The recent lawsuit filed against Apple and five of the six largest publishing houses by the Seattle-based law firm Hagens Berman for illegally fixing prices of e-books raises the question of what does e-book prices include.
Some are arguing that the overhead of paper, printing, packaging, shipping, storage, and retail display effectively disappearing for ebooks, this significant lowering of the costs should be reflected in the price of the e-books.
Publishers answer that ebooks incur new costs for publishers that paper books don’t. Digital preparation, quality assurance on each of the digital formats, and digital distribution require workers and time in their own right and that Digital rights management (DRM) software and credit card payments take a chunk out of the book price can account for between 6% and 11% of the price of an ebook.
The other costs, such as choosing books, editing them, creating a book cover, marketing them etc. remain the same and publishers are also using benefits deriving from successful books to finances the loss incurred with their books for which sales figure do not even cover the overheads.
Yet, that does not explain why the prices of e-books have gone up to as much as 50% since the interview between Apple CEO Steve Jobs and Wall Street Journal technology journalist Walt Mossberg. In that interview, which appeared online, in print, and in video from the January 2010 iPad launch event, Jobs told Mossberg “The prices will be the same … Publishers are actually withholding their books from Amazon, because they’re not happy with it.”
Ebooks from major publishers have undoubtedly gone up in price. Even Amazon’s Kindle bookstore that initially sold many bestsellers at prices of $7.99 to $9.99 has substantially upped its prices. A quick visit to the Kindle store’s New York Times Bestsellers list shows typical prices of $12.99 to $14.99 today, with a precious few falling costing less than $10.
Though consumers, now expecting free content from the Net as a matter of course, undoubtedly think that the price of e-books is too high, some, like business journalist Robert Levine in his <iframe src=”http://rcm.amazon.com/e/cm?t=howtopublaboo-20&o=1&p=8&l=as4&ref=ss_til&fc1=000000&IS2=1<1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr” style=”width:120px;height:240px;” scrolling=”no” marginwidth=”0″ marginheight=”0″ frameborder=”0″></iframe>, take the opposite position. He estimates the cost of paper, printing, packaging, shipping, storage, and retail display as having an impact on the book price as low as $3.50.
Now that a lawsuit has been filed, we will see what the courts have to say about the price of ebooks. All bets are open. What do you think? Please, feel free to comment and launch the debate.