Monday, March 1, 2010

The Holy Grail of Book Sites (Intermission)

Earlier this morning I was reading an article in the WSJ about the publishing industry and costs/profits on ebooks vs hardcopy and it got me to thinking. If you've been stalking me, you've seen that my not exactly humble opinion is that ebooks should cost less than a paperback. I base that on the fact that you get less from an ebook than from a paperback, most notably absent being an actual physical presence.

What occurred to me is that there's a good reason they don't lower their prices. They're not seeing volume enough to think that they'd make more by charging less. That's caused by us being at the initial wide adoption of ebooks and the fact that the publishers, hating the Internet the way that they currently do, are completely clueless about how to advertise on it.

Short pause for some facts. The breakdown the WSJ gives on a $9.99 ebook is

$6.99 publisher is paid
$0.38 digitizing1, typesetting2, and editing
$0.60 marketing
$1.75-2.50(call it $2.12) author's cut3
$3.51-4.26(call it $3.89) publisher's profit pre-overhead

Here's what the advertising problem is. In a book store you have the advertising of all the other books on the selves beside the one the customer is buying. At any given moment they can probably see a hundred or so spines and twenty covers. Several of those they can't help but read as they're looking for the book they want. That's some quality advertising there.

For ebook advertising you currently have Amazon's "you may also like" list. That's six other books that they may not even scroll down far enough to see on a site that's dog-ass ugly. I mention it being ugly because that means it is painful to browse the site like you would in a bookstore. Sure you also have the review sites and series lists but those are only seen by die-hard fans, not every customer. If they do any other advertising, I haven't seen it. That should tell you something about how effective it is.

Honestly, I'm amazed that they sell enough ebooks to even bother with them. What they should be doing is funding the creation of a company whose sole purpose is to create and run the site I've been describing for the past two posts. It would have to be independent or they would run into some serious anti-trust issues. Sell only ebooks--link to other distributors for the hardcopy--but sell them directly from the site. Skim a paltry $0.50 off every sale for the site. Since they'd have every ebook published by all the major publishers and any minor/independant publishers who want to participate, that should more than cover the dozen or so employees, hardware, and overhead they'll require.

Once they start seeing increased sales from the advertising the customers are actually going out and looking for, they can drop their prices even further and more than make it up on volume. Realistically they're going to have to anyway. An awesome site for finding and purchasing ebooks only goes so far in competing with the free of piracy. Make no mistake, they are going to have to compete with pirates; piracy isn't going anywhere no matter how many laws are passed.

1 Seriously? Authors are still typing books out on typewriters? Horseshit. This is the information age, get a freaking computer.
2 I'll typeset any ebook novel you like for a $100 flat fee. It'll take me less than an hour for the first one and I'll have written a script to do it automatically in seconds by the time I hit the fourth. Someone's getting boned here. Hard.
3 I can kind of see why authors don't like ebooks. They make over a buck and a half less per copy than on a hardcover while the publisher only loses around a quarter. With the new pricing they'll still make over a buck less while the publisher actually makes more than they do from the hardcover. Me, I wouldn't stand for that crap.


Kindle Vixen said...

hahaha I love you. if for no other reason than you said someone's getting boned here, hard. lol.

The Mighty Buzzard said...

Eh, what can I say. Between growing up in the 80's and the inspiration of Bender, some things just stick in the old vocabulary.