price of a book.

No need to exaggerate to make that point.

You agree, I think, since you say it is not the dominant cost.

You are quite correct on that score. I'm just correcting the incorrect assertion that the cost of printing one additional copy of a book is anywhere close to zero. It demonstrably is not. The cost of producing an additional copy of an e-book isn't actually zero either but it is FAR closer - so close that it is a rounding error in many cases.

Re:Data centers and bandwidth aren't free either

[dhovis]

Well, if the only cost that goes away when you go to an eBook is printing, then how much should the cost drop? I'm genuinely curious. My guess would be maybe 10%. I'd be shocked if more than 20%. In which case you could lower the cost of the eBook proportionally.

But if the eBook is only 10% cheaper to produce, then a $15 printed book would become a $13.50 eBook. Unfortunately, that isn't going to satisfy the type of people who think that eBooks should be substantially cheaper than printed books. To the end user, that marginal cost is within the noise. People around here seem to expect that a $15 printed book should be $5 as an eBook.

Now, I'm not accounting for distribution costs, which you mention as being higher than the printing cost. So maybe you could give us an estimate of the savings to the publisher by going to eBooks. How much of a discount do people expect when the marginal cost of reproduction drops actually to zero? I suspect that most people would be disappointed.

Re:Data centers and bandwidth aren't free either

[Lifyre]

I wish I had Mod points to bump you up so there would be more attention to this point. eBooks should be cheaper but How much cheaper is the million dollar question I'd like to see answered too.

What do I get?

[cervo]

If you are going to sell your books more expensive than everyone else, what do I as a consumer get out of the deal?

Honestly I would be willing to pay the same as a paperback as long as it was DRM free. Even though an EBook costs way less than a Paperback (because in theory a paperback should include binding/printing charges as should a hard cover), there is a convenience to not filling up a library.

But I'll be damned if I'm going to pay 14.99 every time I switch e-readers for the same book.

Some publishers are holding e-books back long after release. First they release the hard cover, then a few months later they release the e-book with the paperback. For me that's stupid and it would be better to charge more for the e-book. But still I would expect some savings over a full hardcover, after all there are no binding/printing/additional costs. I would expect those savings to be passed onto me. Also if you are going to charge me $20 for a book where the paperback is $10 and the hardcover is $30 then it damn well better be DRM free.

The reality is many of the DRM formats have been cracked and people often buy e-readers expecting to use the DRM cracks to export the title to however they want. But this is stupid because it just keeps funding the companies so they can constantly create new DRM and new nuisances for the customer. It's time to stop rewarding DRM makers. I don't want to have to be a "criminal" (see DMCA) in order to shift books to whatever format I want. I want that as part of the deal. Why people are such idiots and open to being ripped off I have no idea.

And on the e-book prices, if the price is too high then people won't buy. I'm surprised apple is letting publishers set prices. I guess they aren't going to fight the fight to eliminate DRM from books for us like they did on music.

Re:What do I get?

[masmullin]

Absolutely agree.

I sense an agenda....

[mark-t]

If Macmillan wants Amazon to charge more, why don't they just charge more for Macmillan titles? Why change their entire ebook pricing structure for everything?

I don't see how Macmillan gets _ANY_ rights whatsoever to dictate what Amazon wants to charge for ebooks from other publishers.

"Strong disagreement" my ass... this looks to me like they are sucking up to a publisher because the alternative is not selling their stuff.

Grow a pair, Amazon. I'm unimpressed.

Optimal pricing IS based on marginal cost

[sjbe]

You are under the false assumption that items are priced based on marginal cost.

If you take an economics 101 course you'll find that in most cases the optimal price to sell at is where marginal revenue equals marginal cost. So yes, prices are indeed based on marginal cost.

They aren't in practically any market...

On the contrary, prices are based on marginal cost in practically EVERY market including monopolies.

...they are priced at what consumers will pay and what the competition is selling at.

Which is what determines marginal revenue at a given price point. If they price the product too high, marginal cost will exceed marginal revenue which is a fancy way of saying they'll lose sales. If they price too low, sales will be high(er) but they will be leaving money on the table. But there is copious economic literature establishing that the optimal prices is where marginal revenue equals marginal cost. Don't take my word for it, look it up.

Re:Optimal pricing IS based on marginal cost

[keithpreston]

Economics 101 doesn't account for the real world. The world is full of lazy people that often don't have access to good pricing information. If there was good information on pricing, Brick and Mortar store would practically cease to exist, except maybe Walmart. In the same ways, if people didn't want to pay for convenience then gas stations would only sell gas and not overpriced milk and food.

Essentially the market is splitting into 2 types, those whose research prices and don't pay for convenience and the opposite. Businesses have realized this and used it to their advantage with discriminatory pricing to these two groups. Consider the scam of most Cable companies with "promo" pricing that is practically renewable if you say you want to cancel. Lazy and uninformed end up paying more. This e-book pricing scheme is just discriminatory pricing to those lazy techies who have too much money.

Corrections

[mpapet]

If the free market works,
Which, it exhaustive historical observation repeatedly shows that the notion of competitive markets are temporary until some kind of Monopoly/Oligopoly/other mature market takes its place. Book Publishing (not the act of writing the book) is an Oligopoly.

prevailing prices
Prices are simply the cost at which someone is willing to buy and the cost at which a publisher is willing to sell. No relation to anything else is ever necessary. Look at the pricing for DVD's. They cost less than $3 to make and deliver yet the average american consumer pays maybe 10+ times that for the latest and greatest?

reasonable profit
A 'reasonable profit' is the one the seller thinks is reasonable. If I can sell a DVD for USD$1000 that cost me $5 to make, then $995 is a reasonable profit. The only thing I need is a willing buyer. No rational thinking required.

This concludes the Economics lesson for today.

Re:What's the marginal cost of production on an eb

[Phyrexicaid]

You are under the false assumption that items are priced based on marginal cost. They aren't in practically any market, they are priced at what consumers will pay and what the competition is selling at. Fortunately for them consumers are still willing to pay extra for the digital "convenience" and the competition doesn't sell the same books.

No, I'm pointing out that it doesn't cost them anything to sell another copy of an ebook. And Amazon is right in one sense, they won't be priced at what the competition is selling at, because there won't be competition for a specific title.

Of course, a consumer could always buy a *different* title from a different publisher

Re:Amazon bows, I won't. Boycott greedy publishers

[sopssa]

You're doing something wrong if you're buying an eBook/game/whatever for it's bits. I'm buying it for the value it gives me - be that information, entertainment or something else.

Re:What's the marginal cost of production on an eb

[smallfries]

Yes they can. What you seem to be missing (deliberately avoiding) is that a market is the state where you have competition between producers. If you only have one producer of a good then you have a monopoly, at which point if the producer can get away with it they will set prices as high as possible. This is not a failure of the "market" as you are implying. The failure is a complete lack of market to begin with.

The invisible hand is the ability of consumers to freely choose among producers, and the ability of producers to compete through price decreases. In this situation the market "works" by eliminating overpriced producers.

Re:What's the marginal cost of production on an eb

[mpapet]

If you watched Californication

When did Television start broadcasting historically accurate to the last detail stories?

It's probably time to turn off the TV for a good long while.

Re:What's the marginal cost of production on an eb

[maeka]

Perhaps I am unusual (I suspect not), but I often chase authors, not genres, and therefore the book market is not one controlled by substitution, and we see that in it's price inelasticity. I do not see how this would be different if we had even a significantly larger number of publishers with smaller pieces of the pie.

Yawn

[Cro Magnon]

If Macmillan want to charge $14.99 for ebooks, fine. If I decide $14.99 is too expensive, I'll just tell them to fsck themselves. Free Market.

Re:Yawn

[shutdown -p now]

My thoughts exactly. The misconstrued "monopoly" argument aside, if they want to shoot themselves in the foot by being more expensive than anyone else, why shouldn't they have freedom to do so? Of course, it may be that they will actually sell enough that they'll make more profit with this higher price, which, again, is their right.

Were it a real monopoly, the issue would be different, but as it is, I don't see why competition wouldn't take care of bringing the price to its proper point.

Apples and oranges

[Al Al Cool J]

By and large, people who make music are reasonably good at figuring out how to make decent music. They practise, they play for friends, they perform in small venues, they attract a following.

On the other hand, people who decide to write a book, often have no fucking clue how to write. Maybe they have a good idea, or an interesting story, or a unique perspective on certain events. But write a coherent well-structured book? Ha!

And the problem is, people think they can write. Let them all self-publish and many aren't going to believe they need professional help. Many musicians at least know they can benefit from a professional sound engineer, but how many first-time writers hire their own freelance editor?

Take book publishers out of the picture, and most auto-biographies would be unreadable. Large amounts of non-fiction would be unreadable, as would a surprising number of novels. Books that requires illustrations, would be filled with really crappy illustrations. Or none.

You think text books are hard to follow now? Leave academics to their own devices and see what you get.

Book publishers bring a lot more to the party than their music industry equivalents. They rewrite and restructure, fact-check, illustrate, do graphic design, obtain clearance for the use of quotations and excerpts, and translate to foreign languages.

I spent ten years writing custom software for book publishers, and I know that their's is one of the most complex and challenging businesses going. I'm not saying I agree with Macmillan's e-book pricing. But comparing them to the RIAA is ridiculous.

Re:Apples and oranges

[Larryish]

I would like to offer my services as a freelance editor.

Macmillan HAS been charging more than $9.99

[kalbzayn]

I thought the publishers had been setting their prices all along and Amazon was buying them at one price and selling them at a cheaper one. Doesn't that mean that Macmillan will make the same amount per ebook since the price Amazon pays isn't changing but that they don't want readers to get used to "only" paying $9.99. http://www.teleread.org/2009/05/13/amazon-losing-money-on-999-e-books/

You have a choice

[tjstork]

If you don't want a textbook, don't buy one, and try and google it. But writing a good technical text is a heck of a lot of work, as any of us that blows off documentation knows. People won't do it for free.

Re:What's the marginal cost of production on an eb

[SatanicPuppy]

Well, passion is all well and good, but there is nothing wrong with being able to make money on your art. Many of the great artists of history did it for the money, and that includes greats like Leonardo DaVinci, Shakespeare, and Mozart.

I think most geeks are fine with that, it's just the long term copyright crap that drives people berzerk.

Re:Amazon bows, I won't. Boycott greedy publishers

[Vanderhoth]

You're doing something wrong if you're buying an eBook/game/whatever for it's bits.

True, but an eBook/game/whatever without bits is like a paperback book without the paper. I have to assume that if you're buying information, entertainment or something else and you're not getting the bits or other medium of transmission to go with it, you'd also like to purchase a bridge I own over the Atlantic... It's invisible, but you can drive on it, trust me.

Re:What's the marginal cost of production on an eb

[sopssa]

So what does that has to do with anything then? Nothing in the world is sold at marginal costs, even less so digital items. But the work of people needs to be paid, and they probably have to pay other people (like distribution channels, royalties) for their costs. And then theres the obvious profit margin, which is why companies work in the first place. Otherwise we would be working in a communism system where people work for free as long as they get food.

90% to 99% are crap too

[peter303]

Especially blogs. Poor writing and poor content. An editor filters much of that out.

Re:Amazon bows, I won't. Boycott greedy publishers

[Remus Shepherd]

Better solution: Don't buy anything from Amazon. They are trying to lock publishers into DRMed formats and leverage that into a monopoly on ebook distribution. Amazon is trying to cement themselves as a middleman so they can siphon outrageous profit off of other peoples' work. (They forced publishers to agree to give Amazon 70% markup on ebooks! The one who ends up getting screwed, of course, is the author.)

The internet is about removing middlemen. Don't patronize Amazon or they'll become one that will never go away.

I hate e-books

[Anonymous Coward]

They don't burn as easily as real ones.

Re:I hate e-books

[netsavior]

Actually they are quite small, you can burn thousands on to a single disc.

Do we still need publishers?

[mpapet]

Humans as a rule like their entertainment/political leaders to be familiar and similar. This desire is so powerful choices are typically made that harm the individual. For example, in order to share enjoying Californication, consumers pay Monopoly prices for subscription television then go out and pay Monopoly prices for the DVD. These same people vote for their representatives because they come to the conclusion 'I could have a beer with this guy as President.'

So, the answer to your question is, for most people, yes.

Read Tobias Buckell's post on the matter

[Walker]

I notice that most of Slashdot appears to be anti-McMillan, and not anti-Amazon (surprise). For a different perspective on the issue, everyone should read the post by Tobias Buckell on the matter. In short, he is a midlist author, and he talks about his experience with the eBook market. He has seen negligible differences when his books are given away from free versus when they are charged for, and the lower price points are not enough to cover the costs (which he outlines) to go to market.

Agree, disagree, it is helpful to read a perspective from the other side.

Re:Amazon bows, I won't. Boycott greedy publishers

[sopssa]

Exactly that is why we have libraries though. The publishers also have to calculate and estimate the best price point where most people will buy it at best price, to generate the most profit. The $14.99 vs $19.99 change might just be what's required to make me not to buy it.

While everyone getting any book at lets say $1 or having access to all the entertainment in the world for free, that's not how our society works currently. Frankly I also don't see a better way for it to work. People work for money, which drives the entertainment and book industry too. If it didn't, we would have access to even less books and information. Currently almost anyone can enjoy books being made and information flowing, and having them available in libraries even if you can't afford to buy yourself a copy.

Re:What's the marginal cost of production on an eb

[amplt1337]

Because obviously the only possible factor in the price of any good is the marginal cost of production, right?

You're posting a real cute argument, but you have to understand that selling ebooks cannibalizes hardcover sales, and sales of any kind are finite in nature. Price of goods sold will tend towards marginal cost of production only as the number of goods sold approaches infinity. Since no one can sell infinity of any given ebook, it doesn't matter how low the individual production costs are; you still have to recoup some of the fixed costs.

Over and above this, you're wrong about the definition of marginal cost of production -- because you're assuming that the good in question is the copy of the ebook. The ebook itself is the product, and it has a high marginal cost; for every additional ebook that a publisher brings to its catalog, there are very substantial, very real costs associated with exactly the things your parent posted. As they're on a per-ebook basis, they can also be considered marginal costs of producing the good that is a single ebook master copy.

So, sure. The marginal cost of producing additional kernels of corn on the same cob is nigh zero. But don't use that to claim that corn should be free until you've actually spent some time working on a farm...

Re:What's the marginal cost of production on an eb

[Ephemeriis]

Oh that's right, zero.

The marginal cost of producing an ebook isn't zero.

You're going to have licensing costs on whatever DRM you use... Server storage... Bandwidth... Maybe it's less than the marginal costs of producing a paper book, but it isn't going to be zero.

But, marginal costs aren't what drives the price of a book to start with.

In the end, the pricing is business minutiae

[prawn_narwp]

In the end, the pricing is business minutiae. The idealist in my says:

- prices will fall over time
- increased availability of content is a good thing
- this will increase the pool of content to bittorrent/rapidshare/hotfile/rsync
- if this encourages more people to read more books, this is a step in the right direction

IMHO in the end who cares how big your bookshelf is or how full your drive is of you don't read and think (critically) about what you're reading.

Textbooks

[HikingStick]

With textbooks, the trend is to customize the text for each term and each instructor--that way, the books have limited or no value on the secondary market and all students are forced to buy new.

Instructors need to move away from these publishing houses and need to start publishing their own titles independently. Then, the best instructor-written texts can be adopted by those schools that want to use them, and it creates an incentive for other instructors (who feel that they can better present the material, or feel that they have more up-to-date information) to compete on the open market for readers.

I wish there were a way we could join together with virtual torches and pitchforks against the big publishing houses.

My own personal experience...

[Eric Freyhart]

I owned a small self-publishing company for 3 years and sold it. When I started the company I made a firm decision that the company would NOT obtain or transfer copyright ownership from anyone we published for. I knew there were a few publishers that we competed against that had "questionable" contracts that appeared to transfer copyright ownership and/or enforcement from the creator of the work. I thought that by using a more honorable business model we could attract writers and offer another method to get works distributed.

Oh, wow, let me tell you how this industry is...

My company started almost from day one to be hit with a series of slanders and false statements from a number of "anonomous" sources. I was put through the grinder, but did manage to build a good reputation with the people we published and distributed for. I talked to a lot of other people who used various other companies, and got the chance to see some of the contracts that the competition used. I can tell you that most, if not all, either outright transferred the majority of ownership from the original creator or had terms that were so vague that it would take a team of lawyers to figure it out.

My biggest wakeup call was when we had to stop printing a series of art books because the artist signed a contract with another company, not for the works WE printed, but for another totally unrelated work. He didn't see the little part of the contract which gave the company he signed up with TOTAL rights to ALL his works, even those that they had never printed or were never planning to print, created since the day he was born. WOW!

When you control the distribution of a product, you can write your own terms to those who need their product sold. It's as simple as that. For years the publishing companies controlled all the methods to get books into the stores, and it continues to this day. Writers often find that they have to either sign on the dotted line or simply forget about ever having their works seen by the public. I also discovered that a lot of writers and creators had no idea that they had signed away their rights until I pointed out the terms in their contracts.

I once thought that companies such as Amazon could change the landscape for the independant writer/creator. But what I have been noticing is that even with Amazon most people are "locked" in to some sort of system that simply will not let go. A year or so ago I think that even Amazon tried (and may have succeded) into having all works printed through their own company, thereby eliminating small printing companies out of the loop. It's interesting to see that even Amazon must bend to the will of another company when it comes to distribution pricing.

And lets not even begin to think about what Google's book scanning system is doing to the copyright landscape. "Do no evil"? Bite me on that one.
I am glad to be out of the publishing business, and feel greatly sorry for the future generations that will have content locked, forced upon them, distributed through systems they have to participate in, and prices dictated not my market forces but by lack of competition.

Nuff said.

Eric Freyhart

Re:My own personal experience...

[russotto]

My biggest wakeup call was when we had to stop printing a series of art books because the artist signed a contract with another company, not for the works WE printed, but for another totally unrelated work. He didn't see the little part of the contract which gave the company he signed up with TOTAL rights to ALL his works, even those that they had never printed or were never planning to print, created since the day he was born. WOW!

You sure needed a better lawyer. You don't have to obtain copyright ownership in order to secure a nonexclusive right to distribute a work, and if you'd gotten that from the artist in the first place, your contract would have taken priority over the later one, and you'd have been able to continue printing without actually being evil.

I don't know about art books, but for works of fiction it is NOT typical for an author to sign away his copyright.

Re:My own personal experience...

[Eric Freyhart]

I agree. I dropped the book due to the fact that I did not want to bother trying to fight the other company over the subject.

Will this help agains pirating E-Books?

[Anonymous Coward]

As it is now I won't get a E-Book reader becouse I'm not sure about future support of the E-Book format on future E-Book readers, and DRM stuff and all that.

Plus. Where I live I can save something like 1$ by buying an E-Book, over a Hard Cover version of the same book.
And now they what more for the E-Book version.

So do they raises the prise of normal books as well?
Or will it just be cheaper for me to get a Hard cover book. (That I can sell, og give away if I like)

So I was wondering. By setting the price so high on something that do not cost anything to price, or ship to stores.
Will that make people look for E-Books on sites like The Pirate Bay more or less common?

Slashdot still fashionably late to the discussion

[Anonymous Coward]

On related news, the Catholic Church has pardoned Galileo.

My question is this

[C_Kode]

If what publishers offered to writers was a necessity, (physical publishing) then what do they have to offer with eBooks? Nothing you can't get elsewhere. eBook distribution, editing, and marketing you can get anywhere. If I were a writer with any clout, I would tell companies like Macmillan to shove it. Offer my book for physical publishing *only* to a publisher with the best offering for myself and my fanbase, NOT give up any ownership / copyrights, and publish it eBook style on my own. That way I get a far bigger cut from the eBook and you don't have asshead jerks screwing over my fanbase on the eBook front.

Re:My question is this

[rochrist]

If what publishers offered to writers was a necessity, (physical publishing) then what do they have to offer with eBooks? Nothing you can't get elsewhere. eBook distribution, editing, and marketing you can get anywhere.

Uh, yeah. They're called publishers.

Re:What's the marginal cost of production on an eb

[raddan]

The marginal cost of production for books is already about as low as it will go. e-books make this almost zero, but it wasn't a huge factor to begin with.

e-books have additional production costs associated with them (formatting for screen, electronic distribution, electronic storage, and yes, DRM), and these are new things that don't have to happen for paper books. The production process for paper books has been refined over many, many years (at least a hundred in the case of Macmillan US), and so costs are pretty low. e-books are new ground, and so right now, publishers are spending money to break into this market. We'll see how costs shake out in the long run.

To give you an idea of the cost breakdown, look here. Diagram is for textbooks; trade publishing is a bit different, but not wildly so. As you can see, freight is a very small part of the cost, and (it's not clear from the diagram) but printing is not a huge contributor, either. It's mostly editorial and administrative fees, author royalties, sub-licensing, and taxes.

(I work in publishing)

Re:What's the marginal cost of production on an eb

[maxume]

Yeah, I don't have a problem with people charging money, I just figure that works of passion would largely continue to be produced, whereas works of compensation would not (or would at least be drastically curtailed).

Just an aside...

[discHead]

Since when is a homepage featuring book covers for The Haunted Vagina and Ass Goblins of Auschwitz considered SFW at all?

Just sayin'. :-)

I am mighty pleased to learn that these are the folks behind Shatnerquake.

Re:Just an aside...

[Pojut]

lulz is that what they have up there right now? Their homepage changes relatively frequently, last time I was there it would be SFW LOL.

By the way, in case you are interested, here is my review of Shatnerquake: http://livingwithanerd.com/shatnerquake/

I work at a University Press

[twidarkling]

and I have to say, our director would have an aneurysm at the prospect of "stealing" the copyright from our authors. The deal is we have copyright as long as the book is in print, but that's necessary to actually do business. Multiple editions are at the author's discretion, but it's generally in their best interests, and are usually the ones pushing for it so they can get more royalties.

We're not a textbook publisher, though (we've published textbooks, but it isn't our business model), so most of the charges levelled by the summary don't apply to us, and we're Canadian, so the others aren't directly analogous either.

The one thing I can speak to though, is the issue of people thinking e-books should be so much cheaper than print books. That's bullshit. The cost of physically printing books is generally about 30% of the cover price, even less for larger print runs. The biggest chunk of the price is retailers. They buy our books at a 40% discount, meaning they pay $6 for a $10 book. If Amazon wants to make books cheaper so desperately, they can take a fucking smaller profit margin (especially since they like to push for even *larger* discounts, so they can offer the book cheaper). The market for e-books is still quite small compared to paper books, mostly because of how much uncertainty there is in the format (it's worse than Betamax vs. VHS right now) and selling them for so cheap makes it incredibly difficult to recoup costs for small publishers like us (we put out about 15 new books a year, and have 9 permanent employees). Most of our scholarly works retail for between $30-$50. Without printing costs, we could probably move that to $25-40 (keeping in mind we get a little over half that amount, including what we need to pay to the author in royalties-generally another 10%). How many people are going to pay that for an e-book, when there's no guarantee a new reader will actually read it 3 years from now? Maybe with the iPad we'll see some standardization in the e-book format, and then we can drop the price to something lower, and make it up in volume, because right now, it's just not feasible.

Re:I work at a University Press

[Vanderhoth]

You make a lot of very good points and have given me more to think about when looking at the price of a book. I especially like your input on the digital format issue. My sister was given a Kindle for Christmas, which got me thinking about the format issue. I wondered what would happen when the Kindle 2 is released, and if they'll keep the same format indefinitely?

The way I see the issue on pricing is that once a book has been processed enough to be distribued there are two options. 1) print the book and physically distribute it or 2) store it on a server somewhere and make an infinite number of copies that people interested in reading the book will download.

To me it seems the cost over time would be very different. In situation 1 you have a finite number of copies that have the added cost of physical materials (paper, ink, transportation, storage, etc) cost associated with it. In situation 2 there's only the cost of the server(s) to store the digital book on. Users can continue to buy that one copy forever. so instead of printing 100 books and making $10 off each one, you can distribute an infinite number of books making $10 off each one. That sounds like a bit of a scam to me because you're making a much larger profit for much less work.

I know you won't actually distribute an infinite number of books because there aren't an infinite number of people to buy them, but the point I'm trying to make is the market is much wider.

Re:I work at a University Press

[cdrguru]

Sorry, but if you have been paying attention the eBook market is much, much smaller than the market for printed books. Most people want a physical book.

Besides, what the major cost in producing a book (any book) is the editing and promotion. If you decide you want to self-publish a book you can take care of all of that yourself and find out that if you will print 1000 copies it costs maybe $3 each to perfect bind them.

Of course, you will sell almost none of them - no editing and no promotion. That's where the publisher comes in. And why they want money and are pretty choosy about what books they actually take on.

Re:I work at a University Press

[twidarkling]

That sounds like a bit of a scam to me because you're making a much larger profit for much less work.

I know you won't actually distribute an infinite number of books because there aren't an infinite number of people to buy them, but the point I'm trying to make is the market is much wider.

As cdguru pointed out, the ebook market right now is *very* small, especially for a publisher like ours. Yes, over time we might make more money selling ebooks for $10 a shot instead of $40 for a physical copy, but the timeline stretches out a lot further, and we pay for everything upfront, so that means rather than say, recouping costs in 2 years, it might take 5, or 10. And with ebook publication comes that overhyped spectre of piracy. I won't say we'd lose a lot to it, but when you're selling only 200 copies a year, even a few people pirating makes an impact. Yes, 200 copies. An initial print run on our books goes to about 1000 copies for something we think will sell well.

Another thing about books is their a lot like games, sales-wise. Unless they're adopted in to a classroom, sales are mostly done in the first year, and drop off after that, fairly steadily.

So, to put this in a more concrete format, we'll take a hypothetical book and take two scenarios, 1 will be physical-only distribution, 2 will be online-only distribution, and we'll assume that interest in the online-only is stronger, and longer lasting.

1. Book is printed for 1000 copies. Publisher receives $10 per copy, let's say. Book sells strongly, and 500 copies move the first year. That's $5,000. The next year, sells 250, getting $2,500, bringing us to a 2-year total of $7,500, with another 250 copies to sell over time.

2. Book is placed for sale online, and publisher receives $2 per copy, due to lowered prices for online copies. First year, book sells like wildfire, 1,000 copies! Amazing! But that's only $2,000. Second year remains strong, another 1,000 copies! But we're only at $4,000 after two years. That's only $4,000 to put towards new projects' costs. Okay, let's extend the timeline. Third year, interest dips. 500 copies. $1,000, for a total of $5,000. Three years to reach the sales total of situation 1 after one year, and that's with an extra 1,500 copies sold. And then oops, the technology changes, so the old version doesn't work on new readers. And paying to get something converted is nearly as expensive as getting a new print run.

And as I said, we're a fairly niche publisher. Selling 2,500 copies of something is insanely optimistic for us, especially since it's targeted to academics and scholars--a group known to be classically technophobic.

So, as I said, the market isn't there, and a $10 price point for an ebook when the physical copy goes for $50 is not a sustainable business model yet.

We _are_ looking at publishing ebooks, and we've got some of our older, out-of-print titles scanned and converted, and listed in e-library services, but until the technology's solidified so that the market's less divided, we likely won't do much. And even after it's solidified, we're likely to do dual runs, both hard copy and physical. And it's very unlikely we'd run at a $10 price point for new books.

Re:I work at a University Press

[Vanderhoth]

Sorry, but if you have been paying attention the eBook market is much, much smaller than the market for printed books.

If you have been paying attention you'd know that E-Readers are a relatively (compared to books) new product, and that the market for e-books is growing. Hence the reason for this discussion.

Most people want a physical book.

That's a very good point, and the main reason my wife doesn't want an e-reader. I do think that will change with time, but it's hard to say. Having a physical object in hand that can be given to anyone and only requires the skill of reading to use vs. an electronic device that requires power, can only access books in certain formats and have a plethora of other restrictions on what can be done with them.

The price point is the reason I haven't bought an e-reader. I can't see a reason to go an purchase an e-reader when the price of the books is virtually the same. So instead of getting a good discount on the books because the publisher saves money on the physical distribution aspect. I pay the same for the books plus have to buy the reader, I can only access books of specific formats and the formats might change in the future.

Of course, you will sell almost none of them - no editing and no promotion. That's where the publisher comes in.

Another good point. I agree with you that a publishing company would make these things easier. However, I think someone with similar skills to myself could do this on their own and with digital distribution there's no need for them to pay $3 a copy and by 1000 copies. I have to admit I'm ignorant about how digital distribution works and I don't know how you'd go about getting a entity such as Amazon to distribute a book for you, but I'm sure all it would take is an initial lump-sum fee plus a smaller fee (probably in the less than a dollar range) for each downloaded copy. Seems much more like the JITI method of distribution, much more efficient then printing, transporting, storing thousands of copies that you might never end up selling.

Re:I work at a University Press

[oshkrozz]

And must have failed math ... if the cost is 30% to print .. you can charge 30% less for the book in e-book form that seems like a rather simple conversion however that logic escaped your whole rant that should have summed it all up. It costs us $2 to print a book so we can charge $2 less not probably, but most definitely, However, we want to increase our margin and reduce our cost just like any company looking for a profit. Furthermore your message fails to take into account the charge backs (what happens when amazon can't sell all their books?), shipping costs, storage and other costs in keeping around a book, amazon needs a huge climate controlled warehouse, there are tucks and trains that have to be paid to move everything from you to them to the customer all these costs add up even if it is a small amount per book cost here and then it can add $1 - $2 quickly. Just the number of hands it has to pass through. In short .. almost %50 savings right off the bat and wow look at that an e-book that is significantly cheaper then the paper version As for formats, if you didn't put DRM on it and used an open format ... well guess what the format would be readable for a long long time and you saved the cost of not buying DRM. (Last I checked PDF is still very readable by most devices, ASCII even more so).

Re:I work at a University Press

[Vanderhoth]

I appreciate the time you took to explain this. I find it very informative and it gives me a lot to consider.

Re:I work at a University Press

[2obvious4u]

Thats all we consumers ask. We don't want to pay the 30% for physically printing the books and the 40% to the retail location. So e-books should only cost 30% of what a print book costs. So if you're selling the print book for $10 the e-book should be $3. Its just that simple. Anything more and the consumer feels like bohica.

Re:I work at a University Press

[twidarkling]

Are you economically stupid? Amazon's not going to sell a book for free. There are costs associated with converting to any ebook format, too. So, if you want books cheaper, bitch to the retailers to take a smaller cut. Macmillan was looking forward, knowing that at some point, Amazon was going to demand a good share of ebook revenues once the Kindle base was large enough. And I said *at most* printing is 30%. And that's on trade paperbacks. Anything that requires any kind of research and time investiture and that percentage goes *way* down. One of our newer, image-heavy books costs $60, but it was only $5/copy to print. That's less than 10%. Your model is unrealistic at best, delusional at worst.

Re:I work at a University Press

[twidarkling]

The cost isn't a firm 30%, first off. Second, it's not publishers putting in DRM, it's places like Amazon. They dictate what format an ebook can be sold in.

And no, my message didn't "fail" to take in to account "charge backs, shipping costs, storage and other costs in keeping around a book, amazon needs a huge climate controlled warehouse, there are tucks and trains that have to be paid to move everything." Again, all that stuff isn't that huge. Amazon is responsible for Amazon's stock. Warehouses that specialize in storing and shipping books and similar keep stock, and send it to bookstores that order the books. Shipping and storage costs are *tiny* compared to other things. We've got over 100 active titles, and our warehouse charges are about $2000/month. That's about $2/TITLE. Not per COPY. Each has hundreds of copies.

Also, generally, the printing costs also includes the printer shipping it to the warehouses in the first place. Your so-called "50%" savings works out to pennies per copy. Okay, so we'll charge $9.97 instead of $9.99

Shooting themselves in the foot

[TechForensics]

$14.99 is the way to doom for publishers. That's annoying enough to put a ebook (.epub) reader on your smartphone and find an open-source .txt etc. to .epub converter (like Calibre), and then go romping amongst the seemingly millions of scanned books, including current titles, most anyplace on the web.

Greed = failure. Think about it before you gouge us, publishers!

Re:Amazon bows, I won't. Boycott greedy publishers

[SnarfQuest]

Because you can save money by buying the paperback version.

Re:What's the marginal cost of production on an eb

[NormalVisual]

The whole point of copyright is to maintain profits above free market levels.

I hadn't really thought of it in those terms, but that's a pretty profound summation, and a useful thing to keep in mind.

Markets are efficient pricing mechanisms

[sjbe]

Economics 101 doesn't account for the real world.

Nice hand wave. Wrong - but a nice try anyway. I'm sure all those Nobel laureates in economics are glad that you set them straight about the "real world". I predict that every economist out there will suddenly dump their models in favor of yours.

Seriously, you claimed that marginal cost has nothing to do with pricing which is a demonstrably false claim. It's one of the first things anyone who takes an Econ 101 class learns. Even business owners that have never heard the term marginal cost adjust their pricing to try to maximize profits.

The world is full of lazy people that often don't have access to good pricing information.

Neither marginal revenue nor marginal cost require any external pricing information to be useful so long as you can adjust prices. And even the smallest businesses have access to quality pricing information if they care to look. Those that don't go out of business. 90% of new business ventures fail - it's not unusual.

If there was good information on pricing, Brick and Mortar store would practically cease to exist, except maybe Walmart.

So shipping has suddenly become magically free and instantaneous? I'm supposed to wait 3 days for my groceries to be delivered instead of stopping by the store on my way home? I'm supposed to pay UPS to ship my dry cleaning instead of just stopping by a store? I'm supposed to order everything off the internet and wait for delivery instead of going to a store? Apparently you think distribution and availability have no value. You have a very peculiar notion of how people live and businesses work.

Markets are incredibly efficient conveyances for pricing information. It's pretty much the whole reason they matter.

In the same ways, if people didn't want to pay for convenience then gas stations would only sell gas and not overpriced milk and food.

Even ignoring the convenience issue for a moment willingness to pay is not the same for almost any two people. You and I probably have different opinions about how much we are willing to pay for a gallon of milk. This is what a demand curve is all about.

Essentially the market is splitting into 2 types, those whose research prices and don't pay for convenience and the opposite.

No it isn't - at least not any more than it always has been. That's a nice convenient mental model but the "real world" (your term) is much more complicated and nuanced than that. I'm pretty confident that the models of supply and demand, marginal revenue and marginal cost that every economist on the planet uses are more predictive than your two tier model.

Lazy and uninformed end up paying more.

This is nothing new. They always have and always will.

Re:Markets are efficient pricing mechanisms

[keithpreston]

Seriously, you claimed that marginal cost has nothing to do with pricing which is a demonstrably false claim.

First of all, I am not claiming this. I am claiming that for the end-consumer market, marginal cost has very little to do with pricing.

My claim is that the large portion of the end-consumer market is largely uniformed and generally illogical. I don't claim this for small business or any other group, because they tend to be much better informed and intelligent on decisions. This causes the rules of economics to break down when applied to these uninformed consumers. I see this a lot in the real world, because everyday, I buy and resell stuff to the end consumer at tidy profit. The only reason I can do this is because a majority of people are too uninformed to buy off the internet. You have to realize that your consumption patterns are probably far different then the majority. The fact that you have taken or remember anything about Econ 101 puts you in the top echelon of intelligence.

From this claim that a large portion of the end-consumer market is uninformed and illogical, I propose the theory that pricing that has little to do with marginal cost can actually be optimum for the seller. While they might not optimize for percentage of rational consumers (at marginal revenue equals marginal cost). Since a larger percentage of revenue will come from the illogical consumer, they need to optimize profits there and that is what this type of pricing is doing.

Look at a lot of products, they advertise towards emotions, feeling and fear. They sell prestige and brand names. They really are trying to exploit the uninformed and illogical customer into making a higher profit on them. Honestly you could lots of groups of similar products where the cheapest one as far as marginal cost sells for the most. This is why I see marginal cost having less to do with pricing rather then the price a consumer is willing to pay.

Re:Markets are efficient pricing mechanisms

[keithpreston]

Apparently you think distribution and availability have no value. You have a very peculiar notion of how people live and businesses work.

Honestly I do have a slightly difference perspective, with a little patience, I find I can buy almost everything I need off the internet at a fraction of the cost of the store. I raise my standard of living fairly significantly from this fact.

So shipping has suddenly become magically free and instantaneous?

In the same way the overhead difference between a shipping warehouse and a retail store is siginificant

I'm supposed to wait 3 days for my groceries to be delivered instead of stopping by the store on my way home?

Ordering them locally and planned ahead of time can get them there on the right day. With efficient warehouse distribution you can always be 1 shipping day from the warehouse

I'm supposed to pay UPS to ship my dry cleaning instead of just stopping by a store?

Many people ignore the overhead cost of maintain and fueling a car as opposed to shipping. The marginal cost of a trip to the dry cleaner if probably more then the UPS driver making just one more stop on his route

I'm supposed to order everything off the internet and wait for delivery instead of going to a store?

Honestly the patience can result in much lower prices for you

Re:What's the marginal cost of production on an eb

[Anonymous Coward]

You didn't just actually make the argument, "Yuh-huh, 'cause I saw it on TV!", did you?

OCR services? What OCR services?

[denzacar]

All books are edited, proofed and prepared for printing digitally.
Have been since the '80s - AT LEAST. '70s and earlier where it was economically viable. Regardless how book is written originally - on a typewriter or using a word processor.

Only "out of print" and "ancient_only_copy_in_the_world" editions would need to be OCRed - and most of those are public domain anyway.

Re:Amazon bows, I won't. Boycott greedy publishers

[NormalVisual]

And then of course, when a purchase is deemed "too expensive" even by you, you will jump on the "publishers are ezploiting the masses" bandwagon, you hypocrite.

I suspect he/she just won't buy the book.

Have fun not selling any books.

[DarthVain]

What a bunch of idiots.

Common sense would dictate that an "ebook" should be CHEAPER than a "normal" book.

I would have a hard time paying 9.99$, so I definitely would NOT pay 14.99$. That is stupid.

It will just be their lost business. If they are doing this in a misguided attempt to discourage ebook sales in favor of traditional book sales, they they just don't get it. Someone will just do a better job, and that is what people will do. Just means no one will read their books, and anyone interested in reading books on anything but an iPAD (which isn't a dedicated ebook reader, nor can you use it outside due to glossy LCD) will simply give their money to someone else.

I read normal books anyway, so the effect on me, or my effect on them is negligible anyway.

Re:Have fun not selling any books.

[cdrguru]

So how much do you think it costs to print a book?

How much do you think it costs to ship a book from the warehouse to the book seller?

You would be surprised at how little this is. Book publishing is extremely efficient. If you take a $25 hardcover book, maybe $4 is printing and binding. Shipping is around $0.25 in any sort of quantity at all.

So selling an eBook for $14.99 is $10.01 less than $25 which is about double of the printing and shipping cost.

Re:Have fun not selling any books.

[DarthVain]

I understand on an intellectual level that most of their cost is on paying and developing authors, advertising, profit, etc... however what I am buying is more tactile, be it a softcover or hardcover.

The whole industry as far as I am concerned is screwed up. Why for example am I forced to pay for a hard copy version which is way too expensive? Why am I forced to wait some artificial time period before I can buy it in softcover? Are the incapable of releasing both at once? I think not, it is just to increase profits for those that do not wish to wait. Why are prices in Canada so much more than in the USA? It hasn't be a reflection of currency values for a very long time.

If there is an industry that needs to be pounded into giving better service to customers it is the book industry. Just thinking about it makes me want to get out my library card again.

Re: No More!

[TheRaven64]

And, out of interest, what have you created and released into the public domain?

Wrong monopoly

[Primitive Pete]

Actually, it's hard to say. The lower-priced e-books may have the effect of reducing the price of old dead-tree books. This is bad for publishers, at least until electronic books are the lion's share of the market.

The real question about market share is not Amazon vs. McMillan, it's paper vs. electrons.

Re:Amazon bows, I won't. Boycott greedy publishers

[Anonymous Coward]

So boycott Amazon: they are the ones refusing to take off DRM.

Publishers having the flexibility to charge $15 for a book is important, because it gives them the ability to put out a lot of different books. This is a good thing for me, because I like to read books that aren't über best sellers.

Books are not free, and neither are ebooks. When ebook DRM is lifted, $15 isn't so ridiculous. You *do* want editors and copyeditors and proofreaders and typesetters and I don't know who else, so buying their overpriced ebooks gives Macmillan enough money to make another book by the same author, which you and I both like. Is it wasting money to buy an enjoyable book and support the author? If you think so, there are a lot of blogs and unedited manuscripts floating around. Suit yourself.

This is not the recording industry. Writers don't make their money going on tour. I'm not saying every author has a god-given right to make money. But if you want an author to make books, buy their books, and consider a higher threshold than $9.99.

(PS unless we're talking about textbooks. FUCK THAT SHIT.)

"Dinosaur," my ass...

[Garwulf]

Well, I own and run a small publishing company. And one of the things that I always find very amusing is when people call the print book outdated, and those of us who focus on them "dinosaurs." It's not, and we're not.

What I am, however, is connected to reality.

There is a basic business truth: your customer base dictates to you - not the other way around. If your customer base demands e-books, you give them e-books. If they demand printed books, you give them printed books.

So, what does the customer base demand here? Well, the Association of American Publishers tracks the book market based on net sales, and on a month-to-month basis, we can thus tell just what formats the market is demanding. The most recent month's figures available is November 2009.

In November 2009, the total net book market was $808.5 million. Of that, the e-book occupied $18.3 million ($.1 million below the audiobook). This makes the e-book a grand total of 2.26% of the entire book market.

That's right - 2.26%. Any general publisher who abandoned the printed book in favour of the e-book at this time would be endangering their business' survival. Should the e-book one day represent 65% of the market, then anybody not supporting it would indeed be a dinosaur. But, right now, putting the printed book ahead of the e-book simply means that one has a realistic view of the market.

Source: http://www.publishers.org/main/PressCenter/Archicves/2010_January/November10StatsRelease.htm

Re: No More!

[tibman]

You're crazy.. copyright is very important. As an intesting example you could say that microsoft could take any gpl/open source code and use it (then sell it) without penalty. Nobody could stop them. But nobody could get any of MS's source unless it was stolen.

Another example. You form a band and make a fantastic song. At one of your little bar shows a guy records the song. He is a music scout.. he has the cash to really get your song out there... but he doesn't need you. So he takes your lyrics, your song, and gets it out on the radio and selling it on CDs in walmart. You get nothing and can't stop him. If that doesn't make sense i'll try another.. and on topic this time.

You write a book (you're a full time writer) about some random sci-fi scenerio you've been thinking about since a kid. You want to sell it and make money. So you print like 1,000 and bind them with your own equipment. One of the people who bought it really loved it.. but they have the connections and money to really push the book so they take it (not illegal) and republish it minus your name (not illegal anymore). They stole your book and there is nothing you can do about it.. they did not commit any crime.

A world without copyright? You're crazy.

Re:Amazon bows, I won't. Boycott greedy publishers

[Xest]

"While everyone getting any book at lets say $1 or having access to all the entertainment in the world for free, that's not how our society works currently."

But isn't that just it? We've now got this great method for reproducing material without the costs we had before, wouldn't it be better if we actually took that opportunity to improve society rather than do what MacMillan is doing in taking the opportunity to reap greater profits for less work than ever before? The latter half of your argument ignores the fact that as price is lowered, audience size increases.

The real issue here is the same as that with the RIAA- they could maintain profits, and move to the digital era, but as with the RIAA, they've decided to use the digital era to try and greatly increase profits by increasing the price, whilst the amount of work they need to do is lowered, in the case of the RIAA, they also try and use DRM to force people to re-buy the content each time they get a new device. Really, what it comes down to is not maintaining current profits, but greed- they want more from the consumer, and the consumer doesn't want to pay more, quite understandably, when they know less work is involved in a product, they want it for less, but that doesn't mean less profit for the companies involved, it just means they have to concentrate on increasing their audience to grow, rather than milking their existing audience for ever more money.

Re:What's the marginal cost of production on an eb

[azgard]

And that theory has been proven logically inconsistent by Steve Keen. He wrote a paper about it with Russel Standish in Physica A: http://www.debunkingeconomics.com/Papers/Micro/KeenStandish2006_CritiqueNeoclassicalTheoryOfFirm_PhysicaA370pp81-85.pdf

What it comes down to is that the classical argument is a wrong calculation of total derivative. And not only the classical reasoning is wrong, it is also wrong empirically, experimentally, and from the game theory point of view.

Re:Amazon bows, I won't. Boycott greedy publishers

[jedidiah]

If it has DRM, then it isn't a book PERIOD.

OTOH, I will happily pay full price for a hardbound edition if I am impatient. I also have no problems passing it on to the next interested party gratis.

Resale and transfer is a pretty fundemental aspect of property for those of us that actually like to buy things.

Your overhead is your problem.

Re:What's the marginal cost of production on an eb

[jollyreaper]

Perhaps I am unusual (I suspect not), but I often chase authors, not genres, and therefore the book market is not one controlled by substitution, and we see that in it's price inelasticity. I do not see how this would be different if we had even a significantly larger number of publishers with smaller pieces of the pie.

Piracy provides the elasticity. I'll give you the old college student/anime example. As a low-income college student, it was worth my time to track down episodes on emule. You had many people doing encodes, variable quality, and it was pretty laborious to find everything and burn CD's. And hard drive capacities were not as insane as today. If a series costs $200, it's worth my time. But when you can get a full season for $20 or $30, depending on the show, who has the time to muck with downloading? Especially as disposable income rises as disposable time decreases, people want to maximize their enjoyment. If there's ten hours a week for goofing off, people want to be watching the show, not trying to watch it.

shaddup with the iPad already

[masmullin]

Just shut it. do not want. noooooo. khaaaaaaaannn etc.... shut it.

Yes, publishers are obsolete for ebooks

[Weezul]

Editors however are very much not obsolete. Automated spelling and grammar correction covers only a small portion of an editors job, well their core job is identifying places where the author loses readers and/or material that should be removed from the book.

I'll observe however that many many good editors actually work freelance, just like authors. The publishing world could be massively optimized by small publishers that focus only upon selecting the material and pairing manuscripts with freelance editors. It might even be that overhead could be further reduced by paying editors on commission, just like authors.

Society should set itself the goal of reducing the take of middle men that contribute little besides selection or publicity, this covers both publishers like Macmillan, online distributors like Amazon, and brick&mortar distributors like Barnes&Noble.

Re:Yes, publishers are obsolete for ebooks

[Quirkz]

That actually sounds like a pretty good business model for company. Might need a little more time for the ebook market to really take off, or it might take a lot of luck to get to the point where you could also be the printer and let Amazon do the distribution to cover both physical and electronic markets, but it might work. I've been a freelance copy editor, and all the work I did was long-distance. Not a challenge at all. It might be nice to be in the same room with an editor as they're trying to explain to you why the first three chapters have to go, and the last three chapters should come first, or whatever, but even that's probably doable long-distance.

One potential risk is you'd start out this way and find yourself gradually expanding to take on the same roles as a traditional publisher, either because your clients ask for it or because there's profit in it, until you're just like all the others. (Just ask my former boss, who bought the web half of a print/web design company, and now spends most of her time on print materials like annual reports, just like the company she split off from used to.)

Re:Yes, publishers are obsolete for ebooks

[Weezul]

What other roles are traditional publishers engaged in? I'd assume the lions share is advertising. Yes, advertising could suck up awesome amounts of money.

Re:What's the marginal cost of production on an eb

[Darkman, Walkin Dude]

To give you an idea of the cost breakdown, look here. Diagram is for textbooks; trade publishing is a bit different, but not wildly so. As you can see, freight is a very small part of the cost, and (it's not clear from the diagram) but printing is not a huge contributor, either. It's mostly editorial and administrative fees, author royalties, sub-licensing, and taxes

Printing looks like its around a third of the cost of the book, add in store costs and distribution and you could probably half the cost of an ebook all in. I know that digital distribution and storage aren't cost free, but there is a huge difference between that and the infrastrcuture required to grow, transport, process, and produce all the elements required in a normal book, enough that its fair to say its essentially cost free. When you have videos being uploaded for nothing and shown to the general population, books are trivial. As for transcripting to ebook format, if thats not done automatically as part of the production process, something is very wrong with your process.

What I'd imagine the future looks like for the literary or publishing world would be small, independent editing and marketing companies competing alongside shopfronts to produce works of literature, and authors will be able to move easily (less contractual obligations) from one to the next depending on quality of service and cost. Less well known authors might have to pay upfront, better known authors will be able to negotiate a percentage of sales, sales which will be higher in volume because of the ease of access you get via the internet.

As for DRM, thats always going to be broken, which combined with ebook reading qualities is going to make it difficult to make a living as an author in the future. The technology will ultimately be there, make no mistake. If something is going for free on the torrent networks, you'll always get a certain, perhaps large, percentage of people who will take that first rather than pay for an ebook. Musicians can make up the difference through live performances, movies will make money via the cinemas (another form of live performance), books, well thats a different story if you will excuse the pun.

Re:Amazon bows, I won't. Boycott greedy publishers

[2obvious4u]

Yes, that is what we do now. That is what we have been trained to do, but that isn't what we have to do. The Internet changed things. This is one of those things. Information is something that doesn't have to be paid for anymore. We just continue to pay for it because that is what we've always done.

The information providers can still earn a very comfortable living without hording their information. If a professor writes a text book, a university will still need him to teach it. If a mechanic writes a manual for an engine, someone will still pay him to do the work for them. Physical goods and services aren't going away. This primitive idea of hording information is holding back humanity from reaching even greater heights. Information is being lost because people horde it. If instead of hording information all information was free we could continue to grow our knowledge base. Instead everyone is so scared they will loose their wellbeing that they won't freely share their information. The problem is that people are still going to need to produce goods and service the things we build. The knowledge base is no so specialized that even the the information may be available not everyone is going to take the time to learn the material. Learning the material gives you new skills that you can market.

Re: No More!

[2obvious4u]

Another example. You form a band and make a fantastic song. At one of your little bar shows a guy records the song. He is a music scout.. he has the cash to really get your song out there... but he doesn't need you. So he takes your lyrics, your song, and gets it out on the radio and selling it on CDs in walmart. You get nothing and can't stop him. If that doesn't make sense i'll try another.. and on topic this time.

This is what the Internet does best! This is no longer an issue, the Internet fixed it. If someone steals someones work now, the Internet shames the thief. Fans of the original artist get the word out and the thief looses credibility with their fans. The Streisand effect is the best form of copyright yet invented.

You write a book (you're a full time writer) about some random sci-fi scenerio you've been thinking about since a kid. You want to sell it and make money. So you print like 1,000 and bind them with your own equipment. One of the people who bought it really loved it.. but they have the connections and money to really push the book so they take it (not illegal) and republish it minus your name (not illegal anymore). They stole your book and there is nothing you can do about it.. they did not commit any crime.

The same goes for this book scenario as well. If you're the original publisher of the content the Internet remembers. If the thief's book becomes more popular the word will get out that they stole it. This is the democratization of information. Wikipedia and the like will name the original author and the hordes of Internet fans will shame the thief. Before the Internet the person with the larger microphone would just steal the spotlight, the internet has removed the spotlight and has provided the perfect form of copyright protection without the courts.

Don't believe me? Look up the cases of auto dealerships selling cars on e-bay motors for a below market prices and getting shamed into honoring their agreements.

Re:Amazon bows, I won't. Boycott greedy publishers

[NormalVisual]

If a professor writes a text book, a university will still need him to teach it. If a mechanic writes a manual for an engine, someone will still pay him to do the work for them. Physical goods and services aren't going away.

So how do you propose that larger works (movies, large software projects, etc.) recoup the substantial expense involved with their creation if the creators are not able to sell them?

With certain software packages (operating systems, large DBMSs, etc.), you can say, "we can make money on support/services", but not all software is amenable to that model. When was the last time you needed a support contract for Photoshop?

Amazon did fire a shot across Macmillan's bow...

[SiChemist]

I love the next-to-last paragraph in TFA:

Amazon said other publishers and independent presses might ''see this as an opportunity to provide attractively priced e-books as an alternative''.

Re: No More!

[tibman]

I understand what you are saying but you are forgetting that with no copyrights, there is nothing wrong with copying someone elses work and no shame. Your examples only work because people did something they were not allowed to do. They were exposed and shamed.

Re: No More!

[XantheKnight]

*whoosh*

Cool

[Anonymous Coward]

Even more of a disincentive to read books.

Re:What's the marginal cost of production on an eb

[NiteShaed]

If you watched Californication, Mia's (who stole the transcript from Hank) press tour was fully paid by the publishing agency, so yes, publishers do cover the press tour costs.

I missed that one, I think I was watching The Stand, in which the Superflu wipes out 99.4% of the world population, which means that you're probably dead, and I should be choosing between Boulder and Vegas about now....

Payola is legal.

[Anonymous Coward]

That's right, look it up. It is perfectly legal to pay to have a song played on the radio. You can yell this fact to everyone and nothing will happen. You will not get arrested. You will not get fined.

PROVIDED.......

You mention this fact on air before the song is played. Payola is legal as long as you inform beforehand that money was given for airtime. When you hide the fact, then it becomes illegal.

Re:What's the marginal cost of production on an eb

[IICV]

e-books have additional production costs associated with them (formatting for screen, electronic distribution, electronic storage, and yes, DRM), and these are new things that don't have to happen for paper books.

How is electronic storage a cost for ebooks and not for normal books? How is electronic distribution a significant cost? How is formatting a cost for ebooks and not normal books? (hell, how is it a cost at all? LaTeX is free, after all; after that, just get an intern to read the formatted book and make sure it works).

I mean, seriously. I don't get it. I could buy Godaddy's cheapest hosting plan, and for $5/month I'd get enough disk space to store over nine thousand books at once, and enough total bandwidth to sell 300,000 e-books a month.

The only part that would actually cost real money out of the things you've mentioned is DRM, and honestly I would cheap out on that. If people want to pirate your book, they're going to pirate it. Someone who doesn't think twice about downloading $blockbuster_game 2 isn't going to blink twice at downloading a megabyte of information.

Re:Amazon bows, I won't. Boycott greedy publishers

[zrelativity]

Its your money, so spend it on what ever you like. However, if you are a publisher, please explain why I want to spend that $5 with you for Jane Austin's Emma as opposed to $0 from PG. What added value are you providing for that $5 except for DRM?

Matt Kresling

[lennier]

There are exceptions of course. Here's one. Matt Kresling. I found him on Facebook/Youtube, and he offered a free download. So for the machine:

http://www.youtube.com/watch?v=zLwS4SxLwqQ

Re:Amazon bows, I won't. Boycott greedy publishers

[dangitman]

If it has DRM, then it isn't a book PERIOD.

Apparently, you don't understand the definition of the word "book." How does applying DRM to it suddenly make it not a book?

Note: I'm not arguing for DRM, I think that DRM is stupid. I am arguing against your strange definitions that are contrary to the dictionary definitions.

Alternative approach

[joh]

I'm not sure if I'm wasting my time here or if I should patent the idea ;-)

Make a shop in which authors can sell books like developers can sell apps in the Apple appstore. Have them set a price for the book. Then (and now comes the interesting part) have a way for the readers/buyers to VOTE WITH THEIR MONEY for a book by giving the author (and him alone) another amount of money if they liked the book. Rank authors and books by the number of people giving additional money and by how much they gave. Allow those (and only those) to write comments and reviews on it.

What would this produce? Now, probably a steaming pile of shit consisting of lots of cheap books with some diamonds hidden in it. But who cares for the shit if you can find the diamonds easily? In fact I think that such a combination of a direct shop with crowd-sourcing by money would work even with apps, music and other things. People like to promote things they like and have usually no problem to give a tip to someone who deserves it. Combine these and make sure that the money lands where it belongs and you may have solved a hard problem.

Of course you would also need an additional market for people actually helping authors to write books very much like publishers do. But as this is just a service there's no reason why an open market shouldn't work here.

Re: No More!

[dangitman]

Whoooossssshhhhhh?

Macmillan just created a whole new wave of pirates

[mykos]

And those new pirates are all people who were former Macmillan customers/buyers.

Payola is legal..

[Anonymous Coward]

Yup that's right, look it up. It is perfectly legal to pay to have a song played on the radio. You can yell this fact to everyone and nothing will happen. You will not get arrested. You will not get fined.

PROVIDED.......

You mention this fact on air before the song is played. Payola is legal as long as you inform beforehand that money was given for airtime. When you hide the fact, then it becomes illegal.

Re:What's the marginal cost of production on an eb

[RedWizzard]

To give you an idea of the cost breakdown, look here. Diagram is for textbooks; trade publishing is a bit different, but not wildly so. As you can see, freight is a very small part of the cost, and (it's not clear from the diagram) but printing is not a huge contributor, either. It's mostly editorial and administrative fees, author royalties, sub-licensing, and taxes

Printing looks like its around a third of the cost of the book, add in store costs and distribution and you could probably half the cost of an ebook all in.

Look again. That 32.1c for "Publisher's Paper, Printing and Editorial Costs" includes "record keeping, billing, publisher’s offices, employee’s salaries and benefits". Most of that is still going to be applicable to eBooks.

Amazon T-Rex

[Anonymous Coward]

And you want to replace the dinosaurs with the big Amazon T-Rex.

McGraw Hill poor on quality

[CuteSteveJobs]

You would think Quantum Mechanics would be one subject so mind-bogglingly difficult you definitely would not want any errors in your text, but McGraw Hill's "Quantum Mechanics Demystified" (a cram guide) is so riddled with errors it's ridiculous. Worse, in years they haven't bothered fixing these and are continuing to sell the same error plagued edition:

http://www.amazon.com/Quantum-Mechanics-Demystified-David-McMahon/dp/0071455469

This puts to sleep the myth that publishers are guardians of quality control. For many books I would encourage you to check out reader reviews before you purchase because you won't believe the number of textbooks being published today that are riddled with errors.

Re:What's the marginal cost of production on an eb

[Darkman, Walkin Dude]

Look again. That 32.1c for "Publisher's Paper, Printing and Editorial Costs" includes "record keeping, billing, publisher’s offices, employee’s salaries and benefits". Most of that is still going to be applicable to eBooks.

It also says distribution, although distribution is its own section on their money chart. Also correct me if I'm wrong, but isn't all that stuff paid out of the publisher's cut? Which also has its own section? And it doesn't give a percentage breakdown of costs within each section - other posts in this thread (including one from an accountant in publishing) seem to put the paper part at around 30%, which isn't too far out.

All this aside, at the end of the day I still don't see it as being a really viable long term career to be an author or publisher. E-ink has killed it.

They're competing against free

[Anonymous Coward]

They're competing against free, so the more they raise the price the more people they're pushing into downloading their book elsewhere

Amazon vs. Macmillan

[ramosraymond54]

This on-going e-book 'price' war between Amazon and Macmillan is really a case of one monopoly trying to out-muscle another monopoly. The result is a cartel which can dictate prices at will. This is very bad for us consumers, and the only way we can fight this is to buy our books elsewhere. Amazon and Macmillan should know that their total e-book market share is only at a paltry 2.6% of the total book sales worldwide (as stated at another post here). And that both Amazon and Macmillan should both learn that they might be pricing their e-books out of the market.