Trek Books for Kindle

[LightningStorm]

I see where I've not been clear on this. The amount a person is willing to pay is defined as the maximum amount a person is willing to pay where if the price is higher than that then they will not purchase it. Obviously if it is lower they will purchase it for that too because cheaper is always better. But there is an upper threshold at which people will stop being willing to purchase things.

If I had brand new #2 pencils for sell and priced them at $500 each, they would never sell. Even if I was the only person on planet Earth selling pencils, people are simply not willing to pay that much for that item. Whatever the highest price people WOULD be willing to fork over for it, I could potentially sell it for that, because it would sell and I'd make money then.

(Let's pretend that amount is $0.50) Now, of course another person could bring out pencils for $0.40 and under cut my price sure, but that doesn't change the fact that a person is willing to pay $0.50, but would prefer to pay less.

Sometimes pricing is driven by production costs. If I can figure out a way to make a competing product for a lower cost, I may be able to undercut the other guy's price and draw away sales.

This is not production cost that is affecting price, it is competition -- vastly different things.

This isn't totally applicable to ebooks, though, because they aren't truly fungible. Due to copyright laws and licensing agreements, no one is going to be able to produce a lower priced copy of, say, the Typhon Pact novels.

Indeed, and in that case this is literally a what people are willing to pay (since competition is out of the picture), because you are either willing to pay $7.99 for that novel or not. And if not you go without it. I would actually bet (especially given how much Hard covers go for) that people would be willing to pay even more than that for e-books given how ridiculously convenient they are as compared to paper ones.

But, if the public really believes that ebooks are cheaper to produce, they may not be willing to pay the same amount for an ebook as for a physical book. So, indirectly, the perceived cost to produce an ebook may impact the price.

I never said the public couldn't over time change their mind on how much they're willing to pay for something. But even if they did, it's still what I'm saying. It's about what they are willing to pay. If that goes below the current price then so the price of the item comes down with it.

 

[JoeZhang]

I would actually bet (especially given how much Hard covers go for) that people would be willing to pay even more than that for e-books given how ridiculously convenient they are as compared to paper ones.

No, because the barriers to entry into the market are low, the powers of suppliers is weak, the powers of consumers is high - so the pressure on price is downward. The idea that the market will pay more for ebooks is a fever dream of the traditional publishers, it's not reality.

 

[lstyer]

I see where I've not been clear on this. The amount a person is willing to pay is defined as the maximum amount a person is willing to pay where if the price is higher than that then they will not purchase it.

That much was clear, but a person is less important to pricing of a mass-produced product than masses of people. If you're trying to sell a single copy of a book, then you can put it up for auction, and what a person is willing to pay literally sets the price because that person will win the auction.

If you're trying to sell a print run of tens of thousands of copies, though, setting the price at what only the highest-spending consumer is willing to pay may well be a recipe for a bunch of books taking up warehouse space that isn't free. You're going to want to find the balance point between selling the most copies and making the greatest profit per copy, and selling a lot of copies quickly is part of that math.

This is not production cost that is affecting price, it is competition -- vastly different things.

No, it's reduced production cost allowing competition. Production cost sets a floor for price. If I can't produce a product at a low enough cost to be able to sell for "what people are willing to pay" I'm not going to remain in business. My ability to compete on pricing, at least on a sustainable basis, is going to depend on my production costs. If it costs me the same as it costs you to make my competing product, I'm only going to be able to compete on price within the profit margin. If it costs me less, I'll have that much more leeway to compete on price.

I would actually bet (especially given how much Hard covers go for) that people would be willing to pay even more than that for e-books given how ridiculously convenient they are as compared to paper ones.

We might reach that point eventually, but right now I think people, in general, are willing to pay less for an ebook than they are for a print copy. because book readers, right now, place a value on the physical copy. I do think that's generational, though, and that younger people than me place a lot less value on the physical copy.

If [what people are willing to pay] goes below the current price then so the price of the item comes down with it.

In terms of ebooks released by major print publishers, I'm not sure that's the case, because I'm not sure that the majors even want high ebook sales. The majors pretty clearly consider the ebook market a threat to their business model, so they may feel a strong motivation to keep prices higher than people, generally, are willing to pay.

The comparison between the cost of publishing a print book and the cost of publishing an ebook demonstrates how production costs do impact price.

There are costs to getting a print book onto the retail market that are, basically, unavoidable. These cost impose a pressure to set a price that will lead to more sales more quickly while still leaving room for a profit.

There is a cost to producing a print run. Unless we're doing print-on-demand we are going to print up multiple copies. However many of those copies we sell, the print run has already been done, and the cost remains the same. If we sell only 100 copies out of a print run of 1000 the printer doesn't issue a refund for the cost of those 900 copies we're stuck with.

The cost of the print run is just one factor in "production cost," but lets just looks at how that particular cost imposes price pressure.

Lets pretend that I have a book with a print run that cost $3 per copy, and had a print run of 200 copies. Thus my production cost is $600. In order not to lose money, I have to find a price point at which I'll sell enough copies to cover the cost of printing all my copies, even those I didn't sell. That is, I have to make at least $600 in sales revenue. If I price my book so high that I sell only enough copies to make $500 in revenue, I'm out $100. Thus production cost not only sets a floor for price, it also sets a ceiling. Within the space between the floor and the ceiling, there's a lot of room for price to fluctuate. Production costs don't directly determine where the price ends up within that space, but even there it has an indirect impact because it still comes out of any revenue.

That is how production costs effect price. And like I said, that's only one of many factors of the cost of bringing a physical book to market. A big one that's probably more complicated than the cost of the print run is storage. Once you have a print run you have to store it somewhere until you sell it. Unlike the cost of the print run, which is fixed, the fewer copies you sell, the more your storage costs because you're storing more books for a longer period of time. That produces a pressure to price the books a point that will not only sell lots of books, but will sell them quickly. The inevitable storage costs, again, factor into the floor under which you can't price the book, but the fact that the storage costs increase when you sell fewer copies and increase further when you sell what you do sell slowly, they pull down the ceiling.

So, what are the production costs for an ebook? For a major publisher, very little. They've already paid for the content (gave the author an advance, paid the editor, etc.), so we're looking strictly at the cost to bring the finished book to market. You need a piece of software to convert your electronic copy of the book from whatever your house electronic format is to your ebook format of choice. You have to pay an employee to operate that software. Theoretically you should pay an employee to make sure the ebook formatted correctly, but I've gotten enough misformatted ebooks from the major publishers to believe they're cutting that particular corner. You have to pay an employee to upload the thing to Amazon or the Apple Store or whatever. That can't add up to much, and in any case they're fixed, one-time costs.

Here's a few costs you're not incurring. You aren't paying for printing X number of copies, whether you sell that many copies or not. You're not renting a warehouse to store all the copies you haven't sold yet. If Amazon isn't satisfied with its sales of your ebook, it can't send copies back to you for a refund, which is standard with retail book stores.

A lot of the people talking about how ebooks cost less to produce and so should be priced less are only considering that these factors aren't contributing to the price floor.

For the major print publishers, who are very wary of the whole concept of ebooks, it may be more significant that these factors aren't contributing to a ceiling. It's okay to price an ebook so high that it sells only a few copies because the cost of the "print run" is low enough to be quickly recouped. Pricing an ebook so high that it sells only a few copies isn't going to prompt Amazon to demand a refund for unsold copies it purchased. Pricing an ebook high enough to slow sales doesn't leave the publisher paying for warehouse space. In the world of physical books, these costs constrain prices in both directions. In the world of ebooks, they have little to no impact and what impact they have is going to be on the price floor, not the price ceiling.

So, in the case of major print publishers, I'm not sure that what people are willing to pay is setting prices at all. With the negligible cost of doing business, the majors may be setting their ebook prices at what they are willing to accept and considering any sales that they make to be gravy.

 

[sfroth]

Lets pretend that I have a book with a print run that cost $3 per copy, and had a print run of 200 copies. Thus my production cost is $600.
...
Thus production cost not only sets a floor for price, it also sets a ceiling.
...
So, what are the production costs for an ebook? For a major publisher, very little. They've already paid for the content (gave the author an advance, paid the editor, etc.), so we're looking strictly at the cost to bring the finished book to market.

You've made a very good argument here, but I'd like to know why you feel like the price for the content doesn't contribute to the ceiling. That amount, like the fixed production cost of paper books, is something that has to be paid on all books, and is (relatively) fixed regardless of how many copies they sell (relatively fixed because we're told that few books go far enough beyond the author's advance to matter).

 

[JoeZhang]

Amazon began selling hardcover and paperback books in July 1995. Twelve years later in November 2007, Amazon introduced the revolutionary Kindle and began selling Kindle books. By July 2010, Kindle book sales had surpassed hardcover book sales, and six months later, Kindle books overtook paperback books to become the most popular format on Amazon.com. Today, less than four years after introducing Kindle books, Amazon.com customers are now purchasing more Kindle books than all print books - hardcover and paperback - combined.

Since April 1, for every 100 print books Amazon.com has sold, it has sold 105 Kindle books. This includes sales of hardcover and paperback books by Amazon where there is no Kindle edition. Free Kindle books are excluded and if included would make the number even higher.

http://www.winsupersite.com/blogs/e...ow-selling-more-kindle-books-than-print-books

 

[lstyer]

You've made a very good argument here, but I'd like to know why you feel like the price for the content doesn't contribute to the ceiling.

I'm afraid that I'm not expressing this very clearly, so bear with me, please.

I feel like the cost of content does contribute to the ceiling for the print book, but not for the ebook. Keep in mind that I'm only speculating about major print publishers. I don't think the price of the content contributes to the ceiling for the ebooks because I don't think the majors' business model "includes" ebooks. I think they just treat those costs as part of the physical book and then ignore the impact the ebook has on them.

So I guess what I'm trying to say is less that the cost of content does not contribute to setting a ceiling for ebook prices, and more that the major print publishers just don't "do that math" when it comes to ebooks. Ebooks seem to be, at best, a second thought to the majors.

Does that make any more sense?

 

[sfroth]

Does that make any more sense?

What you're saying does make sense, but I disagree with you. The argument that publishers are making is that the cost of production of a print book is small compared to the content cost. Take your example of a 200 paper book run costing $600. If the content cost of that run is $3,000 (I'm making this number up entirely), that means that their total cost is $3,600, and the production costs are 1/6 of the total cost for the book. Even if we assume that ebooks cost nothing to produce (and that's a fallacy), they could still only be 1/6 less than the production price of the paper version, assuming the sale of an ebook means a lost paper book sale. But then that unsold paper book sits, costing the publisher more money.

Publishers can't be ignoring the impact that ebooks have on their line, or they'd be giving them away. Instead, they seem to be terrified of all those unsold paper books sitting in warehouses. That speaks not of indifference, but a calculated business decision to set the price of ebooks to make up for the added storage and production costs of unsold paper books.

 

[LightningStorm]

...a person ...

That was an example writ small. I thought it was pretty clear I meant the general public not one specific person, kinda like "you" can be used generally rather than specifically.

Obviously there is a bell curve of sorts that shows that for any given product there are a select few people who are willing to pay a huge amount and a select few who are only willing to pay a small amount but there is a general public average/standard amount and THAT is the amount "people are willing to pay" which is around the amount that an item hovers at.

And (since I apparently need to be extremely uber specific) by "general public" I really mean a product's target audience as a whole, not literally everyone everywhere.

No, it's reduced production cost allowing competition. Production cost sets a floor for price. If I can't produce a product at a low enough cost to be able to sell for "what people are willing to pay" I'm not going to remain in business. My ability to compete on pricing, at least on a sustainable basis, is going to depend on my production costs. If it costs me the same as it costs you to make my competing product, I'm only going to be able to compete on price within the profit margin. If it costs me less, I'll have that much more leeway to compete on price.

We're saying exactly the same thing but wording it differently. You're just saying that competition is a competition of price lowering, where I'm saying it is a competition of profit maximizing. Two people selling the same item can compete on price to that bottom threshold where it becomes a loss, yes but in both cases they start at the highest generally acceptable price point NOT at the production cost. You might be astounded to learn just how little it costs to make a great deal of the products we purchase. If production cost drove the price of items everything would be a hell of a lot cheaper than it is. Especially things like computers, cell phones, cars and even houses.

I do not deny that production cost plays a part in the price, I however stick to the point that it most definitely does not drive the price.

We might reach that point eventually, but right now I think people, in general, are willing to pay less for an ebook than they are for a print copy.

Reality would suggest otherwise, given e-books even at their current prices are selling like hotcakes. People in general are OK with the prices as they are even though they are higher than they were a couple of years ago.

In terms of ebooks released by major print publishers, I'm not sure that's the case, because I'm not sure that the majors even want high ebook sales. The majors pretty clearly consider the ebook market a threat to their business model, so they may feel a strong motivation to keep prices higher than people, generally, are willing to pay.

And that may be (I don't believe it, but it's possible), but that's still not got anything to do with production costs.

The comparison between the cost of publishing a print book and the cost of publishing an ebook demonstrates how production costs do impact price.

Obviously not, since we're hearing there is essentially no difference between them. So how is a non-difference in production costs between two mediums demonstrating anything other than possibly proving that e-books SHOULD cost as much as p-books because they'd then have the same profit margin?

The rest of your post though, we're basically saying the same thing wording it differently enough that we think we're arguing something we're not. I also think the only thing we would differ on is more of a moral/political thing than how it actually works, and I'd rather not get into all of that.

 

[lstyer]

What you're saying does make sense, but I disagree with you. The argument that publishers are making is that the cost of production of a print book is small compared to the content cost.

I don't buy that, at least outside of really big name authors who can demand big money. But I can't back up my not buying it with any kind of specific citations or anything, so I can see why you'd disagree.

Even if we assume that ebooks cost nothing to produce (and that's a fallacy), they could still only be 1/6 less than the production price of the paper version

Sure, but the majors, in general, aren't discounting ebooks at all. I realize that producing an ebook isn't free, but I can't buy that it's not HUGELY less expensive than producing print copies.

assuming the sale of an ebook means a lost paper book sale

I'm sure some portion of ebook sales cannibalize print sales, even that it's a considerable portion, but I doubt seriously that it's close to all the ebook sales.

Publishers can't be ignoring the impact that ebooks have on their line, or they'd be giving them away.

Oh, I agree that the major publishers are not ignoring the impact ebooks have on their lines. In fact I sincerely believe they are actively attempting to sabotage ebooks specifically to avoid that impact.

That speaks not of indifference, but a calculated business decision to set the price of ebooks to make up for the added storage and production costs of unsold paper books.

See, I think they're setting the prices to avoid ebook sales.

 

[lstyer]

Obviously there is a bell curve of sorts that shows that for any given product there are a select few people who are willing to pay a huge amount and a select few who are only willing to pay a small amount but there is a general public average/standard amount and THAT is the amount "people are willing to pay" which is around the amount that an item hovers at.

That's only the price an item hovers at if the producer is trying to maximize the number of sales. There are all kinds of instances in which a producer isn't trying to maximize the number of sales. I already mentioned auctions. Limited editions are another example. And I'd argue that ebooks from the major publishers are yet another example.

I do not deny that production cost plays a part in the price, I however stick to the point that it most definitely does not drive the price.

I'd probably go with that.

Reality would suggest otherwise, given e-books even at their current prices are selling like hotcakes.

Could be.

that's still not got anything to do with production costs.

That was the point I was trying to make.

Obviously not, since we're hearing there is essentially no difference between them.

I don't buy that. I can't see how running a file conversion program and uploading a file to Amazon costs as much as printing physical books, warehousing them and shipping them all over the country. How the hell does that work?

I also think the only thing we would differ on is more of a moral/political thing than how it actually works, and I'd rather not get into all of that.

Eh. I doubt there's much of a moral/political disagreement here, but I can see what you mean.

 

[sfroth]

What you're saying does make sense, but I disagree with you. The argument that publishers are making is that the cost of production of a print book is small compared to the content cost.

I don't buy that, at least outside of really big name authors who can demand big money. But I can't back up my not buying it with any kind of specific citations or anything, so I can see why you'd disagree.

It's been a long time, but I vaguely remember once that someone in-the-know said that the production costs of a paperback book were pennies per book, not dollars. Sorry, no citations here, either.

And paying the author isn't the only content cost. And even that wouldn't be low. Tie in authors have to be making at least a few thousand dollars per book, or it wouldn't be worth it, and it's probably more - I'm not really comfortable speculating, given that those authors might be reading this. But there's also the salary of the editor, who if we assume is lower middle class is still a couple thousand dollars per book (with their salary split across the couple dozen books they work on per year). There are probably dozens of people who work on line editing and various other duties - you have to split all their wages across all the books they deal with to get any real sense of how much the content of a book costs, all before you even touch the production side of things. Then you need to take into account all the business overhead for the publisher that has nothing to do with production - marketing, administration, etc, spread across all the books the publisher sells.

 

[Ktrek]

My beef is not as much with the price/cost to me of an ebook as it is my expectation that if I am going to pay the same price for the ebook, as the paperback, I want a quality product, and thus far nothing I have bought from Pocket (i.e. Simon and Schuster and subsidiaries) has been the kind of quality I expect. Thus they are not getting my ebook dollars and soon they may even stop getting my paperback/hardcover dollars as well. Truthfully I'm kind of fed up with their agency model and how it has worked out for the consumer. I know I'm just one purchaser but I'm not the only one who is dissatisfied, and sooner or later it will affect their bottom line.

Secondly, is what I perceive to be an attitude of indifference by those who should care the most about the quality of their products and I am referring to all those authors out there that S&S is releasing second rate quality for. Are the authors too concerned about losing contracts and such that they won't voice their concerns or the concerns of their fans? Seems that way from this side because this is not a new issue and has been going on almost since S&S started getting into the ebook industry.

Kevin

 

[Ktrek]

Sorry...somehow I double posted.

 

[bfollowell]

Seems that way from this side because this is not a new issue and has been going on almost since S&S started getting into the ebook industry.

I'll have to disagree with you, at least on this one minor part Kevin.

At one time, back when S&S embraced Microsoft Reader and started putting out all their backlog and new titles as lit files, their quality was top notch. You'd be hard pressed to find better formatted ebooks anywhere. Yes, you'd find the occasional typo but at least they were the same typos that were present in the print versions. The formatting was on par with the print versions, the files all had good covers, title pages and a table of contents. Basically, they were beautiful and a good example of what an ebook should look like. I'm sure someone will be able to pick out an example of a bad one from that timeframe but, for the most part, their ebooks looked great back then.

To me, it seems like the quality really started dropping off from about 2007 or 2008 and on.

Just my two cents.

- Byron

 

[JoeZhang]

...a person ...

Reality would suggest otherwise, given e-books even at their current prices are selling like hotcakes. People in general are OK with the prices as they are even though they are higher than they were a couple of years ago.

But you don't know what the average price so you can't make that statement - sure the agency priced books are $9.99 but if you look at the amazon top 100 lists for any category, you have a couple of big name authors towards the top and the rest are self-published books going for .79, .99 and 1.99. My *hunch* is that the big name authors can still command a premium but sales for new and lower-ranked authors have fallen off a cliff due to self-publishing.

 

[JWolf]

My beef is not as much with the price/cost to me of an ebook as it is my expectation that if I am going to pay the same price for the ebook, as the paperback, I want a quality product, and thus far nothing I have bought from Pocket (i.e. Simon and Schuster and subsidiaries) has been the kind of quality I expect. Thus they are not getting my ebook dollars and soon they may even stop getting my paperback/hardcover dollars as well. Truthfully I'm kind of fed up with their agency model and how it has worked out for the consumer. I know I'm just one purchaser but I'm not the only one who is dissatisfied, and sooner or later it will affect their bottom line.

Secondly, is what I perceive to be an attitude of indifference by those who should care the most about the quality of their products and I am referring to all those authors out there that S&S is releasing second rate quality for. Are the authors too concerned about losing contracts and such that they won't voice their concerns or the concerns of their fans? Seems that way from this side because this is not a new issue and has been going on almost since S&S started getting into the ebook industry.

Kevin

The eBooks quality issues really started cropping up when S&S stopped MS Reader format and went just ePub on their website.

But, the latest NF eBook actually looked pretty good from a formatting standpoint. I cannot say about any textual errors given that I've not yet read it. IFM turned out to be a formatting nightmare. But the textual errors were OK this time around. DTI, I do not recall how bad or not the formatting was. I've not yet read it so I cannot comment on the textual errors.

The formatting errors can easily be found just be loading the ePub into ADE and seeing that the embedded fonts are not working properly or that the italics is missing or whatever else needs to be fixed. The authors say that the book gets a read-through or two for error checking. The eBooks also need the same read-throughs after it's supposedly done to find the textual errors. I also feel that the authors should learn about eBooks in the technical sense so they can tell that there are formatting errors that need fixing since it seems S&S is too lazy to just load it even once.

 

[Deano2099]

They set the price of books at the price people are willing to pay for them.

But surely if the public think that the price is driven by cost of manufacturing, then the price they'll be willing to pay for an eBook is less?

There's a huge amount of surveys out there and they pretty much all say the same thing: people expect to pay less for an ebook than a paperback book. The price people are willing to pay is lower.

We simply don't know how much better eBooks would sell if they were cheaper. Sure, at the moment they sell, but could they sell better?

It's also fairly plain to see from the huge piracy figures out there that the price of ebooks is clearly a lot higher than a lot of people are willing to pay. It's no longer a choice between paying what the publisher sets the price at or going without. There's a third option.

And lastly, the publishing industry has been in decline for years if not decades. Why? Simple: people stopped buying books. And yet prices went up, not down. The price huge swathes of people were willing to pay for books went down, and so they stopped buying them. Yet the price of books didn't fall.

 

[Smitty]

I agree with the whole quality thing. I love my Kindle and love my Star Trek. At first it was easy to overlook the quality issues (no italics, spacing between paragraphs sometimes wonky, etc). But as I buy more books I notice it more. For instance, I am reading Vanguard Harbinger currently (Kindle). There are no breaks between paragraphs which is a problem when the context or scene switches. I would bet the paperback version has these. It most like is missing italics as well but I do not know that for sure.
I feel the authors should care and make a issue about it. I say they should care because of this, before I got my Kindle I would always buy my books from half priced books (used book chain). Books were cheaper but then again the author/publisher gets nothing out of the deal. However, now that I have my Kindle I find myself buying the next book I want to read on it from Amazon for $7.99 or whatever the price is. I would think that the author and publisher does get something from that although it costs me more for the ease of use. I can only imagine that this would be the scenario for many people, but if the quality continues to remain low people like myself may end up back to buying used books again and the author/publisher gets nothing.

 

[LightningStorm]

Reality would suggest otherwise, given e-books even at their current prices are selling like hotcakes. People in general are OK with the prices as they are even though they are higher than they were a couple of years ago.

But you don't know what the average price so you can't make that statement...

I don't need to know the exact specific average of books now. All I need to know is that they are higher now than they were a few years ago. And that higher average price is not preventing people from buying e-books. They are in fact selling quite a bit more than they were then. Proving that whatever that price is now, isn't too high.

They set the price of books at the price people are willing to pay for them.

But surely if the public think that the price is driven by cost of manufacturing, then the price they'll be willing to pay for an eBook is less?

There's a huge amount of surveys out there and they pretty much all say the same thing: people expect to pay less for an ebook than a paperback book. The price people are willing to pay is lower.

We simply don't know how much better eBooks would sell if they were cheaper. Sure, at the moment they sell, but could they sell better?

It's also fairly plain to see from the huge piracy figures out there that the price of ebooks is clearly a lot higher than a lot of people are willing to pay. It's no longer a choice between paying what the publisher sets the price at or going without. There's a third option.

The hole in your entire argument is that people ARE paying for e-books at their current prices. Even with the piracy option, even with the the fact that there does exist a lot of people who won't pay that much, there is quite clearly a lot of people who WILL.

And how much "better" something would sell isn't relevant either. Everything would sell "better" if it were cheaper. That doesn't mean that just because it would sell better at a cheaper price that the supplier should sell it for that price.

 

[reech]

The last 3 Star Trek books to come out on Kindle in the UK (DTI, Indistinguishable and forthcoming Voyager book) are all priced at £3.99 on Kindle, when the paperback is £6.99 . This is proper pricing, and I've got no problems with adding ebooks to my basked when they're £3 cheaper than the paperback.