[DMcCunney]

Originally Posted by mrscoach

Dennis, do you have anything to backup that Amazon pays less per Kindle book than it does hbacks?

Common sense and some knowledge of publishing. (I've been an active observer of publishing for decades, and most of the folks I know and hang out with these days are in publishing, as writers, artists, agents, editors, production people, contracts folk and the like. I know a bit about the topic.)

Amazon's standard price for a Kindle edition is $9.99. The list price for a current hardcover will be around $25 - $30. The standard discount to a retailer like Amazon is something around 60%. So Amazon probably pays the publisher between $10 and $12 for each hardcover.

You are asking me to believe Amazon either sells the Kindle edition of a new hardcover at cost or takes a loss on each sale when it sells at $9.99.

Sorry, I don't believe that. Why on earth should it?

A brick and mortar retailer might have an incentive to do that on selected titles to get people into the store, where they might buy other things as well. (That happened with the Harry Potter titles.) Amazon has no brick and mortar store to want to entice people into, and no incentive to play the "loss leader" game. You can assume Amazon makes money on Kindle sales, and pays the publisher less than what they charge you.

As for competing for time? Yes, but also for dollars. I don't buy hardbacks. The exception was the Harry Potter books. I also don't pay the outrageous prices the agencies now want for ebooks. Yes, the ones I want are less than the hbacks, but I found a few that are out in paperback, and the prices is between the two. Surely they have made their money from the hback sales? Or at least the hback time? Why have the electronic version be MORE than the pback? What is their cost?

The publisher wants to make money. Any vendor of any product will charge what the market will bear. If the publisher thinks they can get more money for the ebook, they'll charge more for it.

(Yes, there's some extreme wishful thinking among publishers about how much they can charge.)

I do buy hardcovers, but hardcover, paperback, or ebook, the same issue arises: I have to find time to read it. Lower prices aren't likely to make me buy more books I don't have time to read than I already do.

Meanwhile, as mentioned, most of the costs of a book are incurred before it reaches the point of actual publication, whether it's a paper edition or an ebook. The cost of printing, binding, warehousing and distribution of a printed book is about 20% of the total book budget.

And the ebook version doesn't get to tag along free with the assumption the production costs are covered by the paper edition. The accounting doesn't work that way. The ebook will be expected to make a contribution to covering the costs. (What happens if the ebook is the only edition?)

Most people I know that read are willing to pay pback prices for electronic versions, or a little more if no out in pback yet, but not a huge amount. Thirteen dollars is a standard price I have seen, and we won't pay it. But again, if I wait will the price of the ebook come down? Or will the price stay the same, even as the hback price comes down?

That will depend upon the publisher, and what it thinks it can get. When the dust settles, I think you'll see publishers roughly matching ebook prices to PB prices, once the PB is released. (They may be dragged kicking and screaming to that point.)

I think if they really want to the publishers can make this work, but that is the point. They. Don't. Want. To.

They want to survive. They want to be around tomorrow to sell you more books. They are all trying to figure out how to do that.

What will you do if they can't survive selling ebooks at the price you would prefer?

I feel they forced agency pricing on ebooks because they are afraid of the medium, not because they were getting less per book from Amazon.

They may be afraid of the medium, but the reasons are bound up in economics. The question for the publisher is how to make money selling ebooks.

If I contract for you to sell wigglies for me I can set the price I charge you, and suggest a MSRP that I tell everyone, but I do not have the right to tell you that you cannot sell wigglies for LESS than you paid me. That is your business, I get $X/wigglie either way.

So you do. And indeed, I can go the loss leader route and sell the wigglies below cost, but why should I? I'll only do that in special cases where I think I can make up the lost revenue other ways. Otherwise, all I'll do is go belly up.

The fundamental question is "How much does Amazon remit to the publisher for each Kindle edition sold at the same time as the hardcover is issued?" You appear to believe they pay the publisher the same amount for each sale whether it's a hardcover book or a Kindle edition.

I don't. I assume the electronic edition is covered by a different contract with a different price schedule, and that the publishers did not anticipate that Amazon would sell Kindle editions competing with the hardcovers at substantially lower prices. When Amazon did so and they lost revenue, they countered with Agency Pricing.
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Dennis