Intersting analysis on the cost of publishing a book. Will be really helpful in defining the value ebook will bring to the authors and publishers.
- Author Royalty – 7 to 15%.
- Book Screening and Acquisition – Publishers cover this. Part of the 12.5% of book cost that goes to book production.
- Successful Books subsidizing failures. Publishers cover this. Unknown percentage of book cost – x%.
- Finishing the Book (producing the final book that will be printed and sent off). Publishers cover this and its included in the 12.5% book production cut.
- Printing. 10%.
- Book Distribution – Wholesalers and Distributors. Between 10-20% of the book’s cost.
- Book Retailing – 35-40% of the book’s cost.
- Book Marketing – 7.5% of the book’s cost.
- Book Returns – Publishers cover this. This is another unknown y% of the book’s cost.
- Customer’s Costs to get Book – This is not part of the book price. However, the cost in time and fuel for every trip to buy books ought to be compared against the upfront cost of buying a Kindle or eBook reader.
Kindle cost analysis
- Book marketing – 7.5%.
- Author royalty – 7-15%.
- Book acquisition and production – 9%.
- Retailer cut.
- Publisher cut.
- DRM, formats, distribution of ebooks – 3%
- Half the price of subsidizing failures.
PW cost analysis
Inside book publishing
In a recent news S&S and HBG decided to delay the launch of ebook version of their next year to be released titles by 4 months. Depriving the e-book readers of these books for sometime.
These publishers seem to be trying to follow the Movie industry where the movie DVDs are launched couple of months after the release of the Movie. It seems the main issue concerning these publishers is fear of cannibalizing their p-book sales. (users expect the ebooks to be cheaper than p-books). One of the major challenges of this industry in coming times will be the pricing of these ebooks. Will the flat 99 cent itunes model work in this industry??
The articles also states that the market of ebooks might not be as huge as earlier estimated:
“Albert Greco, a professor at the Fordham University Graduate School of Business who studies the book industry, estimates that e-book retail sales could hit $201 million in 2010, still a fraction of the physical book market but up from an estimated $150 million this year.”
For complete on WSJ news
Something that these publishing houses should definitely consider is the fact that the delay in releasing the ebooks might fuel up the piracy of these e-books (bigger loss for the industry)
Bnet recently did a blog post on how such an action by the big publishing houses is going to seriously harm their business in future: