[Manabi]

Originally Posted by SteveEisenberg

Average publisher profits margins are much lower than for Microsoft or Apple, but I don't see people asking why Apple needs to sell an iPad for so much. The answer, I think, is that Apple has no more or less moral right to its money than do its customers.

You haven't been looking at the right places on the Internet. Many, many people complain about Apple's high profit margins, even to the extent of hating the company for them. They aren't immune to criticism over them at all. I personally think their profit margins are obscene and won't buy their products. (Although to be completely fair, there's a lot of other reasons I dislike Apple and won't buy from them as well.)

Originally Posted by Snow Sciles

My take is that the industry itself still wants to see the same profits, if not more. So why should they allow ebooks to be cheaper. People working within publish still want the same wages, still have mortgages and schools fees to pay, etc.

But the market is changing, and if the BPHs don't adapt, they'll end up having to do major layoffs as they're forced to downsize as income drops. If they really want to protect their workers, they need to get in front of the market, not stubbornly try to force book pricing to remain where it has historically when buyers are increasingly unwilling to pay those prices any longer.

Also, DRM is probably going to bite them like it did the music industry with Apple. The problem there (and here) is interoperability. If you buy e-books from Amazon with DRM, they only work on Amazon's e-readers and in their Kindle app. Without DRM, you can use them in any e-reader app, so it's easier for smaller stores to compete. With the music industry Apple's iTunes store gained market control because of DRM. Apple won't license out its Fairplay DRM, so other stores couldn't sell DRM'd music that would play on iPods. The music industry finally realized this and dropped DRM, allowing (ironically) Amazon to open a music store that could give real competition to Apple.

Originally Posted by fjtorres

Well, the BPHs aren't "the industry", just a big part of it, but that is exactly what they are facing. Their approach is to maximize per-unit revenue, even if the number of units moved goes down. So they raise prices and reduce costs (by squeezing authors) which means both lower unit sales and lower submissions. So far, the BPHs are balancing the books and racking up modest growth by digitizing the backlist. And by milking the backlist for all its worth so that, currently, about a third of their ebook sales are backlist. And growing. There is an endgame in sight there and it points at consolidation and downsizing, at much higher margins through significantly fewer new releases.

Of course, long term, the day comes when the entire back catalog has been digitized and growth plummets. This strategy is going to help them win the battle (short term profit) but lose the war (long term profit). Not a good long term strategy at all.

I also think that they're going to have to start treating authors better or they'll lose more and more of them.