Why are eBooks So Expensive?

For those of us who have embraced eBooks, the US district court’s ruling last week was read with more than a passing interest.  The court ruled that Apple played a "central role" in a conspiracy with the biggest book publishers in the United States to fix prices in violation of antitrust law.

To understand this ruling a bit of history might be in order.  When the sales of eBooks first began to take off, Amazon was in the catbird seat.  They sold most books at $9.95 or less.  Best sellers, classics, even special interest publications were sold below10 bucks. Then, all of a sudden when the iPad was introduced and Apple wanted into the eBook market, publishers raised their prices.  Apparently the Federal Judge took notice and ruled that this was not a coincidence and those meetings between Apple and some of the publishers were not as benign as Apple’s top brass maintained.

The publishers are not happy, insisting that they need higher prices to make a decent profit.  This is something that I just don’t understand.

Before the advent of eBooks and the Internet, the publishing business was much more complex.  It required the manufacturing, i.e. printing, of books, warehousing, transportation and agreements with affiliate books stores.  All was very expensive.  Even the decision of the number of copies to print was a big gamble.  Too many copies sitting in a warehouse of a less than stellar title was expensive.   Too few copies made available of a gang buster best seller could cost even more money.

Today, with the advent of eBooks publishers have no printing cost, no warehouse fees and no transportation costs.  They don’t have to have any product on the shelf waiting for a buyer.  In short, most of the risk and hard costs have vanished.  Nevertheless they lament that lower prices for the consumer will render their business unprofitable.

If they could make a profit selling traditional books at 15 bucks each, why can’t they make even more profit selling eBooks at $9.95?  Perhaps bits and bytes are more expensive than paper and ink but I think not.

Why are eBooks So Expensive?

For those of us who have embraced eBooks, the US district court’s ruling last week was read with more than a passing interest.  The court ruled that Apple played a "central role" in a conspiracy with the biggest book publishers in the United States to fix prices in violation of antitrust law.

To understand this ruling a bit of history might be in order.  When the sales of eBooks first began to take off, Amazon was in the catbird seat.  They sold most books at $9.95 or less.  Best sellers, classics, even special interest publications were sold below10 bucks. Then, all of a sudden when the iPad was introduced and Apple wanted into the eBook market, publishers raised their prices.  Apparently the Federal Judge took notice and ruled that this was not a coincidence and those meetings between Apple and some of the publishers were not as benign as Apple’s top brass maintained.

The publishers are not happy, insisting that they need higher prices to make a decent profit.  This is something that I just don’t understand.

Before the advent of eBooks and the Internet, the publishing business was much more complex.  It required the manufacturing, i.e. printing, of books, warehousing, transportation and agreements with affiliate books stores.  All was very expensive.  Even the decision of the number of copies to print was a big gamble.  Too many copies sitting in a warehouse of a less than stellar title was expensive.   Too few copies made available of a gang buster best seller could cost even more money.

Today, with the advent of eBooks publishers have no printing cost, no warehouse fees and no transportation costs.  They don’t have to have any product on the shelf waiting for a buyer.  In short, most of the risk and hard costs have vanished.  Nevertheless they lament that lower prices for the consumer will render their business unprofitable.

If they could make a profit selling traditional books at 15 bucks each, why can’t they make even more profit selling eBooks at $9.95?  Perhaps bits and bytes are more expensive than paper and ink but I think not.

Free TV in Jeopardy?

I have written often about the changes in how many of us are consuming TV.  With the proliferation of wireless hand held devices and the expansion of high speed broadband networks, we can now cut the cord or should I say cut the cable.   The shift to some of these new technologies enabling us to view our favorite American Idol or local weather and sports when we are on the move may bring about some other changes.  Those changes may not be so good for the consumer.

Free over–the-air TV has been around since the late 1940s in this country.  Even with the explosion of pay cable and satellite services in the 1980s and the advent of digital TV in the late 1990’s, most of us could still watch many of our favorite programs using a TV and antenna without reaching for a wallet.  In fact recently there has been an uptick in the use of traditional over-the-air viewing since digital TV is capable of providing many more channels than the old analog system. Here in the Cincinnati area it is not uncommon to receive more than 25 channels of programming over-the-air without paying a dime.

Free broadcast TV may be going the way of free air for your tires from the corner gas station.  Recently in some larger cities, ABCprovided free transmission of its local station direct to smart phones.  So while commuting on the train or bus you could watch Good Morning America on the way to work and local news on the way home.  Now after a trial of about six months, ABC has now announced that in order to watch on your phone you will have to be a subscriber to a local cable service and pay a monthly fee.   While this does not affect the reception of the local channels using a standard TV, it does begin to take ABCtoward a pay model for all or at least some of its more popular programs.

With over 85% of all TV viewers already paying for cable or satellite some argue that free TV is already a thing of the past.   Sporting events, especially baseball and boxing disappeared from free TV years ago.  Highly acclaimed series like The Sopranos have never been available on free TV.

The big players like Time Warner, Disney and Comcast have been broadening their holdings and control over new platforms of delivery.  Even internet-only services like Hulu, Netflix and YouTube are attracting suitors from the traditional media giants. 

Content is king so as more quality content switches to the pay model, we can look for a more mindless reality programming available free of charge.   All of a sudden “Free” doesn’t look so good.

Free TV in Jeopardy?

I have written often about the changes in how many of us are consuming TV.  With the proliferation of wireless hand held devices and the expansion of high speed broadband networks, we can now cut the cord or should I say cut the cable.   The shift to some of these new technologies enabling us to view our favorite American Idol or local weather and sports when we are on the move may bring about some other changes.  Those changes may not be so good for the consumer.

Free over–the-air TV has been around since the late 1940s in this country.  Even with the explosion of pay cable and satellite services in the 1980s and the advent of digital TV in the late 1990’s, most of us could still watch many of our favorite programs using a TV and antenna without reaching for a wallet.  In fact recently there has been an uptick in the use of traditional over-the-air viewing since digital TV is capable of providing many more channels than the old analog system. Here in the Cincinnati area it is not uncommon to receive more than 25 channels of programming over-the-air without paying a dime.

Free broadcast TV may be going the way of free air for your tires from the corner gas station.  Recently in some larger cities, ABC provided free transmission of its local station direct to smart phones.  So while commuting on the train or bus you could watch Good Morning America on the way to work and local news on the way home.  Now after a trial of about six months, ABC has now announced that in order to watch on your phone you will have to be a subscriber to a local cable service and pay a monthly fee.   While this does not affect the reception of the local channels using a standard TV, it does begin to take ABC toward a pay model for all or at least some of its more popular programs.

With over 85% of all TV viewers already paying for cable or satellite some argue that free TV is already a thing of the past.   Sporting events, especially baseball and boxing disappeared from free TV years ago.  Highly acclaimed series like The Sopranos have never been available on free TV.

The big players like Time Warner, Disney and Comcast have been broadening their holdings and control over new platforms of delivery.  Even internet-only services like Hulu, Netflix and YouTube are attracting suitors from the traditional media giants. 

Content is king so as more quality content switches to the pay model, we can look for a more mindless reality programming available free of charge.   All of a sudden “Free” doesn’t look so good.

Get Ready For More TV Set Choices

It is hard to tell which new technologies will take off and which will be digital flashes in the pan.  The new TV set offerings make things even more confusing. Now that most of us have replaced our analog TV sets or at least relegated them to the guest bedroom or basement, there are some new offerings now available that might make that new 46” Sony Bravia flat screen seem like that old 27” Sylvania now gathering dust in the garage. 

No too long ago the buzz word was 3-D.  TV manufactures and program producers saw the renewed interest in 3-D content at the cinema and decided that the home viewer would also be interested in watching 3-D programs.  A few 3-D channels were provided by cable companies and most all set makers offered a variety of new 3-D TVs.  Some required expensive eye glasses and others used simpler displays.  The common denominator was that the public really wasn’t interested.  Recently the 3-D channels have been disappearing from the cable line up and it looks like for now 3-D in the home is on life support.

Not to worry if you are one of those consumers who must get the latest new technology before the guy next door.  There are several TV set manufacturers who are developing new sets capable of much high resolution than mere High Definition as we know it today.

Dubbed Ultra High Definition, they come in several “flavors.”   Ultra HD 2K, 4K and 8K and they all can provide breathtaking clarity and detail. For example, a 4K UHD set has trice the horizontal and vertical resolution than the 1080 set that is now in your living room and has four times the number of pixels

You may wish to wait to plunk down your cash for one of these new sets since there are several different competing production formats.  It is setting up a rematch the Beta vs. VHS fight.   Also you will not have anything to watch since no broadcaster, cable or satellite service is moving to provide an Ultra HD service.  No DVD currently has UDH material either. The UHD material is a ravenous consumer of bandwidth and will require major expensive changes in the production and distribution chain from the camera to the display and most everything in between. 

So if you absolutely need to be the first one on your block to have an Ultra HD go for it.  If the screen is very large, i.e. 60’ plus, you may see a modest improvement in clarity but most people will be hard pressed to see the difference.  Perhaps someone will just sell a label with a fake Ultra HD Logo that you can put on tour standard set.  Remember the fake cell phone antennas that were sold for placement on the rear window of your car  when mobile phones were a status symbol?

Get Ready For More TV Set Choices

It is hard to tell which new technologies will take off and which will be digital flashes in the pan.  The new TV set offerings make things even more confusing. Now that most of us have replaced our analog TV sets or at least relegated them to the guest bedroom or basement, there are some new offerings now available that might make that new 46” Sony Bravia flat screen seem like that old 27” Sylvania now gathering dust in the garage. 

No too long ago the buzz word was 3-D.  TV manufactures and program producers saw the renewed interest in 3-D content at the cinema and decided that the home viewer would also be interested in watching 3-D programs.  A few 3-D channels were provided by cable companies and most all set makers offered a variety of new 3-D TVs.  Some required expensive eye glasses and others used simpler displays.  The common denominator was that the public really wasn’t interested.  Recently the 3-D channels have been disappearing from the cable line up and it looks like for now 3-D in the home is on life support.

Not to worry if you are one of those consumers who must get the latest new technology before the guy next door.  There are several TV set manufacturers who are developing new sets capable of much high resolution than mere High Definition as we know it today.

Dubbed Ultra High Definition, they come in several “flavors.”   Ultra HD 2K, 4K and 8K and they all can provide breathtaking clarity and detail. For example, a 4K UHD set has trice the horizontal and vertical resolution than the 1080 set that is now in your living room and has four times the number of pixels

You may wish to wait to plunk down your cash for one of these new sets since there are several different competing production formats.  It is setting up a rematch the Beta vs. VHS fight.   Also you will not have anything to watch since no broadcaster, cable or satellite service is moving to provide an Ultra HD service.  No DVD currently has UDH material either. The UHD material is a ravenous consumer of bandwidth and will require major expensive changes in the production and distribution chain from the camera to the display and most everything in between. 

So if you absolutely need to be the first one on your block to have an Ultra HD go for it.  If the screen is very large, i.e. 60’ plus, you may see a modest improvement in clarity but most people will be hard pressed to see the difference.  Perhaps someone will just sell a label with a fake Ultra HD Logo that you can put on tour standard set.  Remember the fake cell phone antennas that were sold for placement on the rear window of your car  when mobile phones were a status symbol?