Publishers try to defend high ebook prices

The price of ebooks is rising. Amazon tried to fix the price at just under $10, but publishers weren't happy with this arrangement and when the Apple iPad was launched in January, they took the opportunity to put pressure on Amazon to raise its prices. It looks like ebooks will typically be priced at around $13-$15 and they broke down the costs involved with ebooks and traditional paper books in a recent New York Times article. They said that people have unrealistic expectations of how low the price of ebooks should be. However, the figures they present, which show that there's little difference in profit between ebooks and paper books, are all wrong.

One problem is that they use the list price of a hardback book for their figures. Online stores like Amazon discount books quite heavily and even high street stores have offers of 'buy one get the other half price' and so on. Does anyone really pay the list price for books? You can easily get 25% off the list price of a popular book and this makes the publishers' claimed cost figures all wrong.

Another problem is that if you buy a paper book then it is a physical item that can be legally passed on and sold. I can buy a book, read it, then lend it to someone else to read. This is a lost sale for the publisher. I can also sell a book on eBay and recover some of the original purchase price. So I get 25% discount when I buy the book off Amazon, I then sell it for 25% on eBay, so the cost to me is about half the original list price. What's more, when I sell it to someone else, I get the money and the publisher gets nothing. It's another lost sale.

I can also borrow the book from a public library for free. It's another lost sale.

There are lots of hidden costs with traditional paper books that you don't get with ebooks. You can't sell your ebook on eBay, you can't lend it to someone else, and it's not in a public library. Therefore an ebook sale is actually more valuable to a publisher than a paper book sale. They could probably price ebooks at one quarter of the price of a hardback paper book and still make more profit. But will they? It's unlikely.