Author Claims $9.99 Is Not A 'Real Price' For Books
from the oh-really? dept
The NY Times is running an article about how publishers' recent attempts (mostly successful) to boost the retail price of ebooks may backfire really badly as consumers revolt. Most of it is not particularly new to regular readers here, but it does talk to one author whose book received bad reviews on Amazon after his publisher decided to hold off releasing an ebook, hoping that it would "protect" hardcover sales. The author, Douglas Preston, lashes out and attacks his fans, rather than being willing to admit that his customers are telling him something:"The sense of entitlement of the American consumer is absolutely astonishing.... It's the Wal-Mart mentality, which in my view is very unhealthy for our country. It's this notion of not wanting to pay the real price of something.... It gives me pause when I get 50 e-mails saying 'I'm never buying one of your books ever again. I'm moving on, you greedy, greedy author.'"So, what's a bigger sense of entitlement? The one where your customers tell you that you've priced something too high and that they're going to spend their money with others who are offering something at a price point they like? Or the one where you insist that books have to be priced high because you want them to be priced high? I'd argue it's the latter... Along those lines, $9.99 is a real price. Just because you don't like what the market decides a book is worth, doesn't mean that it's not a real price.
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Filed Under: books, douglas preston, ebooks, entitlement, pricing
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Actually...
The price currently charged is the 'fake' price since they are only able to charge that amount due to a government granted monopoly.
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Re: Actually...
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"If I had asked people what they wanted, they would have said faster horses."
The customer is always right... for the short run.
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I guess most other carmakers claimed that the real prices on cars had to be much higher and that such low prices would kill the automobile industry.
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Greed
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If the customer is wrong by the attitude of the seller, then soon the seller is gone.
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This isn't what the customer wants -- it's about what the customer is willing to pay. It's ridiculous to sympathize with a business that refuses to price its goods to maximize the outcome of sales x net profit.
You either figure out what the market will bear, or you die.
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Consumer choice...
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Pot, I'd like you to meet my good friend Kettle. You guys should get along nicely, you're both black.
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What is a real price
Pricing is also a living thing, it keeps evolving - especially as perceptions of value and base line costs keep changing.
The advent of ebooks makes things hard as printing and distribution are two major cost factors in working out your base line cost (and therefore what you think a real price should be). If everyone buys ebooks the cost is only lower if you never printed or shipped any paper copies, if you still printed then your overall costs are about the same. Encouraging people to ebooks doesnt help that much as you still need to print, and with printing its not a linear cost, doing 1/2 the number of books might make costs go up 4-5x.
So thats why print companies hate it. Many authors dont like it because they may be locked into contracts with printers which ensure the printer doesnt lose out if the costs overrun... the author loses.
So there are two sides to the story, and context to the comment about real price is important. Having said that, at the end of the day, consumers (and competition) decide if $9.99 is a real price or not. If it is then some authors will lose out for a while until they adapt to the new model.
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Re: What is a real price
Well... the following amortized price breakdown from Kindle Review (http://ireaderreview.com/2009/05/03/book-cost-analysis-cost-of-physical-book-publishing/) may be instructional here. This is for the average first-run hardcover book:
Book Retail Price: $27.95.
Retailer (discount, staffing, rent, etc.) - $12.58. That's 45%.
Author Royalties - $4.19. Exactly 15%.
Wholesaler - $2.80. Exactly 10%.
Pre-production (Publisher) - $3.55. That's 12.7%.
Printing (Publisher) - $2.83. Translates to 10.125%
Marketing (Publisher) - $2. That's approximately 7.15%.
Basically the numbers of interest are the retailer (45%), printing (just 10%), and the wholesaler (10%). So it's fairly easy to see that online books can dump wholesaling and printing costs... but that's just 20%, or $6. Retailer costs can drop, but most retailers (physical or otherwise) still need to make a profit, even selling ebooks.
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Re: Re: What is a real price
Those costs partially exist because of history, not because they make sense given the product.
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Re: Re: What is a real price
I would say your 20% total cost difference is ridiculously low.
I'm seeing:
$4 to author
$4 to pre-production
$2 to marketing
plus retailer mark up.
So, that's $10, plus retailer mark up. Retailers selling eBooks get to decide what they want to make off of a book, not the author.
So, $9.99 looks to be the perfect "real price" for everyone involved. Except eBook retailers. But they aren't the ones complaining.
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Re: What is a real price?
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Re: What is a real price
And actually, "consumers" didn't decide on $9.99 as a price point, Amazon did, just as Apple decided on $0.99 per song as a price point. In fact, according to industry news, Amazon was said subsidizing the $9.99 price to the tune of $5 a copy, as they were supposedly paying the publisher $14.99 a copy.
Now, Amazon might well decide to eat the $5 (for first run books) if it means gaining ebook market share and if it also encourages people to buy older ebooks (and books) on which they DO make money.
Oh yeah... and if doing so sells the occasional $300 Kindle.
If you think Amazon would not decide to lose some money now in order to build up market share, then you're completely forgetting how Amazon became Amazon in the first place.
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Re: Re: What is a real price
I'm all for the customer deciding what the value of something is. But to pretend that "customers" came up with $9.99 as what they think an eBook is worth is bullshit. The reality is, that is Amazon's customers, because Amazon told them that was the price, even though Amazon knew it was higher (because they were taking a loss on it, for now).
The reality is other eBook sellers are setting different prices, and always have-Fictionwise and Baen to just name a couple. I wish Techdirt had dug a little deeper into the issue before just blasting some whiny author.
The whole Agency Model/Amazon Model fight has no real "good guys" right now.
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Re: What is a real price
Why should someone buying an eBook subsidize printing & distribution costs? Those costs should only be associated to the printed versions and should not carry over to the eBook versions.
As eBook sales pick up, number of printed copies goes down. As the volume savings decreases, the printed version price should go up, and the eBook price should be unaffected. The eBooks price should account for author payouts, editing costs, page layout, and marketing ... plus retailer mark-up. That's it. The existence of paper versions and costs associated with printing & physical distribution should not even enter the eBook pricing picture.
When paperback books with printing & distribution costs can be $9.99 and less, then why again should an eBook version cost more than that when it should not have to account for printing & distribution costs at all?
I paid $250 for my physical representation of a book. I should not be expected to help fund other people's physical product by subsidizing the printed versions with my eBook purchases.
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People are ignorant.
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Re: People are ignorant.
When producing an eBook, they don't have to pay for ...
+ paper and ink to print the physical book
+ labor of printing the physical books
+ warehouse space to store their existing books
+ shipping to send the books to the retailers
+ cover design (If there is a physical book.)
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Re: Re: People are ignorant.
+ paper and ink to print the physical book
+ labor of printing the physical books
+ warehouse space to store their existing books
+ shipping to send the books to the retailers
+ cover design (If there is a physical book.)
Plus disposal of unsold copies.
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Re: Re: People are ignorant.
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Re: People are ignorant.
People work hard for thier money and buy things they value, production costs have no bearing on the matter.
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History.
The real problem of the entitlement mentality is that starts at the individual level it is pervasive in society and what happens on the public stage is just a manifestation of that underlying culture.
Douglas Preston is equally guilty of what he accuse others of being, but maybe his vanity has blinded him to this fact.
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Re: History.
Demand is always dependent on price. Everyone has their own point of view regarding value.
No one is entitled to whatever pie-in-the-sky price they want to charge for something. No, it is the author with the "entitlement mentality".
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Wal-Mart Mentality
How much money is Wal-Mart making again?
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HUH???
Frankly, I see this author as neither a businessman nor an artist. He is not a businessman because he fails to understand how pricing works in the market. He is not an artist because he has no passion in seeing that his words are read by as many people as possible. He has become some horrific hybrid monstrosity that insists that everyone read his books and pay full price for doing so. I never thought I'd see that day that people would be insulted for wanting to save money.
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Re: HUH???
Unfortunately the "Walmart mentality" is nothing to do with "saving money, using discretion and evaluating purchases". It's actually about expecting to be able to buy anything you want cheaply, no matter the real cost of making it (including the costs that are borne by third parties).
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Re: HUH???
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Also...
I have nothing against this author wanting to be paid for his work. Hard work deserves to be rewarded, but if artists had their way, we would all pay an art tax that is distributed to artists everywhere. In other words, we would pay for art we never even went out an enjoyed. That is the attitude these artists take.
If you want to make more money, lower your prices, and score extra revenue in the added volume. Stop crying about how much individual copies sell for!
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Walmart Mentality
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Entitlement viewpoint too simplistic
Here is a post from a long-time reader who is very frustrated with high prices, lack of availability, and the poor quality of e-books—and being rebuffed when she tries to contact stores, publishers, and authors to have the errors fixed or to try to get their e-books available in her country.
And here is my post outlining how those who side with Macmillan and the angry readers of e-books have been talking past each other with neither clearly understanding what the other has to say.
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He'll go through an angry phase, then he'll get over it when he realizes that he doesn't have any choice.
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If someone like Amazon intentionally sells something at a loss to "set customer expectations", that isn't allowing the market to decide anything-it is allowing Amazon to decide. The fact people get "used" to $9.99 is solely due to how Amazon is manipulating the market by controlling distribution. The "fans" who are complaining are basing their idea of what an ebook should cost not on what their value system is, but what Amazon has told them it should be.
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Re:
There's very literally *no* "cost" to make more copies.
So any "price" charged to allow people to download any particular copy (out of a theoretically infinite pool of such potential copies), isn't going to make any sense, whatsoever.
Physical books cost to produce because they have stuff like wood pulp, printing presses, etc. Sure, I guess you could claim that they "cost" the author to write, except that they "cost" him in the same way as choosing to watch the latest episode of "Dancing with the stars" "costs" the viewers.
It makes absolutely no sense for this guy to be complaining that customers *correctly* understand that charging for a digital file that cost effectively NOTHING to produce (or, as near to "Zero" as to make no difference), is actually pretty silly.
Add to that, the fact that Ebook files are usually broken (DRM "protected"), or otherwise use whacky, proprietary file-formats in an attempt to preclude interoperability.
*THAT'S* the real "entitlement mentality" -- the notion that the "rights-holders" (monopolists/their publishers) should have carte-blanche to impose any/every kind of idiocy on the buyer, and that their victims shouldn't even flinch, after having been scammed.
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How is that not "selling at a loss"? I mean, all this rah rah "digital is free" cheerleading, there are in fact marketing costs, editing costs, and you know, paying the author and publisher. But you think the first $9.99 book sold covers all that, and everyone else gets the "free one", right?
I'm not saying the eBook market isn't completely different from the old print book market, and that publishers haven't caught on to that yet. But I'm tired of hearing the same old "there are zero costs to digital" bullshit.
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I don't really have much of an opinion on the whole ebook debate, but I do know that just because it's in digital form, the costs don't magically become $0.
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e reader convert
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Re: e reader convert
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they are taking a lose because the book company is charging more then what they are selling for. that does not mean that it cost 14$ to make that is saying that was the publisher is asking for. which means all this he made up and she made up stuff means nothing since no one knows how much it cost to make the ebook.
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real price of books
PISS OFF GOUGER and whose this author ima pirate him to death so he can be poor and shit on his lawn
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These "artists" need to quit being coddled by these middle men and realise that they control their futures. The middle men actually work for them. Not the other way around. They need to quit begging the publishers (and labels) for contracts (and front money) and start pressuring them to establish reasonably priced digital catalogues. If they have to work a 9-5 (oh the horror) to finance the "pursuit of their passions" then so be it. All the "little people" dont really care any more and are only willing to pay so much. People also realise that digital content has infinite supply at minimal maintenance cost. They dont care about initial production costs. No matter how much the industries cry and whine about it. Its their job to find a way to do it cheaper and make a profit.
Paper and plastic are on their way out (no eco pun intended). They can either change and embrace it, or fade into obscurity.
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No sympathy
These "artists" need to quit being coddled by these middle men and realise that they control their futures. The middle men actually work for them. Not the other way around. They need to quit begging the publishers (and labels) for contracts (and front money) and start pressuring them to establish reasonably priced digital catalogues. If they have to work a 9-5 (OH, the horror) to finance the "pursuit of their passions" then so be it. All the "little people" dont really care any more and are only willing to pay so much. People also realise that digital content has infinite supply at minimal maintenance cost. They dont care about initial production costs. No matter how much the industries cry and whine about it. Its their job to find a way to do it cheaper and make a profit.
Paper and plastic are on their way out (no eco pun intended). They can either change and embrace it, or fade into obscurity.
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a
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The Real Price
Take a look at most books after say a year and note the used price on Amazon. Usually a few bucks, often $.01.
This guy needs a serious lesson in economics. Sounds like he is getting one with people voting with their dollars.
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Re: The Real Price
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Regarding entitlement
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Re: Regarding entitlement
Exactly, but why give away control over your works? You agree to the contract. Stipulate that you are in the loop on pricing and have final say. Make them justify to you any pricing and changes. Make them work for you. After all, you are the one who must answer to the fans, not them. Its your name that sells the books, not theirs. As for ebooks, you can give "copy rights" to say Amazon for either a certain amount of time or a certain number of copies (potential scarcity on infinite supply). after which they would have to come back to you for any changes or extensions. That way you can get feedback from the fans and use that to leverage further negotiations. Remember, without you and the fans, they make no money and have no business. Uh-mm... please no offence from my earlier posting.
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They also seem to forget that consumer perception of received value counts too. I'm a paperback buyer. For eBooks, they want me to pay more for less-- can't lend, can't resell, more trouble to read on the beach, often much poorer quality and insane geoprotections. Get real.
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Re:
Ignorance--- they hope yours in not knowing the differance
Arrogance--- theirs, thats why no shame
Greed------- maximise profits by charging the consumer more and paying the writers less. Then give themselves a bonus for doing it.
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real price my ass
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Let the scanning begin...
Movies are easy to copy and put online
How long until the publishing industry pi**es off enough people so that scanning becomes just as common as burning a CD used to be. It amazes me that the publishers forget that there are options and just like in the music and now movie world, people will copy if they don't like the price. While I think in general that most avid readers are less likely to pirate, at some point something even in a pay friendly group will click and the paradigm shift will be made.
I think it is time to take eBooks to a $5 level to 'own' and a $1 to $2 option for a 90 day rental and to just kill the mass printing of books and just do niche high-end book prints for those interested in collecting. For those that say there just isn't any profit at those levels, I just don't buy it especially if you take the print equation out of it at the mass/non-niche print level.
Freedom
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Book pricing
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Re: Book pricing
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To which I'd like to say, if I pay 1$ for a digital copy of bible, does that mean that the value of that book is low?
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Greedy Author
What did it really cost to get that digital copy to the reader in comparison to a hard copy. There is no printing costs, paper costs, etc... no distribution costs to ship the book to a store, no cost to have a book store employ stock the book and keep it on the shelf for a couple of months before it sold. But then his publisher probably takes just as big of a cut of each ebook sold as they do a hard copy book. I think his focus is misplaced here. I would be bitching about the publishers entitlement here. It didn't cost you hardly anything to put the ebook out to the masses, but you still think your entitled to get back the same amount on each sale.
Yeah I know, I know you think it devalues the book when you price it lower for the consumer, but does it really. Take out those production costs, that you didn't actually spend, and you'll probably find the 9.99 price more along the lines of what it should be priced at. Yeah the hard copy is a bit higher, but if I wanted a hard copy to display on my bookshelf I'd pay a bit higher price for that added value, to support the costs of getting that hard copy to me.
Basically this guy is just like the musicians that are bitching about their own fans and standing up for the RIAA, and making as much money off the consumer as they feel they are entitled to. Sad when you want to piss off those that are paying your bills, but don't come whining to me when you can't because they went elsewhere and you are broke Mr. high and mighty author.
Yeah I say set your prices high, but don't get all butt-hurt when your readers don't buy your books and go to someone else!!!
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?
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entitlement
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Re:
"Pay me for my stuff up front, sight unseen. Maybe you'll like it, maybe you won't. If you don't, too damn bad, I've already got your money."
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Authors and Publishers don't get it
I'd rather not kill trees, but if corporate greed gets in the way, like it has with everything else gone digital, I'll stick to a good old fashion bookshelf full of dead trees.
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Used Bookstore Prices.
As someone noted, a good used bookstore (or, more precisely, a good small used bookstore) tends to be a clubhouse,
http://www.techdirt.com/article.php?sid=20100208/1834278091#c438
and one might add that a really good used bookstore/clubhouse needs a resident cat. One of my favorite places, back circa 1990 (Granny's Used Books, Springfield, Oregon), was presided over by a black Persian named "Booker." He had the customers perfectly trained to open the door for him when he wanted in or out. As an old used bookstore habitue, I am accustomed to being ordered around by cats, but I am also accustomed to the idea that most paperback books ought not to cost more than a dollar or two.
Nowadays, all the better pre-1923 books are available for free, via the Gutenberg Project, or Google, or the Internet Archive. The author who noisily insists that everyone has to pay for his book gets into the awkward position of claiming to be better than Shakespeare. So prove it!
When you read that many books, you don't adulate many authors-- you develop critical sense, like a publisher's reader, laboring away at the slushpile. I suspect that this is what bothers a certain kind of author. A curious point: a lot of these authors who spend a lot of time arguing about their rights have never been to graduate school. The thing about liberal arts graduate school is that you get criticized-- a lot. The basic course is the seminar. Each week, someone presents something, and they go around the table, with everyone else trying to tear it to pieces. It's a form of blood sport, or cage fight. The better public blogs are, in effect, internet seminars. Anyway, if you go through the mill, you develop amazing capacities of self-criticism.
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Let's try a bit of reality here
The reality is that if the price point is too high people won't buy, If it's a good price they well, all other things being equal.
The one who sounds like he has a terminal sense of entitlement is Douglas Preston and the large publishers who don't seem to remember that our economic culture is anything but a mercantile one any longer which guarantees any price to any one. Mercantilism is alive and well in some quarters!
Can't say I'm sure that anyone would be all the interested in pirating his books given that doesn't seem to be as much of an issue as it is with the recording industry and the movie industry. The latter two more than guilty enough of producing low quality product and charging luxury prices. (Not to mention making quite a living off the public domain and trying to copyright it later!)
Ten bucks sounds about right for the kind of work he produces in fiction, though I might be tempted to pay more for his non-fiction.
ttfn
John
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Re: Let's try a bit of reality here
And wouldn't it be lovely to test this out? Unfortunately Amazon has decided on the price and neither publishers nor consumers get a say.
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Re: Re: Let's try a bit of reality here
Those ebooks that I do buy tend to be a lot more expensive than what I can get on Amazon, tend to the technical and don't come encumbered with DRM junk which is nice cause I get to make a ton of notes and cross references in the PDF (or whatever) as my electronic way of ear marking.
So, for me at least, price does play a role when it comes to some things as does convience and my ability to be able to do what I do with printed material.
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John
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translation:
btw: Do those ebooks really cost 10$? Sheesh thats the same price as buying a real book (softcover of course) that you can actually sell again and most of your money back on (assuming it is a *good* book that people actually *want*).
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There are genuine arguments on both sides.
Here's a revolutionary idea: How about we let publishers set the wholesale price and retailers set the retail price?
You guys are all acting like Amazon is the good guy here, but they are protecting their vested corporate interests just as much as publishers. Amazon wants low prices for e-books so it can sell Kindles.
Publishers should have a right to set the wholesale price for e-books, just as they do with printed books. There's nothing to stop Amazon selling at a loss - that's exactly what big box stores did for the Harry Potter books - but it's unlikely they would choose to do that for every book.
We don't really know what the market price for an e-book is because it's never been tested. Amazon decided that e-books should cost $9.95. As no one has ever experimented with other prices, we don't know whether some e-books would sell at higher (or lower prices).
I suspect the reviewers on Amazon were reacting badly to the lack of availability of the book as much as anything else. And Amazon is just as much to blame for that as the publisher. The publisher would have likely made the e-book available if they'd been allowed to set the price they wanted. Consumers could choose not to buy but until the e-book goes on sale at $14.95 we're not going to know. I'd like to base any assessment of price strategy on actual sales rather than the online ranting of a subset of Amazon reviewers.
And the author is right - consumers do have a sense of entitlement when they *demand* low prices. They have a right to vote with their wallet and if prices are really too high, no doubt prices will fall. It's supply and demand.
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Re: Re:
For some there may be costs for readers for ebooks for the blind and that sort of thing.
From that point on you're right the reproduction price is reduced to practially zero.
As for customers demanding low prices that's what customers do and it's not a sense of entitlement that drives that it's simply getting the most bang for the scarce buck.
Will ebooks sell at $14.95? Some will, for a while at least. New books by authors who sell a million copies any time they put pen to paper can demand that sort of thing, or higher. After the bloom is off the rose the price will drift down as demand goes down though not as much as in a bricks and mortar store where the book seller has to clean out storage space for the next best seller.
However publishers setting a sale price strikes me as price fixing which is supposed to be illegal. They can set the wholesale price at whatever they want, after all that's the cost to the bookseller in this case Amazon. They can even suggest a retail price. And leave Amazon to sell for whatever price they want, even at a loss if they so desire.
ttfn
John
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Orson Scott Card....
Last word at bottom is his view on this...
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