Friday, May 20, 2011

E-Books and Amazon

Nik Gregory provides some insightful analysis of the recent news that Amazon's Kindle e-book sales have surpassed print books.

Of Amazon and eBooks, again

a full and comprehensive book pricing breakdown; what you need to know: 10% of cover price covers printing, 10% goes to the distributor and a whopping 40% is taken by the retailer, which is why Walmart manages to sell big titles at 30% and sometimes even 37% off and still make money.

Now onto the news. Amazon’s present claim is grossly misleading, eBook sales still only attribute to around 9% of the total publishing market. Total Book sales for January 2011 was at $805.7 million, and eBooks were only $69.9 million of that.

What’s actually going on?

Mass Market Paperbacks and Trade Paperback sales have been losing ground, notably Mass Markets as this is the key area where eBooks are cannibalizing the market. Why? Because eBooks are the new mass market books. They have virtually zero expenses for editorial work as this has already been done in more expensive editions. They’re released cheap and you’ll likely see the ebook copy only about 10% less than the paperback. Why? As I said, 10% of the cover price goes to printing. The 10% for distribution is still in the midst with Amazon charging kickbacks to the seller.

Hardbacks quite interestingly are still going strong, they have yet to see a true loss in sales. This may be because publishers are recognizing them for what they truly are – luxury items. They’re coming in limited editions, and I don’t doubt it’ll be long before they’re coming in boxed sets with extras and short stories, author commentary and such attached to justify a $50 cover price.

What is truly great news for the publishing industry is this: Mass Market and Trade paperback sales aren’t just disappearing into eBooks. It appears that on the whole, a portion of eBook sales are complimenting the industry, meaning eBooks might actually be increasing the amount of money people are spending on reading (which will mean in about a decade we might have some awesome book->movie adaptations going again).

- Posted using BlogPress from my iPad

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