If you said publishers save money by not having to print and distribute paper books, you’d be right. But you might be wrong at how much they save. There are still expenses like marketing and royalties.
Here’s my summary of what the New York Times figured for the typical hardcover at $26
Bookseller pays publisher: $13
Publisher pays --
Printing: $3.25 - $4.25
Cover design, typesetting, copy-editing: $.80
Author: $3.90 or more for a best-selling author
Publisher’s take to pay overhead, cover art, office space, utilities & profits: $4.05
Now, let’s see what the New York Times calculated for an e-book, based on an Apple agreement where the publisher sets the consumer price and the retailer acts as agent, earning a 30% commission on each sale. In this case, the e-book is priced at $12.99.
Publisher takes in $9.09.
Conversion of text to digital, typesetting, copy-editing: $.78
Publisher is left with $4.56 - $5.54 to pay overhead and write off unearned advances
The article didn’t list what the author gets for an e-book. It did give a reason why publishers are hoping the price of e-books doesn’t drop lower:
As more consumers buy electronic readers and become comfortable with reading digitally, if the e-books are priced much lower than the print editions, no one but the aficionados and collectors will want to buy paper books.Another nugget from the article is:
In fact, the industry is based on the understanding that as much as 70 percent of the books published will make little or no money at all for the publisher once costs are paid.This is just a little from the full two page article. Before you zip off to read the full post, what do you think?