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Monday, December 6, 2010

Are bookshop ripping us off with eBook?

At the moment I am looking for a couple of technical books and since the fad these days are eBook, I am going to evaluate whether or not eBooks offer real advantages.

Remember, a physical book needs paper, inks, printing press to produce it, bookbinding to bind the pages, warehouse storage facilities and transportation. The costs associated with these processes are not insignificant.

eBook, on the other hand, does not require any one of those processes. In fact, it is rare to produce a physical book without electronic manuscript in one form or another that can readily be converted to eBook format, if not already done so. It is well known in electronic products - be it software or computer games - the reproduction cost is almost zero. I have left out the royalty to the author and merchant's profits. It is not unrealistic to assume that the royalty is the same between eBook and physical book. So any cost savings must be due to the above associated costs to reproduce the physical book.

Hence, eBook should be a lot lot cheaper than physical book. Not quite as the comparisons shown below demonstrate that it in fact has negative economic benefits. The tables below show the book prices without inclusion of handling and shipping cost.

Web Service Contract Design and Versioning for SOA
Bookshop eBook Price eBook Protection Book Price Savings Used Price
Amazon $28.79 DRM $42.89 $14.1 $31.52
Barnes & Nobles N/A N/A $43.99 $0.0 $33.99
infomIT $39.59 Watermarked $49.49 $9.9 N/A

SOA with .NET & Windows Azure: Realizing Service-Orientation with the Microsoft Platform
Bookshop eBook Price eBook Protection Book Price Savings Used Price
Amazon $35.19 DRM $42.89 $7.7 $42.06
Barnes & Nobles $43.99 DRM $46.71 $2.72 $33.05
informIT $39.59 Watermarked $49.49 $9.9 N/A

The savings are not uniform and are from book to book, from bookshop to bookshop, ranging from a pittance of under $3 to $14.

Some physical book, despite all these expensive production & storage costs, is cheaper than eBook. Amazon's price for the second book is cheaper than Barnes & Nobles' eBook version. They must be more expensive 1's and 0's used by Barnes & Nobles than those inks and paper used by Amazon!

Now clearly someone is taking advantage of the latest fad to charge for something that cost zero dollar to produce and reproduce.

The above figures are just pure price comparison and now consider the real economic disadvantages of eBook:
  1. For those using DRM, even the owner cannot print out a diagram or pages after all it is something you have paid for. At least you can run the physical book over on a photo copying machine or scanner. Does that pittance in savings enough to compensate for the lost of freedom to use the things you have bought?
  2. Loss of second hand book market. While the above used book prices are indicative, nonetheless, there is a market for used copies and that you can participate without restriction. All eBooks bar you from that market and their form of compensation is only a pittance. Even allowing a discount of 50% for used copy, you can sell it for more than the saving you can get from eBook.
  3. You can't even share part of the book or form a syndicate to buy a book. At least in a physical book, no one forbids you from tearing the book apart to share it. You can tear out pages to lend to others or to give it away. You have total freedom. But not so with eBook. Amazon generously allows you to have 6 devices but they need your access code to your account. Barnes & Nobles has this lend it facility for only 14 days.
  4. No one can take the physical book away from you as long as you have paid for it. Not so with eBook. Even if the bookshop does not have any rights to sell a physical book, so long as you have paid for it and walked out of their doors, that book is yours and they can't take it away.
  5. How soon does the eBook savings recoup the investment cost of a eBook reader? The only outlay for a physical book is your bookshelf cost if you want to store it that way. The floor is perfectly good free storage space for books.
I have to acknowledge that there are benefits with eBook that physical books are not capable of offering. Such as the ability to carry almost a library-ful of eBook with you,  enhanced searchability, or almost instantaneous delivery and with no delivery charges. Well Amazon does not charge delivery charges for purchase over certain amount to US address.

In my opinion, eBook merchants are definitely taking advantage of current hype and fad to over charge the customers and in my mind, it offers more restriction than physical book and preventing book owner from disposing them in a second hand market, which can return considerable amount to the owner.

In fact, it is not uncommon to find eBook costing more than its hardcover versions. The debate whether eBook should cost so much is raging on the Internet and no end in sight if consumers are willing to pay for the hype & fad.

1 comment:

Friendless said...

I won't be getting an eBook reader until it's obvious that the money saved is being saved by me. Until then, I'm addicted to bookdepository.com.

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