Quote:
Originally Posted by RWood
All contracts have a cost associated with them. A cost to administer -- the legal and accounting stuff -- and a cost to execute the contract -- the server resources etc. Fictionwise admitted that OD was only a small part of their total sales so perhaps the costs to OD of keeping Fictionwise as a customer were higher than the profit they derived from the small Fictionwise sales. Thus profits can rise even though total sales decline (all other things being equal.)
The publishers will not take a major hit as most people will simply purchase the book through another retailer. (In this case total OD profits rise even more than the prior case while sales decline only slightly from those people that do not go elsewhere for the books.)
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Ah! That helps clarify things! Thanks!
I'm sorry to say that I am stuck in consumer mode and don't really see the other side of the equation. I guess that explains those grades I got in my accounting classes in college!!
Kaz