Quote:
Originally Posted by Piper_
If they don't let them make at least close to the equivalent of what they make on the hardcover during that new release window, I'm afraid publishers will either stop putting out the ebook version until the window is passed, or they'll raise prices of mid and back list books, to make up for the difference.
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Why do you believe (aside from certain publishers saying so) that an ebook costs a publisher more to produce than a hardcover of the same book?
Let's look at it realistically. First, take out everything that is shared between the two formats, like knocking identical terms out of the sides of an equation. Proofreading, editing, formatting, and so on are all applicable to both, so they can go. So let's look at the lists, with expenses in red and credits in black:
PBOOK:
physically printing and binding the book
shipping book from printer to warehouse
storing book in warehouse
taxes on unsold books (assessed annually)
shipping book from warehouse to distributor
discount from publisher to distributor and distributor to retailer - minimum 50%
shipping unsold book from distributor to warehouse
price paid by remainder store, paper recycler, etc.
EBOOK:
commission paid to Amazon - 30%
Notice a bit of a difference here? Even if we leave out everything except how much the publisher gets per book -- that is, if we assume the publisher guesses the sales precisely, so there are no returns (which are often half of a print run) and no books sitting in the warehouse eating space and paying taxes, we're looking at 50% (publisher's cut of a pbook) versus 70% (publisher's cut of an ebook). Factor returns in there and you're effectively doubling your cost of goods sold, minus the pennies on the dollar that the recycler or remainderer will pay. Slate had an article a while back showing that after all is said and done, including the author's royalty, a publisher may bring in about a dollar of actual profit from a printed hardcover.
One of the flaws of some people's thinking is the assumption that "big companies are always right" and that such companies make the most profitable and successful decisions possible. For them I have two words: Cadillac Cimmaron.* Companies are run by people, and by the people
those people hire as their fellow decision-makers and eventual successors, and people can do some remarkably stupid things. I suspect that not long in the future, we'll look back and the current era of ebook sales and pricing rather like we do the Detroit implosion: asking "what were they
thinking?" Companies do
not always make optimal decisions (remember when Texas Instruments sold a superb computer ... and killed it by suing anyone who sold software for it?) any more than individuals do. I think the decision to leave the potential profits from ebooks on the table in order to protect the market for hardcover pbooks is one of those decisions.
Basically, the publishers are looking at profit per unit sold, like they did with that unfortunate
Chevy Cadillac, rather than at their total profit from the market, and making decisions that are bad for them in the long term. And this isn't just hurting them, because those decisions are also bad for their customers in the short term.
*
Note for the automotively uninitiated: the Cadillac Cimmaron was a Chevy econobox with a Cadillac nameplate slapped on it. It had neither the power and luxury of a Cadillac nor the cheapness of a Chevy. It damn near killed the brand, and its introduction is widely regarded as one of the worst automobile company decisions ever.