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Originally Posted by HarryT
Speaking for a moment as an author who has had quite extensive dealings with publishers, do bear in mind that the price the publisher sets for the book is not particularly related to the cost of printing it. Most of the price for the initial run - whether it be on paper or electronic - is there to recoup all the money the publisher has spent in advance of publication and (hopefully) give both them and the author a reasonable profit.
People who've never had dealings with publishers perhaps don't realise just how much work is involved in publishing a book, and the cost of all that work does have to be recouped, whether the book is published on paper or electronically.
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This part of HarryT's post is spot on target. Printing costs are NOT the majority of the publisher's cost for a book. Over at Baen's Bar various authors have shared with us sales and royalty numbers for some of their work. Jim Baen occasionally wrote on the subject as well. Here're a few tidbits.
- The single biggest bite out of the cover price (from a publisher's point of view) is the mark-up for the retailer and distributer. This can run upwards of 50% of cover price (sometimes well upwards).
- Production costs include editing, proof-reading, overhead (e.g. running the office, etc.), development of new authors (that is: mining the slush-pile, guiding the newby's who get bought, guiding the wanna-be's who almost made it, etc.), typesetting, and lots more. None of this goes away for a digital edition.
- Printing and warehousing do cost money. Significant money. So do inventory taxes. Books that didn't sell out completely typically go out of print when these costs threaten to outweigh ongoing sales.
Baen has clearly demonstrated that both the publisher and authors can make money -- good money -- on electronic sales. While pricing the books moderately below paperback, and
way below hardcover. They charge $6.00 per book (single copy price), or $15 for a bundle of everything they published in a particular month (that they have electronic rights for).
So, when HarryT wrote...
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Originally Posted by HarryT
I think it's unrealistic to expect the initial e-book release of a book to be significantly less than the price of the equivalent HB. A bit cheaper, yes, because there are savings on printing cost, but not dramatically.
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...I have to disagree. A Baen author's royalty on an electronic sale is pretty good, even at their low prices. Royalty on a single-copy sale is about like the royalty on a trade paperback -- more than the mass market paperback royalty, but less than the hardcover royalty would have been. Likewise for the publisher's take. I should note that Baen's accounting for electronic sales charges a pro-rata portion of the fixed costs for a book to the electronic sale -- and eSales are still quite profitable. In fact, electronic sales are higher than all non-US sales (of dead-tree books) combined (including Canadian sales).
But... They've also found that many electronic sales are incremental sales that do not replace dead-tree sales. That is, not only is the sum of electronic and dead-tree sales a good bit higher than dead-tree sales alone were before Webscriptions, but electronic sales have also been a driver for increased dead-tree sales. This means that the author's royalties are up too -- both from eSales, and from increased dead-tree sales. What's not to like?
So, HarryT, we have an existance proof that it is extremely realistic to expect initial electronic sales to be substantially cheaper than the hardcover price. It's just that its mostly due to cutting out two levels of middle-men, not due to cutting out the printing costs.
Xenophon