Why are some eBooks so expensive?

[Brian-M]

I recently bought myself an eBook reader. An Elonex eBook reader on discount for only (AU)$49 at Dick Smith's Electronics. With electronic paper display and thin enough that I'm using a modified DVD case to keep it in, I think it was a pretty good buy.

There's plenty of places to (legally) get free eBooks. Project Gutenberg, Baen Free Library, ManyBooks.net, etc.

But when I went to look for a non-free eBook, specifically "And Another Thing" by Eoin Colfer, I find prices like this...

Formats | Amazon Price | New from | Used from
Kindle Edition | $9.27 | -- | --
Hardcover, Bargain Price | $10.40 | $2.71 | $2.01
Paperback | $14.99 | $4.49 | $0.52
Audio, CD, Audiobook | $14.14 | $5.98 | $7.98
Unknown Binding | -- | -- | --

http://www.amazon.com/Another-Thing-Hitchhikers-Galaxy-ebook/dp/B002WGC8PU

Amazon is charging almost as much for the eBook as it does for the hardcover.

Trying again...

ISBN: 9780241959527
Published : 27 May 2010
Publisher : Michael Joseph

Other formats for And Another Thing ...:
» Paperback : £8.99
» Paperback : £6.99
» Audio CD : £19.99
» ePub eBook: eBook : £7.00
» Downloadable Audio: Audiobook : £12.98​

http://www.penguin.co.uk/nf/Book/BookDisplay/0,,9780241959527,00.html

That's £6.99 for paperback, £7.00 for eBook.
From Penguin, the eBook costs more than the paperback.

Since publishing an eBooks is so much cheaper than publishing a physical book (just royalties, publisher's cut and website costs, without any of the messy business of printing, binding and transporting physical copies), why is this not reflected in the price?



Trying again for "Making Money" by Terry Pratchett, the Amazon price for the Kindle version is £4.94, while the paperback is £5.59. That's only a piddling £0.63 difference. (These are apparently discounted prices. According to the top of the page, the list prices are £7.16 for the Kindle version and £7.99 for the paperback version.)

(I don't know why Google keeps directing me to UK sites either.)

ETA:

Looking for "Making Money" again, Kobo Books doesn't sell it internationally, so I can't buy it from them, while fictionwise.com was selling it for $11.99, but they're not selling it anymore. If I was actually looking to buy an electronic copy (I bought a physical copy years ago), I'd be a mite annoyed.

 

[Cuddles]

Price fixing by Apple, Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster. Most of them are currently being sued multiple times by the US government and are being investigated by the European Commission, although Hachette and HarperCollins settled straight away for around $50 million.
http://www.theregister.co.uk/2012/04/11/us_files_ebook_suit/

 

[Careyp74]

The short answer deals with distribution channels and comparative pricing. The long answer involves the invisible hand of the economy.

One might think that eBooks would reflect the low price of production, however, it doesn't take that much more to produce a hard copy. Most of the price of each is royalties, overhead in the company, and distribution.

Now, new hardcover and paperbacks will tend to lower in price as they age from comparative pricing. The used editions that are readily available will drive down that price. eBooks from Amazon don't have this effect because used editions are not transferable from reader to reader easily, and when they are, it is not done in the marketplace, but among friends.

Also, overstock of a book will lower the price so that the store does not have to warehouse them. There is no overstock of eBooks.

ETA: And what Cuddles said.

 

[DreamingNaiad]

Not sure if it is the same where you are but here there is no tax on books, but there is tax on ebooks because the EU considers them to be 'electronic services'. So even though they *are* books they don't get the exemption.

There are apparently no plans to change this.

 

[Careyp74]

Not sure if it is the same where you are but here there is no tax on books, but there is tax on ebooks because the EU considers them to be 'electronic services'. So even though they *are* books they don't get the exemption.

There are apparently no plans to change this.

I think the taxes would come in at the end, when purchasing, and not a part of the stated price.

 

[richardm]

I think the taxes would come in at the end, when purchasing, and not a part of the stated price.

Most businesses in the UK that are aimed at the public rather than other businesses will include the tax in the stated price.

The pricing of ebooks is somewhat vexing, especially when they cost more than the paper equivalent. How can that possibly be right?

 

[DreamingNaiad]

Yeah, in the UK when we are given a price that is how much something will cost. Tax is already there.

 

[TheL8Elvis]

Price fixing by Apple, Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster. Most of them are currently being sued multiple times by the US government and are being investigated by the European Commission, although Hachette and HarperCollins settled straight away for around $50 million.
http://www.theregister.co.uk/2012/04/11/us_files_ebook_suit/

But not Amazon, right ?

http://ia701206.us.archive.org/6/items/gov.uscourts.nysd.394628/gov.uscourts.nysd.394628.54.0.pdf

 

[Ryokan]

Most businesses in the UK that are aimed at the public rather than other businesses will include the tax in the stated price.

You mean most businesses outside the US.

Shopping in the US can be a confusing experience for anyone from a country where the tax is already incorporated into the price of things..

 

[Brian-M]

Interesting answers. Maybe I should think about this from the other way around.

What would be a fair pricing system for eBooks?

Assuming that the author should receive 10% of the RRP of the print edition, and the publisher normally makes a net profit of around 25% of the RRP on the print edition, and lets say the vendor's fee (eg, selling it though Apple, or for bandwidth and other electronic distribution costs to sell it themselves) is 30% of the eBook price.

That would make a fair price for an eBook 50% the cost of the (undiscounted) print edition, with both the publisher and author receiving the same amount of money they'd have received if you'd paid full price for the printed version.

(Given that they'd already have edited and proofread the manuscript in order to produce the print edition, there's no overhead costs.)

Looking up the VAT situation, it seems that the VAT is dependent on the rules in the seller's country. So no matter where in the EU you were, if you bought an eBook from a seller in Switzerland you'd pay 25% VAT. But if you bought the same eBook from a seller in Luxembourg, you'd only pay 3% VAT (the lowest in the EU).

Not coincidentally, it seems that both Apple and Amazon have set up their European headquarters in Luxembourg.

ETA:

Also, overstock of a book will lower the price so that the store does not have to warehouse them. There is no overstock of eBooks.

Another reason why eBooks should cost less than (undiscounted) printed books. Less financial risk, therefore less profit margin needed as a hedge against the occasional loss from being overstocked.

 

[Pulvinar]

What would be a fair pricing system for eBooks?

I don't see any (sustainable) monopoly here. If people desire the ebook version more than the print version, their price may climb higher. If no one buys them, their price drops. Sounds as fair as anything to me.

 

[Brian-M]

I don't see any (sustainable) monopoly here. If people desire the ebook version more than the print version, their price may climb higher. If no one buys them, their price drops. Sounds as fair as anything to me.

The problem is that it costs next to nothing to make an eBook available for sale. So if the price is too high and eBook sales are low, it doesn't cost the publisher anything. The customer will probably end up buying a printed copy instead. Either way, they still make a profit. It's effectively a monopoly on the author's work.

I'm thinking a better way to do things is if publishing houses didn't have electronic publishing rights for their author's works.

That way the author could also self-publish in places like Apple (which charges 30% of the eBook sale price), Amazon/Kindle (which charges 30% of the eBook sale price), Google (I don't know how much Google charges) or Lulu (which charges 20% of the eBook sale price).

That way consumers would have a choice between buying a printed book from a publishing house or an electronic book direct from the author.

The author could charge as little as $3 or $4 for electronic copies and still get paid more than they currently get from publisher released eBooks.

 

[Babbylonian]

The problem is that it costs next to nothing to make an eBook available for sale. So if the price is too high and eBook sales are low, it doesn't cost the publisher anything. The customer will probably end up buying a printed copy instead. Either way, they still make a profit. It's effectively a monopoly on the author's work.

I'm thinking a better way to do things is if publishing houses didn't have electronic publishing rights for their author's works.

That way the author could also self-publish in places like Apple (which charges 30% of the eBook sale price), Amazon/Kindle (which charges 30% of the eBook sale price), Google (I don't know how much Google charges) or Lulu (which charges 20% of the eBook sale price).

That way consumers would have a choice between buying a printed book from a publishing house or an electronic book direct from the author.

The author could charge as little as $3 or $4 for electronic copies and still get paid more than they currently get from publisher released eBooks.

That only works if the publishers provide no value at all to the author for e-book sales.

For example: New author X gets a hard-copy publishing deal with a company. That company proceeds not only to print the book but they also edit it (this can be critical if someone doesn't already have someone competent at least proofing) and market it with anything from bookstore advertising to radio spots to full-on video commercials. Book tours can also make a huge difference. All of this not only benefits the sales of the print version but also benefits the sales of the electronic version. It seems right and proper that the publishing company should get a cut of those electronic sales.

Stephen King's latest book doesn't really need significant publisher help to succeed - he already has the fame and money to make it work; he's probably got enough dough even to take care of his own printing and shipping costs. Joe Schmoe's new novel absolutely needs the publisher's work on his behalf and/or a bit of luck getting the "right" people to read it who will get the word out.

Cutting the publishers out of e-book sales isn't the solution. Given the current situation, the only thing that's likely to drive prices down is if consumers simply won't buy any book - new, used, or electronic - costing more than perhaps $5-7 (I can stomach paying new paperback prices).

 

[Pulvinar]

The problem is that it costs next to nothing to make an eBook available for sale.

Costs only figure in in setting a minimum price. The price is set (eventually) by what the market will bear. How else would you explain the price of a paper book? It's certainly more than the cost of the paper, but how much more is "fair"?

 

[elgarak]

That only works if the publishers provide no value at all to the author for e-book sales.

For example: New author X gets a hard-copy publishing deal with a company. That company proceeds not only to print the book but they also edit it (this can be critical if someone doesn't already have someone competent at least proofing) and market it with anything from bookstore advertising to radio spots to full-on video commercials. Book tours can also make a huge difference. All of this not only benefits the sales of the print version but also benefits the sales of the electronic version. It seems right and proper that the publishing company should get a cut of those electronic sales.

Stephen King's latest book doesn't really need significant publisher help to succeed - he already has the fame and money to make it work; he's probably got enough dough even to take care of his own printing and shipping costs. Joe Schmoe's new novel absolutely needs the publisher's work on his behalf and/or a bit of luck getting the "right" people to read it who will get the word out.

Cutting the publishers out of e-book sales isn't the solution. Given the current situation, the only thing that's likely to drive prices down is if consumers simply won't buy any book - new, used, or electronic - costing more than perhaps $5-7 (I can stomach paying new paperback prices).

I could imagine that the author pays for professional services like marketing, editing, formatting etc. if he needs it. Things that publishing companies nowadays should do (sometimes they don't, or not effectively).

The advantage being that now the primary monetary stream would be between the most important people in the system: The author and his readers. The problem of the traditional system is that it gives too much power to the publishers who should only be a service company in between the author and the readers.

 

[JonathanMaxBerman]

You can already sell you own books through the various book stores, setting a lower price and taking a larger share of the profits, so long as you don't already have a deal with a publisher. This doesn't give the same ego boost the traditional publication does and the consumer might have a harder time with this system because there is no longer an editorial layer preventing the truly unreadable from being published.

 

[elgarak]

You can already sell you own books through the various book stores, setting a lower price and taking a larger share of the profits, so long as you don't already have a deal with a publisher. This doesn't give the same ego boost the traditional publication does and the consumer might have a harder time with this system because there is no longer an editorial layer preventing the truly unreadable from being published.

Self-published books are always unreadable?

That's a statement I know is wrong.

Of course there's a lot of junk. Then again, I'm not sure that going through a publisher greatly reduces the percentage of junk.

 

[Aidoneus]

The problem is that it costs next to nothing to make an eBook available for sale.

This isn't necessarily true; printing costs account for such a tiny percentage of a physical book's costs that an ebook isn't really saving the publisher all that much money. An ebook still needs to be commissioned, edited, designed, publicised, and royalties still need to be payed to the author, and that forms the bulk of the cost of any book- electronic or otherwise.

 

[Brian-M]

This isn't necessarily true; printing costs account for such a tiny percentage of a physical book's costs that an ebook isn't really saving the publisher all that much money. An ebook still needs to be commissioned, edited, designed, publicised, and royalties still need to be payed to the author, and that forms the bulk of the cost of any book- electronic or otherwise.

Publishers often sell books to major chain stores for half the RRP. Right there, we have 50% of the cost of the book going to the bookstore. If you're downloading the book directly from the publisher, this cost no longer applies.

Even if we assume that the cost of printing, binding, warehousing and delivering books is very low, it's unlikely to be lower than the cost of bandwidth and banking costs for delivering eBooks over the internet. Plus the overhead costs of maintaining the servers and code for the website selling the books would be much lower than that of maintaining printing presses.

So it'd be a safe assumption that the savings on the print copy of a book would more than make up for the costs of selling it electronically directly to the public.

In that case, a fair price for eBooks should be no more than half the RRP for printed books.

Plus there are more savings from the fact that the publisher will never be overstocked with books they can't sell at RRP, forcing them to sell these books at a discount or pulp them. With less risk of loss, they don't need as much profit margin in the RRP to hedge against these losses.

So a fair price for eBooks should be lower than 50% the RRP of printed books.

I'm assuming here that the RRP of printed books represents a fair price. And I'm not using fair price to mean free-market price, as free-market price is only really fair when there isn't a vast disparity between supply and demand. Since there is an infinite supply of any eBook (unlimited copies can be produced effectively instantly at virtually no cost per copy), the market price determined by supply and demand in a free market should be almost nothing for eBooks. However, copyright laws means that eBooks aren't being sold in a free market, as the copyright holders have monopolies on their works.

 

[Babbylonian]

However, copyright laws means that eBooks aren't being sold in a free market, as the copyright holders have monopolies on their works.

I can't let this pass. A free market, at least one in a capitalist society, depends on enforceable ownership of property. Copyright laws - which create that enforceable ownership for intellectual property - are an absolute requirement for books to be worth buying and selling in this age of easy reproduction.