Article on ebook profits

[demingite]

or lack thereof:

http://www.itworld.com/tech-amp-soci...ech_2010-12-10

No wonder publishing is in trouble - they don't even know if they are making money or not.

[JeremyR]

I suspect the book industry is a lot like the movie industry - creative accounting is used a lot.

[Elfwreck]

66% have no clear idea if they're even making money from ebook sales

Ebooks don't fit their current economic models. The cost of making them is unknown (do they count just the handful of hours it takes to reformat the print-ready version, or do they split the full production costs among hardcover, trade, mm & ebook versions?); the costs of distribution are hard to calculate (how much does server space & payment processing cost, anyway?), the costs of advertising are incomprehensible. Of course they don't know whether or not the money they've made selling ebooks--which they could certainly describe in great detail, if they wished--counts as "profit" for the concept of ebooks.

It's a new marketplace. If an ebook doesn't sell well, is that because the public doesn't like that title, or because they offered it only at Amazon and most of that author's readers are ePub fans? They know how to decide which books to release only as MMPB and which ones they believe will have hardcover appeal; they don't know how that works with ebooks yet. They don't know how many projected sales would make a book worth releasing as an ebook.

And--heh--they really don't know how to deal with direct public feedback, and how to consider the costs of that as part of the books' economy.

[CazMar]

Originally Posted by JeremyR

I suspect the book industry is a lot like the movie industry - creative accounting is used a lot.

As someone who spent their entire working life in finance - creative accounting is used quite extensively (see certain stockbrokers ) . What the movie and book industries do is some very creative costing, usually to the point that even they don't know if they make a profit on an item until either (a) they go broke or (b) they suddenly find themselves with a whopping great tax bill. Many years ago I did work for a publishing company in England. It was fun but I was appalled at how they ran their business, it was like living in a Tom Holt novel. (Or maybe Tome Holt worked there as well and got his ideas from the experience!) Perhaps it really was run by goblins.

[SensualPoet]

The (freelance) author writes about technology from an Apple perspective as a living. He doesn't demonstrate any depth of knowledge of publishing and actually has nothing specific to say in his short article. I'd be inclined not to draw any conclusion whatsoever from this space filler.

[abookreader]

Ah, I fondly remember the days when I used to turn the monthly financial statements into the company President and I'd get them back with a post-it note: "We need to make more money than this."

But in this case, I'm sure they'll find a way to blame Amazon and come up with some crazy scheme where they raise prices another $2 but still make less money per book than what they were before.

Then they'll dump another 523 authors from their lists and get James Patterson to write another 6 books a month to replace them.

Really in the end that's their final goal. We all read 6 James Patterson novels every month and we pay $20 each for them.

[CleverClothe]

Originally Posted by SensualPoet

The (freelance) author writes about technology from an Apple perspective as a living. He doesn't demonstrate any depth of knowledge of publishing and actually has nothing specific to say in his short article. I'd be inclined not to draw any conclusion whatsoever from this space filler.

Are you sure you clicked on the right link? The link in the OP goes to an article talking about the Publisher's Weekly survey. I see no insider knowledge, just publicly available data and some personal experience.

[GA Russell]

What is he referring to when he speaks of "trade publishers" as opposed to publishers in general?

[SensualPoet]

Originally Posted by CleverClothe

Are you sure you clicked on the right link? The link in the OP goes to an article talking about the Publisher's Weekly survey. I see no insider knowledge, just publicly available data and some personal experience.

I clicked on the link to the two page article by Ryan Faas and I said nothing about insider knowledge. In fact, that's the problem: handsome Mr Faas has no (obvious) special background or insight into the publishing industry.

The American Publishing Association reports US publishers, as a whole, are reporting 9% of ALL revenues -- trade, paper, hardcover, children's, romance, mass, texts -- are from ebooks in 2010. Those revenues are "gravy" in the sense that they incur only author royalties as incremental per sale costs and they come without any delayed costs (like returns).

Mr Faas asks the question: "Ebooks are hot, but are publishers making money on them?" but doesn't bother to address the question in his "article" other than "many publishers simply haven't been able to make accurate calculations". So ... are they making money, or not? It's a fluff piece that says nothing in particular.

[starrigger]

Originally Posted by GA Russell

What is he referring to when he speaks of "trade publishers" as opposed to publishers in general?

Trade publishers put out fiction, nonfiction, etc. As distinct from textbook publishers, or reference book publishers. A standard bit of jargon.

[DMcCunney]

Originally Posted by demingite

or lack thereof:

http://www.itworld.com/tech-amp-soci...ech_2010-12-10

No wonder publishing is in trouble - they don't even know if they are making money or not.

The ITWorld article references a Publisher's Weekly writeup. PW in turn is talking about a study conducted by ebook technology and service vendor Aptara.

I'm reading the original Aptara study now. I don't think things are quite as simple as the ITWorld article implies. But yes, publishing is still wrapping itself around ebooks, with lots of questions and confusion. I'm not at all surprised if some are still figuring out what their costs are and will be. ("Will be", because to really do it right, you want to start with well formed XML, but the tools to do that are not widespread in publishing. There will be some fairly significant investment required.)
______
Dennis

[DMcCunney]

Originally Posted by SensualPoet

The American Publishing Association reports US publishers, as a whole, are reporting 9% of ALL revenues -- trade, paper, hardcover, children's, romance, mass, texts -- are from ebooks in 2010. Those revenues are "gravy" in the sense that they incur only author royalties as incremental per sale costs and they come without any delayed costs (like returns).

I believe you mean the Association of American Publishers.

Their 2009 estimated sales by category had ebooks generating $313 million in revenue (up 177% from 2008), out of not quite $24 billion in total book sales (which were off 1.8% from 2008.)

Their summary report for 2009 is here: http://www.publishers.org/main/Indus...12009Final.pdf.
______
Dennis

[GA Russell]

Originally Posted by starrigger

Trade publishers put out fiction, nonfiction, etc. As distinct from textbook publishers, or reference book publishers. A standard bit of jargon.

Thanks Jeffrey!

[saoir]

We cannot know how much or how little profits are being made because,like the Music industry, the Publishing industry is highly manipulative about their sales, earnings and profits.
They are also hamstrung by several factors. Firstly they failed grossly to prepare for the transition to electronic devices and are having to incur much greater restructuring costs than they would have had they prepared as they were advised by anyone with a brain.
Secondly they are hamstrung by an old fashioned and outdated pricing system that totally lacks a wholesale - retail pricing structure.This results in a constant state of uncertainty of income and profit calculations.
There is on thing we do know for sure though. That is that the widespread claims by the Publishers of enormous costs in creating eBooks are totally and evidently false. The credibility of the industry is at basement level when they repeatedly issue transparently comical woe-is-me claims.

[CazMar]

Originally Posted by saoir

.........
There is on thing we do know for sure though. That is that the widespread claims by the Publishers of enormous costs in creating eBooks are totally and evidently false. The credibility of the industry is at basement level when they repeatedly issue transparently comical woe-is-me claims.

With 10% unemployment in the USA (and probably almost as bad in the UK) you would think finding a few tech-savvy people to do the conversion to ebooks would be easy and reasonable cheap. You don't need a degree in computer science to do the job, it's not that technical. As most modern books would be electronically typeset these days they should have the raw data on file and anyone who can use HTML should be able to convert to EPUB or produce a PDF file.