I JUST pulled this off of the Kobo site. Brilliant move publishers. Guess what the value of a book is to me now? $0, because it's actually MORE work at this point to legally download a copy of your best seller and you still have the balls to think this is a great idea.
This was actually the first book I looked at because it was on the front page. I checked a few more:
-Watership Down - Cheaper in trade paperback than ebook, although there was also a lower priced ebook version for some reason
-Catch 22 - Cheaper in paperback and trade paperback than ebook
-A Dance with Dragons - About a dollar more for hardcover. Cheaper in paperback, although that's not out yet (preorders)
-Boxed sets for both Hunger Games and a Song of Ice and fire were bout $5 cheaper in Ebook. That's cool.
Here's the thing. When people like Jim Sterling with the Xbox make a huge deal about the cost of digital versions of goods I usually defend the supplier to a point. See, when you buy a video game, you're not paying for the material value of that object. Manufacturing costs and shipping costs have an insignificant impact on the overall price because what you're actually paying for are the production costs...the (this is a bit of a bastardization of the term) "fixed costs" of the salaries involved and the resources that went into making that code, the R&D into whatever engine it's running on, the marketing, and some of the projects that didn't make it through development. This is totally different than a good like a tool.
I have a hammer from when I used to work on site. It's a nice hammer that I got for free but were I to pay for it it would cost roughly $160 - $200. Why pay 10X more for a hammer than if you just bought any other hammer? Because it's made out of titanium and hickory rather than spruce and steel, plastic and steel, or just steel. So, it's stronger, lighter, and absorbs more impact. The marginal costs of the higher grade materials increased the costs by directly increasing the value -- both psychologically and empirically. Of course, I'm sure there was also a premium there just because of the perception of value, but that's something else entirely. This is in stark contrast to how pricing of video games work. In these cases, the development of the good is the cost decider, not the physical resources or the material object.
With a book, it's much the same way as a game. I've seen the breakdown and although the physical cost of producing and shipping a book is higher than that of a game, it's still a pretty small percentage (well, substantially higher, but still....) yet, at the end of the day, you do generally get the same experience whether you read the book digitally or on paper. You got the story, you experienced the same thing as everyone else. So, what's the difference between books and games in my mind? Perception of value -- which is the number one thing which drives quantity demand in markets based on goods without physical value.
Video games have the advantage of being able to sell themselves on the experience they provide alone for a price, which although contested, is pretty much unavoidable. Consumers as a result have been conditioned to a point to associate the video game experience with a market transaction, whether it be renting or buying. So, Valve/Microsoft/EA/whoever can say "Yes, I'm not actually giving you the physical disk and charging the same price, but you have to understand you're not paying for the actual disk anyways. You're paying for the costs to develop what's on the disk." And they're not actually lying. And rather than pass the savings from not shipping a good to the consumer they can just absorb it to "counteract higher development costs" or further stave off the effects of inflation on games prices (the second point I think has a slight bit of merit). They get away with it. Not because it's some injustice, but because unlike games journalists, they have an understanding of the business they are in and know that the market equilibrium point for selling a big budget game is at a certain price...because that's where the perception of value is. And that's why they do it. And that's why they get away with it: not because anyone really believes them or because no one has a choice, or even because it has to be that way, but because that's what the consumer associates with the value of a videogame. And still, they're not just raking in money hand over fist...and this is where guys like Jim Sterling really get lost - because competition is still present and budgets are set based upon this, so costs skyrocket like an arms race.
But back to books. What do video games have that books don't? That very perceived value. Because all my life it's been conditioned that if you're playing a video game for free SOMEONE is getting shafted. Movies, music, and video games have that perceived value which basically says that you should probably be paying to experience, but that's not something which has been associated with books. Goddamn governments set up giant buildings you can walk into, pull out a book for free, read it and bring it back without paying a dime. In MOST countries, royalties aren't payed out on that. Publishers get the initial sale and that's it. And to a certain extent, publishers were okay with that a bit, because libraries also presented to them a fail safe market. But do you know what best selling authors and their publishers hate? Yeah, fucking libraries. Because each one represents potentially hundreds of lost sales.
The value of a book to me was always pretty low. Sure, I'll pay 15-20 dollars if I'm about to get on a flight or NEED a book. I can think of a few books that I paid close to $50 for, and a couple more that I have bought multiple times. But those were all issues of convenience or nostalgia. I needed that book now and didn't want to wait, I needed some book for something I was right about to do, or I wanted another copy of this book I had years ago and really liked because I may read it one day. I've rarely ever walked into a book store and browsed...because fuck, why not just do it for free.
And unlike movies, or video games, or music, book publishers had a grand opportunity here where they could turn that around. Value perception was pretty much non-existent and a new equilibrium could be set. When they're not paying the $3 to print and ship that $9.99 paperback, they can offer it for $6.99 or less. Throw in some sales, cut out some middle men and all of a sudden they have more people actually paying for fucking books and they can offer it for $3.99 or less. Not just because it hits the right price point, but because it could have been actually easier than trying to get it for free.
I really do think that they dropped the ball in a major way and hopefully this is the catalyst which gets the book industry back on the right path.
TL;DRConsumers already don't perceive books as having inherent value in the same way as other forms of entertainment. Publishing industry could have taken advantage of e-readers to appeal to new markets through convenience and set new price points, thereby creating profitability through new markets. Went the other way. Probably fucked. Steve Jobs helped.
