Sony Ebook Boss: DRM Needs To Stay And Ebooks Should Cost More Than $10

from the good-luck-there dept

PaidContent has the details on an interview with Steve Haber, the boss of Sony's ebook reader business, where he trashed the $10 ebook and praised DRM. And now you all know why no one buys Sony ebook readers. Basically, the product's boss has decided to take an anti-consumer stance. Why would anyone want to shell out hundreds of dollars on a product when you know the company that makes it wants to screw you over?

On the price of ebooks -- a topic of widespread debate -- he insists that $10 can't possibly work:
"The $9.99 price point is not a money-maker. Certain bestsellers are sold at that price for retail, competitive reasons. But you need to have a range. You could go from $10 to $20 even to $100 for an e-book. There's no sweet spot and it's certainly not $9.99."
Well, first, let's be clear. The only reason that $9.99 isn't a money-maker is because publishers are still charging more at wholesale for the ebooks, still pretending that the lack of printing, materials and shipping shouldn't result in a lower price. Basically, the publishers are in denial, and Sony shouldn't be supporting them.

How about DRM? Remember, this is Sony, we're talking about, which has a history of abusing DRM against consumers. It's also the same Sony who keeps having its top execs claim that DRM holds up innovation and that open solutions win in competitive markets. And then they release their next DRM'ed/closed offering. So, how does Haber explain his love of DRM?
"You need an orderly process to sell books and DRM makes that possible, mainly because it allows content creators and distributors to make money from that content."
Huh?!? What does DRM have to do with making money from content? Absolutely nothing. iTunes sells a lot of music -- and it's all DRM free (finally). You don't need DRM to make money from content. You don't need DRM to have an "orderly process" to sell things. You only need DRM to limit what consumers can do, limiting the value of the content, making it less valuable to pay for.

It seems that the only thing keeping Sony in this business is the fact that the competition is basically just as bad on these issues, but one of these days someone's going to figure this out -- but it doesn't sound like it will be Sony.


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  1.  
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    Lobo Santo's Ugly New Pet, Dec 17th, 2009 @ 12:08pm

    Mike, what part of economics says that you MUST drop prices because you have a somewhat lower cost structure on a part of your business?

    Underpriced Ebooks would undermine the rest of the book selling business. It is fairly logical for the price of an E-book to be similar in the market place because customer demand supports it. Customers value the product and pay for it.

    I know, it's against your view of the universe, but why would anyone want to drop prices and gut another part of their business by doing it?

     

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    Unfrozen Caveman Lawyer, Dec 17th, 2009 @ 12:12pm

    The only way it could be less is if they don't pay for my counsel. So you customers better get ready for more $10 ebooks now, and $25 ebooks later, when I buy my 50 foot Yacht.

     

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    Dark Helmet (profile), Dec 17th, 2009 @ 12:15pm

    A thought:

    "iTunes sells a lot of music -- and it's all DRM free"

    Is there room for an artist-owned HARDWARE option that would allow for a sensible reduction in cost for digital content? What if a publisher, say Baen, manufacturerd an eBook reader and part of their author/publisher conract included part ownership of the eBook reader? That way author's would have a monetary incentive to want their eBook prices lowered, as would the publisher, all in order to make money off of this physical product. In theory, it might also drive up sales for dead tree books, as many readers who buy and eBook also buy it's physical counterpart.

    While I haven't put a ton of thought into this, it would seem to follow the scarcity test, and both author and publisher could stand to make significant, or perhaps even greater returns....

     

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    TheStupidOne, Dec 17th, 2009 @ 12:25pm

    DRM and eBooks

    I do not have an ebook reader (though I'm thinking about getting a nook) however I was unwilling to unless I could have DRM free books and backups of those books. So I went searching the internet and I found this:
    http://klungvik.com/index.php/2008/how-to-remove-drm-from-ebooks/
    Now I am much more comfortable buying ebooks because I can just strip the DRM out of it.

    As for the price point ... I won't ever pay more than $10 for an ebook. There is no reason in the world for me to pay $25 for a digital copy of a book that costs $0 to go from author to me (I'm ignoring of course the cost of bandwidth but that is probably pretty small) however $10 seems like a good price and I can pay that.

     

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    Anonymous Coward, Dec 17th, 2009 @ 12:27pm

    $100 for an ebook, what universe does this guy live in?

     

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    Anonymous Coward, Dec 17th, 2009 @ 12:33pm

    Re: A thought:

    I kinda doubt it, unless you have a couple million to devote to R&D.

    At the same time, it looks like a Google-based Android OS-based eBook reader platform like Barns & Nobel's eBook Reader, would be something to consider.

    But, just like on the cellular Android-based phones, there will likely be a number of white-label manufacturers that are AndroidOS compatible within the next few months.

    So if you wanted to get into that business, it would make more sense to adopt a hardware platform around AndroidOS. Google's open-source development approach will more likely drive total costs, including the books down, while increasing market share while Sony's proprietary development approach will more likely drive the costs up.

     

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    Rose M. Welch (profile), Dec 17th, 2009 @ 12:34pm

    Re:

    Yes, I'm sure that scribes felt the same way about Gutenburg.

     

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    Anonymous Coward, Dec 17th, 2009 @ 12:34pm

    Re:

    Well one reason could be that market demand that you are talking about seems to be going to kindle and not Sony. So if you want to suceed in a market saying that customers have to pay what you say seems like a bad idea.

     

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    Mike Masnick (profile), Dec 17th, 2009 @ 12:41pm

    Re:

    Mike, what part of economics says that you MUST drop prices because you have a somewhat lower cost structure on a part of your business?

    It's usually in one of the first few chapters. Depends on which text you have... If you let me know which textbook you have I might be able to point it out to you, but the chapters on supply and demand, competition and marginal cost would be good ones to read.

    Underpriced Ebooks would undermine the rest of the book selling business.

    Yes, just like "underpricing" telephone services ruined telecom. Or "underpricing" computers destroyed that industry.

    If marginal cost goes down, it means that someone will figure out ways to charge less, and then if you try to charge more, you're in trouble from a competitive standpoint.

    I know, it's against your view of the universe, but why would anyone want to drop prices and gut another part of their business by doing it?

    Ain't "my view of the universe." It's called economics. As for the answer to your question, why that's easy: if you don't drop your prices, and someone else does, guess where all the customers go? Only way to avoid that is collusion, and guess where that gets you?

    Or are you in favor of collusion and price fixing now too?

     

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    Ima Fish (profile), Dec 17th, 2009 @ 12:46pm

    Re:

    "what part of economics says that you MUST drop prices because you have a somewhat lower cost structure on a part of your business?"

    Correct, the market sets the price. The most people are willing to spend, regardless of how much it costs to produce.

    "It is fairly logical for the price of an E-book to be similar in the market place because customer demand supports it."

    Nope, there is no logic to that at all. There is no logic which necessitates that because consumers are willing to pay $20 for a paper book, that they must be willing to pay the exact same for an ebook.

    First, the paper book can be easily resold, thus a portion of the purchase price can be recouped, that cannot be done with an ebook. Second, the paper books can be easily loaned out, taken out in the rain, can be placed on a shelf to show off to your friends... etc., etc., etc.

    I'm not saying that ebooks should cost less. That's not for me or you to decide. That's for the market to decide. And right now the market is deciding that $10 is a popular price.

    "but why would anyone want to drop prices and gut another part of their business by doing it?"

    Because the market demands it. God, you started off so well. You argued that the market sets prices, not the cost of production. Now you argue that prices are set independent from the market and are arbitrarily set by the seller to whatever the seller thinks is appropriate. That's not the way it works.

     

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    Designerfx (profile), Dec 17th, 2009 @ 12:46pm

    drm business model thing

    why do I still see this argument come around? the "drm lets us do things!" argument? It never makes sense to me.

     

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    Hulser (profile), Dec 17th, 2009 @ 12:51pm

    Re:

    Underpriced Ebooks would undermine the rest of the book selling business. It is fairly logical for the price of an E-book to be similar in the market place because customer demand supports it. Customers value the product and pay for it.


    I'm not sure if I have the wording right, but in the UPS video that Mike did recently, he said "It's better to compete against yourself than have others compete against you." I think what your statements above don't take into account is that Sony e-books aren't just competing with Sony paper books, they're competing with other companies' e-books. So, regardless of whether Sony wants to maintain similar pricing, the marketplace will eventually dictate otherwise.

    Also, in the minds of consumers an e-book that is the same price as a paper book is not "underpriced". It's overpriced. Because the very kind of person that would be willing to buy an e-book is the same kind of person who would know that the productions costs are dramatically lower and, but all rights, the price should be lower. As someone else pointed out, the price is what people are willing to pay, not what the seller wants to get.

     

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    Hephaestus (profile), Dec 17th, 2009 @ 12:52pm

    Re: DRM and eBooks

    I am going to order a nook the thing has already been rooted so you can pretty much do what ever you want with it. Plus there is also support for text files that has been added since it was rooted last week. Which mean you can download the entire Project Gutenberg and the affiliate 100k + books. Plus what you said ... the DRM can be removed from all the e-book file types.

     

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    Esahc (profile), Dec 17th, 2009 @ 12:54pm

    Nope

    I will buy an e-book when the price of a non DRM e-book is less than a mass market paperback.

    $2.50 sounds about right.

     

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    The Infamous Joe (profile), Dec 17th, 2009 @ 12:55pm

    Re:

    I know what you're getting at, and you throw light on the overall problem with *all* digital media.

    You might not know, but in a *competitive* market, everything's price trends to the actual cost to produce it. However, as you so astutely pointed out, ebooks (and music, and movies) are *not in a competitive market*. All the labels sell their music for the same price, all movie downloads are the same price, all ebooks are the same price. Regardless of Label/Studio/Publisher. Odd, isn't it?

    Further, underpricing (as you call it) an ebook would give you the competitive edge over your competition-- if I saw two sci-fi ebooks from an unknown (to me) author, and one was $5 and the other was $10, guess which one I'd buy. Exactly. Now, how much does it cost to make a copy of a hardcover versus a copy of an ebook. Yup, much cheaper. (actually, close to nothing for the latter) That's why anyone who lives in the real world wonders why ebooks cost $10.

    To further prove how out of touch these people are, I submit Exhibit A. Please explain those prices to me.

     

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    Ima Fish (profile), Dec 17th, 2009 @ 12:55pm

    Re: A thought:

    "What if a publisher, say Baen..."

    Because people would not want to buy multiple ebook reader for each publisher. And even if some publishers came together to make an ebook reader, there will always be publishers left out from which consumers could not buy.

    Imagine if each music label had its own music format and player. Or if each movie studio had its own movie format and corresponding player. Consumers would be utterly frustrated, right? Very few people would buy, right? Well, there's your answer.

     

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    Anonymous Coward, Dec 17th, 2009 @ 1:01pm

    Re: Nope

    Yep. It is less functional. Let's say for some reason, you needed to copy a page or two, I don't believe you can. Or maybe you desired to sell the book, this too, is something I limited or not possible.

    Understanding that there is less capability, $2.50 does sound about right.

     

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    Hephaestus (profile), Dec 17th, 2009 @ 1:06pm

    Those who do not learn from history ....

     

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    Dark Helmet (profile), Dec 17th, 2009 @ 1:09pm

    Re: Re: A thought:

    "Because people would not want to buy multiple ebook reader for each publisher. And even if some publishers came together to make an ebook reader, there will always be publishers left out from which consumers could not buy."

    Hmm, I actually thought of the same issue shortly after hitting submit, but I'm not sure they're the barrier you think they are.

    Publishing today, particularly mainstream publishing of the kind that are currently pumping out eBooks, are more and more centralized. You may still have a ton of imprints, but in reality they're mostly owned by very few publishing companies. Take Penguin for example. They are a single publishing company with an assload of imprints that span most literary genres:

    http://en.wikipedia.org/wiki/Penguin_Group

    You get the major publishers to come together and produce one kick ass, end all, be all eBook reader (and yes, they'd have to foot the bill for R&D on the hardware, but together they ought to be able to do so easily), and then you increase the number of authors involved, skyrocketing the value of the reader, then drawing in more authors, etc. etc. etc. I think it could leapfrog itself to generate some serious revenue on the hardware side for both the authors AND the publishers. They could still have some revenue from truly low prices on eBooks, coupled with increased readership on DT books, coupled with complimentary revenue from part ownership of the hardware...I don't know, I think this might just be a winner.

    Some of the smaller, truly independent publishers (and I misspoke in my last example, since ultimately Baen would have to be counted amongst these in terms of sheer size) might not be able to play in this game, or else they'd have to go third party with some other arrangement for eBook revenue. But with the right number of major publishers coming together to put out these readers, you might at most end up with 2 or 3 of them.

     

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    me, Dec 17th, 2009 @ 1:12pm

    #$@!

    Just when I have my mind made up which reader is *most* likely to suit my reading style...the idiot boss of said reader product goes and says *this*.

    screw it.

     

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    Derek Bredensteiner (profile), Dec 17th, 2009 @ 1:12pm

    Re: drm business model thing

    I think I'm going to start a line of lead shoes.

    Hello Mr. Exec, you wouldn't want to go outside without these lead shoes, you might float away. It's dangerous to go outside without them, they enable you to go outside.

    No, you aren't going to float away without lead shoes. No, DRM doesn't actually stop piracy.

     

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  22.  
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    Anonymous Coward, Dec 17th, 2009 @ 1:14pm

    I wonder if there is a upper intelligence cut-off for being at corporate position in Sony? Unless you're below IQ 80 (Wechsler Scale) you don't qualify sort of thing.

    I might have leaked their secret selection procedure detail, in which case I'll await charges brought to me.

     

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    Hulser (profile), Dec 17th, 2009 @ 1:14pm

    Irrelevant?

    Perhaps a bit off topic, but...

    Won't e-book readers be all but irrelevant in a few years anyway? I don't have an e-book reader, so I admit, I could be missing the point, but it's my understanding that people just don't read e-books on their laptops or a netbook because e-book readers have very specialized displays that can render text very well. But then wouldn't it make sense that eventually, companies would be able to make a screen that could display your run-of-the-mill laptop/netbook graphics in addition to very clear, easy-on-the-eyes text? In which case, the whole concept of an e-book reader will be about as popular as the word processor.

     

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    Anonymous Coward, Dec 17th, 2009 @ 1:31pm

    What's interesting about the nook

    The eBook market is already real fragmented. Sony may be happy that they got Rupert Murdoch and WSJ on board, but man, Sony's eBook platform is probably going to go the way of the MiniDisc.

    Sony hasn't really done anything right. Even in a truly captive market segment such as BluRay, they are having trouble displacing previous DVD technoloy.

    I saw a tear down of Barns & Nobel's Nook reader, and it definitely looks like a 1st generation, almost prototype-like device on the inside. This could be good news and very telling that it's going to be looking for OEMs if successful.

    Also, if it's based on Open Source Android, It's possible for it to become the dominant platform in a few years, and other OEMs to start building Android based systems.

     

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    Wolfy, Dec 17th, 2009 @ 1:33pm

    I won't touch and product with DRM, "bluray", or HDCP. Are you listening, Sony?

     

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    Anonymous Coward, Dec 17th, 2009 @ 1:36pm

    Re:

    "Mike, what part of economics says that you MUST drop prices because you have a somewhat lower cost structure on a part of your business?"

    The part that says your customers will abandon/steal from you the second they sense that they're being gouged.

     

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    sehlat (profile), Dec 17th, 2009 @ 1:41pm

    ONE publisher HAS figured it out

    Baen Books figured it out ten years ago. They offer a monthly bundle of all the books in the upcoming month for $15. Individual books become available later at $6. All the books are DRM-free and available in multiple formats: HTML, Ebookwise/Rocket, Mobi/Palm/Kindle, EPUB/Stanza, Microsoft Reader, Sony, and RTF. Since the books are DRM-free, you can "roll your own" if you like. For example, I create a text+_italics_ copy from the Microsoft version, stuff it into my Palm, and read.

    As for the supposed damage cheap eBooks do: Baen actually makes money off the electronic editions, in addition to having seen treeware sales go up. A while back, they started offering electronic Advance Reader Copies of yet-to-be-released books, and enthusiasm and sales exploded.

    I suppose the moral of the story is that if you treat your readers as customers and not as wallets, the sales will be there.

     

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  28.  
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    ., Dec 17th, 2009 @ 1:43pm

    aha!

    That is why Samsung keeps gaining terrain.

    One note though, in Japan Sony is not the only one to sell e-readers.

    There is a fierce competition with Fujitsu that is developing e-ink colored ebooks, samsung that have colored e-ink also if I'm not mistaken and a dozen of LCD based ones if not more not counting the chinese versions that are dirty cheap costing around $50 bucks.


    e-readers:
    Fujitsu - FLEPia
    Samsung - Papyrus
    Cybook
    COOL-ER
    iRiver - Story
    iLiad
    BeBook
    Argosy - EB-660

    The list goes on. There is not just 2 competitors.

     

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    Anonymous Coward, Dec 17th, 2009 @ 1:50pm

    Re: Irrelevant?

    Like this?

    http://pixelqi.com/blog1/2009/11/

    Which is going into production in Q1 2010

     

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    sehlat (profile), Dec 17th, 2009 @ 1:54pm

    MediaFuturist has some interesting commentary, too.

     

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    olddeadmeat, Dec 17th, 2009 @ 1:56pm

    Re:

    Because your old business is no longer a growth model and the new one is.

    By the way - check out webscription.net - they give away no DRM books for free (baen.com/library) and sell many books for $6 or less. And the authors like it BECAUSE THEY GET JUST AS MUCH OR MORE MONEY SELLING THERE than selling a $8 paperback thru border's.

    Sooner or later technological breakthrus gut the old technology's business. There still are businesses out there that repair TVs, sell wind-up pocket watches and oil lamps, but that's not the majority of the market anymore.

    The transistion is happening - it's just how and how fast will it happen.

     

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    Griffon (profile), Dec 17th, 2009 @ 1:56pm

    Nowhere but down to go

    Authors get paid maybe 10-50 cents a copy depending on how big they are.
    Publishers have a lot of dead tree technology and it costs money to print books, hard backs more so.
    Editors marketing etc cost money of course.

    All of that irrelevant. Publishers are going to be in the same squeeze the recording industries finds it's self. It will be cheaper and more cost efficient for authors (and we are seeing this now) to make a separate ebook deal that rewards them as well if not better. New industries and industrie arms of companies like amzaon will grow based on direct author and fan connections. Dead tree companies shrink. The economics and digiital distribution and ludicrously low leaving only editors and marketing to pay for. Everybody can have a bigger cut even with books being almost free (which is a good way to point out how screwed up things are now just like with the record industries).

    Ebooks not from major publishers will be 2.99 within 2 years new releases will be around $6. Within 5 years ebooks will be 1.99 on average with new releases being 2.99.
    Sadly, authors will be back to being payed around the same as today, since the original creators allays get screwed by lack of leverage. But for a short while new digital publishing stars will rise.

     

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    Chris, Dec 17th, 2009 @ 1:57pm

    Re: $100 ebook in post 5

    When the kindle first came out I found a $100 ebook. The paper version sold for $315. However it looks like they pulled it because now I only find the paper version.

     

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    Joe, Dec 17th, 2009 @ 2:05pm

    Overpriced already

    I still don't understand ebooks personally, at least those with DRM. I was on Amazon the other day buying a book, and the print copy was a hair over $10. The ebook version was $9.99, plus I would need to shell out a few hundred bucks for a reader. AND I wouldn't be able to share it with my girlfriend when I was done like I plan to do with the print copy. So, how does that price make sense? Put them in the mp3 range ($1 or so) or make the readers cheaper and they've got something. As it is, that market has no standing at all as far as I can tell...

     

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    Curious george, Dec 17th, 2009 @ 2:17pm

    Re:

    Why do Lobo Santo's ugly pets never respond to any of the comments about their posts ?

     

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    Joe, Dec 17th, 2009 @ 2:17pm

    Race to the bottom

    Wasn't Sony also the company that missed out on the netbook market because they couldn't make any money in a "Race to the Bottom?" And didn't they come out with their own generic and uninspired netbook offering shortly thereafter?

    And besides... who's seriously considering buying a reader from them when there's already the Kindle and Nook on the market and The Edge and Courier (to name just a couple) in the future? Sony used to BE the ebook market, and overnight, they lost it. Why am I not surprised either?

     

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    Anonymous Coward, Dec 17th, 2009 @ 2:19pm

    Re: Re:

    if I saw two sci-fi ebooks from an unknown (to me) author, and one was $5 and the other was $10, guess which one I'd buy

    Not that this has anything to do with your point, but many people might get the $10 instead, assuming that it must be better since it costs more. That's why pricing is so difficult, and there is no correct or fair price.

     

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    No Good Answers For This One, Dec 17th, 2009 @ 2:20pm

    Why would I purchase any product from sony ... (they suck) ... much less a so called ebook reader which comes with many more limitations than a real book and cost the same ?????

     

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    Dark Helmet (profile), Dec 17th, 2009 @ 2:22pm

    Re: Re:

    "Why do Lobo Santo's ugly pets never respond to any of the comments about their posts ?"

    Try questioning someone's dog. You'll get about as intelligent a response....

     

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  40.  
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    interval, Dec 17th, 2009 @ 2:28pm

    Re:

    The same universe that seems to believe that a license should be paid out to 15 different license issuers every time a "public performance" of any work is "performed", even if they don't actually own the work in question, and where a public performance is defined as my whistling the work out of tune. Yeah, that's the universe I want to live in.

     

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    interval, Dec 17th, 2009 @ 2:34pm

    Re:

    You buy an ereader that doesn't have all that crap on it, one like this dandy Etaco I bought at my local supermarket (they have a small consumer electronics section). $150 (still high in my opinion but closer to earth than the nook or that amazon monstrosity), and it supports over 50 formats of electronic data including pdf. This device has 500M static ram installed plus it supports an sd card. I now carry around with me in my briefcase my entire library, all my copyright-free, public domain favorites, a bunch of reference books, and not too few current titles. All drm free. I love it.

     

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    eReader Owner., Dec 17th, 2009 @ 2:40pm

    Sony

    I agree that Sony is being moronic with their stance, but I have to put in a good word for them about one thing. When they switched for the lrx format to the epub format, they could have just told first generation owners they were out of luck because their ereaders didn't support the new format.

    Instead, they paid to overnight all devices to Texas, are upgrading the devices, and overnighting them all back, free of charge to us. I was a bit amazed, and very pleased with Sony coming through. Good service like that deserves a plug.

    Even if they are being stupid about other stuff.

     

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    Anonymous Coward, Dec 17th, 2009 @ 2:50pm

    Re: Re: Re:

    Yes! Did you get the ad for the dog "services company"?

     

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  44.  
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    spaceman spiff, Dec 17th, 2009 @ 3:00pm

    nevermore cried the raven!

    And Sony wonders why I am boycotting their products? This crud is exactly why! I will NEVER purchase another product made or distributed by Sony, period...

     

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  45.  
    identicon
    To scared to say becasue Sony could RootKit me!, Dec 17th, 2009 @ 3:01pm

    I just got my wife a Kindle. I was seriously looking at the Sony reader too. This kind of comment makes me glad I got the kindle.

     

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  46.  
    identicon
    pete, Dec 17th, 2009 @ 3:02pm

    the sony reader supports many non drm ebook formats. is it just the books that you buy from the sony/borders store that are drm. they are many places to get books without drm. sony does have a very good reader it supports more off the shelf formats than the kindle. i have one and would not trade it for anything else on the market right now.

     

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  47.  
    identicon
    Anonymous Coward, Dec 17th, 2009 @ 3:12pm

    Re: Re: Re:

    It could also be mike, as Marcus Carab believes.

    http://twitter.com/beamadelica/statuses/6776368855

     

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  48.  
    identicon
    Just passing through, Dec 17th, 2009 @ 3:16pm

    Re: Re: A thought:

    This sounds familiar. Microsoft...Apple...Market Share?

     

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  49.  
    icon
    Marcel de Jong (profile), Dec 17th, 2009 @ 3:23pm

    Re: Re:

    well it's not stealing, it's copyright infringement.

    But yes, indeed. "piracy" is already there for ebooks, so if this Sony ebook suit thinks he can compete with free by gouging, by all means, he can price himself out of the market, and let his company shrivel up and die.
    I wonder how this Sony suit thinks he can take a moral highground around DRM. I hope we haven't forgotten about the downright criminal tactics that Sony has tried to pull in the past with their DRM schemes? I, for one, haven't, and it's still the basis of why I won't buy Sony.
    Indeed, different departments within Sony, but it seems that these people don't learn from mistakes made by others. And want to press on...
    Music business: we want control, let's try to restrict our customers in the name of 'anti-piracy'. Oh, help, DRM isn't working, people aren't buying it, but instead are downloading even more. I guesss the stick approach didn't work.
    Movie business: Oh, the music business couldn't make DRM stick, but I'm sure that we can. Oh hey, not fair, the download services are sprouting like mushrooms.
    publishing business: hm, both the music and the movie industry haven't been able to make DRM work for them. But I'm sure that we can do that. Let's increase the price even!

     

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  50.  
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    Seshan (profile), Dec 17th, 2009 @ 3:25pm

    Good to know, I just bought my mom a sony ebook reader for christmas!

     

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  51.  
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    ajgajg1134 (profile), Dec 17th, 2009 @ 3:28pm

    Still safe with a sony ereader

    Luckily (like me) if you have a sony E-Reader you can still use most other stores as Sony takes the Opensource EPUB format. THANK GOD!

     

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  52.  
    identicon
    Anonymous Coward, Dec 17th, 2009 @ 3:29pm

    Wuts a Sony? Are they like Samsung?

     

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  53.  
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    Marcel de Jong (profile), Dec 17th, 2009 @ 3:29pm

    Re:

    If you DRM something, you lower the value of the product already, because you limit the customer what he or she can do with the product.
    "No, you can't put this on your Kindle, you need this Sony ereader. And no, you can't loan it to a friend, nor resell it."
    So that's strike one against increasing the price of the product.

    As a content publisher, you also have lower costs for the product. Of course you don't have to adjust the price, but consumers on the whole aren't stupid. They know that a paperbook costs you, as a producer, more to make (paper, ink, transport, storage), than a purely digital copy. (nowadays most books are already delivered in digital format, all you need is to do is convert it to the right format, and sell it in an online store, cutting out printing costs, paper, ink, transport costs, etc.)
    So that's strike two against increasing the price of the product.

    And then there is supply and demand. On the internet, supply is infinite. You don't have to reprint a book, for instance, just make a copy. And Econ 101 states: price = demand / supply. There is a demand for ebooks, but it's not infinite, whereas supply is limitless. Thus you can a price that's supposed to approach 0. But as that's not always a good businessplan, as people realize that artists do need to eat. So consumers are willing to pay a price. But they are not willing to be fucked over through price-gouging.
    And that, my friend, is strike three.

    You're OUT!

     

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  54.  
    identicon
    The Naughty Librarian, Dec 17th, 2009 @ 3:32pm

    Lovin' the DRM

    In my library, I make sure to lock it all up, because books aren't secure unless they are locked down so everyone can read them... When they have my permission, of course.

     

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  55.  
    identicon
    Donna, Dec 17th, 2009 @ 3:49pm

    I have had a Sony reader for about a month and love it. But I have never bought, nor have any interest in buying DRM books. I have filled my reader with public domain books, books downloaded from my library website, and free content from news feeds.

    If you do want to buy books, at least Sony doesn't lock you into a specific ebook store or source, unlike the Kindle. At least with this competition, there is a chance that competition will place pressure on the price.

    Choosing a e-reader should be about buying the best hardware features, not the manufacturer's content store. I discourage anyone from buying a reader that uses any proprietary format.

     

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  56.  
    identicon
    Luci, Dec 17th, 2009 @ 4:34pm

    Re: Re: Re:

    Wow... You're an idiot, too, aren't you? Most people would crack open both books and read a para or two, then decide which they want. Sight unseen, though? I don't think the 'it's more expensive so it must be better' argument is going to see you through as much as you think it is.

     

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  57.  
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    Marcel de Jong (profile), Dec 17th, 2009 @ 4:35pm

    I propose a new businessmodel

    Service as a service (SeAAS, as SAAS is already taken)

    Publisher X has a service (proofreading and publicity).
    Author Y wants proofreading and publicity.

    X tells Y: "For a commission of z amount of dollars (or a percentage of your revenue), I will have your book proofread, and I will publicize your book to these markets. They get in contact with you (or your agent) to set up a trading agreement. If you want, for an extra reasonable fixed fee we are prepared to be the middle man for you.
    You keep all the rights to your book, and you collect the money from the sales."

    Have a sliding scale of services you can offer to the artist/writer/musician/moviemaker, and set prices for it.
    for X amount of dollars, you will get A.
    For X+Y amount of dollars you will not only get A but also B.
    And if you want the complete package, we can arrange a discount.

     

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  58.  
    identicon
    SONY ROOTKIT, Dec 17th, 2009 @ 4:43pm

    NO TO SONY ROOTKIT

    these parasites dont get it
    and thansk for making it clear that everyone on earth that doesnt make 50 grand a year can no longer afford to read

    sky high internet in canada
    throttling
    user based billing
    IDIOT MEDIA LABELS

    whats next
    i have to start paying a user based billing every time i shit

     

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  59.  
    identicon
    Stephen, Dec 17th, 2009 @ 5:57pm

    Re: Re: pricing

    Yep. That's one reason why some hardcovers are $24.95 and some are $27.95 even though they are the same length. The latter are in categories, such as history and science, whose readers are willing to pay the higher price.

     

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  60.  
    identicon
    Stephen, Dec 17th, 2009 @ 6:06pm

    Re: Re: Re: Re:

    Actually, Luci, you're very, very wrong. In the digital realm, a recent study of iPhone app prices showed that people do value apps the more they pay for them. Those that are free generally stop being used pretty quickly. Those for which someone paid even $1 are used much longer. Consequently, the average app price is $1.30, and the point just before there's a significant dropoff in sales is $4-5. So price can dictate value, and I suspect paying that price then results in people seeing value, if only as a result of loss aversion.

    In addition, the entire luxury brands market is based on people equating top brands (and their exorbinant prices) with value, even though the quality of the articles themselves has been greatly diminished over time because manufacturers have realized that all that matters is the label. Read "Deluxe" by Dana Thomas.

     

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  61.  
    identicon
    Griffon, Dec 17th, 2009 @ 6:20pm

    Re: Nowhere but down to go

    You're living in a fantasy world of limitless competition and agnostic readers. Within 18 months, ebooks will the $12.95 at Amazon. Books as iPhone apps, however, may be around $2-5.

    But let's work out the advance for a $2.99 book. Let's say the royalty is 25% of net, which standard now, and let's say the discount from publishers to retailers such as Amazon is 50%, which is actually pretty high for a small publisher. That leaves a net price of $1.50 and a royalty of $.375 A trade ebook, say a paperback mystery or pop science title, might sell 200 copies in year, but let's also assume that there's a lot of growth in this area and bump up the sales to 500 a year (which would be 5-10% of what the treeware version of such a book might sell today). That throws off a year one advance of $187.50.

    I have to say, there aren't a lot of agents who will want to go to all the trouble of selling a subright for less than $200, seeing as their cut would be only $25 (cf. Malcolm Gladwell on why real estate agents don't hold out for higher prices), when they could just sell them as part of the deal with the treeware publisher.

     

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  62.  
    identicon
    Has a Sony E-reader 500 and is not upgrading., Dec 17th, 2009 @ 6:28pm

    Re: Sony

    I agree that Sony is being moronic with their stance, but I have to put in a good word for them about one thing. When they switched for the lrx format to the epub format

    Instead, they paid to overnight all devices to Texas, are upgrading the devices, and overnighting them all back, free of charge to us. I was a bit amazed, and very pleased with Sony coming through. Good service like that deserves a plug.


    That I have to send off my e-reader for them to upgrade is moronic too. What is so complicated about upgrading the OS on my ebook reader that I need to ship it back to the manufacturer?

     

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  63.  
    identicon
    Ima Shrimp, Dec 17th, 2009 @ 7:54pm

    Re: Re:

    Great speech, but you just missed the point slightly!

    Yes, the market sets the price, but the market doesn't always set the price LOW. If a book is $20, and ebooks are marketed at $20, and people buy them, well, the market accepts that price. If nobody buys, then yes, the market sets the price.

    Mike: Books are not specifically a competitive market. There is only one company selling each book. As such, the rules of competition don't specifically apply, because each book is like a minor monopoly. Sure, there is overall market pressure (such as the walmart deal recently) but basically, there is no direct competition for each title.

    So pricing comes down to "what the market will bear" as opposed to a strictly competitive market. Yes, I know what part you are talking about in the textbook, but it doesn't apply in monopoly or near monopoly situations.

     

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  64.  
    identicon
    Justa Minnit, Dec 17th, 2009 @ 8:55pm

    Re: Re:

    Don't know if I'm typical or not, but my library is more than 90% paperback; I only buy a hardcover book if I'm certain that I'll read it numerous times -- and a lot of those paperbacks come a nationally-known used book reseller, so my average price point is significantly south of even $10. The way I see it, a DRM-"protected" title has somewhere around the life expectancy of a paperback, given that it's not easily backed up and subject to reader-technology obsolescence, so why would I pay anything like a hardcover price for one? I can't see ebooks really taking off until there's a positive ROI for paperback buyers like myself.

     

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  65.  
    identicon
    Haha, Dec 17th, 2009 @ 8:57pm

    Re: Re: Re: Re: Re:

    Not just wrong ... but very very wrong !

    That's rather funny. One data point (iPhone Apps) which is not of the same category (books / ebooks) certainly proves your point very very well.

     

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  66.  
    identicon
    Arun, Dec 17th, 2009 @ 10:23pm

    Re:

    Lobo,
    What makes you think that readers who buy paperback/hardback won't buy ebooks and vice versa? It's been the experience of Baen Publishing that readers buy ebooks and paper books because both have different advantages.

    Please do your research before you shoot your mouth off next time.
    Arun

     

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  67.  
    icon
    sehlat (profile), Dec 17th, 2009 @ 11:12pm

    Re: Nope

    I have no quarrel with paperback-level prices for eBooks. The fixed costs that go into a *quality* book involve the author's time and effort, plus copyediting, proofreading, possibly story conferences with the editor, etc. etc. Those costs aren't going to change much because they're all *people* costs.

    And I'm very big on publishers and authors eating hot food and sleeping indoors, if only for the selfish reason that it allows them to produce more of my favorite addiction.

    Be it also noted. I despise attempts to price eBooks at the same level as hardbacks. For one thing, I don't buy hardbacks any more unless the name of Lois McMaster Bujold is on the cover, or they're from Baen, who I figure doesn't charge enough for their eBooks. Cheap eBooks, at least in my life, *can't* "cannibalize" hardcover sales because I don't buy the hardcovers. Period. I buy the electronic editions for me, Bujold hardcovers for my wife and niece, and Baens for the local library, to create new addic... er... fans. :)

     

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  68.  
    icon
    sehlat (profile), Dec 17th, 2009 @ 11:15pm

    Re:

    It may be a real-life version of what I have gathered is a military joke of long standing, that one of the requirements for promotion to the rank of Major is a lobotomy.

    Perhaps in this case, it's simply a requirement for being a Sony executive.

     

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  69.  
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    sehlat (profile), Dec 17th, 2009 @ 11:23pm

    Re: Irrelevant?

    eBook readers have always been pretty much irrelevant to me. I started around 1999 when I discovered Baen was publishing eBooks I could (gasp) stuff into my Palm Pilot. After that, and my discovery of Fictionwise's open formats, all equally Palm-stuffable, I never looked back.

    I tried a Cybook e-ink reader a year or two ago, bought in a mad moment, and discovered that the "blink" between pages (if you want a *clean* page display) made me dizzy and sick. I immediately went back to the PalmOS brigade.

    Besides, why the [obscenity] should I carry one gadget for my schedule/addressbook/checklists AND a separate book reader. Sure, with font set to LARGE BOLD to accommodate 60-year-old eyes, I have to down-click a lot, but I don't even notice that. I just read.

    THAT's why open gadgets and formats are so effective. *I* choose HOW I shall read, and don't have to say "mother may I?" to anybody.

    Also, with open formats, if the publisher doesn't have what you personally like, you can roll your own. Again, I praise Baen for teaching me that. They don't produce my favorite plaintext plus _italics_, but two minutes with a regular-expression-oriented editor and an HTML file, and I've got one ready to hotsync. I've even got scripts to do the job.

    Where's yer closed formats the noo?

     

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  70.  
    icon
    Dementia (profile), Dec 18th, 2009 @ 3:37am

    Re: Re: Re:

    Competition, hmmm, you know, when I go into a bookstore, unless I am there for a specific book, I generally browse through an entire genre to find one that looks interesting. Do I check the prices? Not always, but I have been known to decide one or two just cost to damn much, so they were put back on the shelf in favor of other titles. So, there is no "mini-monopoly" on each title and there is direct competition for EVERY title.

     

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  71.  
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    Dementia (profile), Dec 18th, 2009 @ 3:47am

    Re: Re: DRM and eBooks

    Just keep in mind the circumvention clause. Don't broadcast that you're going to circumvent the protection.

     

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  72.  
    identicon
    Vincent Clement, Dec 18th, 2009 @ 5:22am

    Re:

    what part of economics says that you MUST drop prices

    The part that says you can sell more product if you lower your price. Read the supply and demand chapter in any basic economics book.

    Underpriced Ebooks would undermine the rest of the book selling business.

    So what? Plenty of companies sell products that lose money but make up the loss elsewhere (ink jet printers are a good example).

     

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  73.  
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    Hephaestus (profile), Dec 18th, 2009 @ 6:37am

    Re: Re: Re: DRM and eBooks

    I am not removing the DRM off e-books just stating it has already been done.

    With the fact that the nook runs andriod it is a very good "star trek" style datapad. With the 802.11 b-g WiFi and a little creative programming you can basically upload what ever you want to it wirelessly. The one thing the nook needs is a micro USB keyboard with trackball.

     

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  74.  
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    Hephaestus (profile), Dec 18th, 2009 @ 6:44am

    Re: Re: Re:

    "I can't see ebooks really taking off until there's a positive ROI for paperback buyers like myself."

    You mean like an open system that allows you to re-download "without cost" any e-book you have lost due to reader malfunction,etc ...

     

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  75.  
    identicon
    Derek McQuay, Dec 18th, 2009 @ 7:33am

    "You mean like an open system that allows you to re-download without cost" any e-book you have lost due to reader malfunction,etc ..."

    Baen's doing that now.

    What I don't understand is that if you're selling readers, you have to compete with the established paperback market. You need to undercut that market to get people to migrate to using e-readers. As long as a paperback is cheaper than an ebook and the cost of the reader why would rational people switch to the ereaders? The utility that a ereader provides is not enough to justify an ebook being more expensive than a new paperback book.

     

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  76.  
    icon
    Almost Anonymous (profile), Dec 18th, 2009 @ 9:22am

    Re: Re:

    What a silly question! They are pets, naturally they can't read!

     

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  77.  
    identicon
    Dana, Dec 18th, 2009 @ 10:44am

    Re: Irrelevant?

    I had an eBook a long time ago (a Rocket Book, very nice device for its time). I've used several different devices since then, none which were a dedicated device (Sony Clie, Dell Axim, iPhone). I think the concept of a dedicated eBook device is already obsolete.

    I like backlighting so I can read in the dark so I am not interested in any of the ePaper devices. Others may (and do) feel differently and would prefer different devices.

    It is a bad idea for a publisher tying their content to a device. Baen has the right idea - they make their content available for you to use on whatever device you want.

     

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  78.  
    icon
    nasch (profile), Dec 18th, 2009 @ 1:24pm

    Re: Re: Re: A thought:

    But with the right number of major publishers coming together to put out these readers, you might at most end up with 2 or 3 of them.

    I don't see a problem with 2 or 3 publisher-backed eReaders, as long as they use open formats. 2 or 3 proprietary ebook formats that can be used only for that publisher's books would be bad.

     

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  79.  
    icon
    nasch (profile), Dec 18th, 2009 @ 1:29pm

    Re: Re: Nope

    The fixed costs that go into a *quality* book involve the author's time and effort, plus copyediting, proofreading, possibly story conferences with the editor, etc. etc.

    Fixed costs aren't relevant to pricing in a competitive market, only marginal costs. The fact that a publisher has a monopoly on each title means publishing isn't a perfectly competitive market. However, the point is still mostly true.

     

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  80.  
    icon
    nasch (profile), Dec 18th, 2009 @ 1:34pm

    Re: Re: Irrelevant?

    I like how they angle the matte screen up at the lights, and put a window behind the glossy screen, to maximize the amount of glare on them. Despite the shenanigans, it looks great, assuming the outdoor photo isn't a fake. I've never seen a laptop that looks good outdoors.

     

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  81.  
    icon
    nasch (profile), Dec 18th, 2009 @ 3:22pm

    Re: I propose a new businessmodel

    I propose a new businessmodel: Service as a service (SeAAS, as SAAS is already taken)

    There's a shorter name for that: "service".

     

    reply to this | link to this | view in thread ]

  82.  
    identicon
    Book Calendar, Dec 19th, 2009 @ 7:09am

    An ebook comes first.

    There are a lot of things wrong with this idea. Books are produced electronically before they are put into paper. They are edited over the internet. The author sends a file to their publisher on a computer most of the time. The day of the typewriter is long gone.

    The first portion of the book is the electronic file which can be very quickly turned into an ebook without the cost of printing a paper copy. The only reason to pay extra for an ebook is if there are additional electronic options-- built in music, video, high quality photography which would not appear in the hardcover copy. It is cheaper to make the ebook. Look at the sports illustrated tablet. This is what I would pay extra for in an ebook. It has the extra that is worth it. http://www.observer.com/2009/media/demo-future-sports-illustrated-tablet

    A hardcover copy should cost more than an ebook. They are using paper and other products. This means less should be produced, they should be higher quality and better designed than the current ones being sent out to the consumer.

    The old distributor model is dying. Watch out for things like the partnership between the Espresso Book Machine and Google Books.

    I should have the option of going into a store with a limited display of the best material and a counter where I can pick up a fresh printed copy in three minutes or download something in a universal format to an ereader or a laptop.

     

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  83.  
    identicon
    librarian, Dec 21st, 2009 @ 12:00pm

    free ebooks from your library for sony reader

    If your library is one of the 9,000 or so nation-wide offering OverDrive ebooks, you can get lots of FREE bestsellers for your Sony Reader.

     

    reply to this | link to this | view in thread ]

  84.  
    identicon
    Book Calendar, Feb 18th, 2010 @ 11:07am

    Major cost is not producing the book, it is the intellectual effort.

    The cost of producing electronic products is becoming cheaper in terms of goods. However, there has been a trend to devalue intellectual effort and intellectual property and only pay a few aggregators for the content they are selling. The producer should not be able to make more money than the creator of intellectual property.

    Quality writing requires effort both in editing and writing. The question we should be asking is how do we pay the writer and editors for what they produce, not whether or not Sony is making money.

    We need people who think more than we need Sony. Pay the writer, pay the editor, eliminate the middle man.

     

    reply to this | link to this | view in thread ]

  85.  
    identicon
    proofreading prices, May 13th, 2010 @ 12:15am

    DRM & e-books

    Do not forget the final arbitrator - the satisfied consumer.

    Ultimately, he decides.

     

    reply to this | link to this | view in thread ]


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