I have been thinking a lot about the “perceived” value. I go dancing and take dance classes a couple of times a week. The total cost is about $11 per class, or $11 per hour. How often do I buy a $9.99 e-book that takes me only one hour to read? I still go dancing for social interaction and I still go to the gym for exercise, but if you count cost per hour spent doing the activity, I get more “value” out of my books on my Kindle.
The difference is significant. A dance class requires personal time with a teacher. This time is limited. If that teacher put out a book or DVD, the price might be the same, but again the popularity of the content plays a factor (if it’s sold to the same 20 people that take the class, the cost should really be much higher). This teacher’s book or video can be compared with a professor’s textbook (which often cost over $100).
It would be better to compare a widely available book to a mainstream movie. DVDs typically cost about $20 for two people to see in the theater or about $15-20 new on DVD. The cost of production for most movies is in the millions of dollars, but the number of consumers is very high. A book like The Lost Symbol was widely marketed and purchased. (I bought the hardcover, pre-kindle, and regretted it). I can only assume that the costs for such a popular book is similar to that of a less popular new-release hardcover (the only additional costs coming from extra advertising and probably vendor discounts).
Summing up… a hit movie costs in the order of millions and sells at about $15 per copy, a hit book costs in the order of ten-thousands and sells at about $15 per copy (in stores)… The amount of entertainment purchased is approximately equivalent.
Before I get slammed… I realize it’s not quite so cut and dry… The following (and more) have been left out (above):
1) Flops. The publishers have a higher flop:hit ratio than movies do (though movies flop a lot harder).
2) Niche. Publishers have many more niche markets than movies do… both have their own means of handling special markets.
Here’s what I think the publishers are doing WRONG…
They’re still taking on hit-or-miss books (their biggest cost)! A new medium is available that promises very low costs. What prevents a publishing house from first e-releasing a book with tentative potential or mixed reviews? The known hits can be printed en masse… the unknowns can graduate from electronic formats. This seems to be how the indie market is working now, but if publishing houses would tap books and use the Kindle/Nook/iPäd as their proving ground….. the contracting could still be favorable for both parties (author & publisher). My suggestion fundamentally changes the publisher’s modus operandi, but I think it’s about time for that.