Thursday, November 25, 2010

But It's Just a Reprint

By Brenna Lyons, guest blogger from EPIC (Electronic Publishing Internet Coalition)

A lot of readers state that e-books should be sold for pennies, “because the money preparing the book was already spent on the print release and there is no physical printing and shipping involved.” In their mindset, that means there are no additional costs to preparing the e-book for sale, and therefore, a book should cost little or nothing in e-book.

There are a lot of holes in this theory.

For one thing, not all publishing ventures produce the print version first. Most indie presses either produce the e-book version first or the two concurrently. Even in NY conglomerate, lines like Carina Press and Spice Briefs (both Harlequin ventures) produce only the e-book version. If there is print, it will come later. That means the costs of producing the book fall solely or primarily on the -ebook version.

Assuming the print version was indeed produced first, this line of thought disregards the fact that there are expenses unique to the e-book version. They would include reformatting and layout (since they are not the same for print and e-book), possibly a new cover (or at least altering the old cover for an e-book edition), conversions (which do not exist in print), DRM (for the companies that use it), and the distribution channel cut.

Both print and e-book have a distribution channel cut, and neither is much better than the other. While Smashwords takes only 15%, they are ineffective for more than free reads, from my experience. The effective distribution channels are taking between 36% and 65% of the sale cost of the e-book version and sometimes have a lower limit for sale price. Amazon, for instance, does not take books below $.99 in price, save a few free reads it accepts...from conglomerates only. That’s assuming the distribution channels aren’t setting sales and socking the publisher and author for the reduction in price, which many (though thankfully not all) of the distribution channels do.

Unlike many indie presses, NY conglomerate pays their editors and other staff salaries, which is an overhead expense. NY conglomerate went into e-books to shore up the print system. The e-book versions have as much an expectation of underwriting the overhead expenses (utilities, office space, maintaining and replacing assets, salaries, taxes, licensing and IP issues, etc.) as the print versions do, since the overhead applies to all products of the company. One of the fallacies of the idea that there are no more expenses is that print covers all the overhead expenses, and one cannot assume that. Simple accounting theory in action.

Beyond that, indie press often works on a royalty system. In addition to the royalties authors make, and that is the only money authors make, since even advances are advances against future royalties. In addition to author royalties, many indie presses also pay support staff (editors, formatters, administration, and marketing staff) on royalties. Pricing e-books at pennies means these people are not being compensated for their work. Though NY conglomerate e-book royalties are often anemic compared to those in indie (Carina Press excepted there), they exist, and most readers want the authors paid. The authors and royalty-based staff won’t make a dime when selling the e-books for pennies.

Remember, that most of the price of a book is not printing the book and shipping it. Most of the price is handling other expenses, including compensating authors for their work.

In addition to the costs of making any print book into an e-book, there are special expenses associated with turning an older print book into one. If the book was created before the industry switched to digital files, the book must be OCR scanned, have a new edit to look for scan errors, and then launch it into the preparations for an e-book release. This book, already available in print, has incurred a whole new level of expenses that are typically associated with the initial release of a book. You cannot disregard this eventuality as conglomerates try to bring their entire backlists into e-book formats.

While I agree that there is no reason the e-book should cost more than the print version or be priced at the same level as the hard bound edition, there very definitely are legitimate expenses involved in creating and distributing an e-book version of a book.

Brenna Lyons is an award-winning author in indie press, with more than 85 releases in fiction alone in the last 8 years. She's the former president of EPIC (originally the Electronically Published Internet Connection, which has recently changed its name after 13 years to the Electronic Publishing Industry Coalition) and a plank member of Authors Without a Yacht. She teaches classes in everything from writing the novel to contracts, IP law, and the realities of being an author.

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  1. Very useful information for readers, writers and publishers/self-publishers. Thanks for laying it out so clearly.

    Marian Allen

  2. Obviously people were busy enjoying turkey and family fun and not visiting the blog yesterday. Very helpful information. It was good to have the costs of e-publications explained so people don't think there is little or no expense in production.

  3. Thanks for this post. Interesting information to make people really think about what is involved.
    I produce e-book conversions and have had several Indy authors frown over the estimates I send them (very resonable estimates, too :-)). As if they thought I'd just take their print book (usually a .pdf version) and whisk it into the various DTPs with no effort. If it were that simple, they could have done it themselves.

    Get It Together Productions

  4. Thanks for the comments, ladies. I know. There's so much that people don't realize about the true costs of ebooks. It's an important discussion.

    Another thing that I didn't include in here is the idea that the ebooks should cost less because the handheld readers are expensive. While the price of tech will come down with time, the authors get nothing from the price of the handheld readers. They are two separate items. Just as you cannot expect to get gas for a low price because you purchased an expensive car, you cannot expect to get ebooks for free or pennies, because you purchased the most expensive tech to read them on. Two separate surveys in the last few years show that many ebook readers are reading on laptops, cell phones, and other items they already own.


  5. Hi Brenna,

    Loved the post. I was with one of the big six for my last two books now I am with a small press and never been happier. The press I'm with does print and ebooks. I just wanna say, I have a lot of friends who are epublished and I am also a big fan of ebooks. I think it is unfair for folks to say that ebooks shouldn't be priced the same way as print. Sure maybe the short stories and novellas can be cheaper, but if it's a full-length novel, I don't think it's bad for an author to expect to make money on an ebook they would for print.

    It's like folks forget that the same amount of time, effort and passion it takes to WRITE a book is the same no matter how it ends up published. I think folks forget that. E-published only authors are still authors who worked their heart out to write their story. It makes no difference how it's presented but the author should be paid for writing the book and it has nothing to do with it being print or ebooks.

    I get tired of folks acting like authors aren't supposed to get paid and if we say we want more, we get labeled as whiners and gripers. Writers, I swear are the most disrespected people in the arts and entertainment world but without us, there wouldn't be movies, books or songs. Yet people forget just how important our talent and creativity is.

    So I don't gripe when there is an ebook I wanna buy that costs the same as print. I remember that this is still a writer who deserves to be paid. Also, ebooks are selling more than print now so why not have higher prices for ebooks? This is gonna be the norm in the future and how will writers make money if they aren't paid what they deserve?

    Best Wishes!

  6. Hi Brenna,
    Great blog, very interesting and informative for e-book readers and writers.


  7. Thanks Brenna, for explaining how unfair it is for others to expect us authors to not only be starving artists, but not to complain about it. Our e-publishers still edit our books, and format contract with a cover artist. All of these costs are paid for with sales...along with the author's royalties. I like your analogy of expecting free gas because you paid for an expensive car. Can I quote you on that?

  8. Stacy,

    You hit on a very prominent misconception many readers have. They erroneously believe that the majority of the cost of a book is printing and shipping the physical paper copy. That is simply not so. It's really negligible, compared to other costs. Most of the cost is the preparation of the manuscript, overhead, and the royalties.

    The cost of printing and shipping a book varies widely by format (mass market, trade, hard bound, etc.), printing process (POD, offset, etc.), and options (paper chosen, B&W or color pages, raised or special colors on cover, dust jacket, binding, etc.).

    But an example I like to use that is less problematic is a DVD movie. Making the DVDs (in bulk, as they are made) and the packaging costs $2 (for supplies and manpower)...add a little per unit for overhead costs. Shipping bulk orders of DVDs costs pennies per unit. No one questions that the DVD movie costs $17 or more for a new bestselling movie. No one questions that you pay about the same amount for a download of the movie on Amazon Unbox. But they question the pricing of ebooks.


  9. Fiona,

    I was just paraphrasing something someone else said about piracy...wanting free gas because you bought a car (any car). It's a fairly common analogy on several subjects, so I can't see how quoting it or paraphrasing it as I did would be all that problematic.

    One I will directly quote was originally from Karen Woods of EPIC... "A book is a book, no matter the format." IOW, an ebook is essentially no different than a paper book...both in content and in handling.



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