E-Book Prices Prop Up Print Siblings

[anamardoll]

Originally Posted by nogle

Typically, fixed costs aren't really fixed, they are "lumpy" variable costs. Think about it this way:

Over a small change in title volume, the number of editors stays the same; the cost looks fixed. But, if you experience a large change in title volume, then you need to increase or decrease your number of editors, so the cost changes.

Also, a handy rule of thumb is that in the long term, all fixed costs are variable and all variable costs are fixed.

That's my understanding. In which case all this boo-hooing about the fixed costs cutting into production would seem to indicate that maybe the variable fixed costs could be brought down a bit as opposed to MUST RAISE EBOOK PRICES OR DIE. *cue wild running emoticon*

[kjk]

Originally Posted by carld

Interesting stuff. I had no idea that B&N was so much smaller than Amazon. Of course Amazon sells lots more than just books, but I didn't expect the difference to be so huge.

Amazon has been growing at an incredible rate, as well. What is interesting is that some analysts see their web services (AWS) actually being their secret weapon.

[Ben Thornton]

The figures look a bit suspect. If there is <1bn from ebooks in total, but Amazon are making >10x that from music/books/DVD, while selling more ebooks than paper, that would suggest <~2bn books, >10bn music/DVD. There aren't enough figures to be certain, but my guess is that there are more total ebook sales than claimed (or maybe that was FY to end March 2010 with explosive growth since).

[TimW]

Originally Posted by Ben Thornton

The figures look a bit suspect. If there is <1bn from ebooks in total, but Amazon are making >10x that from music/books/DVD, while selling more ebooks than paper, that would suggest <~2bn books, >10bn music/DVD. There aren't enough figures to be certain, but my guess is that there are more total ebook sales than claimed (or maybe that was FY to end March 2010 with explosive growth since).

I think you should see Amazon.com, the Hidden Empire. There isn't much that Amazon DOESN'T sell.

[kjk]

Originally Posted by Ben Thornton

The figures look a bit suspect. If there is <1bn from ebooks in total, but Amazon are making >10x that from music/books/DVD, while selling more ebooks than paper, that would suggest <~2bn books, >10bn music/DVD. There aren't enough figures to be certain, but my guess is that there are more total ebook sales than claimed (or maybe that was FY to end March 2010 with explosive growth since).

Right. Or maybe Amazon is just not selling that many books, e- or otherwise.

[Ben Thornton]

Originally Posted by kjk

Right. Or maybe Amazon is just not selling that many books, e- or otherwise.

But elsewhere, there is often the claim that Amazons ebooks sales dwarf the rest of the market, which seems plausible to me given the number of Kindles that I see people using compared to anything else (pretty much no other eInk readers in the wild).

So, my guess is that these figures (for ebook sales) are a bit low, or a bit out of date - but I could easily be wrong, there's not enough hard data.

[kjk]

Originally Posted by Ben Thornton

But elsewhere, there is often the claim that Amazons ebooks sales dwarf the rest of the market, which seems plausible to me given the number of Kindles that I see people using compared to anything else (pretty much no other eInk readers in the wild).

So, my guess is that these figures (for ebook sales) are a bit low, or a bit out of date - but I could easily be wrong, there's not enough hard data.

They are for 2010; I'm sure we'll see huge growth this year.
Here are the original sources:
http://publishers.org/bookstats/formats/
http://publishers.org/bookstats/highlights

[Ben Thornton]

Originally Posted by kjk

They are for 2010; I'm sure we'll see huge growth this year.
Here are the original sources:
http://publishers.org/bookstats/formats/
http://publishers.org/bookstats/highlights

Thanks for that.

So, I suppose that a plausible scenario would be the huge growth continuing, with ebooks at 2bn in the period Amazon are reporting revenue for in the other link, and paper the same perhaps, they would then be about a third of Amazon's book/music/DVD sales, and bigger than B&N for books, which would be more like the sort of scale that I expected.

[Ben Thornton]

Another interesting article linked from the above site, here. It says

We’ve been sailing toward this country for some time, but in 2011, we arrived. Last year, the publishers surveyed by the Association of American Publishers saw 8.3 percent of domestic net sales from e-books. Three months into this year, Simon and Schuster’s e-book sales had climbed to 17 percent of revenue; at Hachette, parent company of Little, Brown, the figure was 22 percent. From November to May, according to a Pew Internet Project study, the percentage of American adults with a dedicated e-reader (like a Nook or Kindle) leaped from 6 percent to 12 percent. Another 8 percent now have tablets. To add a little context, fewer than half of Americans even buy a book in a typical year. So for 12 percent of all Americans to have an e-reader is not trivial.

Meanwhile, print sales are down about 25 percent. Physical bookstores, including the Borders chain, which is in bankruptcy reorganization, are on the rocks, rapidly adding stationery sections and ticketed author events to make up for plummeting book sales. And Amazon, which offers books in every possible format but is heavily promoting its proprietary Kindle device, announced in January that it is now selling more copies digitally than in paperback.

From this data, being at about a quarter of the market feels about right.

[anamardoll]

Interesting that 25% of the market is being purchased by 10% of American adults (the folks with eReaders, in your quote). Heavy users indeed.

[Fbone]

Originally Posted by anamardoll

...

The other problem is that this doesn't seem to be on an infinite time scale. It is possible that lower prices over a fixed time period will result in lower profits, but eBooks are (or should be) forever. Are lower prices on eBooks less profitable on an longer time chart? I wonder.

The ebooks aren't forever for the publisher. The only have them for the length of the contract.

[leebase]

As someone pointed out recently -- there are only books for the publisher. Hard back, soft back, trade, ebooks -- are all books that bring in revenue. The revenue pays for the costs and the profits. The ebook is not a separate business any more than the paperback was.

All along, hard backs have been where most of the profits for a book have been earned...and it's still the case.

Lee

[Barty]

Well, whatever the case is, I just can't get very worked up over book publishers. I reserve my hate for the phone and cable companies.

[anamardoll]

Originally Posted by Fbone

The ebooks aren't forever for the publisher. The only have them for the length of the contract.

It was my understanding that as long as the run is being sold, the publisher retains the rights. Doesn't Konrath have some in-print books that he would LOVE to go out of print so the rights would revert to him and he could re-release them as eBooks?

I have to assume that publishers can/will write similar contracts for eBook sales.

[pdurrant]

Originally Posted by anamardoll

It was my understanding that as long as the run is being sold, the publisher retains the rights. Doesn't Konrath have some in-print books that he would LOVE to go out of print so the rights would revert to him and he could re-release them as eBooks?

I have to assume that publishers can/will write similar contracts for eBook sales.

It does indeed all depend on the contract. But contracts that continue while books are 'in print' are becoming rarer now, as PoD facilities mean that publishers can keep books 'in print' without actually spending any money on print runs or promotion. And it's never been a sensible caluse for ebook contracts.

I think that contracts are moving towards fixed terms with automatic renewal unless cancelled in writing.