Why E-Books Are Upending the Publishing Business
The book publishing industry has become very competitive making it difficult for publishers to break-even in some instances. It, therefore, becomes necessary for publishers to look for alternative, creative ways of generating more revenue to cover their fixed cost and or variable costs. This additional income enables them to reduce their retail prices further and acquire a large market share. Strategies employed by publishers to earn an extra revenue include selling of space in their e-books and or physical books to advertisers and especially advertisers who want to pass information related to the books’ contents. This implies that in an academic book, you are likely to come across advertisements for admissions in various institutions of learning. Speaking economically, the revenue earned from selling advertising space acts as a subsidy. It allows publishers to use price as a competitive strategy against their competitors in the market and sell more copies of their book based on relatively low price.
Thinking as a layperson, it seems reasonable to purchase an e-book at $9.99 instead of the same book in physical nature at $19.99. To a person not thinking in economic terms, that is $10 lost. However, economically speaking, it would be important to consider that an e-book will always require you to spend extra money to use it each time. This comes in the form of the cost of internet necessary to access the book. One would also need to have an electronic gadget that can be used to access the book online such as a computer or an android phone. There is also the cost of energy used to run the electronic devices to be considered. It is possible, therefore, that in the long-run, a person using the e-book may just end spending twice or thrice more than the price of the physical book. Once you spend $19.99 on a physical book, you will no longer be required to spend a cent to use the book. Hence, the reason one would be willing to pay more for a physical book that can be bought for less as an e-book.
