Elizabeth Burton’s Techdirt Profile

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  • Jan 16th, 2010 @ 10:07am

    Re: Higher Margins in Printed books?!?!?

    This entire discussion, while interesting, is based on a false premise. Publishers set the "cover" price on their ebooks, not Amazon. And most of the mainstream sets the cover price the same as the hardcover.

    So, Amazon pays them the same on each Kindle sale as they do on the print; it's Amazon that takes the financial hit when they discount those books to $10.

    In other words, the majority of the $10 Kindle books from mainstream publishers are loss leaders for Amazon. If the listed cover price of a book is $25, and Amazon applies their standard discount, the numbers would be:

    Print: $25*50%=$12.50
    Kindle: $25*65% (Standard Amazon discount)=$16.25

    The issue mainstream publishing has with $10 ebooks isn't the money. They're afraid people will come to expect ebooks to be cheaper (totally oblivious to the point that people already expect ebooks to be cheaper), thus requiring that they offer ebooks at the lower prices across the board. The above figures should explain why they want to avoid that.

    And while I appreciate there's a myth that insists ebooks cost nothing to produce, as someone who produces them I have to stress that just ain't so. You can't operate a business with zero cost, and ignoring that with regard to ebooks is disingenuous at best. Print costs are only a small fraction of book production costs, and using them as the basis for a production-cost comparison between ebooks and print books ignores the complexity of the process.

    Just getting a manuscript ready for the printer costs me a minimum $4K, and I do everything but the cover myself. That cost would increase by leaps if I had to pay other people to do it. If you don't factor that into your calculations, the results are useless.