MobileRead Forums - View Single Post - Simon & Schuster is delaying ebooks by four months

Daithi · 12-10-2009, 01:04 PM

The big publishers pulling this are stupidheads. To explain why, a little background --

A typical hardcover price is $26 and Amazon will typically receive a discount of 55% off the cover price. This is a discount of $14.30 on a $26 book, so each book costs Amazon $11.70. If Amazon sells the book for $13.00 they get to keep $1.30. If they sell the book for $9.99 then they lose $1.71. Currently Amazon is eating the cost on a lot of ebooks in order to build marketshare.

Why the publishers are stupidheads --

The publishers are making a killing on ebooks. The margin on ebooks is far higher than it is on hardcovers. An ebook doesn't have printing, warehousing, inventory, shipping, and returns costs. So the publisher gets paid $11.70 regardless of the type of book sold, but the cost of producing an ebook is much lower than a hardcover. Therefore, you would think, the publisher would want to sell as many ebooks as possible. If anything, they should release the hardcovers four months after releasing the ebooks. If you get paid $11.70 regardless, but it costs $5.00 to produce an ebook but $8.00 to produce a hardcover then you would be a stupidhead to focus on hardcover sales.

The publishers aren't total stupidheads though. They realize that Amazon will not continue to lose money on ebook sales forever. At some point Amazon is going to tell the publishers that they need to lower the list price of the digital version of the book (Notice that Amazon is now displaying a digital list price on their pages).

In order for Amazon to make the same profit it does on hardcovers ($1.30 in our example) it would require the publisher to offer the books at a digitial list price of $19.31, so the publisher gets $8.69 instead of $11.70. I'm guessing that even at this price the publisher is still making a bigger margin on ebooks than hardcovers. That's why I think the big publishers that are not pushing ebooks hard are stupidheads. They should be doing just the opposite and what they are doing.

This also doesn't even take into consideration that there isn't a used book market and that ebooks don't go out of print.

12-10-2009, 01:04 PM	#108
Daithi Publishers are evil! Posts: 2,418 Karma: 36205264 Join Date: Mar 2008 Location: Rhode Island Device: Various Kindles	The big publishers pulling this are stupidheads. To explain why, a little background -- A typical hardcover price is $26 and Amazon will typically receive a discount of 55% off the cover price. This is a discount of $14.30 on a $26 book, so each book costs Amazon $11.70. If Amazon sells the book for $13.00 they get to keep $1.30. If they sell the book for $9.99 then they lose $1.71. Currently Amazon is eating the cost on a lot of ebooks in order to build marketshare. Why the publishers are stupidheads -- The publishers are making a killing on ebooks. The margin on ebooks is far higher than it is on hardcovers. An ebook doesn't have printing, warehousing, inventory, shipping, and returns costs. So the publisher gets paid $11.70 regardless of the type of book sold, but the cost of producing an ebook is much lower than a hardcover. Therefore, you would think, the publisher would want to sell as many ebooks as possible. If anything, they should release the hardcovers four months after releasing the ebooks. If you get paid $11.70 regardless, but it costs $5.00 to produce an ebook but $8.00 to produce a hardcover then you would be a stupidhead to focus on hardcover sales. The publishers aren't total stupidheads though. They realize that Amazon will not continue to lose money on ebook sales forever. At some point Amazon is going to tell the publishers that they need to lower the list price of the digital version of the book (Notice that Amazon is now displaying a digital list price on their pages). In order for Amazon to make the same profit it does on hardcovers ($1.30 in our example) it would require the publisher to offer the books at a digitial list price of $19.31, so the publisher gets $8.69 instead of $11.70. I'm guessing that even at this price the publisher is still making a bigger margin on ebooks than hardcovers. That's why I think the big publishers that are not pushing ebooks hard are stupidheads. They should be doing just the opposite and what they are doing. This also doesn't even take into consideration that there isn't a used book market and that ebooks don't go out of print.