Author Claims $9.99 Is Not A 'Real Price' For Books

from the oh-really? dept

Thu, Feb 11th 2010 4:38pm — Mike Masnick

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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Anonymous Coward, 11 Feb 2010 @ 4:44pm

I assume this author pays millions of dollars for his movie tickets? After all, that's the "real price" that "no one wants to pay."
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Anonymous Coward, 11 Feb 2010 @ 4:47pm

When did price fixing stop being illegal?
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Anonymous Coward, 11 Feb 2010 @ 4:54pm

Actually...
Being that digital goods are infinite, the real price is much less than $9.99.

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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The Anti-Mike (profile), 11 Feb 2010 @ 4:56pm

Shall we run out the famous Henry Ford quote:

"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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Glenn, 11 Feb 2010 @ 4:57pm

Consumer choice...
Consumers decide what a book or an album or a song or a movie or whatever is worth to them. If it's worth the price, then they might buy it. If not, then... not. Consumers don't "set" the prices, though they may influence them. How is this any different from the way it's always been? Regardless, blame your publisher, not consumers.
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Anonymous Coward, 11 Feb 2010 @ 5:01pm

Re:
Except that quote has nothing to do with price. Poor effort.
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Ima Fish (profile), 11 Feb 2010 @ 5:02pm

"The sense of entitlement of the American consumer is..."

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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Justin Maloney (profile), 11 Feb 2010 @ 5:14pm

What is a real price
A real price is basically whatever the consumer is willing to pay for it (its perceived value). The debate comes when there is a difference between what the consumers perceived value and the producers bottom line. A producer normally (but not always) sets their bottom line at the total cost divided by the total number of units they want to sell (essentially break even). It all gets much more complicated than this as you argue about what constitutes fair costs to include and you then increase those costs by trying to increase the perceived value (promoting the product).

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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:), 11 Feb 2010 @ 5:15pm

People are ignorant.
People are ignorant of production costs that is a fact, another fact is that people don't care what they use as a measure stick is prices from other places so forgive the public for getting upset when some want to push prices up without any good explanation except for "I deserve better" LoL
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Anonymous Coward, 11 Feb 2010 @ 5:21pm

Re:
TAM, the price to rent your mom is too high. I'm only willing to pay $9.99. Does that work for you?
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:), 11 Feb 2010 @ 5:24pm

History.
For many years people saw author as hard working people, now after many have got stardom status and are being very well paid the public no longer identifies with the majority of them and the current stabilised ideas of remuneration.

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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Modplan (profile), 11 Feb 2010 @ 5:33pm

Wal-Mart Mentality
It's the Wal-Mart mentality

How much money is Wal-Mart making again?
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The Buzz Saw (profile), 11 Feb 2010 @ 5:37pm

HUH???
The Walmart mentality is unhealthy for this country? Really? Given the economic circumstances, I'd say the Walmart mentality is just what this country needs. (Whether Walmart itself is good for this country is a different discussion.) People should look for ways to save money. It is GOOD that people are saving money, using discretion, and evaluating purchases.

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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Anonymous Coward, 11 Feb 2010 @ 5:41pm

Re:
You might want to get that media industry chip in your head serviced, TAM. The innovation of new technologies has nothing to do with the matter at hand, which is the entitlement attitude of this particular author regarding book sales. It's a poor effort, even for you. C- at best.
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Anonymous Coward, 11 Feb 2010 @ 5:45pm

Re:
Also amusing since the recording industry tried to stop cars (MP3 players), the movie industry tried to stop cars (VCRs), and the publishing industry is now trying to stop cars (eBooks).
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The Buzz Saw (profile), 11 Feb 2010 @ 5:46pm

Also...
It also disturbs me that so-called artists have determined that the value of art is expressed solely through the amount of money it rakes in. According to them, a song that is heard by a million people is less valuable than a song sold to one person for $1.

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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bishboria (profile), 11 Feb 2010 @ 5:47pm

Re: Re:
Ouch, bit of a low blow from an Anonymous Coward (even though I disagree with practically everything that TAM says, including his comment above).
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Anonymous Coward, 11 Feb 2010 @ 5:50pm

Walmart Mentality
would mean that the book was made in China with cheap materials and labor, would cause health problems and there would bootleg copies everywhere
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Chris Meadows (profile), 11 Feb 2010 @ 6:00pm

Entitlement viewpoint too simplistic
The Amazon/Macmillan feud blew the lid off of a simmering cauldron of resentment that e-book early adopters have been tending for a long time (ten years or more in some cases). It seems like a lot of authors and publishers aren't really aware of this, and tend to blame the loud complaints on a sense of "entitlement". This isn't strictly accurate.

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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Anonymous Coward, 11 Feb 2010 @ 6:02pm

Ehh, it's going to be a while before this guy realizes anything. The first time he realized that he had encountered free, he felt he was the loser. It happens.

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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Michael Long (profile), 11 Feb 2010 @ 6:03pm

Re: What is a real price
"The advent of ebooks makes things hard as printing and distribution are two major cost factors in working out your base line cost..."

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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Se7en, 11 Feb 2010 @ 6:04pm

While I think his rant is silly, there is another side to the issue.

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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Michael Long (profile), 11 Feb 2010 @ 6:09pm

Re: What is a real price
"...consumers (and competition) decide if $9.99 is a real price or not."

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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Anonymous Coward, 11 Feb 2010 @ 6:20pm

Re: People are ignorant.
While we might be ignorant of the exact production costs of an eBook, we DO know of physical book production costs that the eBook doesn't have.

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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Anonymous Coward, 11 Feb 2010 @ 6:21pm

Re: People are ignorant.
People don't CARE what the prodution costs are. If the product is good enough to justify the PERSONAL cost people will buy it; if not they won't. If production costs were a dollar and the product cost was 50 cents nobody would buy if the product were crap.

People work hard for thier money and buy things they value, production costs have no bearing on the matter.
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Henry Emrich, 11 Feb 2010 @ 6:29pm

Re:
How exactly can you sell Ebooks "at a loss?"

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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Advid reader, 11 Feb 2010 @ 6:30pm

e reader convert
Paperbacks have long been less than Hardbacks. Up to 50% less in most cases. Why shouldn't an e-book with only one time production costs of entering it into the digital format be even less than a Paperback? So you have to wait longer for your preferred version. Book companies have done this for years. I refuse to Pay full price for the digital version of a book. If I'm that desperate to read it, I'll find it in the Library. Oh wait, then I won't pay anything for it and the author completely looses out. It isn't entitlement its deciding what's best for your bottom line. I'm glad I get some books for free with my reader. It has prompted me to buy several e-books by the authors represented. I never would have even tried them if it wasn't for the Free ones.
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se7en, 11 Feb 2010 @ 6:33pm

Re: Re: What is a real price
Yeah, that's what I was trying to say too :p

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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se7en, 11 Feb 2010 @ 6:35pm

Re: Re:
The second (and subsequent) book is free. The first one is expensive. Of course, you'll take the second one. :p
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Sneeje (profile), 11 Feb 2010 @ 6:46pm

Re: Re: What is a real price
Okay, but what does that have to do with the price people are willing to pay? I might be willing to pay $20 for a physical book, but only $10 for an electronic one, especially if I can't use it anywhere I want without batteries, loan it to anyone I want, and not resell it.

Those costs partially exist because of history, not because they make sense given the product.
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Se7en, 11 Feb 2010 @ 6:56pm

Re: Re:
And, as far as Amazon is concerned..they bought the ebooks from the publisher for a certain price. Then they sold them for less than they bought them for.

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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Not so sure, 11 Feb 2010 @ 6:59pm

Re: Re:
Henry, that's overlooking a huge source of costs to publish a book. Authors have to be paid, editors have to be paid (as well as everyone else who works on a book to get it from the authors original manuscript to a consumer-ready product), internal marketing teams need to be paid, media space to promote the book needs to be bought, ad agencies need to be paid their fee.

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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Anonymous Coward, 11 Feb 2010 @ 7:00pm

"(because they were taking a loss on it, for now)."

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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Anonymous Coward, 11 Feb 2010 @ 7:22pm

real price of books
lets see if i go get ink at 40$ a cartridge and print out my own pages that costs me what ten cents a page so think mass production and theres your cost ...over charging in production and remove that needa ink and trees well gee pennies a glass

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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Anonymous Coward, 11 Feb 2010 @ 7:24pm

Re: Actually...
What are you saying?
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AR, 11 Feb 2010 @ 7:41pm

Consumers driving prices down by complaining, and in the end not buying at higher prices, helps to spur progress and innovation. It forces companies to find ways to do it better, faster, cheaper, and safer. This includes new technologies. The established industries dont want anyone to embrace the tech that will eventually put them out of business. Thats kind of understandable, but not realistic, and the "artist" are taking the brunt of the consumer backlash.

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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AR, 11 Feb 2010 @ 7:46pm

No sympathy
Consumers driving prices down by complaining, and in the end not buying at higher prices, helps to spur progress and innovation. It forces companies to find ways to do it better, faster, cheaper, and safer. This includes new technologies. The established industries dont want anyone to embrace the tech that will eventually put them out of business. Thats kind of understandable, but not realistic, and the "artist" are taking the brunt of the consumer backlash.

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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bob, 11 Feb 2010 @ 7:47pm

Re:
I would say the customer is always right look at GM and Chrysler.
If the customer is wrong by the attitude of the seller, then soon the seller is gone.
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a, 11 Feb 2010 @ 7:50pm

a
a
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Scott, 11 Feb 2010 @ 7:58pm

The Real Price
The "real" price is ALWAYS what someone will pay for something at any given time. Period. Aren't we all getting that "real" lesson in real estate right now? Perhaps the pissed-off author paid too much real $ for his house and is now upside down and hoping the suck.. er readers of his books will bail him out.

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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scott, 11 Feb 2010 @ 8:01pm

Re: Re: Re:
no, but they approach zero as the quantity increases. Also, the quoted costs are the costs given a certain sized publisher and certain salary structure for all involved. Somehow I think a book published in a 3rd world country costs way less to produce that a fat-paycheck on in the US.
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J.C. Hutchins, 11 Feb 2010 @ 9:05pm

Regarding entitlement
I agree that snooty authors can play the entitlement card pretty heavily from time to time (we're a whiny-baby bunch), but to be clear: Many authors have absolutely no control over pricing of their products. When we contractually sign over ebook rights, for instance, our publishers set those prices.
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AR, 11 Feb 2010 @ 9:39pm

Re: Regarding entitlement
"When we contractually sign over ebook rights, for instance, our publishers set those prices."

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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cheryl (profile), 11 Feb 2010 @ 10:15pm

The thing that gets me is how a publisher can assert that an eBook should cost more than a MMP, and make that argument without even looking ashamed. I understand about percentages of print production, but I also understand about logistics and everything else and it cannot possibly be cheaper to produce the mass market paperback. Of course, many publishers are trying to get rid of the MMP altogether themselves, releasing an increasing number of books as "trade paperbacks". Really annoying.

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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The Mighty Buzzard, 11 Feb 2010 @ 10:38pm

real price my ass
Yeah, it's a real price. A real high price. What in the world makes him think lending us a book with no physical substance is worth more than selling us a paperback?
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AR, 11 Feb 2010 @ 10:40pm

Re:
Three words:
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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Freedom, 11 Feb 2010 @ 10:42pm

Let the scanning begin...
Music is easy to copy and put online
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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The Anti-Mike (profile), 11 Feb 2010 @ 10:47pm

Re: Re:
If you enjoying banging ashes, that is your problem, not mine.
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Patty, 11 Feb 2010 @ 10:52pm

Book pricing
I worked for a small religious publisher in the early 70's. The way they set the price of a hard bound book was to get a printing price from me (typesetting, printing and binding) and multiply it times 5. I suggested that perhaps this could be changed to reflect the cost of, say, more editorial time on some books but no one was interested in doing it any other way than times 5. I suspect that the pricing of books, even by major publishers, is set in an equally scientific matter to this day. So until they can explain how they do it and why even $9.99 is not enough for a book which requires NO manufacturing I will treat all bitching from publishers as so much bullshit.
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Richard (profile), 12 Feb 2010 @ 12:34am

Re: Re: What is a real price
Who covers the cost of unsold copies in this breakdown?
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Richard (profile), 12 Feb 2010 @ 12:36am

Re: 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.)

Plus disposal of unsold copies.
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Rasmus, 12 Feb 2010 @ 2:16am

Re: Re:
Interesting that TAM brings up Henry Ford since he is famous for disrupting the automobile market by cutting prices to 10% of what they used to be before the model T.

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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Marcel de Jong (profile), 12 Feb 2010 @ 3:40am

I recently listened to a podcast from an author I thought 'got it' (Tracy Hickman in his podcast called The Dragonhearth), on this subject. But he started confusing the price of an e-book with the value of an e-book.
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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JEDIDIAH, 12 Feb 2010 @ 6:02am

Re: History.
Nonsense. It is not "entitlement" to haggle and bargain hunt. This is simply basic economic activity. Anyone that wants to undermine this is trying to belittle basic universal civil liberties.

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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Jeff, 12 Feb 2010 @ 6:36am

Greedy Author
Sad when an author who is definitely having his own entitlement issues and tries to make his fans / readers out to be the bad guy.
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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Ron, 12 Feb 2010 @ 7:26am

?
Why do the publishers let Amazon sell their stuff. Its obvious to me that if I were a publishing company, I would make more money by selling it myself.
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crade, 12 Feb 2010 @ 7:59am

entitlement
The sense of entitlement of *this guy* is astonishing. He is entitled aparently, not only to set the price, but to set consumer demand for his book as well.
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Alan Gerow (profile), 12 Feb 2010 @ 8:37am

Re:
fail.
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Alan Gerow (profile), 12 Feb 2010 @ 8:46am

Re: Re: What is a real price
Well, the retailer won't need to spend as much since eBooks don't require warehouse spacing, staff to stock, ship, and sell. So, that number drops. A lot.

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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Anonymous Coward, 12 Feb 2010 @ 9:29am

"Give me stuff for free. Maybe I'll give you money for it, and maybe not." sounds like entitlement to me.
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bshock, 12 Feb 2010 @ 9:55am

Re:
How is that relevant?

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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Almost Anonymous (profile), 12 Feb 2010 @ 10:11am

Re:
Let me reverse that for you:

"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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Stephen, 12 Feb 2010 @ 12:05pm

Re: Re: What is a real price
This is pretty much correct. $27.95 is pretty high for most hardcovers, marketing is perhaps $1 a copy for most books that get it, and I'd add in $.50-1 for post-production e-book costs (conversion, quality control).
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Stephen, 12 Feb 2010 @ 12:09pm

Re: Re: People are ignorant.
Of course the ebook would share in the cost of the cover design and the copy. It just wouldn't need a printed jacket.
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mertz, 12 Feb 2010 @ 12:11pm

what actually goes into a book price? annyone have a breakdown?
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Stephen, 12 Feb 2010 @ 12:13pm

Re: Book pricing
Ideally you want a the ratio of price to unit cost of a book to be a minimum of 10:1. For a mass market paperback, the ratio can be much greater if the print quantity is high. 15:1 or 20:1 wouldn't be unusual. Da Vinci code is probably 25:1.
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Alan Gerow (profile), 12 Feb 2010 @ 12:24pm

Re: What is a real price
"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)"

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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HunterA3 (profile), 12 Feb 2010 @ 1:21pm

Authors and Publishers don't get it
They think because the ebook is so convenient and the new thing that we're going to pay similar prices to a physical book. Either they don't care or don't realize that people want to be able to do with their ebooks that they've always done with their physical books--loan them to friends, keep them forever, and pass them on to their children. You can't do any of those with an ebook. So, the price is lower because you don't own it, you're leasing it. Seems like a fair trade off to me.

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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Andrew D. Todd, 12 Feb 2010 @ 1:27pm

Used Bookstore Prices.
Well, traditionally, if you read widely, you found your way to the local used bookstore, because that was the only place you could afford to buy five hundred or a thousand books a year. At that level, if you wanted to use a library, you had to read in the library, spending hours a day there, rather than checking things out. It was not unlike websurfing. You became a connoisseur of the edibles available in the library's vending machine room (eg. refrigerated bologna and cheese sandwiches, oh yum, yum).

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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TtfnJohn (profile), 12 Feb 2010 @ 2:43pm

Let's try a bit of reality here
We can argue all we want about the costs of producing a book. At least what the big publishing houses say the cost is.

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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crade (profile), 12 Feb 2010 @ 2:53pm

translation:
boohoo, my customers complain because I don't give them what they want. My customers are all assholes. I hate my customers. It is their fault I am not succeding.

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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niltiac (profile), 15 Feb 2010 @ 12:23am

I think the snarky tone of the post and the comments is unnecessary and missing the point.

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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niltiac (profile), 15 Feb 2010 @ 12:27am

Re: HUH???
"Given the economic circumstances, I'd say the Walmart mentality is just what this country needs... People should look for ways to save money. It is GOOD that people are saving money, using discretion, and evaluating purchases."

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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niltiac (profile), 15 Feb 2010 @ 12:30am

Re: e reader convert
Actually, authors do get royalties from libraries.
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niltiac (profile), 15 Feb 2010 @ 12:33am

Re: The Real Price
Yes, but the consumers didn't set the price; Amazon did. As many people up the thread have already said.
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niltiac (profile), 15 Feb 2010 @ 12:35am

Re:
It's about the timing of the release as well. The mass-market paperback doesn't come out for several months after the hardback. Perhaps the e-book price can be a certain price while the hardback is out and then drop once the paperback comes out?
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niltiac (profile), 15 Feb 2010 @ 12:38am

Re: 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."

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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The Buzz Saw (profile), 15 Feb 2010 @ 10:54am

Re: Re: HUH???
But that's how economics works. I don't care if you can convince me that it cost $99 to transfer the milk from the cow to the carton. I appraise the value of milk cartons myself and decide whether I really want/need milk in my home. If prices push too high, I just stop buying, and you're left holding the bill. The problem is that these authors want this to be seen as some horrible crime. I do unpaid hard work all the time. It's a shame that authors were raised to charge out into the world and demand payment for EVERYTHING they do.
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The Buzz Saw (profile), 15 Feb 2010 @ 10:58am

Re:
Wholesale price on a digital good that costs zero to reproduce?
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TtfnJohn (profile), 15 Feb 2010 @ 11:10am

Re: Re: Let's try a bit of reality here
You probably wouldn't be surprised when I say I agree with your sentiments.

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.

ttfn

John
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TtfnJohn (profile), 15 Feb 2010 @ 11:24am

Re: Re:
In some fairness there are up front costs for publishers, even of ebooks. There are still cover design costs, type setting costs (and believe me they're more than when you design for print because very few fonts don't strain the hell out of your eyes when they come off print and onto a screen). Minor things like payment to the author and so on.

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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Valkor, 17 Feb 2010 @ 9:39am

Re: Re: e reader convert
They don't in the USA.
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Anonymous Coward, 18 Feb 2010 @ 11:07am

Orson Scott Card....
http://www.hatrack.com/osc/reviews/everything/2010-02-07.shtml

Last word at bottom is his view on this...
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Getwhatupay4, 21 Jul 2010 @ 4:00pm

Re: HUH???
Walmart mentality is just what this country needs? What America needs is less greed and people who are wanting to pay bottom prices for goods is not fair to those who manufacture, grow and ship the goods. People who brag about saving money at the price of exploiting labor is not good and that is what Walmart mentality means.
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diogenes (profile), 2 Apr 2011 @ 1:39pm

Greed
Exactly! You'd figure at least one of the three would have learned from the others, but apparently no such luck.
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diogenes (profile), 2 Apr 2011 @ 1:48pm

Re: What is a real price?
Shovel it any way you want but consumers still won't eat it. Why would it be the consumer's fault the cabal's costs are so high? And why should the consumer subsidize the cabal's inability to adapt and/or run a business efficiently?
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