Sunday, December 30, 2012

it doesn't matter what ebooks cost to make

gigaom | Book publishers are trying hard to defend the pricing of e-books — perhaps in part because they’ve been accused by the Justice Department of rigging prices to keep them artificially high — by arguing that it costs a lot more than most people think to produce the electronic version of a book. But as author Chuck Wendig notes, what e-books cost to manufacture or distribute is irrelevant to everyone but the publishers themselves. All that matters is what book consumers are willing to pay for an e-book — and the same principle applies for any form of digital content.

Hearing the complaints of book buyers must be frustrating for publishers, because they actually have a pretty good case for why e-books cost what they do. Although many see the price of old-fashioned things like paper and printing presses and trucks to ship them as a big cost for printed books, publishers like Penguin point out that the main costs involve advance payments to authors, marketing and other support expenses — things that also apply to e-books. As Wendig puts it:
[P]roducing e-books costs more than you think. You’re paying for editors and cover design and, of course, for the book itself, and the mechanics of putting those things into a container are not the bulk of a book’s cost. Hence, e-books are always going to be close to their physical counterparts in cost.
But as the author also notes, consumers don’t really care what a publisher’s costs are, nor are they likely to pay more simply because a publisher argues that their content is really valuable. In the same way, movie-goers don’t really care how many millions of dollars a movie studio spent on their latest blockbuster — that has no bearing on whether they want to see it or not. It is the perceived value of the e-book that matters, not the cost — and there are some good reasons why e-book consumers might want to pay less.

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