10/19/12

Ebooks: A Tale of [Publisher] Stupidity

Ah, October.  A chill is in the air (somewhere I'm sure, it's still in the upper 80s here).  The talk turns from the beach to carving pumpkins.  In the Library (or Research Services as we call it), the Librarian's thoughts focus on Budgets and Desk References.  Desk References are a challenging part of the Budget process.  Not only do you have to account for additions to the firm's Professional Staff, but you have to juggle the differing demands for how you deliver the product; do you provide the books in print or ebook format or both?  Which format do you use for ebooks? And then there are the big questions:  What is a reasonable price for an electronic book?  Should it be different from a print book?  If so, should it be higher or lower?  Let's focus on the price questions and leave the format discussion for another day.

I believe the price should be different.  Tina Brown, on MSNBC's Morning Joe this morning, justified the decision to make Newsweek a digital-only publication by referring to cost of $43 million to print, manufacture and distribute the publication.  Now, I'm not suggesting that this is the magnitude of savings that any publisher going digital will realize but it is indicative that there are substantial savings that occur when a book is published digitally rather than physically.  And I don't claim to be an expert on the costs inherent in producing books.  However, it seems reasonable to conclude that the result should be a decrease in the price reflecting the lower cost to produce and deliver each unit.  At worse, the price point for an ebook shouldn't be different from the print. 

However, it appears that one legal publisher (located in Eagan, MN) has a different view of the economics involved.  I have been told by their representative to expect to pay a premium of at least of 20% above the print price to purchase an ebook edition.  I'm not sure how they can justify this kind of an adjustment, especially in light of the discussion above.  And to do this in the current economic climate doesn't seem to be good business. 

I don't know of many (if any) Library Managers that rubber stamp purchases without looking at the costs involved.  And we understand the economics of publishing well enough to know that prices should reflect when costs go down.  Other companies are offering ebooks for the same price as the print as well as offering bulk purchase discounts.  With this in mind, why would anyone want to raise prices?

The company referenced above may be trying to accomplish one of two things:  (1) Taking advantage of the ebook demand to increase revenue or (2) trying to chill demand for ebooks to prop up the legacy print business.  If it is (1), they are making a mistake.  Desk References are, for the most part, compilations of the code sections the attorney often refers to in his/her practice. As such, these are published by multiple vendors which means we have a choice when purchasing these.   Since price is the main driver in these types of products, this will only result in a loss of revenue (and market share).  And, as the Borg said, "Resistance is futile."  Change will continue to occur and it will be this company that will be on the losing end.
    

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5 comments:

Anonymous said...

Isn't this true of all eBooks now? At least when you compare trade paperbacks to Kindle books, Kindle books are more expensive the majority of the time.

Mark Gediman said...

Not sure which vendor you are referring to. I currently have a quote from a vendor who is offering us our desk reference ebooks at the same price as the print and is eligible for the same bulk discount as the print, regardless of format.

Jason said...

Mark,

If you are delivering a static epub version that could be sideloaded into any ereader, then it would seem that pricing should be reduced by cost of print + delivery, at the very least. If you're trying to encourage epub adoption, then obviously you'd consider going lower. However, I suspect that in the case you mention there are some platform costs that are trying to be recouped. What those are, I have no idea, but transparency is always best in situations like this.

But pricing aside, I think a conversation about how crappy epub is when it comes to law books is definitely something we should be talking about. To me the format increases costs on the back end, regardless of how much money you're saving on the front end.

Richard Gadsden said...

Most of the costs of printing are per-edition, not per-copy. The main savings for Newsweek in going digital-only are that it no longer needs printing presses and it can lay off all the compositors. It's not the paper and ink that costs the money.

If their 3000 copy print-run costs very nearly as much as the 5000 copy print-run cost, then there's no good reason to lower the prices of the 2000 eBooks they sell - the total costs are almost the same either way.

The big savings only kick in when they decide to go eBook only, though. While they're producing both printed and electronic editions, the total costs are actually higher than paper-only.

Robert McKay said...

I think it is reasonable and responsible for publishers at all times to try to grow and maintain or increase margin. To this extent I believe it is wrong to suggest that just because an element of cost may be reduced, prices have to fall. If they were to do this, the outcome may be financially detrimental to the business.

Market forces will normally determine the extent to which the publisher has calculated wrongly, in which case competitors take advantage

 

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