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Books / Media, Technology

Have They Seen The Light? Probably Not Yet.

Several weeks ago we castigated the book publishing industry, and in particular Knoff Doubleday, for the idiocy that passed for their marketing strategy of e-Books.

Marketing?

Marketing?

At the time of our post Knoff Doubleday had declined to offer The Lost Symbol, Dan Brown’s (author of Da Vinci Code) new book on Amazon’s Kindle until some unspecified time.

We are pleased to report that the Kindle edition will now be offered at the same time as the print edition. Here’s the notification that Jeff Bezos just posted on Amazon’s site.

One For The Gipper

One For The Gipper

But before we get too self-congratulatory let’s do some back-of-the-envelope calculations, using pricing information generally available from the book industry itself.

Usually the book retailer (Amazon) pays the publisher 1/2 the list price of the book.  “The Lost Symbol” will retail for $30 which implies Amazon is paying Knoff $15, and they are discounting the book to $16.17 so they are making a little over $1.50 from which they need to subtract their own costs. We don’t know much about Knoff’s costs, so we won’t speculate.

Perhaps Amazon gets a better deal, or with huge best-sellers (like this one) the discounts are different, whatever.

But let’s look at the Kindle edition. The last published info on pricing here was that Amazon pays Knoff the same for the Kindle edition, which they are selling for $9.99. This implies Amazon is losing at least several dollars on each sale.  On the other hand Knoff has virtually no incremental costs for the Kindle edition. No printing, distribution, returns etc. etc. So they are making out like bandits.

Clearly Amazon is investing in change and in the future.  At the same time they are growing and their profits are increasing.

Meanwhile the (traditional) publishing industry is in decline along with ‘old media’ for many reasons.

I’m rooting for ‘old media’ to get things sorted out, but so far I’m not seeing any public leadership that can explain how they are going to do it.

Hint, hint: Start by doing what Amazon does; focus on your customers and provide them outstanding products and services.

And stop demanding to be dragged into the future kicking and screaming.

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Discussion

3 thoughts on “Have They Seen The Light? Probably Not Yet.

  1. I doubt Amazon is loosing money on the Kindle books — there has to be some back end deal or rebate back to them.

    Posted by Sal | September 5, 2009, 8:37 am
    • Sal,

      I agree that there’s probably more than meets the eye, and I’m not privy to those kinds of deals.

      But what I do know is that if the publishers have figured out what they are going to do in the future, it’s a very closely guarded secret.

      Also Amazon isn’t talking very much either…

      Posted by Bob Gelber | September 5, 2009, 9:42 am

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