[ubuntu-uk] Book costs (was Re: e-books without Adobe Digital Editions)

Bruno Girin brunogirin at gmail.com
Thu Nov 11 21:12:03 GMT 2010

On Wed, 2010-11-10 at 18:28 +0000, Will Bickerstaff wrote:
> On Wed, Nov 10, 2010 at 10:45 AM, Glen Mehn <glen.mehn at oba.co.uk>
> wrote:
>         <snip>
>         The bank analogy doesn't exactly make sense as banks are
>         replacing
>         something expensive for them (employees, time, and physical
>         space) with
>         something very scalable and well-understood (web apps). Books
>         switching
>         to ebook is replacing something well-understood and dirt cheap
>         (printing/distribution) with something not so well understood
>         (three
>         major competing formats, a dizzying array of DRM options or
>         not,
>         personal fears in a declining industry, no standard)
> So a second hand 10 year old half decent machine is going to set us
> back circa £250,000 (Not cheap). Believe it or not, the equipment is
> actually going to need to occupy some physical space. Likewise our
> finished products are also going to need to occupy physical space
> until they are distributed. Space is space, whether you a bank or a
> printer, in fact as a printer your probably going to need more than a
> bank. Then we have energy use, some 33kW, Maintenance Work and
> operators, so there's your employees and time which I don't think
> materially differ too much from banks either. There's also a ton of
> other work that you'd need to account for whether it be another energy
> consumer or direct labour, think loading/unloading materials packaging
> for despatch, order taking and processing staff facilities etc. So
> actually, I think the bank analogy works very well. In my opinion,
> there are probably bigger savings for printers than banks.

I don't think I fully agree with you.

As far as the bank is concerned, whether you go through a branch or the
internet, you are still using the same services and they are still
making money the same way, by basically allowing you to store your own
money in their bank accounts or by lending you money. Money is already a
line item in a database so what internet means for them is the ability
to present those line items online rather than on a piece of paper. They
can therefore streamline those processes and use less resources to
deliver them but in essence they don't change their business model.

For a publisher, the traditional business model is based on acquiring
the rights to reproduce a text, producing physical items out of this
text, shifting those books to distributors and selling the physical
objects. Most of the cost is in the distribution and the value is in the
physical object so that's what you pay for.

Switching to digital means that this business model doesn't work anymore
because the distribution and copy become very cheap and anybody can do
it, not just them. So the value no longer is in the distribution and a
physical product, it is in the artistic creation performed by the author
and they don't know how to monetise that. So in order to keep the same
business model, they have to artificially restrict the ability to
distribute and copy by using DRM. In addition to this, it means a major
change in how they produce the book: they have to retrofit a digital
workflow on top of a traditional industrial workflow. So yes there are
some potential cost savings but there is also a massive change in
business model and that's where they have a problem.



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