4 ms·

MacMillan doesn't "need" $12 to $15 to make money Actually, you'd be surprised. The author's cut is a royalty based on the suggested retail price, which for a

by cstross 17y ago

MacMillan doesn't "need" $12 to $15 to make money Actually, you'd be surprised. The author's cut is a royalty based on the suggested retail price, which for a hardback offering would be 10-15% of $24, or for a first ebook at $15 would be 25-30% of $15. The production cost of an ebook is non-zero; there's a lot of editing, copy-editing, proofreading, typesetting that goes into it, not to mention commissioning cover art (arguably obsolescent) and other marketing activities. Rule of thumb is $7000-$20,000 for a book, which must be recouped somehow. Typical book sales are much lower than most folks imagine -- midlist hardcover SF novels sell 3000-8000 copies at $24 discounted to $16, paperbacks sell 15-30,000 copies at $8 discounted to $6 (but with a hideous level of wastage such that typically 20-50% of the print run will be pulped due to not selling within 90 days). Suppose the $15 ebook somehow sells as many copies as the $16 (after discont) hardcover. The iBook cut is 30%, leaving $10. The author's cut is another 30% of $15, leaving $5 for the publisher. They then have to defray $7-20K of production costs before they're into profit; an expensively produced book that sells for $15 but only moves 4K copies is thus a loss. You want to know the grisly truth? Right now, ebook sales are lucky to make it into three digits. Even Baen, who are Doing It Right, are happy to shift 4000 ebooks at $6 each. And Amazon isn't taking only 30% of the cover price: they're wanting 30% with a cap of $10, and they get to set the retail price, or 70% of retail price (current books). Let me say it again: in publishing, about 70% of the revenue stream is soaked up by rent-seeking intermediaries between author/publisher and reader.

waterlesscloud 17y ago
I love your books, but "rent-seeking intermediaries" is a pretty insulting way to refer to the people that bring your words to me, isn't it? You've written enough economic reality into your work that I know you realize those truck drivers and store clerks are performing necessary work, and the "rent-seeking" is necessary so that those people get paid for their work. And I know you must know this fact too- Ebook prices are going to come down, dramatically. It's going to happen, due to market forces. Publishers are going to have to adapt. There's not going to be a choice. They can lament. They can complain. That's understandable. I would too. It's still going to happen. Whether or not it's fair, or affordable, or even desirable. So what's the plan to deal with that?
- cstross 17y ago
  So what's the plan to deal with that? Unfortunately, I can't answer that. See also: http://www.antipope.org/charlie/blog-static/2010/01/the-monetization-paradox-or-wh.html http://www.antipope.org/charlie/blog-static/2010/01/the-mone...
  - waterlesscloud 17y ago
    Thanks for the link. I'm sure you and a number of other very smart people are trying to figure out viable paths. I know it's not clear what the right solution looks like, but it is pretty certain that it's going to involve disruption to the current model and discomfort to the current players.
patio11 17y ago
Charles Stross! I flew to America to buy a copy of Merchant Princes. Well, OK, not really: I tried to buy it in Japan from my Kindle with the intention of reading it on my annual trip back, and I was denied because of some licensing agreement your publisher had. I eventually bought it while passing through Detroit Airport. Despite the fact that this is ridiculously convenient for argument I am about to make, I am actually telling the truth: http://news.ycombinator.com/item?id=1002315 http://news.ycombinator.com/item?id=1002315 When you say"rent-seeking intermediaries" I think of a different player than you do. See, Amazon makes my reading experience awesome. Your publisher? They have not made my experience awesome. I know they spend a lot of money on, e.g., typesetting and wood pulp. That must suck. I am having a hard time mustering up sufficient sympathy to back your publisher's attempt to charge me more so that I can subsidize the continued practices which result in 50% of print runs getting pulped. Is Amazon's contribution to total awesomeness worth 70%? Eh, I don't know. I'm a software vendor. Google takes fifty cents out of the last dollar of sales for me (for advertising), despite the fact that I do all the "actual work". I use the scare quotes because if the last couple of years have taught me anything it has taught me that making the sale -- which is what Amazon does for you -- is a non-trivial bit of the business equation. I don't see my profit split with Google as a moral issue -- I see it as a fairly simple business decision. To whit, I sure like getting that last fifty cents. I think I managed to get about $20 of your books on my trip to America. Now, I don't know whether you see $1 or $3 of that at the end of the day, but either is a darn sight better than $0, which is what your publisher is pushing hard for you to get from me.
- cstross 17y ago
  The publisher's contribution is invisible, but awesome. Trust me, the books wouldn't be the same without them. Amazon's visible contribution is ... well, there's something rather nasty happening behind the stage curtain. Agreed, the mass market channel for paperback distribution must die -- everyone in publishing agrees on this (the 50% wastage is grotesque) ... just not until there's a replacement way for injecting cheap books into readers' eyeballs.
  - Poiesis 17y ago

by cstross 17y ago

waterlesscloud 17y ago

I love your books, but "rent-seeking intermediaries" is a pretty insulting way to refer to the people that bring your words to me, isn't it? You've written enough economic reality into your work that I know you realize those truck drivers and store clerks are performing necessary work, and the "rent-seeking" is necessary so that those people get paid for their work. And I know you must know this fact too- Ebook prices are going to come down, dramatically. It's going to happen, due to market forces. Publishers are going to have to adapt. There's not going to be a choice. They can lament. They can complain. That's understandable. I would too. It's still going to happen. Whether or not it's fair, or affordable, or even desirable. So what's the plan to deal with that?

cstross 17y ago
So what's the plan to deal with that? Unfortunately, I can't answer that. See also: http://www.antipope.org/charlie/blog-static/2010/01/the-monetization-paradox-or-wh.html http://www.antipope.org/charlie/blog-static/2010/01/the-mone...
- waterlesscloud 17y ago
  Thanks for the link. I'm sure you and a number of other very smart people are trying to figure out viable paths. I know it's not clear what the right solution looks like, but it is pretty certain that it's going to involve disruption to the current model and discomfort to the current players.

patio11 17y ago

Charles Stross! I flew to America to buy a copy of Merchant Princes. Well, OK, not really: I tried to buy it in Japan from my Kindle with the intention of reading it on my annual trip back, and I was denied because of some licensing agreement your publisher had. I eventually bought it while passing through Detroit Airport. Despite the fact that this is ridiculously convenient for argument I am about to make, I am actually telling the truth: http://news.ycombinator.com/item?id=1002315 http://news.ycombinator.com/item?id=1002315 When you say"rent-seeking intermediaries" I think of a different player than you do. See, Amazon makes my reading experience awesome. Your publisher? They have not made my experience awesome. I know they spend a lot of money on, e.g., typesetting and wood pulp. That must suck. I am having a hard time mustering up sufficient sympathy to back your publisher's attempt to charge me more so that I can subsidize the continued practices which result in 50% of print runs getting pulped. Is Amazon's contribution to total awesomeness worth 70%? Eh, I don't know. I'm a software vendor. Google takes fifty cents out of the last dollar of sales for me (for advertising), despite the fact that I do all the "actual work". I use the scare quotes because if the last couple of years have taught me anything it has taught me that making the sale -- which is what Amazon does for you -- is a non-trivial bit of the business equation. I don't see my profit split with Google as a moral issue -- I see it as a fairly simple business decision. To whit, I sure like getting that last fifty cents. I think I managed to get about $20 of your books on my trip to America. Now, I don't know whether you see $1 or $3 of that at the end of the day, but either is a darn sight better than $0, which is what your publisher is pushing hard for you to get from me.

cstross 17y ago
The publisher's contribution is invisible, but awesome. Trust me, the books wouldn't be the same without them. Amazon's visible contribution is ... well, there's something rather nasty happening behind the stage curtain. Agreed, the mass market channel for paperback distribution must die -- everyone in publishing agrees on this (the 50% wastage is grotesque) ... just not until there's a replacement way for injecting cheap books into readers' eyeballs.
- Poiesis 17y ago