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DOJ Sues Apple and Publishers for Collusion


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#41 OFFLINE   lparsons21

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Posted 12 April 2012 - 10:14 AM

I would hope that would end up being the price model going forward.

For me, it isn't important that I read that latest best seller when it comes out. If it is a good read, it will be around for a long time and I'll read it later. Same for DVDs and video of all sorts.

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#42 OFFLINE   klang

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Posted 12 April 2012 - 10:40 AM

Some e-book prices are already changing with the same cycle of hardback and paperback releases. I held off buying Clive Cussler's The Jungle until it came out in paperback. The e-book price went down about $5.

#43 OFFLINE   TBoneit

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Posted 12 April 2012 - 11:26 AM

As a consumer, I welcome lower prices...

but...

Why do people assume e-books should be priced lower than "real" books?

I grant you that the production costs for an e-book are negligible compared to actually chopping down trees and making real books... but given the author does the creative work to create the content... and what we want to buy/read is that content... why should anyone assume that e-books automatically should or would cost less?

Snip


Ebooks should be lower cost for several reasons.

1. No physical media. This means no paying for paper, printing, typesetting, Warehousing, Trucks running around delivering, labor costs.

2. Same payment to the author and less distribution fees and Ebook should allow a lower price with a higher profit.

3. I'm sure it costs Amazon a lot less to warehouse a Ebook (1 server?) than to have warehouses all over for the same print title, pay for packing materials, packing labor, shipping costs (cost to pack, then take to loading dock and ship. Include paying to have the books delivered, unloaded and stocked in the warehouse Vs having them delivered over the Internet.

4. The customer paid the expense for the Ebook hardware (the reader) not the publisher.

If the book sells for $20 hardcover, Vs Ebook. Pay the author the same fee. I'd bet the publisher could make the same $$, the Author the same $$, the seller the same $$, possibly a distributor's $$ and still sell for a lot less.

IMO there is price gouging going on if the price is equal or higher.

Just one persons opinion of course.
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#44 OFFLINE   Christopher Gould

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Posted 12 April 2012 - 12:17 PM

Game of thrones at Walmart paperback 6.59 lists for 8.88. Kindle 4 book set 29.99 average out to 7.50 a book. So paperback cheaper than e-book.

#45 OFFLINE   Stewart Vernon

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Posted 12 April 2012 - 02:41 PM

Ebooks should be lower cost for several reasons.


To be clear... lower "cost" or lower "price"?

Clearly an ebook is cheaper to produce than a real book (i.e. lower cost)... but that doesn't necessarily translate to a lower price for the consumer.

Think about you and your job... You get hired today for $10/hr and 2 years from now you are much better at your job. You can do the work more efficiently, higher in quality, and are just all-around better at your job. So... should you get paid more for your skills OR should you be paid less because you shouldn't get paid more to do the same work?

Why should an author be expected to charge less for an ebook than a printed book? Why shouldn't the author be able to get more money for his work? IF you were an author wouldn't you want more money for your work?

Also, once printed books become a thing of the past... and ebooks are the only way for authors to sell... why then wouldn't they cost whatever the author wants to sell them for?

1. No physical media. This means no paying for paper, printing, typesetting, Warehousing, Trucks running around delivering, labor costs.


Agreed. The cost to produce an ebook is lower. But that doesn't automatically mean the price will or even should go down.

2. Same payment to the author and less distribution fees and Ebook should allow a lower price with a higher profit.


True... but the author could keep the price the same and make even more profit. Why isn't that possible?

4. The customer paid the expense for the Ebook hardware (the reader) not the publisher.


I bought my bookshelf too... not the publisher. Not sure what that has to do with anything.

If the book sells for $20 hardcover, Vs Ebook. Pay the author the same fee. I'd bet the publisher could make the same $$, the Author the same $$, the seller the same $$, possibly a distributor's $$ and still sell for a lot less.


Yes... very true... but they can make more profit if they keep the price the same.

Think... Why should they charge different prices? IF they charge the same price for ebooks and printed books... then you decide if the book is worth $20. If the book is worth $20 to read, then you pay that price and choose your format (printed vs ebook).

There's just no automatic reason to expect an ebook to *have* to be priced lower than a printed book whether it can be or not.

They could also lower the price of real books too... sometimes they do this... Amazon sells books nearly half their listed price anyway... so clearly there is profit built into the model, right?

IMO there is price gouging going on if the price is equal or higher.

Just one persons opinion of course.


You are of course entitled to your opinion. I've already said too that I would like lower prices... That would be nice and I would buy more books... but I don't expect lower prices just because they are ebooks. I don't know why anyone should expect lower prices, no matter how much we might want them.

Lower prices means less perceived value. Consumers will still wait for sales and want further discounts... People always want things to be cheaper... and I don't want authors to stop writing books.

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#46 OFFLINE   trh

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Posted 12 April 2012 - 03:39 PM

I don't think anyone believes author's fees should go down with eBooks. The New Yorker article stated that Author's royalties went from 15% to 25% with eBooks. And they (the publishers) could afford to give more royalties to the writers because a good portion of their overall costs went down -- but they wanted to keep the same selling price.

Another item not mentioned previously as a cost for publishers is 'returns'. The New Yorker stated the industry normal is 35% of all printed books are returned by vendors to publishers. The publishers have to write that amount off; and they do that by charging us all more for our books. This cost doesn't apply to eBooks.

And the comparison using someone working for an hourly rate isn't appropriate. Writers are more like commissioned salesman -- they more they sell, the more they make. So as an author becomes more popular/successful, they will make more money (and that hasn't changed whether the book is printed or digital).

But the lawsuit is because Steve Jobs wanted 30% of $15, not $10 and he told the publishers that he could make that happen.

#47 OFFLINE   trh

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Posted 12 April 2012 - 03:56 PM

One good thing that came out of the push for higher prices was that I started looking for other legal methods to get books. And lo and behold, there are tons of free ebooks out there, and not just the classics.

Don't forget to check with your library also. Many have eBooks you can 'check out'. And if yours doesn't ask them if they have any agreements with other libraries. My county hasn't implemented eBooks, but the county next door does. I had to drive 35 miles to their library to get a card, but since then, I've read 20 books from their system.

Of course publishers are trying to charge libraries additional fees for eBooks, but that is another topic.

#48 OFFLINE   bobukcat

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Posted 12 April 2012 - 06:10 PM

The main reason I expect e-books to be less than print = Amazon sold MILLIONS of copies of new releases for $9.99 on Kindle when Hardbacks were $20+. Of course that was before Apple and the Publishers got together and decided they could force us to pay more. If Apple had used the same purchasing (from the publisher) model that Amazon was, the same model Amazon (and other retailers) had been using for physical media books for years and years we wouldn't all be paying more for e-books today.

Everyone loves Apple but does anyone really believe that e-book adoption rates would be anything like they are today without the Kindle and Kindle applications Amazon brought to market? Sure others were making e-book readers before them but none of them compared in adoption rate. When B&N released the Nook line popularity increased dramatically again. Then the iPad was released....

#49 OFFLINE   bobukcat

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Posted 12 April 2012 - 06:18 PM

Why should an author be expected to charge less for an ebook than a printed book? Why shouldn't the author be able to get more money for his work? IF you were an author wouldn't you want more money for your work?


Lower prices means less perceived value. Consumers will still wait for sales and want further discounts... People always want things to be cheaper... and I don't want authors to stop writing books.


I'm not sure anyone has said they want the author to get paid less, if they did I missed it. The fact that lower price of finished product may equal a higher volume (others have linked statistics that e-book consumers buy more books than non-e-book consumers) is further incentive for writers.

Amazon and others (Google most recently) provide ways for authors to publish directly, enabling a whole new generation of writers to go to market without the publishers. JK Rowling completely cut the publisher out of her e-book delivery. The times are changing and the publishers are trying to do anything they can to keep themselves relevant as long as possible, that's understandable until they conspire to fix prices - then it's time for a lawsuit. :-)

#50 OFFLINE   jdskycaster

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Posted 12 April 2012 - 06:24 PM

trh hit it on the head. The issue is with apple taking a rediculous comission for doing nothing other than hosting a file for download. This is becoming an issue not just for books but for everything that is sold on itunes.

Many companies that want to develop commercial applications for their customers are forced to pay these royalties to apple when the companies creating the apps are already supporting apple by making the hardware more attractive to apples customers. This is not a two way street and there are already signs that many commercial apps will not be ported or developed for ios because of the itunes royalty ripoff.

Who deserves to be paid more? The writer, the publisher or apple?

#51 OFFLINE   Stewart Vernon

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Posted 12 April 2012 - 08:17 PM

The iTunes 30% "take"/royalty for Apple is literally apples vs oranges.

iTunes (Apple) hosts the worldwide Web site, handles accepting credit cards, taking payments, delivering the product when ordered, marketing to the whole world via iTunes and Apple TV commercials, etc.

Above are all things YOU would have to pay for yourself if you sold the App (or book) yourself. Heck, Agents often take 10-20% for an author's published manuscript... and arguably the Agent does far less than Apple!

The point is... you can do everything yourself, or you can sell on "consignment" and let someone else take the risks...

Meanwhile, regarding ebooks and prices.

People still seem to have this assumption that an ebook should sell for less than printed... and I don't know where this comes from.

Should you pay less for a movie ticket at a digital theater than one who projects film? It saves money not to make those film copies, so I guess you expect them to "pass the savings" on to the consumer. That almost never happens.

An eBook should sell for what the market will bear. If people want to pay, it will sell... if they don't, it won't.

That is why I'm against the artificially high prices like Apple setting a minimum price or colluding to get publishers to agree across the board on pricing... but I don't like Amazon's undercutting-to-get-marketshare model either... because that is a race to the bottom where people only want to pay a few bucks for all eBooks and the result would be driving the higher caliber authors out of the business.

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#52 OFFLINE   trh

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Posted 12 April 2012 - 09:07 PM

Meanwhile, regarding ebooks and prices.
People still seem to have this assumption that an ebook should sell for less than printed... and I don't know where this comes from.

My expectation of this came from the original marketing by Sony (I have one of the first Sony eBook Readers -- still works just fine). Their marketing was $9.99 (or less) for new releases/NY Times Best Sellers.

I just want a free market determining the pricing.

#53 OFFLINE   Stewart Vernon

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Posted 12 April 2012 - 10:58 PM

I just want a free market determining the pricing.


The problem is... in some ways, the market is more free now than it was before. IF Amazon dumps prices to the point they control the market and drive other publishers out of the market... prices could go up again AND not be going to the author's pockets, but Amazons... if they are allowed to have a monopoly, which is where things were headed just a couple of years ago.

Here's a good article explaining the irony here and one point I was trying to make...

On the one hand:

"After the Department of Justice announced an antitrust lawsuit against Apple and five major publishers, three of whom settled immediately (see “DOJ Files Antitrust Suit in E-Book Pricing Case”), Amazon, the nation’s leading retailer of e-books, responded by announcing that it was planning to lower e-book prices."

But on the other hand:

"Before the major publishers adopted the agency model in 2010, which let the publishers set the retail price of their ebooks (and kept e-book retailers like Amazon from selling below the publishers’ retail price), Amazon controlled 90% of the e-book market. The agency model helped other retailers such as Barnes & Noble and Apple gain share to the point that Amazon now controls just 60% of the e-book market."

Full article here.

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#54 OFFLINE   phrelin

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Posted 13 April 2012 - 12:24 AM

Meanwhile, regarding ebooks and prices.

People still seem to have this assumption that an ebook should sell for less than printed... and I don't know where this comes from.

Should you pay less for a movie ticket at a digital theater than one who projects film? It saves money not to make those film copies, so I guess you expect them to "pass the savings" on to the consumer. That almost never happens.

An eBook should sell for what the market will bear. If people want to pay, it will sell... if they don't, it won't.

That is why I'm against the artificially high prices like Apple setting a minimum price or colluding to get publishers to agree across the board on pricing... but I don't like Amazon's undercutting-to-get-marketshare model either... because that is a race to the bottom where people only want to pay a few bucks for all eBooks and the result would be driving the higher caliber authors out of the business.

All forms of the written word, including novels and non-fiction narratives and self-help manuals, should be sold for what the market will bear. But if you're a author is your goal is to sell one copy of your writing for $4 million? Or is it to sell 4 million copies of your writing for $1? Whatever, I look at it from the author's point of view.

Let's look at the economic flow for printed versions of your writing ignoring the printed self-publishing option which usually doesn't work out:
  • The author should sell rights to his/her work for the highest return he/she can get. But if the price is too costly, unrealistic, the printed version might not sell even if there is some publisher interest. And getting serious publisher interest if you are a new author is all a matter of luck. That's at the beginning of the economic flow.
  • The publisher should resell those rights in the form of printed hard bound books and printed paperback books to retailers for the highest overall return they can get which is a function of price less cost times volume. But there are significant costs well beyond paying the author, labor for editing, marketing which flows money into magazines and newspapers, labor and materials costs for printing, shipping which involves money flow through trucking firms to drivers, etc.
  • Retailers in hundreds of locations should sell hard bound books and printed paperbacks for the highest overall return they can get which again is a function of price less cost times volume. They have rent and insurance. They have to pay the help just to keep the store open, clean, and interesting. They have competition. The big emotional argument used to be over the neighborhood bookstore or the large chain. But retailers have a problem related to space for inventory, particularly unsold inventory. They have to drastically mark down - clearance prices.
  • At the other end of the economic flow is the reader, the final buyer. He/she buys the right to to read the author's words. Once they have been read, the book, whether a $8 paperback or a $28 hard bound, is a used commodity that can be resold, shared with a friend, or a dust collector on a shelf or trash. Nothing about that used commodity will generate more money for the author, but it might result in lower sales volume for the author, publisher and new book store retailer.
Now let's look at ebooks which are a different story:
  • Again, the author should sell rights to his/her work for the highest return he/she can get. No interest from a publisher? Self-publish on the internet. Maybe through Amazon's Kindle Direct Publishing. You set the price of your writing and have two royalty options. But let's say you get a publisher's offer. It's nice to get a publisher who generates printed hard bound books. The typical hard bound sells a few hundred copies and never gets printed in paperback. But you're looking for a serious ebook publisher.
  • You land a publisher that has a serious ebook approach - it's all about marketing on the internet. Your publisher should resell those rights in the form of an ebook through online retailers for the highest overall return they can get which is a function of mostly volume times price less online marketing and formatting costs. There are relatively minimal costs beyond paying the author and on line marketing - no money flowing into magazines and newspapers, no labor and materials costs for printing, no shipping which involves money flow through trucking firms to drivers, etc. I guess they pay editors, though you could fool me.
  • Ebook retailers should sell ebooks for the highest overall return they can get which again is a function of volume times price less costs. They have to pay the help to program the site, operate and maintain the servers, etc. They have competition. But they don't have a problem related to space for inventory, even unsold inventory. And if your book isn't selling, they can do what Amazon does - offer your writing as the Kindle Daily Deal for 99¢. They get some return and you might actually get to be known. And if you get to be known, people can buy your book because its still there on line. The retailer still has it in the store, not having replaced it with this week's new book.
  • At the other end of the economic flow is the reader, the final buyer. He/she buys the right to to read the author's words. Once they have been read, the book is simply available through the reading device, not taking up physical space and collecting dust, it can't be resold nor is it easy to lend.
IMHO the ebook model will be most successful for the most authors based on low pricing and volume.

IMHO printed books have a rather strange "economic model." It is an "economic model" that I find hard to defend.

If the printed book publishing business is suffering, it is because of high overhead and marketing costs related to snob appeal (always have a few overpaid executives lunching with the "right" people to get you a review in the New York journals). And it is just silly to use up all that paper and ink and energy to print a book. And it is downright wasteful to truck the book all over the country. And retail stores use energy for lighting, heating, etc.

But if you are an author, and you are lucky enough to get the right publisher, and that publisher assigns you to the "right person" and your book gets circulated to the right reviewers and one or more decides your book looks interesting enough to read and finds it interesting enough to opine about on the pages of the New York Times, you may get to be on the NYT Best Seller List and your book will sell for $34.95. And that will make your publisher richer, may make you rich and your writing ultimately will be broadly read when the book comes out in paperback and ebooks at a cheap price.

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#55 OFFLINE   Stewart Vernon

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Posted 13 April 2012 - 02:13 AM

The problem on the other end of pricing is that consumers tend to see "low prices" as synonymous for "cheap"...

Yes, people want to spend less... but if eBooks routinely become <$9.99 then people will expect them to sell for even lower... and the lower the price is, the lower overall value people will assign to the product.

There is very little difference between a $10 burger at a sit-down restaurant and a $5 burger at Burger King these days... but the sit-down restaurant can't drop their prices because people will see it as if their food isn't somehow as good. Similarly, people won't pay more at Burger King because they perceive fast-food as lower quality.

Blu-ray movies that are new releases of a movie in theaters earlier this year are sold at higher prices than Blu-ray releases of a movie from 20 years ago just now released in high-def... even IF that older movie is actually a superior movie.

Similarly... a movie found in the bargain bin at Wal-Mart is assumed to be a lesser movie... while simultaneously setting expectations for more movies to show up in that bargain bin soon.

It's part of the race for the bottom I was talking about.

Paperbacks of a novel might be say $6.95 while a hardcover of that same novel might be $19.95... It's the exact same story, so the only reason for the difference in price is the packaging. Hardcover books are seen as more "collectible" or something to display on your shelf.

A digital copy might cost less to make, but it provides things you can't do as easily with your printed book. For instance... you can search within the digital book very easily on a computer or mobile device. You can also copy/paste from the book to an email or something else to share with someone else for say a book review or just to tell someone something funny you read... instead of having to hold the book open and type all that OR scan the page.

The point is... a digital copy provides some things a printed copy doesn't, and vice-versa. What is it worth? It depends on the consumer and it depends on the book. Each book will be different and each consumer will be different.

It's easy to say printed books cost more, because they certainly do... but the value of a book is more than just what it costs to package it up... and I think some people are forgetting that value.

If you like a book, it is worth more... if you don't like it, you probably couldn't be paid to read it.

Look at all the great classic literature that is available in eBook format for FREE... stuff that costs you $5+ at a book store... Don't forget about that when talking about eBook pricing.

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#56 OFFLINE   hdtvfan0001

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Posted 13 April 2012 - 05:47 AM

At the end of the day:

- This lawsuit is based on 3 remaining parties (including Apple) violating current price fixing laws. One would like to give all 3 parties credit that they knew about this law as they chose to try to circumvent it.

- The publishers who went along for the ride are no less guilty, but likely felt somewhat intimidated to go along based on Apple's market position, and also for their own self interest to make more money.

- The participants were wrong, should be punished, and likely will receive still penalties for their actions. Still, as others have pointed out, Apple in particular has already set aside money for any fines and will simply move on.

- Since the cost of "manufacturing" eBooks is measurably less than paper-based Books, their pricing should be able to sustain sufficient profit margins at market costs below their paper counterparts.

We'll have to see how this unfolds. I suspect we'll see some kind of "settlement" and this never goes to trial.
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#57 OFFLINE   jdskycaster

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Posted 13 April 2012 - 06:25 AM

The problem on the other end of pricing is that consumers tend to see "low prices" as synonymous for "cheap"...

Yes, people want to spend less... but if eBooks routinely become <$9.99 then people will expect them to sell for even lower... and the lower the price is, the lower overall value people will assign to the product.

There is very little difference between a $10 burger at a sit-down restaurant and a $5 burger at Burger King these days... but the sit-down restaurant can't drop their prices because people will see it as if their food isn't somehow as good. Similarly, people won't pay more at Burger King because they perceive fast-food as lower quality.


This does not hold up in the digital world. You cannot feel, see or taste the digital bits of information. You can see some cover art and read a sample of the written book just you can sample a song but it really does not matter if it is .99 or $10.99. In today's digital world most purchased are based on word of mouth or written reviews rather than price shopping.

Why your food analogy does not work at all is that there can be a huge difference in quality that you can see and taste in the final product and that is service aside. If you think Burger King and Mcd's use the same ingredients in their dollar menu burgers as a sit-down restaurant serving a $10 burger you are going to the wrong sit down burger joint.

#58 OFFLINE   Stewart Vernon

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Posted 13 April 2012 - 12:41 PM

This does not hold up in the digital world. You cannot feel, see or taste the digital bits of information. You can see some cover art and read a sample of the written book just you can sample a song but it really does not matter if it is .99 or $10.99. In today's digital world most purchased are based on word of mouth or written reviews rather than price shopping.


Tell that to the people on iTunes who are routinely having sales of half price or so on their Apps in order to boost sales. This seems to indicate that some (like me actually) wait for sales to buy some apps. I also shop for the free TV shows they have on iTunes from time to time.

Why your food analogy does not work at all is that there can be a huge difference in quality that you can see and taste in the final product and that is service aside.


Unless you are reading books differently than I am... you can't taste the difference in eBooks either :)

If you think Burger King and Mcd's use the same ingredients in their dollar menu burgers as a sit-down restaurant serving a $10 burger you are going to the wrong sit down burger joint.


Where in my message did I say anything about the dollar menu? I specifically said the $5 burgers at fast food places are not much different than the $10 burgers at a sit-down place. Obviously the dollar menu is different, and sit-down places don't have a dollar menu equivalent.

Although, that said, I'd be surprised if the source of the beef at most restaurants isn't often the same... they all shop around for bargains I'm sure... so while I wouldn't make the comparison, there might not be that much difference (except for size and toppings) in dollar menu burgers after all.

Whereas a digital eBook contains the exact same content as a printed book.

Which reminds me... how come the debate is only about price of eBook vs printed book? Why no debate on the price of audio books which are routinely more than eBooks? An audio book is someone else reading the book to you, often paraphrasing or abridged from the eBook/printed book counterpart too... but I'm not seeing any outrage over prices of audio books.

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#59 OFFLINE   TBoneit

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Posted 13 April 2012 - 02:04 PM

Where I said cost I was referring to what It would cost me to buy.

I believe the author should get the same Dollar return per copy sold whether it is eBook, Paperback or Hard cover. Unless they agree to a sliding scale dependent on time.

I still believe that the author and the publisher can both come out ahead on a lower price based on the real costs for eBooks.

If a eBook would sell 20,000 copies at a $20 price point would not a $10 price point sell more for popular fiction? Thus making more money for the author due to higher sales? Would this also not make it likelier that a book buyer might take a chance on a book at a lower price and become hooked on the author?

Certain books that will always be low volume or have a fixed volume such as reference works or technical matter or books used in schools will in general have approximately the same sales independent of price within reason.

I don't have to have an expensive bookshelf for paperbacks or hardcovers.
For eBooks I have to invest in hardware.

Therefor I buy real books and do not even have a eBook reader.
In the last 6 months I have bought approximately 40+ books.

I wouldn't even think of giving someone a eBook for a Christmas gift for example.

Many of the books I bought in the last year were used. Not available new and for sure not as eBooks. One came from England.

One book for example was
http://www.amazon.co...t/dp/B0007E1H7Y
Sleeping planet
William R Burkett

Worth reading BTW.
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#60 OFFLINE   trh

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Posted 13 April 2012 - 03:53 PM

Which reminds me... how come the debate is only about price of eBook vs printed book? Why no debate on the price of audio books which are routinely more than eBooks? An audio book is someone else reading the book to you, often paraphrasing or abridged from the eBook/printed book counterpart too... but I'm not seeing any outrage over prices of audio books.

Probably hasn't come up because this thread is about the DOJ lawsuit regarding eBooks. Also knowing what goes into making an audio book (everything that goes into a printed copy plus having someone spend weeks in a recording studio with a recording engineer and a producer), adds more cost than an eBook or printed book. So no outrage from me.

Edited by trh, 13 April 2012 - 04:02 PM.





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