Thread: Is Publishing Doomed? JOHN B. THOMPSON with Williams Cole
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Old 11-15-2010, 03:24 PM   #15
Kali Yuga
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Quote:
Originally Posted by HamsterRage View Post
These threads always boil down to this same point don't they?
Ehh, there's about 4 points that keep getting restated, yes.


Quote:
Originally Posted by HamsterRage
I think you're on shaky ground when you start tossing out a single percentage like that....
I think it's pretty clear that these figures are ballpark. It doesn't really matter that much if the paper aspect is 8% for one book, and 15% for another. The key point is that for a variety of reasons, people have a false belief that paper makes up 80-90% of the cost, therefore ebooks ought to be 80-90% lower.


Quote:
Originally Posted by HamsterRage
But it is interesting in all these arguments that we don't seem to have touched on the fact that the costs for an ebook for the retailer are almost nothing, at least compared to that of a bricks and mortar store.
I may be wrong, but I think that's a more recent focus of MR postings. Before agency pricing, people were eviscerating Amazon every time an ebook cost more than $10, so discussions of "retailer's costs" were more common.

I'd also say that people tend to exaggerate the savings for the retailer. For example: Due to the volume, Amazon is likely paying pennies to ship books, and use high shipping fees either as a profit center (e.g. charging you $18 for overnight shipping, that costs them $3) or as an enticement to buy more ("If you spend $2.95 more, shipping is free!") or to lock you in as a customer (e.g. "spend $70 on Amazon Prime and shipping is free").

Meanwhile, they still have massive costs related to bandwidth, energy, security, servers, databases, taxes, staff, wireless fees, legal, fraud protection, PR, advertising and the lot.

I have no doubt they are spending a lot less to store and transmit ebooks than paper -- especially compared to brick & mortar stores, which carry tons of fixed costs. But I don't think the savings are anywhere near as much as people presume, especially for companies like Amazon or Powell's, which are pure or nearly pure etailers already.
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