Monday, January 9, 2012

Follow Up on Book Piracy

I've been pondering about the actual cost of publishing, since I wrote the last blog post. In fact, going back through some of the blog posts and over at Llewellyn.com, I've come to notice a few things. Some points I'd like to correct - hey, I can admit when I'm wrong - and others I'd like to clarify or reaffirm.

One of the first points is the cost of a book. Why do books cost as much as they do? I will admit, when I came up with my number, I was basing it off the cost of a CD back when I worked for the big box electronics retailer with the blue polos and yellow tags. Books are a different beast. A really wonderful New York Times article broke it down really well. Here, they even provide graphics!


So how much does it cost to actually print a book?


Conglomerate estimates say about $3.25 (which includes storing and shipping the books after you've printed them. This leads us to assume, naturally, that printing a book actually might be in that $1-$2 range). A quick breakdown of the other numbers you're seeing. Design, typesetting, and editing. These are the "formatting" parts of a book. Choosing the font, paying an editor, laying out the book, etc. You also see marketing. This is done for all books in all formats. Also, the 'Author's royalty' is based on a percentage. If the publisher got $50 per book, the author would get a lot more. If the publisher got $5 per book, the author would get a lot less. (This can lend itself to the argument for self-publishing or digital rights for authors, which would increase the author's profits significantly. Many new or non-Stephen King-level authors do not make a living off of their books. In fact, they typically don't make much at all.)

The article states that if a publisher has, say, Barnes & Noble sell a new hardback book for them at $26, the publisher gets about half of that ($13). Of that half, about $9 goes to pay fees, and about $4 is profit. However, the article is quick to note that final profit is even less per book, because that profit goes to pay the cost of overhead for the publisher. You know, silly things like paying the people that work for the publishing company, keeping the lights on, renting office space, and so on.

What the article does point out is that it is more profitable for publishing companies to produce e-books, because there are no printing, storing, or shipping fees associated with the book. Yes, you're still paying for editors and typesetting and marketing and royalties and such, but you're not paying about half of the cost of the physical book.

For e-books priced at $10, the publisher gets $7. That's a heck of a lot better, strictly speaking in percentages, from 50% of a hardback. Also, the cost of producing the e-book goes from $9, to between $2.73 and $3.48. The publisher is getting a much higher profit margin off of e-books than off of physical books. So, there, I was wrong. An electronic book wouldn't cost $1 to produce. It would cost about $3. My mistake.

And, yes, $4-$6 per book profit doesn't sound like a lot. Consider, however, that publishers aren't just selling 5 or 10 copies of the book. They're selling thousands, sometimes millions of copies. If you just sold 100 e-books at $4 profit, you're making $400 profit. Several years ago, Llewellyn came out with a new edition of Cunningham's Wicca: A guide... . The cover proudly stated that they've sold over 400,000 copies. At $4 profit, that's $1.6 million from just that one Cunningham book alone. Go Llewellyn! Who says pagan businesses can't be profitable, huh? Of course, given the e-book craze, and how they are starting to outpace physical books, Llewellyn could be looking at an average profit of $5 per book sold. (So, for the next 400k sales, they stand to make around $2 million. Not too shabby for a book that was published in 1989 and is still one of their most popular sellers.)

See, some perspective is nice, huh?

Then, I've seen the argument pop up that "information should be free". Folks, nothing is free. The creator of that information has to eat, too, and if they're trying to make a living as an author, your hippy, free-love, share the information mentality is doing nothing but taking food out of their pockets and coins out of their coffers. Sharing a book with a friend or making a digital copy for yourself is completely different than actively promoting the free dissemination of an author's work.

We only stand to lose great potential authors, because being a writer isn't a lucrative career path. It's difficult enough getting your footing without knowing anyone with a scanner and an internet connection can take your book and give it away for free. If you would like a "free source of information", then head over to Wikipedia, which allows you to look up all the information you want for free. If you are choosing to pick up a book, however, you should be choosing to pay that author for their perspective, their story.

Also, and this is the last thing, I swear, the Llewellyn blogger seems to not know how to use Amazon. Many commenters to her blog post keep bringing up the point that e-books are sometimes more expensive than paperback versions of the same book, a fact which she seemed completely oblivious to. I did a great deal of perusing of the Amazon site, and noticed something. No Llewellyn publication costs more in Kindle form than in physical form. So, score 1 for Llewellyn blogger lady. However, what I noticed time and again is that the physical copy of the book is maybe $0.50-$0.80 more. They're nearly identical in price.

Given what we now know about profit margins and the actual cost of a book, I wonder what the next excuse will be as to why the cost of the e-book can't come down just a smidgeon.

Just some updates on this ongoing conversation. Keep those comments coming! This really is a very interesting topic.

Love and Lyte,

Fire Lyte

2 comments:

  1. I need to learn proper internet researching skills like you seem to have.

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  2. Thank you for doing the leg work, that was a nicely done article that provided great information!

    ReplyDelete