A relatively small part of the price of a book goes into its physical production. The actual percentage varies widely from book to book. Tobias Buckell’s post and a few others that I linked to delve into the math a bit, but the gist is that if you start the price low, you have to sell an extremely unlikely number of books for the increased sales volume to make up for the decreased price.
.-= India´s last blog ..What’s been gnawing at me lately =-.

“The pricing scheme that’s been in place for decades” is built at least in part on…

* printing costs
* stocking costs
* shipping costs
* returns costs
* additional print run costs

… and a host of other things that bear no relevance to electronic publishing/distribution. Lately, publishing has even tried to argue that the cost of paying rent on a brick and mortar store is something that affects the final retail price of a paper book.

If pubs want to charge more for first-release (or, as Baen does, eArcs), and gradually reduce prices over time. Fine. If the market supports it, fine.

But the argument that ebook pricing should, baseline, be 60% the cost of the (printed, shipped, stocked, returned, reprinted) paper counterpart released at the same time is unsupportable math.

Or so I see it.

Maybe the math totally works, but until pubs decide to lay every dime of production/profit out in a spreadsheet to prove that initial development comprises sixty percent of all a book’s gross costs, I don’t buy it.

I kinda doubt they’ll do that.

And if they do, and the math works, my next question is “how do we fix that?”

Because that? That’s broken.

As far as I understand the rest of your post, I think the rest of my summary of current practice – though simplistic – stands, but please let me know if that’s not true.

I know that, from the point of view of anyone inside the industry, my summaries are hopelessly simplified. I know that because I’m married to someone inside the industry, and my summaries routinely produce exasperated sighs.

Not because they’re wrong, but because there’s “more to it than that”.

Usually, “more to it than that” means there are reasons for the way things are… not that I’ve represented “the way things are” inaccurately.

(It also means I ascribe motivations to the participants based on my own impression, which aren’t usually very complimentary to anyone, and that’s annoying to damn near everyone.)

Anyway, the thing is (which folks in the industry don’t get), is that to folks not in the industry, the reasons don’t matter as much as the end result.

You said:
“The pricing change that Macmillan is trying to implement is no different from the pricing scheme that’s been in effect for books for decades.”

Yeah… see… from my point of view, that’s pretty much the problem, in a nutshell.

Thanks for linking. The post “What’s been gnawing at me lately” is, in fact, by me; only the photo is by Eirik. Although he is an author and an e-book aficionado and has a lot to say on the subject, it’s usually in Norwegian; worth reading, if you can bear automatic translation (or if you read Norge).

A couple of things.

Regarding the snorking over the word monopoly, the point is not that anybody thinks Macmillan doesn’t have a monopoly on its content, it’s that it’s such an obvious statement—most manufacturers have monopolies on what they produce. Amazon has a monopoly on the Kindle; oooh, spooky! So Amazon is treating its customers like idiots, trying to make this normal state of affairs sound like an evil conspiracy when, in fact, it’s Amazon that’s using its near-monopoly in online bookselling to punish Macmillan for trying to negotiate new terms.

About Charlotte, she has other options, if she really “just wants to read.” l I’m a starving graduate student, and I simply don’t pay for e-books at all, unless they’re technical books I need for school or work. It helps that I tend not to read any book published after 1850 to begin with, so most of what I want to read is in the public domain.

The pricing change that Macmillan is trying to implement is no different from the pricing scheme that’s been in effect for books for decades: the book is released first as an expensive hardcover, and only those people who have to have it right now buy it. Everyone else waits for it to go on remainder or get released in a less expensive paperback. In certain genres (mysteries, science fiction, military, etc.), readers can count on being able to buy a mass-market paperback even more cheaply, if they can just wait long enough. Nobody is saying that e-books are going to always cost $15, throughout the life of the book. Rather, a book will cost $15 until sales drop off, then it’ll probably go to $10, and when sales slow again at that rate, it’ll drop to $5. If Charlotte doesn’t want to spend $15, she can simply not read frontlist books; frontlist is a tiny slice of what’s available for sale at any given moment.

And lastly, what I’m saying about the X-Acto and wax technique is directed to book designers, who make up a lot of my readership, and further up in that post I linked to an earlier rant explaining in greater detail what I meant. I’m sorry if that was unclear. My point is not that the books have to be OCR’d to make e-books out of them. That’s simply not true, except in the case of converting pre-digital-production backlist—let’s say, books published before 1985, though it’s probably a bit later—as I describe in a comment near the bottom of the page. My point about the X-Acto thing is that files are being created in ways that are not easy to convert. They’re digital, of course. They’ve been digital for years. But because of the way they’re put together, converting them to e-book formats requires a lot of fiddly hand-work—basically, re-proofreading the entire text—that is apparently not getting done. Some publishers have been using an XML workflow for years—Cambridge University Press is one—but it’s still a relatively new process, so a lot of trade publishers have not yet gotten around to converting things.

I hear you with the story about John; I’ve worked with Johns everywhere I’ve ever worked. But the problem is not that the tool is sitting in front of them and they won’t learn it, it’s that the tools are expensive, and retraining all those people to use them is expensive, and converting an entire production process while you’ve got thousands of books in halfway done is a huge headache, and there is not—has never been—enough profit in the books business to pay for that kind of thing.

Independent publishers that started up in the last five to ten years are having a much easier time of digitizing their books because they started digital, and they have a lot fewer people involved, and a lot fewer software licenses to buy, and a lot fewer salaries to pay, and a lot fewer books in production at one time. It’s much easier for them to adjust their process as they go along. They also are more likely to have direct relationships with their readers, through direct mail and e-mail, because they can’t afford to compete with larger companies on traditional advertising and promotion, and on buying placement in places like Barnes & Noble. (The consolidation of publishing companies over the last several years is a big villain in all this, and Barnes & Noble’s massive superstore deployment in the 1990s definitely helped set the stage for what Amazon is doing now.) Does that mean all the big publishers are big bad meanies and are doomed and deserve to go out of business? Well, I don’t think so, and I don’t think that would be a good thing for readers or writers.

I could go on, but I would probably grow even less articulate as I did so. I apologize for taking up so much space. But my point is that the situation is more complex than you’re making it out to be. Please go back to my post and follow more of the links. Much of what I linked to is intended for insiders, but Scott Westerfeld’s Zinc Blinked and Tobias Buckell’s Why My Books Are No Longer Available on Amazon.com are particularly good overviews directed at general readers.

Thanks again. Sorry for the confusion, and the blathering.
.-= India´s last blog ..What’s been gnawing at me lately =-.

They’re supposed to HELP.