Welcome to All Things From My Brain.
Recently paid $13 for an eBook.
I know, I know – you’re thinking, “What the Hell?” Me too.
I did it because I was curious about the author, Elmore Leonard, whose stories about a U.S. Marshall named Raylan Givens, served as inspiration for the FX TV Series, Justified – which I love. But it took me the better part of a week to buy that book. My finger kept guiding the mouse to the ‘one click’ button and hovering there before navigating away to view other things on the Internet. Amazon was kind enough to remind me, when I navigated back to the site, that I had recently viewed ‘Raylan’ by Elmore Leonard. Helpful little bugger, Amazon.
There was this internal conflict going on inside my head. You see, eBook pricing is still kinda stupid. No one has figured it out yet. If they tell you they have, they’re full of shit. (Sorry if you think you have it figured out).
The problem is perception and some preconceived notions, plus some facts that always seem to get in the way. I myself suffer from this, making it difficult for me to pay $13 for an eBook. I know that publishers don’t want to hear anyone say that. I can’t help it. I’ve been conditioned to see eBooks a certain way, and to undervalue them compared to a print book. Not the writing or the art or any of that, but the process by which they are produced. The world we live in tells us that digital is cheaper than physical, whether it actually is or not.
Here’s the facts as I understand them:
Fact No 1: Publishing is a business. Publishers are in the business of publishing in order to make money. They make money by turning a profit. Profit is whatever you have left over after you have absorbed all of your costs, overhead, etc. If they aren’t making money, guess what? They aren’t going to stay in publishing. If an author isn’t doing well sales-wise, they will reduce what they are willing to pay that author for their stories. If the sales just aren’t there, they might drop the author altogether.
Fact No 2: Overhead includes all the costs associated with doing business, including: taxes that you pay, people you employ, the office you rent, electricity for the office, equipment like computers, phones, etc., paper, glue (books, binding), art (covers, maps) — You get the drift? Someone, somewhere, takes all of these things into account and comes up with a ‘cost’. Then someone sets a ‘price’. The difference between the two is ‘profit’. (Really simplifying this)
Fact No 3: Overhead producing an eBook is different than producing a printed book. I should clarify that this is something that I fervently believe because I produce things digitally and physically as a marketing person. Are there some overlapping costs? Absolutely. But there comes a point where the two diverge because they have completely different distribution models. One is physical and the other is digital. In the physical model, you have to print the book, look at proofs, change the type size or font, run more proofs, pick a paper. You have to print (maybe) a dust jacket. Then there’s printing and binding on a mass scale (usually on a web-press). Next, you have to store your printed books somewhere. Probably use a ton of cardboard boxes, tape and shrink wrap for that. Then you have people loading pallets, and a guy driving the forklift (tow motor if you’re from the south) around the warehouse (warehouse rental, insurance), and loading those pallets on a truck. The truck drives cross-country (have you seen the price of diesel?) to deliver your books to bookstores, maybe goes through a local hub where the pallets are broken down into smaller bites for delivery. Any or all of this could be true and is part of your overhead – for the physical book.
The eBook would have it’s own course. No need for a warehouse because there’s nothing to store. Maybe you have a server farm somewhere – easily pennies on the dollar versus a physical location full of employees – where you store your finished, ready to go eBooks. Maybe you have them on a tower in such n such’s office – I don’t know. Probably have a person, or persons, whose job it is to submit that eBook to all the major distributors, your Amazon, Barnes & Noble, etc. I don’t see that as costing anywhere near the same as a physical book’s overhead for distribution.
Maybe I’m completely wrong. This could totally be that preconceived notion I mentioned above. See, in my dayjob, I create marketing materials. There is a clear delineation after the materials are created as to how much they cost once I distribute them. If I create a flyer, double sided, 4/4 color, full bleed, for example, and I push that out through email (digital distribution), the cost becomes pennies on the dollar compared to if I send it to the press (physical distribution), where I will pay a little extra for full color, also for the full bleed (the color goes to the edge of the paper and is then cut to size), extra bit for folding (if it needs to be folded), so on and etc. I might pay $1.65 per piece by the time I’m done. Less if I order in the 2500 qty range. More if I order in the 20 qty range (much more). But digitally, I can send out tens of thousands of copies and come nowhere near the cost of 2500 physical copies.
I admit here and now that I am overlapping my own experience dealing with digital versus physical overhead and cost, and in that experience, printing anything at all costs more than not printing. So in my mind, how can an eBook cost the same (which I have been told before that it does) as a printed book?
I’m willing to accept that overhead for producing an eBook could be around the same, only with different built in costs that maybe I’m not seeing. This idea has been bothering me lately. You see, it’s entirely possibly to eliminate the costs of the physical distribution model only to replace them with new and different costs that add up to around the same thing. Looking at my dayjob example above: I could pay $50,000 a year for an Enterprise Level marketing platform (yes, they exist) that does email, websites, print marketing, etc. The cost of that system, while bloated and probably way more than I need, would have to be factored into the overhead costs, so much so that it might actually change the dynamic completely and make the digital distribution method more expensive versus the print model.
Which is a depressing thought.
And really doesn’t help me with the $13 eBook.
Another thing that has been bothering me, is the realization that publishers are in what I believe to be a unique situation. Traditional publishing has gone in cycles. Hardcover comes out first. Could be on the market for a year, making publisher and author money, before the paperback comes out. Some people buy the hardcover, others will wait for the paperback. Today, a hardcover has a retail price of $30 on it, give or take. The paperback $8, give or take. Rising in popularity has been the trade paperback, which falls in-between hardcover and paperback in size and in cost, usually between $12 – $16.
The eBook effectively breaks this cycle. People with eReaders want to be able to read the book when it comes out (the same time the hardcover is released). They don’t want to wait a year. Or a day. They want it now. That’s part of the whole digital distribution revolution – instant gratification. Want a song now? Download it. Want to watch the tv show you missed last night? Stream it. Movies too.
This forces publishers to compete against themselves. Think about that for a second. A hardcover doesn’t compete against the paperback. They come out at different times. Most of the people who will buy the hardcover already have by the time the paperback comes out. If they released them at the same time, I’m sure they would lose a lot of hardcover sales because who doesn’t want to save money when they can?
Now, the publishers have a problem. That $30 hardcover will get sold at a discount when it’s first released, maybe another discount for club members at their local bookstore, or on Amazon, so you might pay around $20 for it. Overhead/cost is figured in, profit is made, everything is good. But if the eBook is released at the same time at a price point of only $9.99, that might encourage people to get an eReader or software for their computer/laptop to save $10, which cuts into the profits on the hardcovers.
If paperback readers demanded that the paperback be released at the same time as the hardcover, what do you think publishers would do? Give in? I don’t think so.
Unique situation. Two competing products. Two overhead/cost/profit structures on the market at the same time leading me to pay $13 for an eBook copy of Raylan.