What does it cost to make a Kindle book?
As we’ve often noted, publishers are not big fans of the Amazon Kindle. Amazon’s strident efforts to keep the standard price of a Kindle Book at $9.99 has ruffled a lot of feathers amongst the big publishers, who are reluctant to do away with the existing print dichotomy, where they get to sell hardcover books at $30 a pop for four months until they release an affordable paperback version of average shmoes like you and me. Publishers claim they need that hardcover money to cover their expenses, while e-Reader users have long assumed the lack of printing and distribution costs should make up the difference.
A recent article out of the New York Times sought to illuminate the costs involved in producing a book so we could see which side is closer to the truth. The difference in the take for publishers after distribution and before costs from a hardcover to an eBook is only about $4, but that is made up almost entirely by the difference in printing, storing, shipping, and marketing the hardcover edition. Indeed, eBooks leave publishers with around $5 when all is said and done, where print leaves them with just $4. Oddly enough, eBook seem to somehow result in a lower cut for the author, as they only haul in $2-3 on an eBook but come out with nearly $4 on the hardcover edition.
So what does that really leave publishers to complain about? The next in their list of complaints is that if eBooks start to become too big a share of the market (they’re at less than five percent right now), publishers will have to spread the costs of the print version over fewer copies, making them more expensive per book to get to stores. And those stores will suffer as well, because once people start moving to eReaders in larger numbers, the big box book store is going to go the way of the dodo. I like getting coffee and relaxing with a book at Borders as much as anybody, but I’m not going to be too broken up if their numbers are culled a bit.
If anything, seeing the numbers broken down like this, it becomes apparent that the easiest part of a book’s production cost to remove is the part going to the publisher. Nobody wants to lower the share of the profits going to the author, and the marketing, editing, and typesetting are fixed costs that you can’t get rid of if you want a mainstream success. The money that is there waiting to be reclaimed is that being collected by the owners and shareholders of the major corporations with their tentacles wrapped around the publishing industry.
What’s to stop popular authors from skipping the whole step of talking to the publisher and instead publish independently, or at the very least, talk directly to Amazon, Apple, and Barnes and Noble themselves? All it would take is a big mainstream name like Stephen King to do this before the whole publishing edifice comes crashing down.
And perhaps that’s exactly why the publishers are so keen on keeping the cost of eBooks high. The higher the prices go, the slower the transition to eBooks happens. The slower the transition happens, the more time they have to squeeze a penny out of the system. In short, I’m not falling for it, and neither should you.