For those of you who, like me, have never even seen a Kindle or other e-book device, there's a very informative article on The Wrap today. This is one of the few articles that gets into the numbers involved.
Those e-Books Are Here to Stay ... Get Used to Them
By Rafi Mohammed
In last week's New York Times, Motoko Rich and Brad Stone wrote that “no topic is more hotly debated at the moment than the timing, pricing and ultimate impact of e-books on the financial health of publishers and retailers.”
The primary debate centers on how low-priced ($9.99) digital books affect demand for more expensive ($25+) hardcover books. Since digital books are more profitable to publishers, my response is “who cares?”
The norm in the publishing industry is to set a wholesale price equal to 50% of the hardcover list price. A $25 list price yields a $12.50 wholesale price. Interestingly, publishers also sell e-books to retailers at the same 50% (of hardcover retail) price. Thus, when Amazon sells a popular e-book for $9.99, it is usually losing money on each sale.
E-books are more profitable than their hardcover counterparts for publishers. With significantly lower production, warehouse, royalty, and delivery costs, as well as no profit-draining returns from retailers, e-books are relative cash cows.
For the rest go here:
Tom Piccirilli was good enough to interview me about my new book and some personal issues as well over on The Big Adios. Thanks, Tom.