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Let's face it: the ebook market is FUBAR, thanks to pure greed
40hz:
To the best of my knowledge, printing and distributing a book is a minor part of overall publishing costs. I think a standard hardback print run for a mainstream novel costs less than £1 per book. So if publishing companies are looking to maintain the same level of profits on ebooks that they obtain on print books, you're not going to see a huge reduction in prices.
-johnk (February 04, 2011, 05:55 PM)
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Based on my own personal experience in getting technical books printed and distributed, I doubt a finished "standard" hardcover book could be produced at a cost of £1 per copy regardless of the size of the production run.
Back in the 80s I was responsible for annually getting over 100K sets of technical documentation printed, bound and distributed for a major corporation. The average "doc set" consisted of two to three (paperbound oversized-trade format) books averaging 300-500 pages each. Even with "normal" industry runs of 20,000 copies the average delivered cost of each book hovered in the $7+ range despite using every trick in the book ("slow time" press runs, aggregating paper purchases for multiple titles, etc.) to keep the costs down. And this was back around 1988, so boost it $1-2 to account for inflation and paper cost increases since then
And while manufacturing may only account for a portion of the cost, it's not an insignificant part of the expense to produce a book. Add in transportation and shipping, warehousing, returns for unsold and damaged copies, etc. and the fully absorbed manufacturing costs climb even higher.
A general rule of thumb for manufacturing is that sales prices need to be set somewhere in the range of 3X to 5X the total manufacturing cost to maintain profitability. Volume runs can help get unit costs down, but there's a limit to how much savings volume alone can provide. Especially when factored to account for risk (unsold, damaged, transportation cost increases, etc.) which increases more than proportionally with larger production runs.
The way it usually works is the publisher sells to a book distributor for roughly 50% off the cover price. The distributor sells to retail channels at 20-30% off cover depending on the title and quantity.
So lets run some very round quick & dirty numbers:
Publisher's total manufactured cost = $5.
To be profitable, they'll need to sell it for $15-20 per copy.
Based on the going market, similiar titles retail for $28-35.
Publisher sets the initial cover price at $30 (actually $29.95 for marketing reasons but lets use whole numbers)
The distributor purchases from the publisher @ $15/copy (with 10% discount applied to unsold copies after 2 months, and full return allowed after 6 months.)
The retailer purchases from the distributor at 25% off cover. So $30 less 25% = $22.50
Here's the breakout (under absolute ideal circumstances):
Mfg's Cost $ 5.00
Mfg's Markup 10.00
Distributor Cost $15.00
Distrubutor Markup 7.50
Retailer's Cost $22.50
Retailer's Markup 7.50
Sell Price $30.00
Note: take the above example for what it's worth. In actual practice it's much more complicated than that. But at least it will give you some idea of what's driving physical book prices.
Not that ducky a gross profit margin for the publisher. Especially once discounts get taken and the returns start coming back. I don't know what it is today, but back when I was involved with this stuff, a title that earned back total cost + 15% was considered a wildly successful title. Most titles were lucky to break even or make a few percent. Subtract out all the titles that lost money, and the bottom line for a very successful publisher used to be somewhere around 2-3% of total revenues.
Truth is you can make better money selling books than making books to sell. And with less risk since all distribution copies, and virtually all retail copies, are purchased with the option to return for refund.
Any wonder product quality has deteriorated, and so much of the manufacturing now gets done in places where labor is dirt cheap?
One good indicator of the publisher's cost is to check out the remainder tables. The publishers usually agree to sell at or below cost just to avoid getting books returned to them for "pulping." So all those $28 books that you see selling for $8.95 at Borders or Barnes & Noble? Take 30% off that closeout price and you have a pretty good idea of what it actually cost to print them.
:)
Paul Keith:
With debt you're confusing governing economic systems with banking systems. It's possible to have debt/credit in capitalist, socialist, communist, fascist systems. -Renegade (February 05, 2011, 10:48 AM)
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See that's another confusing criteria to the whole situation. Is capitalism not a banking system but a purely governing economic system?
Can government systems be even separated from banking systems?
I don't think all people agree that it should be possible to spend debt in a capitalist system. (Note that this is different from whether it is possible to acquire debt while in a capitalist system.)
But capitalism is far more prevalent. There are no socialist or communist states (that matter). They are all captialist. Those that profess to be socialist/communist are in name only. Go to a "communist" state like China or Vietnam. It's a joke. They are capitalist all the way.
I'm only talking in real terms about what is the case.
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Except again here, what is real? Like you said, a communist state could be a capitalist system but then you also said a socialist state can also be capitalist.
Certainly the word capitalism is thrown more often but is it more prevalent? For me it's not because most people don't even agree or know what a capitalist system often times and other times there's a bias towards stating all are capitalist but not all are socialist or communist especially in parts of the world like America where socialism is portrayed as something of an evil thing even if by people who only say so just to force away a healthcare plan that their party is against.
Capitalism just happens to be the prevailing system world-wide. It's not unfair. It's simply fact. Socialism is only a flavoring right now.
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I have to disagree unless by now you mean something that stretches back to the Great Depression. Again it's not like a vacuum where capitalism with say NAFTA is the same as capitalism with a different Free Trade Agreement or capitalism without a gold standard is just a different flavor of capitalism with a gold standard.
Certain things depending on certain people's definition of capitalism could break another person's definition of capitalism.
But it is the dominant system everywhere. (Everywhere that matters anyways.)
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We'll have to agree to disagree there.
This sound preposterous until you see how this sentence could be applied to both socialism and communism too:
Socialism fosters them in a financial and visceral way, and they are the major resistance against any change. (issues like opting out of healthcare, increased spending despite being in debt to help the needy, produce sharing at the cost of quality or necessity)
-Paul Keith (February 05, 2011, 07:29 AM)
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Not sure what to say about that. -Renegade
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I'm just demonstrating how open (or closed) your sentence could be when trying to fit it into capitalism.
I don't know what you mean by "dependents".
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Dependents as in situations that don't exist in a vacuum. Things that have cause and effects and different elements that could determine different necessities. Like a poor hungry kid in a vacuum could be helped by giving them money but depending on their roles, like say a beggar, they may not be able to utilize that money for food or healthy foods.
But there are no socialist or communist forces pulling kids out of school. Those forces are all capitalist or religious.-Paul Keith (February 05, 2011, 07:29 AM)
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This doesn't mean pulling young children to work in factories is the right moral path to take either but we don't exist in a vacuum. Something like everyone having a VCR under communism may sound good but everyone getting free internet might be better but everyone paying and supporting web developers thus increasing the number of people interested in that job branch may also seem even better especially if it could lead to cheaper sustainable products... but then again, they could be worse.
-Paul Keith (February 05, 2011, 07:29 AM)
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I don't see where that counterfactual has any basis in the world we live in. Can you provide an example?-Renegade
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Well that's the thing. We only have one branch of timeline. Everything else is theory. If you believe the Gold Standard people for example, you could say after the gold standard there was no capitalism anymore.
But then that's not clear either. Even communism, the only way you can see there is no communist school forcing kids out is because most communist systems fell. Then imagine things like healthcare. In a hypothetical prime of healthcare, you're not going to see many casual people go against healthcare bills outside of the fear mongerers. Yet if that healthcare bill falls then it falls as a capitalist system even though it's a socialist intended system because well... it was paid in currency that is central to a capitalist system.
But that's alot of what ifs depending on each of your beliefs and knowledge and it's just too vast.
Again, for the Gold Standard people, the economic bubble is history repeating itself. For the non-Gold Standard people, it may not be history repeating itself but the natural course of capitalism and greed. Then of course depending on the other sub-branches like a communist would just as say "See, it's not just communism that doesn't work when it's corrupt" and socialists on the other hand may say "Well, look at so and so socialist country that's not overspending or over-in-debt as the United States of America, look at how they are handling the recession."
There are no real example of socialism or communism, and that's the problem.
To be clear -- I like working in a capitalist system. I simply don't like the abuse of it.
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See again that's dependent on your own definition but there are just as many that would say, in the practical sense, there was and are real examples of communism and socialism and that's not the problem. The problem is socialism and communism gets certain exemptions from their flaws unlike capitalism because conceptually they sound more like good will governments. Which one is right there?
Well the answer doesn't matter in this discussion because we're not really defending or going against another system. Simply discussing whether a system is so prevalent in it's structure that it has dictator-like hold on the world to which I said, I don't feel that way. Maybe socialism has a dictatorship but not capitalism.
Paul Keith:
@40hz
I thought johnk was exaggerating but thanks for that wonderful post.
Deozaan:
For example, viewed from the comfort of my armchair here in the UK, American politics seems a very frightening beast. You have a right-wing party (the Democrats), an extreme right-wing party (Republicans) and another large political organisation (the Tea Party), for people for whom even the Republicans don't seem right-wing enough. Terrifying.-johnk (February 05, 2011, 10:04 AM)
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That's an interesting perspective. From my point of view, there's an extreme left-wing party (the Democrat party which has been overrun by the extreme-left "Progressives"), a moderate-to-left-leaning party (Republicans), and a bunch of people who have noticed that the Republicans, who are traditionally "supposed" to be right-wing, have moved so far left (so-called Tea Party-folk).
This is using the modern, narrow definition of right-wing to mean the extent to which you accept state intervention in everyday life (through taxation, or regulation).-johnk (February 05, 2011, 10:04 AM)
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Huh? Did I miss something? By your own definition, "Conservatives" (at least as I understand them in the U.S.) are not right-wing at all, as they generally want smaller government, less taxes, etc.
As for the original topic, capitalism is not evil. It is merely a tool that allows people the freedom to do good or evil with it. As is often the case in life, we very often focus mostly only on the bad parts and fail to recognize the good parts. There are lots of wealthy people who do a lot of good with their money. There are plenty of large, successful, billion+ annually corporations that do a lot of good with their money. But all we generally hear or think about is the ones that rip us off or in some way harm others, and in doing so, we often call a corporation or a person evil or greedy when that is simply not the fact.
For an example, I was watching an episode of CSI the other day, and there was a bus that malfunctioned and crashed, killing many of its passengers. So during the investigation they found out that the bus company was doing everything according to the law and safety standards and was very proud of the fact, but one thing of note was that they had recently chosen a different provider of a certain kind of bolt that held the suspension in place or something (I'm not too knowledgeable about the mechanics of automobiles). They switched because this bolt provider offered them a better price. Well, the bolts they were selling weren't as high quality as they said they were, and they broke. Yet the TV show seemed to call the bus company greedy for "trying to save a buck" when in fact the bus company was doing everything it could to do the right thing. It was the bolt company that was the dirty, lying, greedy, evil company, because they were selling inferior bolts with the label of the higher quality bolts.
Obviously that's just a fictional example, but the point is that most people watching that show probably got the message that "corporations are greedy and evil!" and came away thinking the bus company was at fault even though the bus company was honest and had integrity.
I'm tired of capitalism getting a bad reputation because some people abuse it. It's like saying the internet is evil because some people abuse it. IMO, capitalism is a freedom, and like all freedoms, people are allowed to choose how to use or abuse it.
40hz:
@40hz
I thought johnk was exaggerating but thanks for that wonderful post.
-Paul Keith (February 05, 2011, 12:03 PM)
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I didn't. :)
Who knows, maybe with improvements in press technology (i.e. faster = cheaper) and "third world" slave labor rates it could be possible to do a book for a pound.
But so many people think so much stuff costs only pennies to make, no matter what, that I felt some oddball need to put on my accountant's cap and write something.
Which was foolish of me considering I'm in the middle of an onsite server upgrade and just blew my twenty minutes of lunch/free time to do it.
Oh well... Back to those "dark satanic mills" for some more long hours of Fun with Microsoft!
;D
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