Book people are easily spooked. And their first line of defense is to hyperventilate.He then goes on to lay out a twisted tale of how publishers should be operating, something he calls “a Dutch auction on a distribution fee.” Then he concludes by asking himself if he thinks publishers will embrace this new business model. His answer is: “No. They're too greedy.”
Here’s his formula:
If the publisher is going to sell the book to Amazon for $9, it should offer to take $3 per book as a distribution and marketing fee. A fat hardcover book costs $2 in paper, printing and binding. The author would keep $4, which is basically what he would earn in royalties on a $27.95 book. But since this is a competitive situation, the publisher might bid lower -- say, $2 per book and a pass-through on the marketing costs.To do that, he recommends publishers drastically cut their overhead and develop new authors via e-books.
If the book succeeds, the author makes a boatload of money: $5 million on a million copies sold. If it fails, the publisher isn't crushed by the unearned advance.
I don’t see anything offered to those in-between the mega sellers and new e-authors. New authors apparently will work, as always, to establish themselves, although they’ll be rowing in e-form rather than the print book boat, and the mega authors will sail away on their boatload of money.