Quote:
Originally Posted by kennyc
Yes and no. You are right about the upfront money perhaps, but it depends on the terms the retailer has with the publisher --- perhaps 90 days, which means they could get the books and not have to pay for them and perhaps even return them before they had to.
The costs and the distribution mechanism are critical. There are shipping costs, warehouse costs etc. You can say those are all built in but the are going to vary from book to book and the equivalent costs for the ebook are tiny in comparison. There is no retail sales people etc. Just an on-line presence. No storage costs no production costs (minimal at least) so the profit on the ebook is perhaps 2-10 times more than for the pbook. In your example you are assuming the profit is the same. It's not.
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Yeah, my example was simplistic, but I was trying to illustrate a point, not delineate the actual facts - for the precise reason that you point out, namely, it all depends on the deal, and there are all kinds of deals.
As you point out, the ebook distribution business and the pbook distribution business are two different things. But when they are housed under one roof, and selling the same content, they impact each other's dynamic.
My point is this: existing publishers not only have an existing business model, they have an existing financial structure that is premised on a particular kind of money flow. Ebooks alter all that. Pbook publishers, even ones who embrace ebooks, are in the position not only of having to rebuild the airplane while it's in flight, but refuel it, too.
It is not going to be easy for them.