This discussion reminded me of an old calculation I performed based on numbers provided by HarperCollins.
https://www.mobileread.com/forums/sho...d.php?t=216608
This was based on the infamous HarperCollins presentation where the CEO was explaining to investors how clever they were on making a larger contribution to profit per unit on ebooks then hardcover books. They were admitting that the per unit contribution to profit was $2.20 higher under $14.99 agency because they were paying $1.58 less per unit to author royalties. They are also pocketing an addition $0.62 per unit. I had to go to the internet archive to find a copy of the slide that it was based on.
https://web.archive.org/web/20130811...always-denied/
I admit that I threw that comparison table together quickly and I was being sloppy (lazy) but I'd tried to show in the final column that under the wholesale model the publishers were likely afraid of the authors squeezing them to make the same per unit royalties as on hard covers and the retails would be squeezing them to make 30% so the publishers contribution to profit could drop significantly.
In Amazon's statement they are presenting even a worse picture for Hachette.
- The customer is happy because they're paying $9.99 instead of $14.99
- The authors would be getting $3.50 royalties instead of $2.62 (per unit)
- Amazon gets 30% so they'd be happy
- Hachette gets $3.50 contribution to profit instead of $7.87
If unit sales went up 71% because of the lower price the authors should be thrilled, Amazon would be thrilled but I'm not sure it would be enough to fix Hachette's profit margin.
The statement was very clever to get the consumer and the authors on Amazon's side but it certainly wasn't intended to help make an agreement. It might make Hachette think that the wholesale model would be better for them but I doubt it. This is going to drag on.