Laura Miller at Salon has a good backstory on Amazon’s Kindle and the Apple iPad eBook reader.
Laura Miller – Salon.com: “This dust-up is the culmination of a long-standing feud between Amazon and book publishers. What triggered it, however, is something new: the introduction of Apple’s iPad.”
Apple has agreed to sell e-books through its forthcoming iBooks store according to what’s known as an “agency model,” much like selling on commission. Publishers will get to set the price of books — from $5.99 to $14.99, with new “hardcover” releases ranging from $12.99 to $14.99 — and the retailer will take 30 percent. Under this arrangement, as John Sargent, CEO of Macmillan, pointed out in a statement, the retailer stands to make more money off the sale of an e-book than Amazon is making now, and the publisher makes less. Book publishers are willing to accept — no, advocate for — this for a couple of reasons: They want more control over the value of their product and the prospect of an Amazon lock on the e-book market makes them very, very nervous.
It sounds like Amazon’s fight with Macmillan (described in her article) was nasty enough that other publishers are worried.
And then the production sort of stuff that I love, on pricing:
only about 20 percent of the cover price of a new hardcover goes to those [production] costs:about $5 out of $25. Retailers take from 40 to 50 percent, and after that, the majority of the cost of a new book goes to author royalties, editing, design, marketing, publicity, overhead and so on. But these elements aren’t material or tangible, and as a result, consumers seem to be skeptical about their true worth.
Terry Belanger once told me that in the 18th C, books were priced according to a “Rule of 3s” meaning that the cost of production was about one-third the cost of the final book. Post-1980 printers told me that about one-sixth of the cost of the book went to production–and that’s pretty darn close to 20%.
(h/t Jeremy Dibell at Philobiblos)