Printing Isn't The Costliest Part Of Producing Books

It's an argument we hear all the time: ebooks should be much cheaper than their paper equivalents because there's no printing involved. But is printing really the costliest part of the book publishing equation?

Picture by Kate Hiscock

Industry analyst Benedict Evans of Enders Analysis says not. Speaking to BBC News about an ongoing dispute over how publishers set ebook prices, he argues that this concept is something of a canard:

"The perception is that publishers are saving a fortune because they are not physically printing a book," he said. Actually, said Mr Evans, printing costs were a small fraction of the total outlay required to produce a book. "All the costs are the people in the publisher's HQ and the writer's mortgage," he said, adding that these had not changed significantly with the rise of ebooks.

That doesn't mean there shouldn't be some discount for the ebook version; after all, no-one is claiming that printing and distribution cost nothing. But it's not the case that what you pay for a book is largely determined by its physical printing cost, especially with mass-market titles.

Publishers warned on ebook prices [BBC News]


Comments

    Hell, I'd be happy if ebooks were the *same* price as the printed version. Every time I buy a book for my Kindle, I discover that the paperback version is significantly cheaper.

    Of course it isn't the most expensive part of the process. Look at all the "dirt cheap books" stores around that can sell novels for $1. It's the same physical good as your best selling title going for $40, it's all just paper and ink, it all still needs to be transported across Australia and the world the same way.

    This is why the argument for things like Games and DVD's costing more in Australia doesn't stack up either. If you can make the physical goods, ship it, and sell it at the Reject Shop for less than $5, there's no reason the same process couldn't be applied to XBox 360 games. At the end of the day they're both just DVDs, sitting in a plastic case, getting transported on trucks. If the Recject Shop can sell these products at retail for less than $5, the actual cost of goods would be less than $5 for sure, so how do you justify a $40 mark up when the cost of goods is no where near that increase?

      Places like the Reject Shop are not getting their stock through normal channels, so their prices are in no way representative of the true cost of standard retail. The books and games they sell for $5 are most likely liquidated stock from someone whose business has gone under, so they can be sold below actual cost at a profit. Try going in there and asking them to get a specific title for you and see how you go.

      Cheap stores tend to buy stock that is unwanted by it's owner and is often sold to them at below wholesale price just so the owner no longer has to store it.
      Video game prices are a totally different matter and is actually local distributers milking the market which is why buying Xbox 360 games from the UK is cheaper by more than 10% even after including individual item delivery.

    There are so many parts of the process where ebooks must be much cheaper that there is simply no persuasive argument for ebooks to be as expensive as they currently are. Even if the cost of manufacture and distribution is tiny, it is still a saving. Buying a Kindle book from amazon also saves GST and amazon's fixed costs are much lower than your local bookstore's, so retail margins should be much lower. The cumulative effect should be that ebooks are considerably cheaper than actual books, yet Gollancz are currently charging $21.96 for new Kindle titles. That's more than a freakin' paperback and completely unjustifiable. I've also noticed that a lot of other Kindle titles have had stiff price rises in recent months. e.g. I bought Neal Stephenson's new book, Reamde, for under $9 in November, now its more than $13, despite the dollar being worth about 5% more than it was then.

    The other aspect of eBooks that doesn't make sense is regional pricing. The aforementioned $21.96 book is only $12-something for US resdients. I'd love to hear them justify that!

      Because Australia is in the middle of nowhere and it's really expensive to ship bits there! Wait...

      (not that this "explanation" is any more valid for physical books either, they're usually printed in this region)

      Or it's collusion/price fixing:
      http://online.wsj.com/article/SB10001424052970203961204577267831767489216.html

      Fortunately, there is a way around that one -- if you add a US address to your Amazon account (for instance, if you've ever used a mail forwarder, just use that address again), you can get the ebooks for the cheaper price.

      Not that this in anyway excuses the ridiculous markup, of course.

    Shipping does not COST THAT MUCH. When buying a single physical product from overseas like the US plus shipping to Australia still comes out to be cheaper than the Australian retail price...they can't use shipping as an excuse esp if they ship bulk with bulk ship discounts (which with fed-ex or UPS can be a small fraction of non bulk prices)

    The simple reason is they charge more in Australia because they can get away with it, and Australians who shop retail accept to pay for it.

      UK distributors will ship directly to AU and will be a lot cheaper than local prices even when including shipping and even if 20% extra was included as GTS or import taxes.

    Shipping is now so dirt cheap that I get all my goods shipped to AU from China for free, by the pallet load. One of the problems is, rent prices in Australia are so unreasonably high that shops must charge a lot to try break even. The owner of my local shopping centre is making a killing, and the shops go under one after another. They know more suckers are lined up to try their luck. The cost of labour is also a killer.

    He's right, shipping doesn't cost as much!
    The markup for books is 50% in book stores (That's why some stores can give significant discounts). So lets say you have a book for $20, $10 is for the bookstore (or retailer)
    The Author if they are lucky and have a good name gets %10 of that $10 so $1.
    That leaves $9 for the publisher, agent, editor, other middle men etc, then printing and transport.
    If printing and transport are not significant, then that leaves the middle men making the rest of the portion.
    Have a listen to the episode of TWiT (www.twit.tv) just after new years (I think the 8th of Jan) It features Jerry Pournelle a prominent SCI-FI author and they discuss the publishing industry (among other topics).
    Interesting listen. He mentions that Agents are starting to do their own publishing for e-books, completely bypassing the publishers.

    Having worked in publishing for almost 20 years and at a publishing house for over 7 years I can fully agree that printing is not the costliest part of producing a book... but distribution is!
    I think it is common knowledge among publishers that distributors are the ones that get the biggest piece of the cake.
    Electronic publishing (read: no films, printing, etc.) and distribution (read: no shipping, warehouses, etc.) is a huge saving for publishers, so there is no excuse for the excessive price of eBooks. Actually, there is one: greed.

      And someone finally tells it how it is, thank you!

      not to mention much larger audience.
      I see no reason why a book that would have only been sold as print in Australia to be sold worldwide
      publish an ebook on all the major ebook stores and in doing so the would have 10 times as many possible customers

    Another way that eBooks are more lucrative for publishers is that they can't be bought and sold second-hand or lent to others. Therefore they get more sales.
    So the reader gets a book that is more portable, quickly, but costs more, and can't be shared or resold.

    Just look at ebook pricing in itunes. Pick a title and check the AU versus US pricing. AU is massively higher in a lot of cases. Excluding GST, this can only be due to the AU publisher's unrealistic pricing. There is no other variable I can think of to consider.

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