There are definitely times (my recent business trip/vacation) when a Kindle would be handy. But all the practical and pragmatic problems I have with the device and its utilization and DRM still remain.
But … what if Amazon instead also sold Kindle downloads of books as a surcharge to hardcopies. So for example.
Faboo Book (Kindle ed.): $9.99
Faboo Book (hardcover): $15.99
Faboo Book (hardcover + Kindle): $17.99
Unless Amazon is already seeing a lot of doubled-up sales like that, the third option is a win for everyone — Amazon (more money), publishers/etc. (more money), and customers (a hardcopy for hardcopy’s sake and permanent ownership and loanability and all that jazz; a Kindle copy for, well, the Kindle). And Amazon benefits even further by increasing the sales of Kindles (since folks can add the utility of a Kindle copy to their original purchase for an incremental cost).
Heck, Amazon knows every single book I’ve ever purchased from them — why don’t they offer me a $2 Kindle version of each whenever I want it?
The problem has been this sort of “either-or” false proposition — people either buy a “real” copy of a book, or they buy a Kindle copy. With this sort of deal, both options are available, and nobody loses.
I know since the big kerfuffle a while back with one of the publishers, the T&Cs by which Amazon sells Kindle copies are somewhat constrained, but I think they still have pretty much the ability to sell Kindle versions at the price point they want, so that’s not an issue.
I’m sure someone will note that, “Well, this lets someone buy the hardcopy and the Kindle version, then resell the hardcopy to someone else.” Um, so? Amazon, the publisher, and the author have all gotten their cut of both a hardcopy and Kindle copy being bought. I seriously doubt the used book sales in this case are going to cannibalize much from new sales — and the big fear of people being able to loan or sell their digital copies of the books stays out of the picture.
So what important reason for Amazon et al. not to do something like this am I missing? It seems a natural and straightforward enough deal that I’m surprised they haven’t, so presumably I’m being myopic in one aspect of this or another.
I have a few guesses…
1) publishers are adamant against anything that implies that the value of the books is less than the current price (this was an issue in a recent tiff with Amazon).
2) publishers are obsessing on the individual profit margin of each transaction rather than on total profits of their operation (a VERY common problem in modern business… a trees-not-forests hyperfocus blindness).
3) current contracts with authors pay per unit sold with no or limited allowances for reducing royalties when bundling copies like this (which isn’t to say royalties are the major cost of publishing… but they are a cost).
4) publishers don’t really want digital to succeed, because they don’t understand how they’ll continue to make their margins in a post-print world (the later is clear, they don’t understand).
5) people really don’t understand how the math works, in that they don’t believe there will be enough extra sales at the lower price to exceed today’s profits at the higher price (poor economics, at best).
6) publishers can hide behind the “no standard format” argument for a while longer (not a real issue for your particular Amazon-partnership rule, but a dodge used to avoid ebook bundling in general).
I’m betting if I noodled it around some more, I’d come up with another few arguments, all of which would be as transparently poor as these (although (3) has some real substance… not much, though).
There’s still progress around the edges (Baen continues to include CDs of the plaintext versions in Honor Harrington hardcovers), but in general the publishing industry isn’t learning from history. Buggy whips forever!
Yeah, that certainly makes sense. I’m not enough into the biz to know what the royalty cost per copy is for an author, but I have to believe that even if the author is being paid for both copies, the net-net for both Amazon and the publisher is an increase.
The problem, as you note, is both FUD over the whole digital model and bad business economic sense. And it’s (at least in part) a matter of thinking of the bundle as actually selling two copies, when it’s (functionally) selling a single, multi-form copy to a given buyer.
I’m aware of the CDs for the HH novels (I have at least one of them), but have never made use of them since I don’t have an ebook reader. But if I did, I probably would (esp. since that was some of the Huge Thick Volume Juggling I was doing this trip).
At this point, the bundling thing is a case-by-case basis. In other words, it’s something an author can angle/negotiate for when working out a contract with a publisher (I’m doing so), but if someone doesn’t propose it, no one’s doing it.
I could talk about why they aren’t doing it until I’m blue in the face and trembling with rage — while I love a lot of people *in* the industry, the industry itself makes me want to kick puppies.
It’s worth noting that this ‘bundled’ model is one that’s reached about 70/30 in indie game publishing these days. The only guys who don’t do it are either (a) those hopelessly paranoid about piracy and (b) those releasing their first game, and still worried about loss of sales vs. good will.
I bring that up because publishing seems to lag about a decade behind indie gaming S.O.P.
The problem might even be a little more primative than two-copies-as-one-product…
They consider their product The Book (physical or digital thing sold). Thus, two copies are two products.
We consider their product The Words In The Book (content that makes the physical or digital thing worth buying). Thus, one purchase in multiple formats is a natural fit.
That’s not 100% true, as clearly they realize that The Words must be correctly created, edited, laid out, and then protected or The Book loses value. But they want to sell us The Book and we want to buy The Words and from that distinction grow many problems.
Oh, and Doyce is right as well. Indie games are often doing a surprisingly good job with this, and even keeping brick-and-mortar stores (who do the necessary set-up work; thankfully, mine is aggressive about supporting the idea) in the chain to avoid burning a vital bridge to the customer.
And I can say with certainty on that issue that it requires care at the contract stage. I know the Dresden Files RPG needed a last-minute contract revision to allow their very successful “PDFs with pre-order” deal.
A few other bits. For new released, the prices you listed look more like:
Faboo Book (Kindle ed.): $12.99
Faboo Book (hardcover): $24.99
Faboo Book (hardcover + Kindle): $???
Personally? At that price, I’d just bundle it with the hardcover for free.
Then…
Faboo Book (paperback.): $7.99
Faboo Book (paperback + ebook): $9.99
But… yeah, that’s not going to happen for years. Too many publishers are convinced that all (seriously, all) the costs of publishing a hardback (printing, binding, shipping, warehousing, inventory mgmt costs, returns*) are directly communicable to ebooks.
I’d *like* to point out that all the development work (copy editing, formatting and layout, et cetera) that goes into making the book in any format means that you don’t HAVE to redo that same work for the next version of the book, except that – apparently – you do have to redo all the format/layout, because the antiquated systems in use can’t take a book formatted for paper publishing and actually USE THOSE FILES to create an ebook. Seriously: most publishers send hardcopies of their books to a third party that rips them apart and scans them to make their ebooks.
Yes. Seriously.
The really ‘advanced’ pubs have a department in-house that does it instead, but the process is the same.
The costs of ebooks from big publishers is so high because of their incredibly stupid methods.
As for royalties. Yeah…
You’re typical writer is making approximately – VERY approximately – 10% of any book sale through any kind of normal book market. (Actually? Less — a hardback sale will earn an author about $.70 to $1.20 per.)
If they were paid an advance, their royalty must first pay off that advance before they start actually getting paid anything additional. Publishers currently tally their sales every six months, and pay the authors about three months after THAT, so once their advances are paid-out, an author can expect to see initial royalty checks in… nine months.
For about 10% of the gross. If you sell a LOT of that book, there’s a point after which the publisher shifts the royalties up to 12% for any sales that occur after that point, and then after a lot MORE books, it shifts to 15%. (Maybe 10 authors in the US see sales that eventually reach the point where they start earning 15%… which happen right about when the market is saturated.)
Because Publishing managed (about fifty years ago) to convince authors that the Writing (the work without which the story itself wouldn’t exist) was worth about 10%.
Conversely, an indie writer can create an ebook for pennies and release it through amazon and earn (as of mid-June) 70% royalties.
An independently-published author selling ebook copies for $2.00 will earn more per sale than than would on a trad-published hardback. Easily.
To Jack’s point: as Rob Donohue pointed out awhile back, the problem is the the Publishing Industry has trained readers that the intrinsic value of a book is in the Bucket, not the Water.
Hardback’s cost more than Paperbacks. A LOT more. Cost of PRODUCTION of hardbacks is not commensurately more than paperbacks, so the profit margin on hardback sales is much better. Pubs would like it very much if every sale was a hardback sale.
So they sell the bucket. “Look, a pretty, lovely, durable hardback. So much nicer than a chintsy paperback.”
The story inside those two version of the book? Exactly the same. Clearly, the variable in cost is in the BUCKET, not the water.
Now: ebooks. There is no bucket. (Or the bucket holds a tanker truck’s worth of water — in either case THEY DON’T SELL THE BUCKET.)
So what do they try to convince people now? That book cost is based on the value of the WATER, and ALWAYS HAS BEEN. So much so that Bucketless Water (ebooks) should cost twice as much as Paperbacks with the same water inside.
(And just ignore this New Logic when hardbacks come out — keep spending 25 bucks on those particular buggie whips, please.)
And I’m reaching the point on this topic where I start dropping grocer’s apostrophes into random words, so I’ll take a breather.
Actually, one more thing that Kate clarified for me:
Authors with trad publishers are getting 10% of NET from hardback sales. “Net” on a $25 hardback is $12.50, 10% of which is $1.25 per sale.
Authors with trad publishers are SORTA getting 25% of ‘price received’ (read: sticker price) for ebooks sales. I say ‘sorta’, because they’re currently getting 25% of however much is left after the ebook dealer takes their 30%, which agents are currently raising hell about. ANYWAY:
$12 ebook. 70% of that is $8.40. 25% of that is $2.10. Not *quite* double the royalty from a hardback sale, but close*. If the 25% is taken off the TRUE price received, the value to the author is obviously even better: $3/sale.
* – Yeah, I’m not mentioning that the agent gets 15% of that $2.10 or $3.00, but they get 15% of the measly $1.25 also, which I didn’t mention, so it all evens out.
Actually, tye price differential between paperback and hardcover is interesting, because (a) it seems to be shrinking (h/c, esp. with Amazon discounts, is often close disturbingly close to paperback, largely because paperback is getting more and more expensive, and (b) when h/c goes onto remainder discount (the front racks at Barnes & Noble), the price is often at paperback costs (which is why I have quite a number of Robert Parker “Spenser” novels in hardcover, which I otherwise would never do).
There’s not a lot I can add to the intelligent and detailed analysis above, except that these guys are clearly just not following a rational business model — and, as a result, it’s much less likely I’m going to be getting into ebooks any time soon.