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Inspired Wordsmith
NJMetal
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Re: I'm a good customer - it is BN's job to force the publishers down on price, not mine.

I, like you, noticed how close the price of the ebook format and hardcover are.  My solution to this problem is simple.  I will not be purchasing this book at that price point.  I would not normally purchase the hardcover even at that discounted price (it's not absurd, just not what I'm willing to pay for the material).  Likewise I am unprepared to spend that much for the eBook version.

"We always condemn most in others, that which we fear most in ourselves." -Robert Pirsig, Zen and the Art of Motorcycle Maintenance
Nallia
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Re: Discounting

 


ABthree wrote:

@Coanda - 1910

 

Excellent analysis, for those willing to stick it out until the end. :smileywink:

 

The "natural monopoly" aspect is one I've tried to highlight in various threads, and an argument the significance of which the "$9.99 or I Won't Buy It!" faction chronically underestimates, or can't understand. 

 

As long as the relationship is "One Author-One Publisher" -- in other words, for the forseeable future -- books are not perfectly fungible.  For a well known current example, when Towers of Midnight comes out on November 2, Robert Jordan fans are going to buy it.  Even if they like fantasy, as they probably do, they aren't going to substitute another, cheaper title by another author.  They'll want THAT particular book, as soon as they can get their hands on it.  That gives Tor a pricing power completely unrelated to production costs in any medium.


Yep!  And I will spend the money to buy it in hardcover and paperback.  I have to complete my hardcover collection of the WOT books--I've been buying them in first editions since they were first released.  :smileyhappy:

 

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ABthree
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Re: Discounting

 


Nallia wrote:

 


Yep!  And I will spend the money to buy it in hardcover and paperback.  I have to complete my hardcover collection of the WOT books--I've been buying them in first editions since they were first released.  :smileyhappy:

 


 

My pre-order's already in for the hardcover, and I'll be buying the eBook as soon as it comes out, of course.  Probably not the paperback, though.

 

I'm not that hardcore.  Nope, I'm not addicted.  I can quit any time.  Any time at all...... :smileyvery-happy:

+LORD, preserve the good in their goodness, and+
+in your kindness, make the wicked become good.+
-- St. Basil the Great+
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FrogAlum
Posts: 3,425
Registered: ‎12-25-2009

Re: Publication costs

 


DLCrouch wrote:

I'm not an accountant nor do I play one on TV. Reading is one of my favorite leisure time activities and the idea of sitting on home or on a plane w/o something to read is a frightening thought.

I've put aside all the fretting of eBook vs.. Hardback vs.. Paperback pricing and buy new eBooks when the mood strikes and I feel it's worth the price. I'm not a complete spendthrift, so I do read book reviews, talk to friends with similar tastes and always check public libraries before purchases.

If I obsess about eBook pricing like I do about electronics and sports equipment, I'd never have anything to read.

All that said, I am curious to see how all this plays out - I'm a big fan of the online subscription models like Rhapsody and Netflix offer for music and video. Wonder how they'd price an all you can read best seller plan?

 


I am an accountant and believe in your philosophy all the way!  :smileyhappy:

 

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bklvr896
Posts: 4,814
Registered: ‎12-31-2009

Re: Publication costs

 


FrogAlum wrote:

 


DLCrouch wrote:

I'm not an accountant nor do I play one on TV. Reading is one of my favorite leisure time activities and the idea of sitting on home or on a plane w/o something to read is a frightening thought.

I've put aside all the fretting of eBook vs.. Hardback vs.. Paperback pricing and buy new eBooks when the mood strikes and I feel it's worth the price. I'm not a complete spendthrift, so I do read book reviews, talk to friends with similar tastes and always check public libraries before purchases.

If I obsess about eBook pricing like I do about electronics and sports equipment, I'd never have anything to read.

All that said, I am curious to see how all this plays out - I'm a big fan of the online subscription models like Rhapsody and Netflix offer for music and video. Wonder how they'd price an all you can read best seller plan?

 


I am an accountant and believe in your philosophy all the way!  :smileyhappy:

 


This is a me too post.  I am also an accountant and while I pay attention to the prices, I don't obsess about them, I have my various price points and I'll either buy it or not.  I will say though, where I used to buy the HC books for several authors whenever they first came out, I am a little bit more price conscious these days.  I've found that some authors that I previously felt the need to read immediately, I no longer have that need, so I will now put the book on my wish list and wait for the price to come down and/or look for at the library.  In that respect, I'm a more price conscious book consumer these days.  (However, I've yet to find a book that I'm willing to pay $14.99 for the eBook).

 

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ABthree
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Re: Publication costs

 


FrogAlum wrote:

 


I am an accountant and believe in your philosophy all the way!  :smileyhappy:

 


 

I thought you were a travel agent????????

 

I'M SO CONFUSED!!!!!!!!!!:smileysurprised:

+LORD, preserve the good in their goodness, and+
+in your kindness, make the wicked become good.+
-- St. Basil the Great+
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FrogAlum
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Re: Publication costs

 


ABthree wrote:

 


FrogAlum wrote:

 


I am an accountant and believe in your philosophy all the way!  :smileyhappy:

 


 

I thought you were a travel agent????????

 

I'M SO CONFUSED!!!!!!!!!!:smileysurprised:


Both!  Agency owner...  :smileywink:

 

Doug_Pardee
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Re: Publication costs


03FLHT2 wrote:

 

If you only sell about a 1000 copies yes I can see the price being that high but when you start getting into the thousands of copies, it has to go down.  No way does it cost that much to continue to print the book.


I suspect you're thinking in terms of the big-selling books. If a publisher only produced best-sellers, that logic would work. They'd also be scrutinized by every other publisher, trying to determine how the heck they do that.

 

The vast majority of titles published by the 'Big 6' publishers will sell (to bookstores) in the few thousand copies. Of those copies, about 40%, on average, will be returned as unsold for a full refund. These titles required all of the pre-pub effort that a James Patterson novel does, but don't sell anywhere near enough copies to cover the costs.

 

The average cost of pre-pub per copy is based not on a single title, but rather is the total pre-pub cost of all titles over total unit sales of all titles. As I noted, trade publishing is a gambling game in which the player has to make enough money on his winners to cover all of his losers.

 

My personal opinion: there are two major problems with pre-pub costs for the 'Big 6' American trade publishers: outrageous royalty advances to their star authors, and paying Manhattan prices for everything from office space to salaries to coffee. I suspect that Baen's lower prices are primarily the result of avoiding those two issues.

 

Inspired Contributor
Mark_F
Posts: 85
Registered: ‎10-22-2009

Re: Discounting

Thank you for the very long but well thought out response.  I don't know that I agree with you on every issue but that really isn't relevant.  I think ultimately no "explanation" matters because customer perception is key.  As I said before no one will ever be able to convince me that an eBook should cost as much as they sometimes do.

 

Two quick issues with your response:  Your sunk costs are sunk twice by your explanation. The costs are already sunk with the production of the DTB.  You can't then claim the same sunk costs for the eBook and no, the eBook doesn't have to share in the costs because it is a byproduct of an existing product  It is "double-dipping".

 

Also, sounds to me like the Agency pricing model is nothing more than price fixing.   Isn't that illegal?  Since when could any industry tell another what price they can charge for the products they buy wholesale.  Perhaps it does happen in other industries but it must still be rare and certainly should not be happening at all.  To me, this Agency 5 collusion, because that is what really is, will always seem wrong even if deemed legal.

 

-Mark

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ABthree
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Re: Discounting

 


Mark_F wrote:

 

 

Also, sounds to me like the Agency pricing model is nothing more than price fixing.   Isn't that illegal?  Since when could any industry tell another what price they can charge for the products they buy wholesale.  Perhaps it does happen in other industries but it must still be rare and certainly should not be happening at all.  To me, this Agency 5 collusion, because that is what really is, will always seem wrong even if deemed legal.

 


Yes, it is pricefixing -- but not under the legal definition.  And it is collusion -- there are investigations going on in several states right now, but so far it appears to be legal, too.  All because of the crucial and sinister role played by Apple.
If the Agency Five had met together and decided to impose the Agency Model on the booksellers, that would have been a "per se violation" of the antitrust laws.  But they didn't do that.
Instead, they each contracted separately with Apple to sell books through Apple's iBook store under the Agency Model -- and not to sell books to any other retailer who would resell them for less.  No agreement with each other, only individual agreements with Apple -- and exactly the same results.
Neat, hmmm? 

 

+LORD, preserve the good in their goodness, and+
+in your kindness, make the wicked become good.+
-- St. Basil the Great+
Doug_Pardee
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Double-counting sunk costs


Mark_F wrote:

 

 

Your sunk costs are sunk twice by your explanation. The costs are already sunk with the production of the DTB.  You can't then claim the same sunk costs for the eBook and no, the eBook doesn't have to share in the costs because it is a byproduct of an existing product  It is "double-dipping".


The costs are sunk only once, but they're also recovered only once... if you accept the idea that relatively few people will buy both the hardcover and the e-book. The general pricing model assumes that each e-book sale is a lost hardcover sale: that e-book sales aren't "gravy". Both e-book and hardcover prices must "pull the same weight" as far as recovering sunk costs.

 

There is also some additional sunk cost on production of the e-book in addition to the hardcover, but it probably isn't all that much per copy.

 

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bklvr896
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Re: Discounting

 


Mark_F wrote:

Two quick issues with your response:  Your sunk costs are sunk twice by your explanation. The costs are already sunk with the production of the DTB.  You can't then claim the same sunk costs for the eBook and no, the eBook doesn't have to share in the costs because it is a byproduct of an existing product  It is "double-dipping".

 

 


The eBook is not a byproduct of an existing product anymore than a paperback is a byproduct of a HC book.  All versions should bear the burden of its share of the sunk/fixed costs.

 

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JustTrish
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Re: Discounting

 


Doug_Pardee wrote:
The print discounts and such are taken out of the retailer's cut, and do not in any way affect the wholesale price that the publisher gets paid. For the Agency Model, which is where discounts are no longer allowed, the discounts would directly affect what the publisher gets paid for e-books.

 

The Agency 5 publishers do their own e-book discounts and promotions—some publishers more than others. Unlike print discounts, these promotions are almost always on older titles in order to generate interest in current releases. HarperCollins is probably the most aggressive in this area, with Penguin in second place.

 


 

Without considering any discounts, the NYT analysis has hardcover books making about the same profit as the $9.99 ebook.  So, the choices are:

 

1) the NYT has no clue of what they are talking about and their reporting/analysis is shoddy

2) their analysis is accurate.

 

Considering they don't have a dog in the fight, I'm going with #2.

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ABthree
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Re: Discounting

 


JustTrish wrote:

 

 

Without considering any discounts, the NYT analysis has hardcover books making about the same profit as the $9.99 ebook.  So, the choices are:

 

1) the NYT has no clue of what they are talking about and their reporting/analysis is shoddy

2) their analysis is accurate.

 

Considering they don't have a dog in the fight, I'm going with #2.


 

What fight?  What dog?

 

I don't see anybody defending the Agency Model -- which surprises me a little because some people used to.  Apparently they've lost interest.  Those of us who remain all seem to hate it with varying levels of intensity.

 

This thread started with OP reading B&N the Riot Act for insufficient zeal in beating publishers up, and stating with great vehemence that he'll never pay more than $9.99 for an eBook.

 

Others (I for one) have pointed out that hating on B&N about Agency Pricing is misplaced (there's nothing B&N can do about the Agency Model, except perhaps cooperate with any investigations in progress) and that $9.99 started out as an arbitrary price point, and it is still an arbitrary price point. 

 

The people who treat the $9.99 price point as something sacred and rational can be happy in their consistency, and the people who decide what to pay on a case by case basis depending on how much they want the book will be happy, too.  Win/win.

 

Either way, nothing to get abrasive about. :smileyhappy:

+LORD, preserve the good in their goodness, and+
+in your kindness, make the wicked become good.+
-- St. Basil the Great+
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JohnP51
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Re: Publication costs


bklvr896 wrote:

 


FrogAlum wrote:

 


DLCrouch wrote:

I'm not an accountant nor do I play one on TV. Reading is one of my favorite leisure time activities and the idea of sitting on home or on a plane w/o something to read is a frightening thought.

I've put aside all the fretting of eBook vs.. Hardback vs.. Paperback pricing and buy new eBooks when the mood strikes and I feel it's worth the price. I'm not a complete spendthrift, so I do read book reviews, talk to friends with similar tastes and always check public libraries before purchases.

If I obsess about eBook pricing like I do about electronics and sports equipment, I'd never have anything to read.

All that said, I am curious to see how all this plays out - I'm a big fan of the online subscription models like Rhapsody and Netflix offer for music and video. Wonder how they'd price an all you can read best seller plan?

 


I am an accountant and believe in your philosophy all the way!  :smileyhappy:

 


This is a me too post.  I am also an accountant and while I pay attention to the prices, I don't obsess about them, I have my various price points and I'll either buy it or not.  I will say though, where I used to buy the HC books for several authors whenever they first came out, I am a little bit more price conscious these days.  I've found that some authors that I previously felt the need to read immediately, I no longer have that need, so I will now put the book on my wish list and wait for the price to come down and/or look for at the library.  In that respect, I'm a more price conscious book consumer these days.  (However, I've yet to find a book that I'm willing to pay $14.99 for the eBook).

 


Add me to the list. I am a Certified Public Accountant licensed in the Great State of Texas. Yeah I know but you know how Texans like to brag.  Buy it or don't buy it. It's a consumer's option to do so. The other side issues are phoney baloney issues that accomplish nothing other than taking away from our reading time.

John

"Books are for people who wish they were somewhere else." ~ Mark Twain
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Mark_F
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Re: Discounting

[ Edited ]

I was just about to let your post go but then felt I had to respond.  Yes there is something BN can do but they just won't.  The retailers are the ones calling the shots and I honestly believe that if they stood firm against agency pricing they could end it but for political/marketing reasons they have chosen not to. Chosen is the key word here.

 

There are many people in this very forum who are supporting Agency pricing.  Sometimes it is only tacit support but it is still support.  In fact, I was just wondering after reading some of the replies to this thread how many posters are plants or have some stake in the publishing industry.  

 

The best way to combat this is with an all out boycott of the book sellers until something is done about it.  Probably never happen but notice to whom I'm directing my disapproval.  Not the publisher.  My point, as I stated from the beginning, is that we are buying the books from the retailers, not the publisher.  Forget Agency pricing, or deals made behind the scenes or the economics of book publishing.  I don't care about any of it nor should I have to care about any of it.  I should simply say to the book SELLER I don't care what you paid for it, I'm not paying that.  That should be enough.  It is their job to do better.  Which all along was the subject of the original post.  It is not my job to negotiate with their middle-men.

 

 

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JohnP51
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Re: Discounting

Maybe if you took a course or two in economics, accounting and cost accounting you might understand business models a bit better. I don't have a stake in this issue one way or the other, I just understand how business and marketing work.

 

Boycott all you want to but those who are willing to pay more than $9.99 (another phoney baloney price break pulled out of the air) for books they want, will do so. Those who won't, will not.

John

"Books are for people who wish they were somewhere else." ~ Mark Twain
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ABthree
Posts: 4,123
Registered: ‎01-27-2010

Re: Discounting

@Mark_F

 

I have no doubt that you "honestly believe" that "the retailers are the ones calling the shots".  However, ALL of the data -- not just MOST of the data -- on the topic indicates that your belief is false.

 

On the way to adulthood, most of us learned that wishing for something, no matter how hard and believing in something, no matter how honestly, won't make it true if in fact it's false.  I'm sorry that you missed out on that lesson, but that unhappy fact doesn't make your argument any more cogent.

 

I think there's real virtue, though, in your boycott idea -- for you.  You'll feel far less frustrated if you stop letting those bad booksellers cheat you, and in turn feel far less motivated to spread that frustration by sharing your confusion between facts and imagination.

+LORD, preserve the good in their goodness, and+
+in your kindness, make the wicked become good.+
-- St. Basil the Great+
flyingtoastr
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Re: Discounting

 


Mark_F wrote:

I was just about to let your post go but then felt I had to respond.  Yes there is something BN can do but they just won't.  The retailers are the ones calling the shots and I honestly believe that if they stood firm against agency pricing they could end it but for political/marketing reasons they have chosen not to. Chosen is the key word here.

 

 


 

What possible motivation would BN have for fighting the agency model? They were losing money on a lot of lucrative ebooks with the old Amazon controlled wholesale model, now they're making a small profit on them. Look at what happened when Amazon, a business with just as much clout as BN, tried this same thing. Penguin simply pulled all their titles, and there was nothing Amazon could do about it. Books are fundamentally different than most other items - there is a natural monopoly with the publishers on their certain books and not all books are created equal, people will want certain books. So you're right, BN made the business decision that they would rather stay profitable than fight for the little guy and possibly watch their whole ebook business collapse as a result.

You're confusing "liking the agency model" with "hating the wholesale model". Both of them kind of suck, but the agency model (IMHO) sucks slightly less. If you can think of a pricing system that gives consumers below-cost-of-production ebooks without being abused by Amazon to shove everyone else out of the market I'm all ears.

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ABthree
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Re: Publication costs

 


JohnP51 wrote:
I am a Certified Public Accountant licensed in the Great State of Texas.  The other side issues are phoney baloney issues that accomplish nothing other than taking away from our reading time.

I love the way he throws around those technical terms!  We can trust him -- he's an accountant!  :smileyvery-happy:

 

+LORD, preserve the good in their goodness, and+
+in your kindness, make the wicked become good.+
-- St. Basil the Great+