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Originally Posted by Xenophon
Actually, they are well aware that there's a core group of us who would rather have the eBooks. According to various comments made by Baen insiders (I am emphatically NOT a Baen insider!) the single largest savings is cutting out both the distributor's and the retailer's cut of the price. They do save somewhat by not having to print the book, but not nearly as much as some poster here seem to think.
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Correct. Publishers sell books to wholesalers and big chains at a considerable discount off the cover price. How
much of a discount may vary, and the last I heard, publishers were experimenting with offering higher discounts in exchange for a "no returns" policy.
Historically, publishing had operated on a 100% returns basis: wholesalers and retailers could return any unsold books for full credit. Hardcovers actually got returned, with attendant shipping and warehousing costs. Paperbacks had the covers stripped off and returned, and the rest of the book became trash. Lots of small vendors incurred publisher's ire by turning around and selling the stripped copies for a fraction of the cover price instead of actually throwing them out.
Publishers long knew 100% returns was potentially deadly, but like many other practices, no one wanted to be the first to change it, fearing it would put them at a disadvantage.
It the publisher sells ebooks directly, they can charge the wholesale price rather than the retail price, offer the books much cheaper, and still make out as well as they would have on the paper edition, with the mentioned added values of no shipping and warehousing costs, and no costs from returns.
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They also say that eBooks cover their pro rata share of the various fixed costs. And that eBooks bring in more money than all foreign sales combined (which includes Canadian sales). They're nowhere near enough to run the company, but they do make a significant contribution to the bottom line.
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I had an email exchange with Jim Baen years back where he stated the Free Library was intended to promote the dead tree editions, and he didn't see profit in pure electronic books at the time. Webscriptions has demonstrated he was wrong, and I'm sure he was happy about it.
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The other major effect they cite is that eBooks are not subject to inventory taxes (or warehousing costs), so they need never go out of print. Which I think is a dandy side benefit.
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In actual fact, ebooks
can go out of print.
In standard publishing contracts, when a paper book goes out of print, the author (or author's agent) can request that the rights revert, and attempt to resell the book elsewhere. I asked an editor I know how ebooks and Print on Demand affected that. She said that current contracts tend to specify sales levels for ebooks and POD editions in determining whether a book was considered out of print. Sales below the negotiated level were considered evidence the publisher was no longer actively trying to sell the book, and the rights should revert.
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Dennis