How Amazon pays for Kindle books — now.
Here’s an interesting blurb about Kindle book sales and how they relate to publishers – and then agents – from New York’s article about the publishing business, The End:
The ultimate fear is that the Kindle could be a Trojan horse. Right now, Amazon is making little or nothing on Kindle books. Lay down your $359 and you can get most books for $9.99. Publishers list that same Kindle version for about $17.99, though, and—as with all retailers—charge Amazon roughly half that price for it. Which means that Amazon keeps only a dollar on each book, while the publishers make $9.
But Amazon may be offering a sweet deal now in order to undercut publishers later. If their low, low prices succeed in making e-books the dominant medium, they can pay publishers whatever they want. “The concern is they want to corner the market,” explains one books executive, and then force publishers to accept a genuine 50 percent discount. “If they took over as little as 10 to 20 percent of the market,” says an agent, “publishers simply would not be able to exist.”
How that cost is passed onto authors on their books — now, and in the future — is something we’re all talking about!
There are big publishers out there. The equivalent to big record labels. Given their size and the impact that would have on Amazon’s bottom line, they probably could avoid this from happening. Amazon could only push two ways on the price, out to the reader or back to the content owner.
If they pushed on the consumer, they would likely lose given that it will be a cold day in H E double L before the Kindle marketplace is the overriding option and choice for the majority of consumers. It’s likely the book marketplace will be disrupted by other ebook marketplaces before that happens.
That basically leaves small publishers getting pushed around. three options: 1) takea wait and see approach and then push back on Amazon in a collectively organized way 2) maintain sales channel diversity 3) push for support of a universal format of distribution in all Ebook marketplaces
The second is the probably the most feasible given the variety of current marketplaces. Small publishers should also think about creating and promoting independent sales channels.
The third, push for support and distribution of interoperable E-book formats in all eBook devices and their respective marketplaces. Right now, I would submit that the primary reason that Amazon’s format is proprietary is due to their not being a Universal DRM format for eBooks. Publishers want DRM (at least the big ones). If there was this said universal format, or publishers would agree to an existing standard that lacked DRM, Amazon would have much less leverage to demand larger cuts of sales in the Kindle marketplace since Kindle users could get the ‘kindle’/universal format at any other marketplace. They only have the convenience factor at that point, and the access to the web from all electronic wireless devices like the Kindle is only getting better.
Amazon has shown they are willing to distribute this universal format for music: the MP3. It lacks DRM. As a publisher, tell Amazon you’d like to distribute your eBooks in an interoperable eBook format from their store. They’ll probably listen even more if you tell them that format can be DRM-free.
Adam
September 16, 2008 at 10:30 pm
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September 26, 2008 at 4:21 am
The Kindle is actually quite classy; it’s like a convergence of old school and new school technology
Joe
February 23, 2009 at 10:56 pm