One of the questions publishers are asked often is “Why are books so expensive?” The answer is not simple: It involves the interacting elements of production costs and overhead, pricing and discount policies, and markets. This chapter presents a simplified explanation of these topics that should console authors and book buyers – or at least quell their suspicions. Another question that comes up often is “Are books doomed to extinction?” For the scholarly monograph, this question is as much economic as cultural. In this chapter, we look at the financial implications of publishing without paper and ink. In the final chapter, we will explore the creative possibilities of digital publishing.

Costs

In publishing a book, a publisher incurs direct costs and indirect costs. Direct costs are those clearly attributable to publication of a specific title, such as the cost of having the book typeset.

Indirect costs are overhead items, including rent, utilities, salaries, and supplies. They are the publisher's general operating costs: costs that must be incurred to publish any books at all but that cannot readily be assigned to a particular title in a way that is not arbitrary.