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> Obviously it's not about the value added because of extra functionality, it's about the new technology having lower marginal costs Is that really how supply

> Obviously it's not about the value added because of extra functionality, it's about the new technology having lower marginal costs Is that really how supply and demand works though? If people are willing to pay more for the extra functionality, why would you not sell it at that higher price?

chrisabrams 10y ago
Most people aren't paying for the extra functionality of ebooks though. Most people are still buying physical books: http://authorearnings.com/report/print-vs-digital-report/ http://authorearnings.com/report/print-vs-digital-report/ Also, your reasoning for selling a book at a higher price is not correlated to supply vs. demand. What you are talking about is a pricing strategy. There is a near unlimited supply of an ebook, so it's not supply vs. demand, it's a pricing strategy that's setting the price. A pricing strategy could also be used to sell the ebook at a cost below production costs to drive sales. Again, the ebook supply remains constant.
- jjnoakes 10y ago
  > Most people aren't paying for the extra functionality of ebooks though. Most people are still buying physical books That's not what I'm talking about though. I'm talking about this: if you set the price of ebooks at some small margin above the price to produce plus the price to license the content, you sell at price $X. If you set the price where people are willing to buy it due to increased convenience for them, you sell at price $Y. If $Y > $X, why not sell at $Y? Of course, this isn't a direct relationship, since different people have different $Y prices, but there's a price curve there, and one ought to sell their ebooks on the curve to maximize the (number of sales) * $Y. > Also, your reasoning for selling a book at a higher price is not correlated to supply vs. demand. Maybe supply vs demand was the wrong choice of words, but that shouldn't detract from the point.
coldtea 10y ago
>Is that really how supply and demand works though? If people are willing to pay more for the extra functionality, why would you not sell it at that higher price? People are not willing, they are forced to, if they want the book, because books have an artificial monopoly based on copyright. That is, I can't offer the same book for cheaper unless I have the copyright to the content.
- jjnoakes 10y ago
  > People are not willing, they are forced to, if they want the book, because books have an artificial monopoly based on copyright. In many cases people have a choice of ebook vs physical copy, which is what we're discussing here.
  - coldtea 10y ago
    >In many cases people have a choice of ebook vs physical copy, which is what we're discussing here. Well, then it's still no free competition, between those are two entirely different technologies, and the sole owner of the copyright sets the price of both. To put it in another way, the prices of ebooks that are in public domain (e.g. 19th century books) are way lower (e.g. $1 per book for some publishers), whereas printed editions of said books are as high as they ever were.
    - jjnoakes 10y ago
      Which supports my point. Price isn't set relative to production cost. It is set relative to value to the users.

chrisabrams 10y ago

Most people aren't paying for the extra functionality of ebooks though. Most people are still buying physical books: http://authorearnings.com/report/print-vs-digital-report/ http://authorearnings.com/report/print-vs-digital-report/ Also, your reasoning for selling a book at a higher price is not correlated to supply vs. demand. What you are talking about is a pricing strategy. There is a near unlimited supply of an ebook, so it's not supply vs. demand, it's a pricing strategy that's setting the price. A pricing strategy could also be used to sell the ebook at a cost below production costs to drive sales. Again, the ebook supply remains constant.

jjnoakes 10y ago
> Most people aren't paying for the extra functionality of ebooks though. Most people are still buying physical books That's not what I'm talking about though. I'm talking about this: if you set the price of ebooks at some small margin above the price to produce plus the price to license the content, you sell at price $X. If you set the price where people are willing to buy it due to increased convenience for them, you sell at price $Y. If $Y > $X, why not sell at $Y? Of course, this isn't a direct relationship, since different people have different $Y prices, but there's a price curve there, and one ought to sell their ebooks on the curve to maximize the (number of sales) * $Y. > Also, your reasoning for selling a book at a higher price is not correlated to supply vs. demand. Maybe supply vs demand was the wrong choice of words, but that shouldn't detract from the point.

coldtea 10y ago

>Is that really how supply and demand works though? If people are willing to pay more for the extra functionality, why would you not sell it at that higher price? People are not willing, they are forced to, if they want the book, because books have an artificial monopoly based on copyright. That is, I can't offer the same book for cheaper unless I have the copyright to the content.

jjnoakes 10y ago
> People are not willing, they are forced to, if they want the book, because books have an artificial monopoly based on copyright. In many cases people have a choice of ebook vs physical copy, which is what we're discussing here.
- coldtea 10y ago
  >In many cases people have a choice of ebook vs physical copy, which is what we're discussing here. Well, then it's still no free competition, between those are two entirely different technologies, and the sole owner of the copyright sets the price of both. To put it in another way, the prices of ebooks that are in public domain (e.g. 19th century books) are way lower (e.g. $1 per book for some publishers), whereas printed editions of said books are as high as they ever were.
  - jjnoakes 10y ago
    Which supports my point. Price isn't set relative to production cost. It is set relative to value to the users.