Originally Posted by WhiteCrane
If you eliminate physical stock, prices will rise. That's my point.its happening right now. I regularly find hard cover books for less than their eBook equivalent.
The reason for this is two fold, a consumer public that is ignorant and an industry trying to use a supply and demand model for digital media.
Look book costs are set when it comes to ebooks. The cost is the initial fee paid to the writer, editors, final formatting. Now add to this the initial book promotion and any translations that are needed and the ebook costs are done. The problem is these are not all costs of the ebook, all of these costs are shared with the paperback, hard cover and audio book as well.
The other formats now have additional costs for their production but the ebook production costs stop here. This is where the consumer ignorance and an outdated supply and demand model kick in.
Under supply and demand as the demand goes up the cost can rise do to the costs to increase the supply. This however fails at the ebook or digital media level because there is zero cost for supply outside the initial cost of production. Thus if the demand is 100 copies or 1 billion copies there is no extra costs associated with the ebook sales based on numbers.
Now based on this model, if the publishers and book sellers insist on holding to supply and demand, ebooks would have a reverse pricing scenario. As sales go up the cost of the book would reduced because the profit margins would increase drastically as all sales after a set level are 100% profit. This is where the ignorance of the consumer comes in because if we knew that we would be raising nine levels of hell about digital media pricing.
I am not opposed to early adapter pricing, this means when a book or such is first released the price is high. The idea is to recoup the initial cost as quickly as possible. So an ebook at first release being say $15 is not to me a big deal. However in the book world 6 months to a year into sales the prices on books plummet. The initial sales are done and this move is made to keep sales going. The same should happen to an ebook, drop that price to say $5. Now if sales come back up, unlike other book formats where a piece of the price pie has to be taken out for perhaps another production run to match demand, the ebook price can stay stable because there is no additional run cost.
Digital media is a new shopping frontier and the publishing companies should adapt, but until the public gets educated on this and actually acres they do not have to adapt because people keep paying stupid pricing models.