For people who feel that paying more than $10 for an eBook just doesn't feel right, here's some news to make you feel a little bit smug. The publishers are lying to you, of course. They want you to spend more money on eBooks, claiming the content should cost the same regardless of media. But then again, they charge more for hard cover books than paper backs, so this argument is entirely disingenuous. Pretty much the publishers want to rape your wallet. Here's a cost analysis break-down of the money that gets put into a hard cover book, and shows why $10 is the ideal target for an eBook that results in near identical profits for the publishers and authors (the retailers eat most of the loss):
The most detailed cost rundown for costs associated with a hardcover book I've found are:
Book Retail Price: $27.95.
Retailer (discount, staffing, rent, etc.) - $12.58 (45%)
Author Royalties - $4.19 (15%)
Wholesaler - $2.80 (10%)
Pre-production (Publisher) - $3.55 (12.7%)
Printing (Publisher) - $2.83 (10.125%)
Marketing (Publisher) - $2 (7.15%)
Starting with the MSRP of $27.95 for a hardcover book. The retailer should be able to set their own price for their profit. If a retailer wants to make $0 profit on an eBook as a loss lead, then that is their prerogative, as they've been doing that for years with physical product.
$27.95 - $12.58 = $15.37
Next on the list is printing. It's an eBook, there is no printing. No paper, no ink, no binding. This line item disappears entirely.
$15.37 - $2.83 = $12.54
But we're not done yet. There's one more item: wholesale. Why does an eBook need a wholesaler? There's not 200,000 physical books needing housing and distribution. We can lose the wholesale item, or at least a vast majority of the costs associated with it.
$12.54 - $2.80 = $9.74
So, to the book publishers, they can charge $9.74 and not lose any profits over their hardcover book offerings and the authors can get the exact same dollar number (with an increased percentage). By wanting to push the price of eBooks far above and beyond this number they are looking to (1) kill the fledgling eBook market so it does not eat into their physical product sales because lower print sales affect the profits as they have extra physical product, and (2) they're using eBook transitioning as a means to pry more money out of people's pockets.
A $9.99 price on eBook versions of hardcover books would maintain profit lines for publishers, appeal to the perceived value of an eBook to customers, and give retailers a little bit of change per book for profit (hey, at least it's better than taking a loss on each eBook, and considering retailer costs are also dramatically reduced, it may make sense for them ... we all know they're willing to do it).
So when the publishers spout off their lies, misconceptions, and misdirections about eBook pricing, remember: the numbers don't add up to their arguments. Barnes & Noble wants to give us $9.99 eBooks. We want to pay $9.99 for new eBooks. The publishers are getting greedy and scared. They don't know what to do with their own business and are making poor decisions. It's important as consumers we know the truth and the facts.
Don't support publishers that look to raise the price of eBooks to unreasonable levels. And DO support those publishers, authors, and retailers that are nurturing the eBook market with reasonably priced or free content. The nook allows you to load content from a variety of sources in a handful of formats. Use that feature to its fullest and give support to those who are making the eBook market successful, and do not support those who are trying to poison it.
By popular demand, SOURCES:
As your body grows bigger
Your mind will flower
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'Cause knowledge is power!