7 ms·

Of Amazon and eBooks

9 points by nikgregory 17y ago

thisduck 17y ago
"Net loss: $10 per eBook." Why are we equating a published singular book with an ebook? Net loss per ebook can only be calculated based on the number of ebooks sold, not on the number of ebooks produced. One ebook is equivalent to thousands of ebooks, there is no difference. People, it's digital.
- MikeCapone 17y ago
  Indeed. I think people tend to underestimate the cost of actually printing stuff, as well as shipping it, storing it, returning it when it doesn't sell, etc. It all adds up, and required a lot of capital machinery, buildings, employees, etc.
  - nikgregory 17y ago
    Printing is 10% of cover price, distribution is 10% of cover price (this I believe includes the cost of returning too). For a hardcover this can total $8, for a mass market paperback this can be $1. Amazon, lik I didn't get into a discussion of benefits of eBooks, especially when colour e-ink readers arrive. Specifically comics and graphic novels would likely fare excellently, low editing costs (almost all the work is done by the author art, inking, and minor amounts of writing), virtually no marketing or advertising costs make printing (higher than a simple black-ink book) and distribution the major costs. It could literally be back to $0.99 comic books. Printing in comics can be up to 40% of cover price, distribution taking 30%, which compared to a book is killer. I have no intention to say eBooks aren't going to become huge one day, but many of the costs in book making are from well before the ink hits paper. Unless you're willing to sacrifice quality, the prices are going to remain very close.
    - MikeCapone 17y ago
      Could you cite your sources? Are those industry averages, or just for one publisher you are familiar with?
      - nikgregory 17y ago
        Here's the best explained I've found: http://journal.bookfinder.com/2009/03/breakdown-of-book-costs.html http://journal.bookfinder.com/2009/03/breakdown-of-book-cost... Other breakdowns always seem to hit close. All numbers are averages, but printing generally hit between 8% and 12% for fiction. However all prices vary, some writers need no editing so figures for printing will be artificially raised, whilst a poor writer with great ideas will cost a small fortune to edit and printing will be tiny in comparison. Colour pages and anything else always cost more (I once read 20 colour pages in a book can cost as much to print as the other 230 pages), same with non-colour artwork and everything else. Non-fiction is always priced differently from fiction due to extra steps in the editing process. Sources have to be reviewed and evaluated, plus the author can have an advance before they've finished the second chapter.
FluidDjango 17y ago
The problem that I have with his analysis is that it assumes that we continue with the all huge costs of publishing (including marketing). At some point many of these costs may be significantly wiped out, e.g., by cutting out much of marketing (as well as shipping, wholesalers, etc.). What if writing/"publishing"/marketing of "books" (fiction & nonfiction) became a mutant of current blogging: with the public voting/marketing through the digital social media. An ebook revolution is not going to happen IMHO through supporting the existing overheads of the 20th century publishing model.
- dpapathanasiou 17y ago
  Exactly. The concept of "publisher as angel investor" only works if you assume the old publishing model of printing, storing, and distributing physical objects. Electronic publishing is a completely different cost paradigm.
  - jseliger 17y ago
    Not as much as you think: writers still need editors. They still need someone to help them market their books, since every minute not spent writing is a minute not spent honing their craft. Merely saying "get a blog" isn't enough. They still need to be able to eat. And so on. A lot of these analyses have been busily pointing out physical costs account for a relatively small proportion of the overall cost of a book. In addition, you, the reader, still needs someone to help you sort through the vast amount of stuff out there that you could read. Publishers, for all their other ills, help do this to some extent, despite all the false positives and false negatives that get through (or don't). Electronic publishing might eventually become "a completely different cost paradigm," but it sure isn't there yet.
    - dpapathanasiou 17y ago
      Those are valid points, but the publishing company's value add is not as significant as you might think. My startup is working specifically in this area, and the results might surprise you.
    - 17y ago
ghshephard 17y ago
I wish the author had provided citations for his costs, because I know at least one of his number - book printing cost, is just plain wrong, which causes me to suspect the rest. "The Printing process costs, on average, 10% ($4) of the cover price of a book, " So, "Printing Process" is not a function of the cover price of the book. It is a function of what size of book, spine design, what type of binding, what type of covers, whether there is printing on the inside of the cover, whether there is color, what type of paper, and how many pages, and how many books you will be printing. For example, sitting on my bed right now are two softcover books: "Maps in a mirror, short fiction of Orson Scott Card", 671 pages, $23.95 list. "Advanced Unix Programming, Second Edition", 717 pages, $64.99 list. Both Black and White, perfect Binding, color cover, no printing on inside of covers. http://www.instantpublisher.com/Price-quote.aspx http://www.instantpublisher.com/Price-quote.aspx sugests that the cost of each should be $4.72 - which is 19% of the Orson Scott Card, and 7.2% of Advanced Unix Printing. In addition, this is what it would cost _me_ - I have to believe that large publishers are able to print their books for less that what I would pay.
- mechanical_fish 17y ago
  So, the author's back-of-the-envelope calculation is 10%, yours is 13% (the average of 19% and 7.2%), and your conclusion is that "the author is just plain wrong"? What would the author's rough estimates look like if they were "in excellent agreement" with yours? Would "11%" be close enough for you, or are you holding out for "12.8% to 13.3%"? Can I suggest that you read the Wikipedia article on "orders of approximation"? Or, better yet, "Fermi problem"? http://en.wikipedia.org/wiki/Orders_of_approximation http://en.wikipedia.org/wiki/Orders_of_approximation http://en.wikipedia.org/wiki/Fermi_problem http://en.wikipedia.org/wiki/Fermi_problem
  - nikgregory 17y ago
    Of a few sources for the clearest figures, most appeared to be quoting from this, and not self-pub figures like the OP of this thread. Here's the best written I could find: http://journal.bookfinder.com/2009/03/breakdown-of-book-costs.html http://journal.bookfinder.com/2009/03/breakdown-of-book-cost... List price = MSRP/Cover Price. If John Grisham has 10% printing costs, I think everyone else is likely to. The problem with extrapolating from self-pub figures is that these companies make money off of printing. Publishers don't make a penny off of printing, they make their money once pre-production and marketing has been paid off. Of course every book is unique, some writers are awful and need more editing, others are brilliant and need none. Colour pages drive up prices ridiculously and non-fiction books are not priced like fiction, which is the major debate piece on the eBook front, discussing non-fiction is rather irrelevant as prices are based on work regardless of cost, plus they need to pay off expenses fast due to far lower sale volumes.

9 points by nikgregory 17y ago

"Net loss: $10 per eBook." Why are we equating a published singular book with an ebook? Net loss per ebook can only be calculated based on the number of ebooks sold, not on the number of ebooks produced. One ebook is equivalent to thousands of ebooks, there is no difference. People, it's digital.

MikeCapone 17y ago
Indeed. I think people tend to underestimate the cost of actually printing stuff, as well as shipping it, storing it, returning it when it doesn't sell, etc. It all adds up, and required a lot of capital machinery, buildings, employees, etc.
- nikgregory 17y ago
  Printing is 10% of cover price, distribution is 10% of cover price (this I believe includes the cost of returning too). For a hardcover this can total $8, for a mass market paperback this can be $1. Amazon, lik I didn't get into a discussion of benefits of eBooks, especially when colour e-ink readers arrive. Specifically comics and graphic novels would likely fare excellently, low editing costs (almost all the work is done by the author art, inking, and minor amounts of writing), virtually no marketing or advertising costs make printing (higher than a simple black-ink book) and distribution the major costs. It could literally be back to $0.99 comic books. Printing in comics can be up to 40% of cover price, distribution taking 30%, which compared to a book is killer. I have no intention to say eBooks aren't going to become huge one day, but many of the costs in book making are from well before the ink hits paper. Unless you're willing to sacrifice quality, the prices are going to remain very close.
  - MikeCapone 17y ago
    Could you cite your sources? Are those industry averages, or just for one publisher you are familiar with?
    - nikgregory 17y ago
      Here's the best explained I've found: http://journal.bookfinder.com/2009/03/breakdown-of-book-costs.html http://journal.bookfinder.com/2009/03/breakdown-of-book-cost... Other breakdowns always seem to hit close. All numbers are averages, but printing generally hit between 8% and 12% for fiction. However all prices vary, some writers need no editing so figures for printing will be artificially raised, whilst a poor writer with great ideas will cost a small fortune to edit and printing will be tiny in comparison. Colour pages and anything else always cost more (I once read 20 colour pages in a book can cost as much to print as the other 230 pages), same with non-colour artwork and everything else. Non-fiction is always priced differently from fiction due to extra steps in the editing process. Sources have to be reviewed and evaluated, plus the author can have an advance before they've finished the second chapter.

FluidDjango 17y ago

The problem that I have with his analysis is that it assumes that we continue with the all huge costs of publishing (including marketing). At some point many of these costs may be significantly wiped out, e.g., by cutting out much of marketing (as well as shipping, wholesalers, etc.). What if writing/"publishing"/marketing of "books" (fiction & nonfiction) became a mutant of current blogging: with the public voting/marketing through the digital social media. An ebook revolution is not going to happen IMHO through supporting the existing overheads of the 20th century publishing model.

dpapathanasiou 17y ago
Exactly. The concept of "publisher as angel investor" only works if you assume the old publishing model of printing, storing, and distributing physical objects. Electronic publishing is a completely different cost paradigm.
- jseliger 17y ago
  Not as much as you think: writers still need editors. They still need someone to help them market their books, since every minute not spent writing is a minute not spent honing their craft. Merely saying "get a blog" isn't enough. They still need to be able to eat. And so on. A lot of these analyses have been busily pointing out physical costs account for a relatively small proportion of the overall cost of a book. In addition, you, the reader, still needs someone to help you sort through the vast amount of stuff out there that you could read. Publishers, for all their other ills, help do this to some extent, despite all the false positives and false negatives that get through (or don't). Electronic publishing might eventually become "a completely different cost paradigm," but it sure isn't there yet.
  - dpapathanasiou 17y ago
    Those are valid points, but the publishing company's value add is not as significant as you might think. My startup is working specifically in this area, and the results might surprise you.
  - 17y ago

ghshephard 17y ago

I wish the author had provided citations for his costs, because I know at least one of his number - book printing cost, is just plain wrong, which causes me to suspect the rest. "The Printing process costs, on average, 10% ($4) of the cover price of a book, " So, "Printing Process" is not a function of the cover price of the book. It is a function of what size of book, spine design, what type of binding, what type of covers, whether there is printing on the inside of the cover, whether there is color, what type of paper, and how many pages, and how many books you will be printing. For example, sitting on my bed right now are two softcover books: "Maps in a mirror, short fiction of Orson Scott Card", 671 pages, $23.95 list. "Advanced Unix Programming, Second Edition", 717 pages, $64.99 list. Both Black and White, perfect Binding, color cover, no printing on inside of covers. http://www.instantpublisher.com/Price-quote.aspx http://www.instantpublisher.com/Price-quote.aspx sugests that the cost of each should be $4.72 - which is 19% of the Orson Scott Card, and 7.2% of Advanced Unix Printing. In addition, this is what it would cost _me_ - I have to believe that large publishers are able to print their books for less that what I would pay.

mechanical_fish 17y ago
So, the author's back-of-the-envelope calculation is 10%, yours is 13% (the average of 19% and 7.2%), and your conclusion is that "the author is just plain wrong"? What would the author's rough estimates look like if they were "in excellent agreement" with yours? Would "11%" be close enough for you, or are you holding out for "12.8% to 13.3%"? Can I suggest that you read the Wikipedia article on "orders of approximation"? Or, better yet, "Fermi problem"? http://en.wikipedia.org/wiki/Orders_of_approximation http://en.wikipedia.org/wiki/Orders_of_approximation http://en.wikipedia.org/wiki/Fermi_problem http://en.wikipedia.org/wiki/Fermi_problem
- nikgregory 17y ago
  Of a few sources for the clearest figures, most appeared to be quoting from this, and not self-pub figures like the OP of this thread. Here's the best written I could find: http://journal.bookfinder.com/2009/03/breakdown-of-book-costs.html http://journal.bookfinder.com/2009/03/breakdown-of-book-cost... List price = MSRP/Cover Price. If John Grisham has 10% printing costs, I think everyone else is likely to. The problem with extrapolating from self-pub figures is that these companies make money off of printing. Publishers don't make a penny off of printing, they make their money once pre-production and marketing has been paid off. Of course every book is unique, some writers are awful and need more editing, others are brilliant and need none. Colour pages drive up prices ridiculously and non-fiction books are not priced like fiction, which is the major debate piece on the eBook front, discussing non-fiction is rather irrelevant as prices are based on work regardless of cost, plus they need to pay off expenses fast due to far lower sale volumes.