Re: e-books pricing (was: Re: a very small quantum entertainment)

From: Michael S. Lorrey (
Date: Mon Jul 24 2000 - 11:24:52 MDT

Damien Broderick wrote:
> I passed on this customer reaction to Steve at Fictionwise, who made the
> following response, which he's allowed me to repost here:
> =============
> An ebook should be priced a little lower than the
> print edition, but not at "a fraction" of the cost. (Unless the fraction
> you are talking about is 9/10.) The printing costs for
> a physical paper back book are only about $1 out of a list price here in
> the usa of about $8. So by any reasonable logic the price should be about
> 10 percent less for an ebook with the same content. What people are
> paying for is the *content* not much the package.

As I was saying, electronic commerce, in terms of its true costs (not counting
the costs of hyping your dot com), I put forward these facts I just gleaned from
Operations & Fulfillment Magazine (, the July/August
2000 newstand issue, on page 10:

<< Contact Sport
Don't pooh-pooh the trend toward renaming call centers "customers contact
centers" - the contact, of course being mostly electronic. By 2001, about a
quarter of all customer interaction will occur by email or through the web. At a
recent CRM show, sofware provider Davox Corp estimated that the worldwide
customer contact center market (yes, its now a 'market' in its own right) will
reach $14 billion by 2003, with sales of customer interaction sofware totalling
$2.9 billion. A compound annual growth rate of 23.4% will make this the second
fastest growing software category. Heres what Giga Information Group says some
options will cost you for each customer contact, including agent time and

Live Operator $10.00
Interactive voice response $6.00
Manual email or fax $3.00
Automated email (typical means of ecommerce purchase authorization) $0.25 >>

So what we are talking about here is a 40 times reduction in the in-house
overhead cost for each order, compared to the traditional mail order business
(which has a smaller overhead cost than retail book sellers).

Mike Lorrey

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