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Daithi · 02-02-2010, 01:16 PM

I think in many places you and I agree Kali Yuga. I'll also grant you that unless we could examine actual contracts and sales figures that we can't know anything for sure. However, there is quite a bit of information available for us to reach some general conclusions, and if the figures I provided in my original post are correct the authors are taking the short end of the stick in this deal.

BTW, the figures I used came from a NYTimes blog article in which a Macmillan represenative said, "Amazon could continue to buy e-books under its current wholesale model, paying the publisher 50 percent of the hardcover list price...". The 20% royalty figure on ebooks came from a Publishers Weekly article that quoted Sargent as announcing that "Macmillan would be instituting a boilerplate contract across its divisions that would offer a 20% royalty on net proceeds on e-books, a drop from what has become the de facto industry standard of 25%."

I was wondering on what you are basing your figures. In the examples you provided you used royalties of 20% of the cover price (what I called list price). I've never heard of an author getting that much. When paid a royalty on cover/list price I've seen figures in the 8% to 12.5% range depending on volume. You also included wholesale prices, but it is my understanding that the big 6 publishers all deal directly with Amazon.

The point I think we can agree on is that Amazon must do something to insure publishers that ebooks won't harm their business. You also made a good point about the $10 price point being established.

If you look at the price at which Amazon is currently selling hardcovers you will see they are normally selling for around $15. Let's say that printing, distribution, warehousing, and reseller returns comprises $3.50 of that cost (I think this figure is low and it is probably closer to $5, but for the sake of argument). This means an ebook "sold" at $11.50 would give the publishers and retailers the same profits they receive on hardcovers. If Amazon had a system in place that insured the publishers that the publisher wouldn't lose money in the future then they might not be so reluctant to see Amazon losing money to establish the ebook market.

02-02-2010, 01:16 PM	#4
Daithi Publishers are evil! Posts: 2,418 Karma: 36205264 Join Date: Mar 2008 Location: Rhode Island Device: Various Kindles	I think in many places you and I agree Kali Yuga. I'll also grant you that unless we could examine actual contracts and sales figures that we can't know anything for sure. However, there is quite a bit of information available for us to reach some general conclusions, and if the figures I provided in my original post are correct the authors are taking the short end of the stick in this deal. BTW, the figures I used came from a NYTimes blog article in which a Macmillan represenative said, "Amazon could continue to buy e-books under its current wholesale model, paying the publisher 50 percent of the hardcover list price...". The 20% royalty figure on ebooks came from a Publishers Weekly article that quoted Sargent as announcing that "Macmillan would be instituting a boilerplate contract across its divisions that would offer a 20% royalty on net proceeds on e-books, a drop from what has become the de facto industry standard of 25%." I was wondering on what you are basing your figures. In the examples you provided you used royalties of 20% of the cover price (what I called list price). I've never heard of an author getting that much. When paid a royalty on cover/list price I've seen figures in the 8% to 12.5% range depending on volume. You also included wholesale prices, but it is my understanding that the big 6 publishers all deal directly with Amazon. The point I think we can agree on is that Amazon must do something to insure publishers that ebooks won't harm their business. You also made a good point about the $10 price point being established. If you look at the price at which Amazon is currently selling hardcovers you will see they are normally selling for around $15. Let's say that printing, distribution, warehousing, and reseller returns comprises $3.50 of that cost (I think this figure is low and it is probably closer to $5, but for the sake of argument). This means an ebook "sold" at $11.50 would give the publishers and retailers the same profits they receive on hardcovers. If Amazon had a system in place that insured the publishers that the publisher wouldn't lose money in the future then they might not be so reluctant to see Amazon losing money to establish the ebook market. Last edited by Daithi; 02-02-2010 at 01:18 PM.