Riddle me this (e-book division):
Jan. 1st, 2010 08:48 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
libertangoWhy is it the retailers like Amazon and B&N coming out with Kindles and Nooks? Why isn't it the publishers?
As I understand it, the standard splits in publishing for the longest time have been 50% for the retailer, 40% for the publisher, 10% for the writer (of which 10% goes to their agent, so really 9% for the writer, 1% for the agent).
If you're a retailer who brings out an e-reader, that means you still have to deal with publishers, so the percentages shouldn't really change -- even if Amazon then charges only USD$9.99 for a "hardback" that's $24.99 in a cloth edition.
But if you're a publisher who brings out an e-reader, with a Kindle/iTunes-like "store" of your titles, that means you can cut the retailer out entirely. 90% of $9.99 turns out to still be less than 40% of $24.99 -- but not by much, it gives you lock-in over time, and it beats 40% of $9.99 all hollow.
Or, the nuclear option in the other direction: What if Amazon and B&N are thinking about becoming publishers themselves (and not just of public domain works a la Dover the way B&N has done for a while now)?
It seems to me one level of this ecosystem is about to become superfluous. Who? Am I missing something?
Edited to add: Urban myths don't constitute an explanation. Bertelsmann's sales alone annualize out at just shy of $21 billion, larger than either Amazon or B&N. Book sales have been holding steady since 2007 according not only to Bertelsmann's, Amazon's, and B&N's annual reports (and inside sources in publishing), but according to the US Census Bureau, who show only a 1.5% drop 2007-01 through 2009-10, annualized out. The broader economy has been having trouble during that time, as you may have heard. Here's Amazon's 2008 annual report; here's Barnes & Noble's. Unsurprisingly, the majority of their revenue does come from book sales.
Have some used book stores closed over that time? Yes. Have a great many dealers, including new ones, gone to ABEBooks, Alibris, etc. over the same time? Yes, again. While bricks and mortar stores may have decreased in number, I would be completely unsurprised if the total number of book dealers has increased. (If reputable numbers can be found, I'd welcome them.)
As I understand it, the standard splits in publishing for the longest time have been 50% for the retailer, 40% for the publisher, 10% for the writer (of which 10% goes to their agent, so really 9% for the writer, 1% for the agent).
If you're a retailer who brings out an e-reader, that means you still have to deal with publishers, so the percentages shouldn't really change -- even if Amazon then charges only USD$9.99 for a "hardback" that's $24.99 in a cloth edition.
But if you're a publisher who brings out an e-reader, with a Kindle/iTunes-like "store" of your titles, that means you can cut the retailer out entirely. 90% of $9.99 turns out to still be less than 40% of $24.99 -- but not by much, it gives you lock-in over time, and it beats 40% of $9.99 all hollow.
Or, the nuclear option in the other direction: What if Amazon and B&N are thinking about becoming publishers themselves (and not just of public domain works a la Dover the way B&N has done for a while now)?
It seems to me one level of this ecosystem is about to become superfluous. Who? Am I missing something?
Edited to add: Urban myths don't constitute an explanation. Bertelsmann's sales alone annualize out at just shy of $21 billion, larger than either Amazon or B&N. Book sales have been holding steady since 2007 according not only to Bertelsmann's, Amazon's, and B&N's annual reports (and inside sources in publishing), but according to the US Census Bureau, who show only a 1.5% drop 2007-01 through 2009-10, annualized out. The broader economy has been having trouble during that time, as you may have heard. Here's Amazon's 2008 annual report; here's Barnes & Noble's. Unsurprisingly, the majority of their revenue does come from book sales.
Have some used book stores closed over that time? Yes. Have a great many dealers, including new ones, gone to ABEBooks, Alibris, etc. over the same time? Yes, again. While bricks and mortar stores may have decreased in number, I would be completely unsurprised if the total number of book dealers has increased. (If reputable numbers can be found, I'd welcome them.)
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no subject
Date: 2010-01-02 05:11 am (UTC)People have been buying fewer books, and buying them from Amazon. In order to stay in business, they're changing dramatically. There's only one way to sell "books" faster than Amazon: send the information inside the book without the paper.
no subject
Date: 2010-01-02 06:05 am (UTC)Most publishers, meanwhile, would have to start from scratch, and even if the expensive effort is technologically successful, you've then got a marketing problem to sell yet another reader, limited to one publisher's titles, to people who probably already have one that already delivers several or all of the other publishers' titles.
Or they can keep going with Kindles and Nooks and keep making 40% while they think about it some more.
no subject
Date: 2010-01-02 06:36 am (UTC)At least for most of the time I was paying attention (so, up until the last handful of years) neither Amazon or Barnes & Noble made the majority of their money off of booksales. The cash came more from everything from stock market moves to rack allowances and remainders.
Meanwhile, under-capitalized publishers were being bought up left and right by media conglomerates more interested in securing licensing rights than in increasing book sales.
The move to ebooks has been alluring but terrifying, with plenty of expensive failed attempts and the specter of Beta-Max to remind them all that the best technical solution may still not prevail.