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Comment by patrickyeon | Hacker News Reader

A little off-topic, but I found this interesting:

> "Specifically, a lot of the traditional guys price e-books at $20–30, often times more than the paperback/hardcover, which is so stupid."

It catches my eye when people get stuck on an e-book version costing more than a hard copy. It's funny that a Kindle version can be more valuable (instant delivery, easier to carry around, and a more enjoyable reading experience) to somebody, but still seem like it should cost less. Personally, I'll gladly pay an extra dollar to get an e-book version for anything I'm only expecting to read once or twice.

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>It's funny that a Kindle version can be more valuable (instant delivery, easier to carry around, and a more enjoyable reading experience) to somebody, but still seem like it should cost less.

That's a bizarro reasoning.

Obviously it's not about the value added because of extra functionality, it's about the new technology having lower marginal costs (and all that functionality comes basically for free), and publishers still charging as if they still incur the full physical production and distribution costs.

When commercial music records first came out in the late 19th century, they cost quite a lot -- but that was justifiable because it was a new technology, with big costs to manufacture, carry, etc.

Would you justify paying the same amount for an mp3 today, just because it's more convenient and it sounds way better than those disks?

publishers still charging as if they still incur the full physical production and distribution costs

I haven't worked out the numbers to figure out whether there's really parity here, but the physical production and distribution costs are now borne by computing and network infrastructure.

> Obviously it's not about the value added because of extra functionality, it's about the new technology having lower marginal costs

Is that really how supply and demand works though? If people are willing to pay more for the extra functionality, why would you not sell it at that higher price?

Most people aren't paying for the extra functionality of ebooks though. Most people are still buying physical books: http://authorearnings.com/report/print-vs-digital-report/

Also, your reasoning for selling a book at a higher price is not correlated to supply vs. demand. What you are talking about is a pricing strategy. There is a near unlimited supply of an ebook, so it's not supply vs. demand, it's a pricing strategy that's setting the price. A pricing strategy could also be used to sell the ebook at a cost below production costs to drive sales. Again, the ebook supply remains constant.

> Most people aren't paying for the extra functionality of ebooks though. Most people are still buying physical books

That's not what I'm talking about though. I'm talking about this: if you set the price of ebooks at some small margin above the price to produce plus the price to license the content, you sell at price $X. If you set the price where people are willing to buy it due to increased convenience for them, you sell at price $Y. If $Y > $X, why not sell at $Y?

Of course, this isn't a direct relationship, since different people have different $Y prices, but there's a price curve there, and one ought to sell their ebooks on the curve to maximize the (number of sales) * $Y.

> Also, your reasoning for selling a book at a higher price is not correlated to supply vs. demand.

Maybe supply vs demand was the wrong choice of words, but that shouldn't detract from the point.

>Is that really how supply and demand works though? If people are willing to pay more for the extra functionality, why would you not sell it at that higher price?

People are not willing, they are forced to, if they want the book, because books have an artificial monopoly based on copyright.

That is, I can't offer the same book for cheaper unless I have the copyright to the content.

> People are not willing, they are forced to, if they want the book, because books have an artificial monopoly based on copyright.

In many cases people have a choice of ebook vs physical copy, which is what we're discussing here.

>In many cases people have a choice of ebook vs physical copy, which is what we're discussing here.

Well, then it's still no free competition, between those are two entirely different technologies, and the sole owner of the copyright sets the price of both.

To put it in another way, the prices of ebooks that are in public domain (e.g. 19th century books) are way lower (e.g. $1 per book for some publishers), whereas printed editions of said books are as high as they ever were.

Which supports my point. Price isn't set relative to production cost. It is set relative to value to the users.

Sure, it's about supply and demand, but the cost of distributing and ebook compared to a hard copy is close to zero. Plenty of products are artificially priced, but when this is very obvious, it feels like a rip-off.

Things cost as much as people are willing to pay for them.

If I'm willimg to pay $5/$20/$50 for an ebook, it should be irrelevant how much it costs to distribute it.

It has information in it and if I want this information I will give author the money.

He may have determined his price by considering the distribution costs, or how much he wants to make per hour, or based on how much he thinks people will buy it for, or he may have simply pulled it out of his butt.

If I'm handing him $50, and am not disappointed after reading the book, it is not a rip-off.

To expand on this: if the book can provide value above and beyond its selling price, it is a worthwhile purchase.

Your examples of "how to price" are all focused on what the author wants (or what he can get away with). The way to justify a higher price is to focus on what the READER wants, and the value they will get out of the book.

An ebook about learning React, for instance, might be worth $39 because it will save the reader HOURS of reading through random blog posts. How much is their time worth? (source: I wrote and sell an ebook about this. People actually buy it :)

Anything digital artefact seems to cost less because a electronic copy seems almost free (in time, space and energy).

If it's an DRM free ebook I'd understand your argument. But almost all ebooks you can buy have DRM and therefore you don't really own it, you can't lend it to friends etc. It's not just about the marginal cost and the distribution cost.

> Personally, I'll gladly pay an extra dollar to get an e-book version for anything I'm only expecting to read once or twice.

Sure, but you won't be able to pass that book on to someone else and that is a major feature that paper books have that e-books should have (and maybe even better than paper ones) that they don't due to DRM.

I agree with you that this is an issue, and is why I buy hard copies of books I want to share or read many times over. When I'm buying an ebook, my thinking is "this will entertain/educate me and I would like to give money (that I'm lucky enough to be able to afford to spend) to the people who made it possible". If that weren't the case, I'd just use my library card.

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