Even a decade into a market changed by ebooks, it’s clear – at least to me – that a significant fraction of readers [and some rather large publishers as well] don’t really understand what’s happened and the implications and ramifications of those changes.
First off, despite all the words and arguments to the contrary, the costs of getting a book published haven’t changed much, except that they’ve increased. What has changed, particularly with self-published authors, is who is paying what costs. The cost of physically printing a book was never the majority of cost. From what I’ve been able to determine, the actual cost – just of printing – a hard-cover book runs in the range of three to six dollars, depending on the length of the book, the quality of paper and cover, etc. The costs of physically distributing print books likely run around a dollar a book. A standard publisher’s other costs — editing, proofing, typesetting, cover art, marketing, etc.– still run around ten dollars a hardcover. Those costs are all attributed to the first two years of sales for most publishers, but only a small percentage of books bring in significant revenue after two years. Now, I might be a bit off on some of this, but I’m in the ballpark.
Under the old marketing agreements, and those that still exist for printed books, the publishers sell books to stores at fifty to sixty percent of list price. Since most large publishers are barely more than breaking even, and some are losing money, there’s not a lot of profit involved. Add to that the fact that, even for the most successful publishers, almost half of all books sold lose money, which is why publishers need best-sellers.
So… how come all these independent authors can sell their ebooks for $3.99 or $5.99? Well… they can do that because they’re personally absorbing all the costs that are born by publishers. They have to come up with the cover design and artwork. They have to line up editors, or alpha or beta readers; they have to do the formatting or hire someone else to do it. They have to do the marketing, and make the arrangements with Amazon or someone else [who takes a percentage, of course]… or spend the time handling the finances and the bookkeeping. And the vast majority of these authors – probably 98% – actually lose money… in addition to spending a huge amount of time for which they’re not compensated, except if the book sells really well. Now, the ones who are indeed successful reap solid rewards, if not as much as most people think, because they’re not saddled with the costs of books that didn’t earn out in the way a standard publisher is.
So the lower prices of all those cheaper self-published books come out of the hides of their authors… and those dollar and time costs are substantial. Why do you think that almost all indie-published authors who are offered deals by major publishers take them… gladly?
For those of us who are with major publishers, and who aren’t multi-million sellers, the rules have also changed. We have to spend more time personally marketing, arranging appearances, attending things like comic-cons and conventions, for some of which we may be partly compensated and for some of which we’re not compensated at all. We spend more time and effort, generally for less return, than authors did twenty years ago – just like almost everyone else. And authors whose later books lose money also risk losing their publisher, requiring either more non-writing work or trying to make it by self-publishing or going with a small press [and a great many end up taking on more non-writing work].
One way or another, lower prices for ebooks come at the expense of the authors of those books. In addition, the consumer demand for cheaper books is creating a secondary market of generally lower-paid writers who are all competing with each other to write and produce books at a lower cost, and that means either lower quality or even more cost and strain on the writer. The demand for lower-cost ebooks also fuels the demand for pirated works, usually of best-sellers, but that piracy reduces the sales of those best-sellers, in turn reducing the risks that publishers will take on new or unpublished authors… and they’re definitely taking less of those risks, for the most part. That reduces the scope of what’s available from some major publishers and in some bookstores, and it means that readers have to work harder to find those kinds of books in the mass of hundreds of thousands of self-published or indie-published electronic works.
In short, no matter what anyone says, lower ebook prices have a lot of costs that no one really thinks about, and even fewer care about – just like they don’t really care about what’s behind the lower prices from Amazon and Walmart, or not enough to change their buying patterns.