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Saturday, October 2, 2010

Economics and E-Books

For my economics class this semester, I was presented with a choice of a traditional textbook or a digital book for half-price (and no shipping).  I chose the digital textbook for many reasons, not just the price.  For starters, I hate carrying a bunch of extra weight around every semester.  This way, I can carry the laptop and that's it.  It's one less thing to clutter up my kitchen island, one less potential target for happy-face stickers, one less giant paperweight at the end of the semester.  Not to mention that nobody had to print the book or inventory the book or ship it.  

It's sort of fitting for an e-book to be offered for an economics class.  The marginal cost is essentially zero (translation: the publisher can make as many copies as they want and it won't cost them anything more than it did for the first one), it's much less capital-intensive to produce, and the barriers to entering the e-book market are virtually nonexistent.  

However, the first principle of economics is that people face tradeoffs.  Who's losing out on this transaction?  At least in the world of fiction, the authors are, according to this article in the Wall Street Journal.  Although authors now get a higher percentage of the sale, the overall sales price of an e-book is much lower than a paper book, so the net effect is a decrease in author payments.  In addition, people so far are more likely to buy an e-book from a well-established, popular author than a newbie.  The bookstore browsing model just doesn't exist much yet on the internet.  Libraries are also getting worried.  And there are the publishing houses, of course.  

My best guess is that the business of books will work itself out the way that music has with the advent of .mp3's and iTunes.  Marketers will have to get creative, of course, with emerging authors.  But it's anyone's guess as to when that will happen, or if the situation will find a way to right itself before authors and libraries start to get out of the book business.  What do you think?  Have you read an e-book lately?  Some people will inevitably prefer the weight and smell of an old dusty hardcover to the sanitary landscape of a Kindle.  But then again, people used to like typewriters too.

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