Quote:
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Publishers and authors say it is much more complicated than the cost of paper and shipping. The lower e-book price “is not sustainable,” said Mr. Baldacci, whose novels regularly rise to the top of hardcover best seller lists. If readers insist on cut-rate electronic books, he said, “unfortunately there won’t be anyone selling it anymore because you just can’t make any money.”
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Perhaps these folks should be asking Baen how they're making money selling books at a max of $6 US, with discounts well below that point. And doing it while paying authors excellent royalties (royalty on an e-Sale is about equal to trade-paperback, which is modestly less than hardcover but waaaaay better than mass-market paperback). And they make that money with no significant hit to their paper sales (yet -- we'll see what happens as eBooks become more popular). Baen also has no reason to fear the changeover to eBooks, because their profit margin on eBooks is significantly better overall than for dead-tree-format ("overall" means wrapping up all dead-tree sales of a book in all formats and comparing that against all e-sales of the same book).
The problem for Baldacci is that he's dealing with publishers who haven't figured out a business model that works in eBooks. Not that the lower e-book price "is not sustainable."
On the other hand, Amazon probably doesn't like Baen's business model much either. After all, the way that Baen's able to succeed with low prices is by cutting the distributors entirely out of the value chain (and mostly cutting out the retailer too). They aren't quite selling directly -- Webscriptions is a separate business -- but Ingram and Amazon and B&N and friends aren't in the picture. And here's the important part: Ingram and Amazon and B&N and the like aren't getting any markup on those e-Sales either.
Xenophon