The stupidest thing I've heard in a long time
Mixmaster Shecky wrote:I think this just perfectly illustrates the dysfunctional thinking of conservatism in general...
They think they want freedom, but they don't realize how it can overwhelm them. Better we make the decisions for them...
Conservatism? I have my own problems with conservatives, but the whole: "True freedom is too much for you people, we know what's best for you..." pretty much sums up the nanny state.
I also cannot find the most remote stretch of an analogy to connect copyright and intellectual property law in the publishing industry with accounting fraud in the energy trading market.
But bringing things back to the topic at hand...
This "$3 to read once" business model, essentially digital book rental, may or may not fly. Right now, ebooks are in their infancy. I give it another decade or more to see what form they take when they finally go mainstream. I personally love physical books (the clutter of them around my home is always in constant competition with my minimalist design philosophy).
For myself, the two major attractions to an ebook would be:
A.) Having the iPod book- A book that held all my favorite books where I could carry my entire library around in my pocket at all times.
B.) The "search" key. Man, what I'd pay to give my personally library a search key!- 'Look through every book I own, and find every references to Frédéric Bastiat...'
For my money, this read-once-and-terminate payment model would be of no interest at all.
I think this James DeLong
fellow is deluding himself when he speculates that these 'read once' digital books will replace $30 hardcovers. People who buy the hardcover edition want to 'own the artifact'. For whatever he may know about technology or intellectual property law, he appears to know very little about human psychology or marketing. That said, I can imagine it doing well with romance novels and thriller fiction. The type of mindless stuff people read to kill time on long airplane flights. Here's the rub- these books already sell for pretty cheap in paperback. $3 read-once digital version doesn't sound too competitive for books that already sell for as little as $5.99. How much of that is production, distribution and retail markup? How much is margin? How much is marketing? What percentage is the writer's royalty? I don't know what kind of profit is built into a cheap paperback (miss carol
works at a bookstore, right? perhaps she knows) Then you'd want to know another number- how many times is a typical cheap paperback gets read, including by different people: siblings, spouses, coworkers, and friends who share books. You will still have some marketing costs, and writer's royalties. A pretty simple equation should tell you what you can sell that book for to be read only once, and have the same "per read" profit margin as a regular paperback. Essentially eliminating the production and distribution costs, passing the savings down to the buyer, and collecting the same profit.
I just did some superficial research and it seems that a paperback has an 11- 12% margin. Let's go with 12%. Another search tells me that cheap paperbacks today are going for between $5.99 and $7.99. Let's split the difference and say $6.99. That's 84¢ profit on every cheap paperback. Royalties will differ based on how much name the writer has. My 30 seconds of googling tells me 6% for the average writer. So 42¢ has to be built into the price for the writer. As for marketing cost per book, my cursory search tells me it is all over the charts. I'm going to extrapolate to 10%. My bet is they will spend less promoting the ebook version because of lower volume in an infant category, the title will piggy-back on the brick-and-mortar marketing dollars for a while. Let's go light, and say they put 5% into ebook marketing. We get 35¢.
Now, if the ebook were not
"read once", this back-of-the-envelope calculation would say we should sell at $1.61. But we're building in this read-once termination.
Ad rates for print advertisements in magazines are calculated with numbers that take into account that, depending on the magazine, more than one person looks at each copy. Spouses share their issue of TIME, girls share their fashion magazines with one another, trade publications are shared throughout a department in a company, etc. I cannot find any hard numbers for an average reader, I also don't know how many times most books are read over again by the same reader. If one in three people read a book twice, that's 1.33 reads per book. If every other person shares the book with one other person, that 1.5 different readers per book. So, I'm going to go with these made up numbers. I'm going to add the extra third that is read twice and the half that is read by a second person (if I wanted to get really technical, I'd count the one half of second readers that then read it twice after it gets handed down, but neh...). So, based on my bogus numbers, each cheap paperback is read 1.83 times.
So, if I am correct that the best target for a terminating ebook is a reader of disposable paperbacks, then the cost per read-once ebook should be 88¢.
Time will tell whether there is a market for this. If so, people will buy them, and it will thrive. If not, people won't be interested and the business model will die. The marketplace will decide.
How conservatives or Enron or politics at all supposedly factor into this, I have no idea.