E-Readers and Publishers

A New York Times article, titled Steal This Book (for $9.99), talks about the public push for publishers to lower the price of e-books.

For many readers, this may sound like sufficient reason. Buying music, after all, is so much cheaper now that there aren’t discs and plastic cases. Shouldn’t the same logic apply to books? …
Publishers are caught between authors who want to be paid high advances and consumers who believe they should pay less for a digital edition, largely because the publishers save on printing and shipping costs. But publishers argue that those costs, which generally run about 12.5 percent of the average hardcover retail list price, do not entirely disappear with e-books. What’s more, the costs of writing, editing and marketing remain the same.

Without going into how that “writing, editing and marketing” cost is falling more and more on the author to cover, what this article seemed to really be about is the publishers fear of Amazon.

For the moment, say some publishers, Amazon is effectively subsidizing the $9.99 price tag for new book titles in digital form by paying publishers the same $13 it pays them for a new hardcover title with a list price of $26. It’s a classic “loss leader” situation. Although Amazon won’t comment on the arrangement, the online bookseller is using low-price e-books as a lure to persuade consumers to pay $359 to buy a Kindle, or $489 for the new, larger Kindle DX.
But Amazon presumably won’t be willing to take those losses forever. And publishing executives say they fear that Amazon eventually will pressure them to accept lower payments for e-books.

Sure, there are other e-readers out there, but Amazon, for the moment, rules the roost.

Publishers are hoping that as more people begin to use e-readers, they may be buying books for less, but they’ll buy more of those books. And publishers hope to raise their bottom line through more sales. Let’s hope that scenario includes the authors’ bottom lines.