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Originally Posted by gweeks
That's pretty much backwards actually. The publisher is loaning money to the distributer in the form of unpaid books. The distributer only pays for them after some period of time. Sometimes as long as or longer than 90 days. It depends on the contract. That's what pushed Borders over the edge. The publishers changed their terms to cash up front before delivery, because Borders had not been paying their bills on time.
Greg Weeks
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Remember, the issue is not "what is the system used for pbooks" but rather, "why would publishers charge more for ebooks than for pbooks?" No doubt I am wrong about the details (it's been a while since I've read about this,) but the fact remains that the distribution system for pbooks is, in some fashion, tied up with the financing system in a way that it is not with ebooks. And, that being the case, I can imagine that it impacts pricing decisions.
I'm sure that there are other reasons as well. I expect that a lot of publishers look at the pbooks as the "standard book" which will sell more copies & therefore require a smaller margin of profit than ebooks, which are the exception & sell fewer copies.
Personally, I think that publishers are making the same mistake as movie distributers. Rather than thinking that they have one product with different distribution systems, they think that they have competing products, and are trying to milk each product for the maximum profit within that product category. So they stagger the release dates, trying to move the product with the highest return first, and set different price points for each "separate" product. There is some merit to that viewpoint, since the products (movie, dvd, streaming) (hardback, paperback, ebook) are somewhat different, but at least in the case of movies, a recent study shows that by staggering release dates, the movie producers actually lose money.