Friday, March 12, 2010

I guess $9.99 matters for ebooks

To me, at least a little. I saw that the new Jack Reacher novel from Lee Child, 61 hours, is available on Amazon, but it’s $15.40, which is above the $9.99 that Amazon had been selling books at, but below the hardcover at $17.50. I didn’t but it today, and I’m not sure when I’ll buy it. I know I bought the last one, Gone Tomorrow, the first day I saw it listed, before it was even released.

It’s $2.10 less, exactly, which could be the cost of the paper and ink, but I would think that there are other costs, like warehousing, storage, distributor fees, etc. that would add up to more than $2.10.

So where are the other costs?

My guess is that on this book there is some margin the publisher wants to make. I’m OK with them making a profit, but I’d like it to be a reasonable profit. I think in this case there is some “extra” profit that the publisher is trying to make from a popular author and the recent ebook craze. After all, tons of people got Kindles for Christmas, so why not try to make a few more sheckels?

I did note a couple of Google searches turned up that the approximate cost to the publisher of a hardcover is $2 more than a paperback. That’s possible, but these days, especially for the large ebook retailers like Amazon and BN, I can’t understand why there’s a distributor involved? Why doesn’t the publisher just sell to Amazon, which has to be at a lower cost than using a distributor.

I’ve heard that a distributor can take up to $4-5 a book from a publisher. I don’t know if that’s true, and I’ve seen places say that 25-30% of revenue is likely. If you sell to Amazon for $10, then that would be $3 per book. I am guessing that big authors like Mr. Child earn $2-3 for a hardback, so there is some decent wiggle room in there still.

I don’t know the complete economic picture, but since the large publishers seem to be doing well, I can’t help but think there are good margins built into the business. And that they are taking advantage of lower costs through automation and technology to make more profits.

I guess that’s OK, but it means for now that I might be curtailing some of my e-reading.

No comments: