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Customer Discussions > Kindle forum

Trend in e-books costing more than tree books


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Showing 201-224 of 224 posts in this discussion
In reply to an earlier post on Jun 3, 2012 11:44:02 AM PDT
Denis Powell says:
Mooncat, I used to be a market trader and customers would often say to me "I can grow my own tomatoes for less than you charge." I used to reply that I was growing them for less than they were, but had to cover the cost of my pitch, storage and transport as well as earn enough to make a living. If I charged cost price, a little over that, or even the price some people thought was "fair" I would have starved to death.

In reply to an earlier post on Jun 3, 2012 11:50:32 AM PDT
Unlikely to help, due to a total lack of reading comprehension, which no dictionary can cure.

In reply to an earlier post on Jun 3, 2012 12:10:28 PM PDT
J. Donahue says:
Great response Denis!

I often ask people who complain of e-book prices if they buy coffee at Starbucks. When they reply in the affirmative, I then ask them if they really think it costs $5.00 to produce that cup of coffee they have in their hand.

The looks and sputtering reply I almost ALWAYS receive are priceless!

Posted on Jun 3, 2012 12:29:03 PM PDT
batgirl says:
I do not go to Starbucks because I think
The prices are too high as well and they do provide value
For my hard-earned Monet.

Posted on Jun 3, 2012 1:15:14 PM PDT
When I see a "pre-order" advertisemement at $12.99 ot more for a book I'm going to want to read I put in a reserve order at my local library. By the time the book comes out I'm 1st or 2nd on the list and get the book within a week or two.

In reply to an earlier post on Jun 3, 2012 1:32:06 PM PDT
Sad. They probably don't take the time to put anything else into perspective.

In reply to an earlier post on Jun 3, 2012 1:39:51 PM PDT
Do they also provide value for your hard-earned van Gogh?

In reply to an earlier post on Jun 3, 2012 4:05:56 PM PDT
Anne Shirley says:
Not to mention, whether someone "could" do something often has little to do with whether they would be willing to, and whether the end product they might produce is the same quality as the same item they pay someone else for.

In reply to an earlier post on Jun 4, 2012 3:23:05 PM PDT
John D says:
I'm going to go a little long here. I'm not trying to convince those who are settled in their opinions. I'm just trying to explicate something some folks might find informative.

There are costs associated with producing an edited manuscript that are essentially invariant across distribution mechanisms. There are additional costs extrinsic to individual titles which must be recovered across the catalog as a whole. And as you point out, the publishing enterprise must turn a profit or it will cease to exist.

In addition, there are certain marginal costs for producing from the manuscript, copies for distribution in various media. None of them are free to produce, but some cost more than others.

In the old days, it was MUCH more expensive to go from manuscript to printed copy than it is today. When my father was in the printing industry, each edition had to be typeset. When I was in the printing industry, things had changed and it became possible do the typesetting electronically from the manuscript, and nowadays generating an electronic master from a manuscript is pretty much the same whether you're creating a hardback, a paperback, or an e-book.

What does differ, though, between media, is the mechanisms for production, distribution and returns. DTBs and e-books require all three, but the costs are definitely and provably lower (though of course nonzero).

Anyone who has looked with open eyes at the industry can see the truth of this. E-books are cheaper to distribute than are DTBs.

But this does not necessarily translate to lower prices for e-books.

Why?

For the same reason paperback books are generally so much cheaper than hardback books, when sold new. Hardbacks cost a little more than paperbacks to print, ship, store and remainder, but not very much more. The price difference is far more due to "price discrimination" than anything else. This just means selling a single product at a premium price to those willing to pay it, and selling (essentially) the same product to others at a lower price, so you don't leave their money on the table.

Publishers have understood and profited from price discrimination since time immemorial. Let's say there are 100 people in this country who want to read a certain book. 10 of them LOVE the author and will pay $25 for the book without reservation. 25 of them will pay $12. Another 25 will pay $9. Another 25 will pay $5. 10 more will pay $1, and the rest will read only if they think it's free.

If the publisher is constrained to sell the book at a single price, he must examine the cost of each mechanism and expected sales, and choose the price point that will yield the biggest profit. In the example above, the publisher will have (10 people * $25) $250 in revenue if selling the hardback, ( (10+25) * $12) $420 in revenue if selling the second most expensive edition, ( (10+25+25) * $9) $540 in revenue if selling the mid-range edition. The $5 edition yields $425 in revenue and the $1 edition takes in only $90.

But they're too smart for that. They'll find a premium feature (it's a Hardback you quality consumer you!) to justify a high price point, and get $25 each out of those first ten people. That's $250. Then they'll sell a nice paperback to the 25 folks willing to pay $12, for another $300. The $9 paperback takes in another $225, and the $5 pulp edition brings in another $125. Even the last ten folks bring in $10. Total revenue: $910.

Over the course of decades, publishers have figured out the right price points for the various editions, and other methods (e.g. delaying paperback release) to nudge a few more folks into higher price points, with the end goal of maximizing profits.

But e-books are new to publishers, and the "right" prices to set aren't yet clear. It's true that e-books are cheaper to distribute than paper books, but that is, from the publishers' point of view, not really relevant.

What is difficult for them, though, is that many of us here in Kindle world are aware of the lower costs and expect to find the books priced accordingly. And there's no really obvious way for the publishers to exercise price discrimination for e-Book purchasers. Delaying the release dates wastes marketing money, and e-Books are actually very friendly to marketing: When a potential purchaser can have the book on her Kindle 60 seconds after hearing a book discussed, that's awesome!

I think the publishers will eventually end up with a graduated pricing model for e-Books. Early in their life-cycle, e-Books will be priced much like hardbacks. Later, they will be priced more like paperbacks. Whether they'll be above or below is a strictly economic decision; if there is much public sentiment that the e-Book should be priced lower than the current DTB, publishers may find their profits are higher if they meet the public's expectations.

Another way they may try to create price discrimination is to copy the model of the movie studies: Add "premium content" to e-books.

So, I hope if anyone reads this they'll see I'm not trying to dismiss either "side" in this conversation, but rather offering some thoughts I've not seen commonly expressed in this thread but which do have some bearing.

In reply to an earlier post on Jun 4, 2012 5:28:59 PM PDT
Norwenna says:
John Deurbrouck: thank you for spending the time to write this very interesting post.

In reply to an earlier post on Jun 4, 2012 5:34:10 PM PDT
R. Wilde says:
"Delaying the release dates wastes marketing money, and e-Books are actually very friendly to marketing: When a potential purchaser can have the book on her Kindle 60 seconds after hearing a book discussed, that's awesome!"

The biggest threat ebooks pose to my bank account is not that some may cost me a dollar or three more apiece... it's the dreaded impulse buy! It's worse than the candy rack next to the cash register at the grocery store, because if I succumb to that I'm only going to buy one candy bar. With ebooks, I'm just as likely to want to buy a series... and then another series before I've even read the first, the next time I get an impulse.

In reply to an earlier post on Jun 4, 2012 5:50:43 PM PDT
Anne Shirley says:
Thank you, John. It's rare that we get informed feedback from people who truly know the nuts and bolts of the pricing issue, and it's appreciated by those who seek the truth of the issue, whether the truth is 100% in agreement with their ideas or not. Your explanation is logical and believable.

In reply to an earlier post on Jun 4, 2012 6:42:13 PM PDT
Thanks, John. I'm copying your answer (with url, etc.) for my own files so I don't lose it. It's the most cogent response to this question I've read in a while.

In reply to an earlier post on Jun 4, 2012 11:31:51 PM PDT
Denis Powell says:
John, I'd like to add my thanks to that of others here. I quite understand why some people won't buy at certain prices. Value is about perception and what one person values highly another wouldn't want even as a gift. What does irritate me is posters saying that because they don't want something at a particular price I must be a fool for accepting it. If someone thinks a Rolls Royce is good value that's fine by my. I like public transport but it has very little to do with the cost. It means I get to enjoy the scenery or read my book and I don't have to worry about the traffic, finding somewhere to park, or if I have enough gas to get me home. The other person may like driving, value the time saved, the privacy during the journey and enjoy the luxury. We're both "right".

In reply to an earlier post on Jun 5, 2012 2:11:34 AM PDT
Discus49 says:
Thank you for your enlightening submission; it's rare to hear a reasoned voice on any thread discussing e-prices.

I would be fascinated to hear your views on why e-books in (for example) Australia are higher by sometimes a factor of two or even more than in the US. The costs of getting an e-book to the other side of the world are irrelevant. Is it simple greed by the publishers' Australian outlets, or just because they've been ripping us off for paper books for decades and they see no reason to stop now that digitally published books are here?

Should you want to see many many quoted price discrepancies have a glance through "Australian Kindle users' thread".

In reply to an earlier post on Jun 5, 2012 2:19:26 AM PDT
CBRetriever says:
it's happening in Canada as well and, in that case, it's because the Canadian government wants to give preferential treatment to the local companies (Kobo was a Canadian company), so ebooks from outside Canada are taxed more than those published in Canada

In reply to an earlier post on Jun 5, 2012 2:31:38 AM PDT
Discus49 says:
To the best of my knowledge, we have no e-books published in Australia. What we do have is Australian publishers who are a subset of the Big Six charging hugely inflated prices for e-books published by their "masters" in the US at half what we are being asked to pay.

Posted on Jun 5, 2012 4:11:02 AM PDT
zanara says:
Its obviously because all e-books for Australia have to be converted, at great cost to the publishers, to be read upside down for those of us "down-under"

In reply to an earlier post on Jun 5, 2012 4:20:25 AM PDT
Discus49 says:
Jeez Zanara, why didn't I think of that? Someone like you, who thinks outside the square, would be very welcome on the Aussie thread. Why don't you visit. We even welcome Septics, if they've been "treated".

Posted on Jun 5, 2012 4:25:55 AM PDT
CBRetriever says:
Septics?

Posted on Jun 5, 2012 4:40:11 AM PDT
Discus49 says:
Aaaah, I'm glad you asked CBR. Australia adopted a lot of cockney rhyming slang from the old country. eg apples and pears = stairs. Rather unfortunately "Yanks" were christened "septics" after "septic tanks". It's nothing personal, y'understand, just our idiosyncratic sense of humour. Mind you, you lot still have to explain the huge rise in the birth rate round about 1944.

In reply to an earlier post on Jun 5, 2012 11:16:26 AM PDT
John D says:
Discus49, my wife grew up in Australia and has seen the high prices on many goods. So often, the perception was that high prices were due to the unavoidable additional costs of shipping.

As you reasonably point out, that's not an issue with e-books.

I think you've hit the nail on the head in feeling that the Australian distributors are trying to preserve their profit margins.

It's going to be interesting to see how this shakes out in the future. We now have the technology to share literature with the entire world for distribution costs that are incredibly low. This has a lot of interesting implications with regard to how quality work is recognized and rewarded and improved, how those with vested interest in the status quo will seek to protect it, and how the shape of the culture of literature may change.

In reply to an earlier post on Jun 5, 2012 11:57:17 AM PDT
Grapes&Wrath says:
I havent 'seen' you in a while John! I want to echo from a lurker that i was very impressed with your well written and very informative post above.

In reply to an earlier post on Jun 5, 2012 12:36:15 PM PDT
Kindle, Wi-Fi, 6" E Ink Display - includes Special Offers & Sponsored Screensavers
The reason I have not bought a kindle is that current books can cost as much or more than paper books. I have no problem with reading rhe paper ver and when I do read a free e=book I do so on my smart phone.
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Discussion in:  Kindle forum
Participants:  53
Total posts:  224
Initial post:  May 27, 2012
Latest post:  Jun 5, 2012

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