Wednesday, July 22, 2009

e-books; Gorman interview

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.


Matt said...

It's no surprise the corporate cows at the New York Times are trying to push public favor towards e-books. As you pointed out, Ed, e-books are insanely potential money-makers for publishers.

All those jobs associated with "production, warehouse, royalty, and delivery?" They all go away. Which may be good to buy a few extra platinum back scratchers for the wealthy publishers. But not good for you and me. That loss of American jobs only continues to hurt our economy and consolidate wealth in the hands of the few at the top.

And the Kimble? Ugh.

The worst part about the Kimble is what it will do to your local economy. It has the potential to destroy book stores just like the iPod did to music stores.

And turning every local book store into a single online venue at Oy destroy a significant piece of your local economy thus hurting your own income. Not to mention your personal lack of resale. With a Kimble you don't own anything. You just rent some Zeros and Ones for $9.99 a pop...

Further disconcerting is amazon's caveat that they can, er, "update" your books at any time. Something offensive in the first edition? No problem, boyo. We'll just sanitize that for you...

And once your book stores are gone and every publisher goes to e-books on the Kimble? Then the great Blockbuster can easily search for, er, "offensive" material and edit at will.

"Mamma's gonna keep baby healthy and clean..."

Be selfish. Protect your brain. Buy local.

Dave Zeltserman said...

What Matt said.

The push to e-books (and Kimble) is the push towards the end of bookstores (and publishers). Do we really want every aspect of publishing, purchasing and reading platform to be controlled by Amazon???

And all the authors who are rushing to put their backlist free or cheap on Kindle, I hope they think a little harder about what they're doing and whether it's really in their best interest to encourage more readers to buy kindles.

Matt said...

For the record, it's a honor to see no less than Dave Zeltserman write, "What Matt said." Small Crimes is the sh!t.