The real cost of books

[mdlbear]

So... here's an article on Gizmodo about How Much It Actually Costs to Publish an Ebook vs. a Real Book, based on Making the Case for iPad E-Book Prices at the New York Times.

Giz puts it all in a handy table -- I'll wait while you go and look -- that makes $13 for an ebook look like a fair deal compared to $26 for a hardcover. The publisher gets about the same amount in both cases. The bookseller -- Amazon, say -- gets $3.90 for the ebook, vs. $13 for the hardcover, which is fair because there's no inventory, floor space, or need to cover inventory that doesn't sell. The author gets a little less for the ebook: $3.25 vs $3.90. Printing, storage, and distribution for the hardback is only $3.25. Seems fair, right?

Not so fast.

Giz also says "There is no equivalent paperback market with lower costs to eke out more money later in a book's life (especially if the hardcover flops)." But isn't the ebook more like a paperback? The marginal cost of one more ebook is zero.

If you take out both the bookseller's and the publisher's cut from the ebook, you're down to a perfectly reasonable $4.53. That still includes $1.28 per copy for copyediting, design, and marketing. That means that an author who sells ebooks directly to the public can make money at a lower price.

And that, my children, is why crowdfunding works.

(I'm oversimplifying, of course. Unless you're already an established author or famous for some other reason, it's almost impossible to get your sales figures up to what a publisher could get for you. And so on. But the publishing industry still has to worry.)

Cross-posted to mdlbear and crowdfunding.

Comments

[trektone.livejournal.com]

In most cases, crowdfunded fiction isn't externally (to the author) edited, is it? Even for authors I love, I think a good editor can make a big difference. And yes, I've donated to crowdfunded projects ...

[ravan.livejournal.com]

Their comparison metric is wrong. The e-book market is not the hardcover market - it's the paperback market. It's easy to make overpriced $15 e-books look cheap compared to hardcovers at full MSRP. Compared to $7 paperbacks? Fail.

[mdlbear]

Very true -- if you start out crowdfunded and publish incrementally in a blog, you get your editing for free, along with most or all of your marketing. And "book design" also goes to zero when you're using your blog or website's existing templates.

[mdlbear]

Yup. And there are lots of $.99 and $1.99 books on the Kindle. At that point you're competing with the used paperback market.

To be fair, the article is talking about the new-book market, before the paperback release, and why publishers want to delay e-book releases as long as they can to keep from cannibalizing their hardback sales. They still fail, of course.

[elf]

There's a lively discussion at Mobilread. And yeah... they're insisting that ebooks should compare to hardcovers (and gee, that publishers should get *more* profit from ebooks than hardcovers). We notice the utter lack of a third column for paperbacks. And if those are the costs, Baen.com must be on the verge of bankruptcy, and its authors working for pennies, right?

The editing costs are useless numbers. For hardcovers, they might be based on "an average print run of X books." But there is no average print run of ebooks, and no reason to stop selling them after a few months or a year, so the per-unit costs of editing drop as sales go up.

I notice there's no money set aside for *actual editing.* I suppose that's not part of book production anymore. (And does anyone think that they spend 3/4 as much on marketing per ebook as they do per hardcover?)

The publishing industry is going to go into conniption panic fits the first time a megastar author decides he's better off self-publishing. Because Stephen King's next book is going to sell a zillion copies whether he goes through Random House or Lulu and Smashwords... and several midlist authors have already figured out that they make more money selling kindlebooks at $3 than paperbacks at $9.

[mdlbear]

Thanks for the link. Similar discussions are, of course, going on in the music world; they're a little further along.