What the commentariat often fails to understand is that book publishers are not in business to encourage e-reading. Ebooks represent, to a publisher, just a different format in which their books might be supplied. For a publisher the ebook is no more “desirable” than the paperback, the hardback or the audiobook. It’s just another way to supply content.

Here’s a piece from GoodEReader, in which the question is asked “Why do ebooks cost so much?” Might as well ask, as no doubt lots of people do, “Why do books cost so much?” I have written about the pricing of ebooks quite a lot (see Index to all posts): no doubt that’s because it has frequently been a topic of discussion out there. What most people get misled by is the obvious fact that when you buy an ebook there’s self-evidently no material there, no evidence of work like printing or binding having gone on. It is true that after a book is published if nobody ever buys a copy the publisher will not have incurred any more cost for an ebook, while there is already a pile of inventory cost sitting in a warehouse in the shape of printed books. But just because there’s no marginal cost in selling an ebook does not mean there’s no cost. Imagine a book which costs $5,000 to write, edit, design, layout, proof etc.. Let’s say every copy of the print edition costs $2 for paper, printing and binding. The ebook, obviously, costs $0 for its physical output (maybe there’s tiny electricity bill and some marginal computer cost, but let’s just say $0). If you published the book only in ebook form, you would not price it at $0 — clearly you still need to recover that $5,000, so you have to guess how many copies you’ll sell and divide the $5,000 by that number so that you can eventually cover the cost of creation. So this means that if the book were to have been a print book, sold at $25, the ebook could stand being published at $23 with the same gross profit (after all it costs $2 less to manufacture). Actually the math makes the difference more than that, so let’s call it $20 for the ebook. You can argue of course that publishing at a lower price will increase sales. And that is true. Unfortunately, except in the rarest of cases, it won’t increase sales to the extent needed to bring in the same budgeted amount of revenue*. In this regard the idea is a bit like trickle down economics: as a policy it has never worked.

The whole basis for the struggle trade publishers undertook with Amazon a few years back was a fear that Amazon was on the way to accustoming customers to an ebook price of less than $10, something which would have had disastrous consequences for the example quoted. At the time it looked like ebooks might continue to gain market share so that eventually publishers would end up locked into a pricing model which prevented them from ever publishing in the first place. One of my earlier posts from 2013 illustrates the point. Now we are much more relaxed about the “threat” of ebooks — indeed I think you could say publishers are now more likely to view the ebook as an opportunity rather than a threat. Relevant is also the fact that early ebooks were all conversions from print books, so that all the upfront costs were already covered by sales of print books. But loading all the costs onto the print edition isn’t a viable policy. Sure it’ll work in this case or that case, but ultimately, if print does go away, customers would be faced with huge price increases in their unsupported ebooks.

Self publishing really needs to be analyzed as a separate business. Of course an author can stimulate vast sales by pricing at $1.99. I can attest that that price in and of itself can also lead to minuscule sales. Will all books eventually end up being self published? Could be; and I do think it’s easy to see this as happening in those areas where maybe it is already happening, such as genre fiction. I think it’s a lot less likely in the case of the majority of books which, being directed at more specialist audiences where the quality control function of the gatekeeper is valued, tend to be overlooked by the commentariat.

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* Another pundit problem is guessing at sales numbers. Just about the only sales numbers the public hears about are the big, exceptional ones. Nobody is out there boasting about books which fail, and publicizing their pathetic sales numbers. Sorry folks, most books are not bestsellers.

 

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