Quote:
Originally Posted by sirbruce
One problem with your analysis, Elfwreck, is you're missing the assumption -- not a necessarily true assumption, mind you, but one which must be made for business reasons -- that every ebook sale is one less pbook sale. So you can't just ignore the pbook overhead. If ebook sales were purely additive, then you could. There's no doubt that ebook does stimulate demand and that ebooks are bought by people who would never buy the pbook. But nevertheless, you can't just assume the cost of overhead doesn't exist; Angry Robot doesn't want ebooks to be an afterthought. *If* you were going to treat them as such, then it would mean higher pbook prices to cover the falling demand (since people start buying the cheaper ebooks rather than the pbooks), or fewer ebook titles (only those ebooks that had large enough pbook sales would be offered, since ebooks wouldn't be covering their share of overhead).
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Experience at Baen suggests that eBooks have three effects (no particular order):
- eBooks substitute for some paper sales. (Note, however, that they make more from selling an eBook than selling mmpb or trade-pb. It's only a lose if the eBook substitutes for a hardcover.) For example, I purchase fewer dead-tree books from Baen than I did before they started selling eBooks. But note that I've tripled(!) my purchases from Baen in dollar terms over the same period. And most of those dollars go to the Webscriptions store, rather than to retailers, so Baen also makes more profit from each dollar. These days I buy their entire output in bits. I also buy paper copies of the few books that are my most treasured favorites.
- eBooks increase paper sales over all. Lots of people either try free samples or buy bits, and then buy dead-tree-format as well. I expect this effect to slowly diminish as eBooks go mainstream (which they haven't yet done).
- eBooks (especially when aggressively priced) introduce readers to authors they would otherwise have ignored. This helps build an audience for those authors, and so leads to increased sales in the long run.
After 10 years selling from their own store, Baen is making more money from eBooks than from all non-US paper sales combined (including Canadian sales). Reading between the lines of various public statements they've made, they seem to be running somewhere around 20% of total sales through Webscriptions -- and the share of profits coming from bits is higher than that.
Xenophon