Kindle Books Outsell Hardcovers

[AnemicOak]

Here are a couple example P&L's that may be of interest (these are, or should be, done for every title a publisher puts out)...

http://www.bizmark.net/publishing.htm

http://www.ibpa-online.org/articles/...s.aspx?id=2463

[GA Russell]

My opinion is changing. I used to think that I would continue to buy hardcopies only for books of a certain interest in which I have a collection.

But now I think I will buy the hardcopy unless the eBook is significantly less expensive. When I'm finished with it, I can give it away.

Lord knows how many hundreds of free books I have on my jetBook Lite. I like the idea of spending money on the occasional hardcopy.

Of course, there is no need to do 100% one way or the other just because you buy a device.

[DMcCunney]

Originally Posted by AnemicOak

Here are a couple example P&L's that may be of interest (these are, or should be, done for every title a publisher puts out)...

http://www.bizmark.net/publishing.htm

http://www.ibpa-online.org/articles/...s.aspx?id=2463

Every book has a budget. The ones presented above need to be taken with large grains of salt.

For instance, the Bizmark P&L lists the author royalty, but does not list the advance paid to get the rights to publish the book, and that advance can be a very significant number. The advance should be a line in development costs. The question for the publisher is whether the book will "earn out" - sell enough copies to cover the advance and generate additional royalties the author will see in royalty statements. The vast majority of books do not earn out. (The goal of an agent negotiating a book deal with a publisher will be to get an advance high enough it isn't likely to earn out.)

And Bizmarks estimate of printing/binding costs as a percentage of the total is high for the majority of books published by a major publisher. It's probably closer to 15% - 20%.

The IBPA numbers are decent, but assume you are looking at publishing yourself, and are only partially applicable to a book from a major publisher. Again, it doesn't include the advance.
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Dennis

[DMcCunney]

Originally Posted by GA Russell

My opinion is changing. I used to think that I would continue to buy hardcopies only for books of a certain interest in which I have a collection.

But now I think I will buy the hardcopy unless the eBook is significantly less expensive. When I'm finished with it, I can give it away.

Lord knows how many hundreds of free books I have on my jetBook Lite. I like the idea of spending money on the occasional hardcopy.

Of course, there is no need to do 100% one way or the other just because you buy a device.

I see ebooks as an additional format for books, and not as a replacement for paper. I still buy hardcovers, and have some books in both paper and electronic format. I also have a fair number of books for which electronic format is a poor fit: I was a designer/print production guy before becoming a computer geek, and have a fair collection of books on art, architecture, photography, design, and typography. Most of them would a very poor fit as an ebook, because the screen simply isn't big enough and the display resolution probably isn't fine enough. (And if it's an eInk device, add no support for color.)

Paper books aren't going away here.
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Dennis

[Avarwen]

Originally Posted by Valmore Daniels

It was inevitable.

So very true I don't see why this comes as a surprise. In the 80's offices as well as some schools were switching over to computers (DOS anyone). The 90's saw the rise of the cell phone, personal computer,DVD and CD. The millennium saw the dawn of the MP3 player and laptop. So it seems the 10's (is that right) will see the beginning of the e-reader and tablet PC age. So as technology evolves companies will just have to learn to adapt or die.

[murraypaul]

Originally Posted by kjk

According to this, even less:http://p.printingchoice.com/e-books-...vs-real-books/

That link shows 62% production and distribution (including retailer profit). With eBooks there is no reason they can't cut retail out completely and take all that, or at least more than currently.
Retailer profit is part of distribution cost, you are paying them to display your wares.
Plus of course there is no need to handle returns.

[DMcCunney]

Originally Posted by harryE123

Well, I never said this was anything but my opinion.

Understood.

Yes I firmly believe that an ebook copy should be given with every paperback too, it costs close to nothing extra. Even if pbook prices rise by a % I think they should ALL include a cross platform ebook version too by default.

You don't understand how costs are accounted.

Like I said, 80% of the costs of an average book occur before you get the file that will be sent to the printer as a PDF to make plates and print the book, or will be turned into an ebook for electronic distribution.

And ebooks impose an additional cost because they are an additional step in the production process. Right now, writers submit manuscripts in the form of Word documents. Once line editing, copy editing, and proofreading are done, the final version goes to desktop publishing. DTP imports the Word document into Adobe InDesign to do typesetting and markup. The output from InDesign is a PDF file sent to the printer, who feeds it to an imagesetter to make plates the book will be printed from.

InDesign can generate an ePub file, but current versions do so badly. A good ePub file requires starting from well-formed XML, and something has to produce that and generate the ePub. It's not automatic, and someone must be involved in that stage.

Add to that the fact that ePub isn't the only ebook file format in current use. Consider the Amazon Kindle, that uses the Mobipocket format. InDesign doesn't generate that at all - something else has to, and once again, someone has to be involved.

But even if InDesign produced good ePub, and the processes were in place to automatically convert ePub to other formats like MobiPocket (which is possible, as ePub contains the content and metadata required), it still would not be considered to have "no extra cost". Accounting doesn't work that way. The same P&L generated for a paper copy would be generated for an electronic edition. The electronic edition will be expected to cover a portion of the overall costs of the book.

And what would you do in the case where there was only an electronic edition? We are seeing that now, and are likely to see a lot more in the future.

I want to continue buying my paper books and have a physical library, yet I also want the right to read a few pages or take a few of them with me on an ebook reader without having the bulk for the occasional trip. Should I pay almost twice for that? Of course I and others shouldn't. The status quo as is, is unacceptable.

You shouldn't? Why not? The status quo is unacceptable to you. The question is the rest of the market.

I suspect we'll see three market segments: those who buy only paper copies, those who buy only electronic copies, and those who buy both. The main change I see in the next few years will be the number who buy only one format, as people who bought paper move to electronic editions. The number buying both will remain a fraction of the total market.

And this is not self corrective by the market, that's a long gone myth.

It is? Do you buy things you think are over priced?

In a competitive market, the price is what the market will bear, and value is what the customer is willing to pay for. If enough of my market is willing to buy my widget at the price I sell it for to cover my costs and make enough money to justify selling it and keep me in business, by definition, I'm charging a fair price. You may think my price is too high, but that's your problem. You vote with your wallet and don't buy. Enough other people do buy that I have no strong incentive to lower my price.

I am sincerely sorry for authors losing profits, but most lesser known authors do not have their copyrights violated on the web.

Don't bet on that...

(Though you can argue that less known authors are in the same relative position as less known bands whose work is copied and shared. They might well be happy about it, as it exposes more people to their music. Less known authors might have similar feelings. SF writer Cory Doctorow said "An author's real problem isn't piracy, it's obscurity.", and he has a point.

The question is how many people download and read a pirated electronic copy instead of buying a legitimate version. It's possible to track the downloads, but lost sales are quite another matter.)

In any case this is a certain radical stance that will possibly show publishers that whatever they do unless they start offering a fair product, which is to say a slightly higher price for ebook+pbook combos over ebooks, better cross platform standards (no more of that pdf garbage), open non drm books (that is questionable even to me too so far), they will face the radicalism that the web affords. Do they want to be like the music industry that was too late to notice this and has hemorrhaged profits every since (and hadn't it been for apple they be shooting themselves on the foot), or do they want to wizen up?

They don't seem like they do. Shame.

PDF isn't garbage. There are some books for which PDFs are the only realistic format to use, with textbooks as a good example. (Especially those containing any significant amount of math.)

But cross-platform standards aren't just the publisher's problem. Amazon's Kindle uses Mobipocket format. Barnes and Noble's nook and the Sony Reader use ePub. Do you think either is likely to drop the one they use and adopt the other?

I have hopes DRM will go away, but am not holding my breath.

Of course you understand I am referring to physical libraries. These are irreplaceable to me. The sense of owning own, having friends and relatives browse it over a cup of coffee, making a reading room where you read surrounded by your books, and you can get up and move about the physically browse it outside of that perennial screen we have in front of us...handing out a book, the tactile sense of the book, the dog eared pages, the inscribed note etc. etc. are all irreplaceable to me. More so than for music. But even with music I miss that physical item a lot as well, vinyl in particular.

Understood. I own about 1,500 vinyl LPs. I still have a turntable, and the vinyl isn't going anywhere.

But I feel the same way about electronic music files as I do about ebooks - it's an additional format, not a replacement.
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Dennis

[DMcCunney]

Originally Posted by murraypaul

That link shows 62% production and distribution (including retailer profit). With eBooks there is no reason they can't cut retail out completely and take all that, or at least more than currently.
Retailer profit is part of distribution cost, you are paying them to display your wares.
Plus of course there is no need to handle returns.

You can take that one step farther and say "cut the publisher out completely and take it all."

The problem is simple: you can self publish, but how do you reach that market that might be interested in reading your books sell to them?

While you can argue that they don't do it well, selling books is what publishers and retailers do.

If you want to make your living writing (or even a significant fraction of it), you still need a publisher and retailers in the loop, and are likely to for the foreseeable future.
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Dennis

[murraypaul]

Originally Posted by DMcCunney

You can take that one step farther and say "cut the publisher out completely and take it all."

There is a difference. You need retailers for pBooks because you need to physically put the books in front of your buyers. You need to get copies into every major market, that takes hundreds or thousands of stores to do that.
All that goes away with eBooks.
What is Amazon's retail margin on eBooks?
Most of what the publisher does up until actually getting the book printed still stays the same.

Edit: to answer my own question, it seems that under the agency model the retail margin in 30%. So that is 20% saved right there, even taking no account of having no returns and no manufacturing cost.

[tompe]

Originally Posted by murraypaul

I find this very hard to believe.
In fact, I can't believe it without hard numbers, it just doesn't make sense.

Why do you find that hard to believe? It makes perfect sense to me so I am curious about your argument.

[murraypaul]

Originally Posted by tompe

Why do you find that hard to believe? It makes perfect sense to me so I am curious about your argument.

Well very simply because it seems that the initial figures were ignoring retailer markup.

I also note that the second link in post 106 gives physical manufacturing as over 50% of cost of sales, and that is for a limited run of only 5000 copies. The more copies, the greater the physical cost becomes as a proportion.

[harryE123]

Interesting response DM, thanks for taking the time to reply, I have some work to do, but I will get back to you on that.

[Oldpilot]

Originally Posted by foreverjuly

Buying books in print will become the new way of appreciating a book you really love. AFTER you read it as an ebook while you were in traffic, you decide you want to have it for when you're actually sitting in your chair deliberately reading too.

That's reaching back to the Old World way of adding books to one's library. In France at any rate books were sold as paperbound editions, with a generic cover. If you liked the book after reading, you took it to a bookbinder and had it bound in leather to match the other keepers in your library. Otherwise you sold it to one of those stalls along the Seine.

[DMcCunney]

Originally Posted by murraypaul

I also note that the second link in post 106 gives physical manufacturing as over 50% of cost of sales, and that is for a limited run of only 5000 copies. The more copies, the greater the physical cost becomes as a proportion.

Er, no. The biggest cost in printing aside from the paper is "set up and make ready", that is, creating the plates the book will be printed from, putting them on the press, adding ink, and running test copies to make sure registration is exact and color values (if the work includes color) are accurate. The incremental cost of printing additional copies once you've done that is a small fraction of the total. (And paper costs less when purchased in larger quantities, too.)

Economies of scale take place: the larger your press run, the more you can spread the cost of manufacture over units produced, and the less of a percentage of the cost manufacturing is for an individual book. If I print 5,000 copies and my printing cost is $5,000, my manufacturing cost is $1.00 per book. If I'm charging $5.00 for the book, printing costs are 20% of the price. If I print 10,000 copies, my printing cost doesn't double. It may rise to, say, $7,000, and my manufacturing cost per book is $.70 or 14% of the price.

It's one of the reasons you have to take the numbers in the P&Ls linked here with caution: The numbers do not all rise in equal proportion as the press run goes up, and many of those costs may vary depending upon the book being produced.
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Dennis

[brecklundin]

Originally Posted by darknessangel

Really awesome... I don't get mine from Amazon but it really is a good thing for the ebook reader market. I just hope for a decent reader for large technical pdfs cause up to now my prayers to the god of technology have gone unheard. Perhaps I should start with the human sacrifices...

GJMS

glad ya aren't limiting yourself to virgin sacrifices...it would suck to lose Harry (HarryT not the "new" Harry ID)!! hehehehe....