Totally agreed to whatever you said. What you said was out of ultimate logic and research that you have probably made concluding on what you just suggested. However, I happened to read an article by Motoko Rich who is a journo at the New York Times and she has made a thorough research on the issue after interviews with the big tigers in the industry. She has done a very nice differentiation between the costs of printed books and e-books. the article is publisher’s explanation that they hardly earn any big difference in ebook and printed one I have mentioned a few extracts from her article here which goes as follows:
Publishers basically have their own cost structure and it varies from publisher to publisher. Their cost, composite is quite different from one another but according to the survey conducted, we can conclude the following as the basic structure of cost and composition
• It is the publisher who sets the price of a typical printed book. On an average it is around $26. Te bookseller typically pays half of the amount which is $13.
• From the entire revenue earned, the publisher possibly, printing storing and shipping of the book, returning of unsold books etc costs him around $3.25
• Around 80 cent per copy is spent on cover-designing, typesetting and copy-editing of the book
• Marketing cost may be around $1 per copy which varies as per the popularity of the author and the title
• Almost all of these costs come down with the sale of more copies
• We cannot forget the author who is typically paid the 15% of the total cost per sale as royalty which in our case sums up to $3.90.
• In certain cases, when the author is too popular a name, the author’s advance goes above the amount earned by the publisher
• Minus, such write-offs and all, the publisher has some amount around $4.05
• From this amount, they have to pay for editors, design, office space, electricity bill and other overheads that follow
Talking about e-book, the profit that they earn is not much as suggested or assumed by you all. It is hardly of any difference.
• Publishers sign an agreement with Apple which states that the cost of the eBooks will be fixed by the publishers and not by them
• Here, they are settled down with a payment of 30% of each sale, that is if the book costs $12.99, the publisher earns $9.09
• Out of this, the publisher pays around 50 cents to the convert to text software which also involves manpower
• It pays almost the same amount for copy-editing, alignment and typesetting again involving an expense of manpower
• The marketing amount sums up to around an amount of 78 cents on each copy
• The 25 percent of the gross revenue earned from the e-book selling that the publisher earns is paid as royalty to the author, which comes to $2.27
• Now, all of this leaves $4.50 for the publisher, still leaving other overhead expenses and the writing offs
For a layman it might look like that e-book earns a lot of profit to the publisher, but the facts and numbers say something else only. If there is a permanent replacement of the printed e-books with e-books, then they will be in the above mentioned profits as the structure’ll get much more balanced and defined.
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