[Macworld]

Post your comments for Apple vs. Amazon: Who's the real price-fixer? here

[jschaffe]

I don't buy hardbound books, as a rule, but I do buy a lot of paperbacks to feed my SciFi hunger. In the past 5-10 years or so the prices went from $4.99 to $6.99 to sometimes $8.99. I'm not sure what's going on, but I find it cheaper to buy a physical book than an e-book. I hate the waste, I'd buy e-books if they felt right, which means they should cost less than a physical book. I read articles like this and I wonder whether I'm living in the same world as everyone else!

[s2foster]

You claim that "Amazon's $9.99 price point cannot support quality ebook production, which is what happens when no one makes money." What do you base this on? If publishers can sell trade or paperback books for $7-9, they can sell an e-book with virtually no production or distribution cost for less- and still make the same margins they make on a paperback- if not more- plus they have no returns or damaged product, much lower overhead/infrastructure costs that need to be applied to ebook production, etc.

[Xenotar7]

"Book publishers do not provide as much value with ebooks as they do with traditional books, so they can't expect the same margins."

Not sure I agree with this statement - from the the publisher's standpoint, (if they're a really GOOD publisher) they have as much into an ebook in the form of editorial costs, administrative costs, marketing, and design - as they do with books made from dead trees. Printers print books and distributors distribute them. The real job of publishing is everything else. It's not something the typical reader thinks about, but the costs (and the value they add to the work) are very real. Ebooks are very good at creating an illusion that they should cost less - heck, they don't weigh anything, they're not REAL books - I shouldn't have to pay for them at all.

[jdb8167]

s2foster, on 17 April 2012 - 01:46 PM, said:

You claim that "Amazon's $9.99 price point cannot support quality ebook production, which is what happens when no one makes money." What do you base this on?

Yeah he left out the part that the publishers were also trying to save the distribution of printed books by using the price hike on ebooks to subsidize sales to brick and mortar stores.

An explanation here:
http://blog.authorsg...urow-grim-news/

This post has been edited by jdb8167: 17 April 2012 - 01:57 PM

[rob53]

Why do people feel there's no production or distribution costs for eBooks? eBooks require production costs just like anything else. They aren't produced out of thin air. Distribution systems need to be created and maintained, which could cost as much as printing facilities. Payment systems are created for both. Yes, you can say Apple already has all of this using iTunes and iCloud but that cost money to build. You will always have people wanting a return and something has to be built to handle those (payment system). You might expect all of this to be handled by computers and not people but people are also involved so they have to get paid. Printing presses have become high-tech as well so they require fewer operators than they used to (including me). When I left the printing industry, most printing was done overseas for less money than in the US so the production costs for printing books isn't necessarily as much as you think it is.

[Stewsburntmonkey]

s2foster, on 17 April 2012 - 01:46 PM, said:

You claim that "Amazon's $9.99 price point cannot support quality ebook production, which is what happens when no one makes money." What do you base this on? If publishers can sell trade or paperback books for $7-9, they can sell an e-book with virtually no production or distribution cost for less- and still make the same margins they make on a paperback- if not more- plus they have no returns or damaged product, much lower overhead/infrastructure costs that need to be applied to ebook production, etc.

Certainly they could make money on a $9.99 book in many cases, but Amazon was using the $9.99 for everything, even new releases which didn't have a paperback version yet. What should happen with the agency model if it is allowed to continue is what happens with the traditional publishing market, which is that prices for books will fall overtime with new releases being priced higher and older books priced substantially lower. It will take time for things to sort themselves out, but I don't think Amazon's unilateral price setting would have served anyone except themselves in the long run.

[leicaman]

The DOJ jumped the gun and began the prosecution before the monopolist had actually killed off its victims by underpricing the product. That's the main problem here.

[leicaman]

rob53, on 17 April 2012 - 01:56 PM, said:

Why do people feel there's no production or distribution costs for eBooks? eBooks require production costs just like anything else. They aren't produced out of thin air. Distribution systems need to be created and maintained, which could cost as much as printing facilities. Payment systems are created for both. Yes, you can say Apple already has all of this using iTunes and iCloud but that cost money to build. You will always have people wanting a return and something has to be built to handle those (payment system). You might expect all of this to be handled by computers and not people but people are also involved so they have to get paid. Printing presses have become high-tech as well so they require fewer operators than they used to (including me). When I left the printing industry, most printing was done overseas for less money than in the US so the production costs for printing books isn't necessarily as much as you think it is.

Well yep. Staff to produce books is the vast majority of the cost of a book. Textbooks doubly so, since they have to be kept up-to-date and compliance rules vary from state to state (and country to country in the case of my employer). People have no idea how labor-intensive authoritative textbooks are to produce.

[sportyguy209]

rob53, on 17 April 2012 - 01:56 PM, said:

Why do people feel there's no production or distribution costs for eBooks? eBooks require production costs just like anything else. They aren't produced out of thin air. Distribution systems need to be created and maintained, which could cost as much as printing facilities. Payment systems are created for both. Yes, you can say Apple already has all of this using iTunes and iCloud but that cost money to build. You will always have people wanting a return and something has to be built to handle those (payment system). You might expect all of this to be handled by computers and not people but people are also involved so they have to get paid. Printing presses have become high-tech as well so they require fewer operators than they used to (including me). When I left the printing industry, most printing was done overseas for less money than in the US so the production costs for printing books isn't necessarily as much as you think it is.

There are production costs associated with eBooks, but there are production costs associated with printed books.

As a small publisher, it takes about the same time in production to produce an eBook as it does a printed book. However, one produced, it costs nothing to distribute through Apple or Amazon whereas, printing a book, warehousing it, processing orders, and shipping it to distributors, book stores, etc. regardless of whether it is printed in China, costs a bunch.

I think it's a total scam for publishers to sell eBooks for the same price, or more, than printed books. In my opinion, those publishers are just holding onto more of the profits...

I'd argue the same goes for music companies and movie studios. Once music or video is produced (same process regardless of distribution method), not pressing cd's (dvd's), not printing covers, not processing orders, not warehousing, not shipping, is a huge savings for them. It has to be more profitable for them to sell their products electronically/digitally, than traditionally.

This post has been edited by sportyguy209: 17 April 2012 - 02:31 PM

[rumplestiltskin]

$9.99 is a low-ball price with little margin? Perhaps, but only if the publisher sets the wholesale price at absurdly high levels. This is not a physical book; no paper, no binding, no distribution costs (except for a computer). The "agency model" is price-fixing although it's open to question whether Steve suggesting this amounts to collusion; maybe the publishers getting together to discuss it (as alleged in the complaint) can be construed as price-fixing.

The publishers are 19th century businesses that can't bear to be dragged into the 21st century. If you eliminate the printing and distribution costs, how much is really left? The price should probably be around $6 (to allow $3 for the author, $1 for Amazon, and $2 for the publishing house - you may argue the division as you wish).

Of course, if one is self-publishing with Amazon and iBooks, what is wrong with the "agency model" there? 70% to the author seems an even better deal ($5.20) with 30% ($1.80) to the publisher (which, in this case, is Amazon, Apple, B&N, whoever...)

[s2foster]

My math is even simpler. If they make money (and are not complaining) when selling a paperback, then they make money selling an eBook for the same or less. Don't you think the retail store makes at least 30% on the book?

The real issue is loss of control of a market and change to the status quo. Like the dinosaurs that run the music business, they just don't want things to change- or are afraid of it- or are concerned that they won't make quite as much.

[wardoggie]

jschaffe, on 17 April 2012 - 01:26 PM, said:

I hate the waste, I'd buy e-books if they felt right, which means they should cost less than a physical book.

How do you know what an eBook should cost? Show your work to get full credit.

Personally, I get more value out of the only eBook I've ever bought ("Steve Jobs") than I would from an ordinary book because it's always with me. So is the ebook that came with iBooks ("Winnie the Pooh") and a royalty-free eBook version of Sun Tzu's The Art of War that I downloaded at some point. I would never carry any one of those everywhere I go, but thanks to my iPhone and iPad, they're always with me.

The fact that "Steve Jobs" cost $14.99 in electronic format and close to $30 in print doesn't even enter into the value equation, IMO. I'm hooked and definitely prefer eBooks over printed books now.

[AppleKiwi]

Why can't publishers set their own price?

If they're trying to sell an e-book for more than a printed version, then surely simple economics will apply and people will purchase the printed version and receive a discount, or, if rational consumer believes they're buying a better product, then they will happily pay a premium. It baffles me that the DOJ has taken this stance; if they can prove price fixing took place then sure go ahead and prosecute, but to dis-establish a free-market pricing structure because Amazon (who had 90% of the e-book market) set prices is quite a confusing concept for me to understand.

At the end of the day, the majority of people reading this site have been happy to pay a premium for a better product (i.e. Apple), and we've always had the choice to purchase a "sub-standard" product for a discount. Let the market decide what is sustainable - I doubt the Amazon model is sustainable for a lot of publishers/authors. If e-books were too expensive vs printed, then people wouldn't buy them and prices would have to be lowered.