There is a pretty interesting look at the CEO of Barnes & Noble this week in the NY Times. It shows how much of a David and Goliath fight B&N is in for, with 1% of the valuation of Amazon who they are trying to compete with.
I have very mixed feelings about Amazon, and continue to have mixed feelings about my kindle, and the closed nature of the device. But I’m becoming less and less a fan of the book publishers. They seem to just be missing the point that their old pricing model, and scarcity model, doesn’t work any more.
Their insistence on pricing control dramatically makes me buy less ebooks. An unlendable ebook has an intrinsic value of $5 or less to me. They are priced typically at 3 times that, which has made me a frequent buyer of used hardcover from … Amazon, where no one other than Amazon is making any money on it.
If ebooks came without DRM, so I was sure I’d still be able to reread it in 4 decades, or could lend my mom & dad the book once I was done with it, then the current $10 – $15 range would be something I’d be fine with. Though I expect I’d still purchase more dollars worth of books over all if they were priced closer to $5.
And then, there is the scarcity issue. Richard Wiseman, an established author, couldn’t get his book Paranormality published by any of the american publishers because it says ghosts aren’t real. American publishers are so focused on cranking out supernatural to their readers, that they block out anything that calls that into question. Failing to get an american traditional publisher, he self published on Amazon and Apple in ebook form.
All of which makes the book publishers look, feel, smell, a lot like other big media, and completely out of touch with what their paying audience is interested in.
4 thoughts on “The Ugly Business of Books”
Big media is big media whether via movies, music or books. Personally, I still like the feel of a real book, and the entry point of a decent dedicated ereader + books tends to give me the “why?” factor in terms of buying ebooks. If the books themselves are not significantly cheaper than the physical counterparts, it just makes no sense. I know they need to make a profit, but to see that the sheer amount they would save in printing and distribution costs not get passed onto the consumer is a disappointment.
On the why front, reading in bed is an exceptionally better experience with a kindle than a physical book, as you don’t keep having the flipping book problem. That’s made me read more since I got the kindle. And while I dislike many parts of ebooks, the experience of eink is phenomenal.
On the cost front, the actual physical part of the book economics is quite small. $3 on a $26 MSRP – http://www.good.is/post/how-much-do-books-really-cost-to-make/, which is a number about what I’ve seen elsewhere as well.
maybe I’m not reading it carefully enough, but if a previously $26 book only yields ~$3 in profits, and ebooks are being sold for $15 and the physical costs of the book are $3.25, they can only expect the bookseller to pay $10 which means the bookseller went from a $13 profit to $5. And that’s if the publishing company decides to make no extra profit on an ebook. Though I guess from a book seller POV, they no longer have to provide physical space so I wonder what their actual profit margins are on taking in $13. It’ll be interesting to see if the booksellers and publishes work it out so that they each still have the same ratio of profit, and if they’re counting on quantity or if they individually can still make *more* money from ebooks or not.
And I wonder what the economics look like for soft cover books in that case. $9 vs $26 just doesnt seem to be able to support the same type of margins, albeit, by the time the book reaches softcover, I guess the majors costs have been recuperated.
It seems pretty clear to me the publishers don’t want to sell ebooks at all, and have been dragged into it. Which is why they are pricing them so unattractively. Amazon pricing on ebooks used to be much lower until the big publishers colluded with Apple to force up their prices to the same as hardcovers.
And that’s my real issue, the publishers really need to realize this is a market they want to be in, and jump into it. But, probably like the music industry, they’ll just drag their feet beyond when they have any control over the situation, because they assumed the primary reason people bought books was because it was a dead tree, instead of the fact that people actually like reading.