So, is Macmillan losing money on Dominion?

[stevenehrbar]

Dominion, by Fred Saberhagen, is a direct-to-paperback release from Macmillan, under the Tor imprint.  The price is $6.99.  Serpent Moon by  C.T. Adams and Cathy Clamp , is another direct-to-paperback release from Tor, for $6.99.  Both were released February 3rd, 2010.

That sure looks like proof that Macmillan can, in fact, currently edit, typeset, and otherwise prepare a book, then sell it for a profit at a retail price of $6.99.  Which would pretty strongly suggest that they could edit, typeset, and otherwise prepare an ebook, and then sell it at a profit for a retail price of $6.99.  It's not like an ebook has any of the printing, warehousing, and distributing costs of the paperback; surely it isn't more expensive to make than a paperback?

Maybe, of course, the author royalty on the book is razor-thin.  So we then could, say, add an additional $3.00 to the price, to represent a compensation to the author equivalent to a 12%-of-retail-price royalty on a $25 hardcover.  That would bring us to a price of $9.99 for the ebook as high enough to make a profit for Macmillan and definitely reward the author.

Interestingly, ten bucks is the same price Amazon was using as a standard, and that Macmillan is saying was way, way too low for an ebook.

Oh, well.  I'm sure on the $12.99 ebook sales they're paying authors a royalty in excess of $3 a copy, right?  Right?

Comments

[archangelbeth]

Oh, 35% is higher than many royalties for physical media. However, it's not the same rate that Apple iTunes was handing over to the record companies. (Thus, the difference in "Okay, you don't want our very generous offer? Fine. Whatever." Versus Amazon's, "You don't want us to keep gouging you, plus we get to do whatever we want with your price? Sucks to be you. We won't carry your physical books, either.")

And it's not even close to the same rate that, well, the e23 manager at the time (not SMarsh, I see now from records) quoted at me as being what they considered an industry standard.

(Further, there are several ereader apps available for the iPhone/iPod Touch, and the iPad'll add Apple's own... I dunno if Amazon is going to be that "go-to" for books if they keep limiting their selection like this. Though it's true Apple will be coming from a serious underdog position.)

[lhn.livejournal.com]

My understanding is that Amazon's rolling over means that they won't be limiting their selection. (Granted, the Macmillan titles aren't back yet, but all the announcements from both sides indicate they will be.)

On the other hand, it doesn't sound as if any vendor will be able to compete on price (since the publishers will be setting that themselves). So I don't know on what basis they'll compete. Maybe convenience, multiplatform options, and who can get their devices with their store as the default into the market fast enough.

I wonder if the agency model forbids offering rebates, points to be used for future discounts, coupon codes, or other marketing gimmicks, or if it just specifies list price and how much the publisher expects to receive from each transaction.

[archangelbeth]

If they've kicked everyone's books out once, they'll probably try it again if they think Macmillan gave enough ground. Naughty Amazon.

Maybe convenience, multiplatform options, and who can get their devices with their store as the default into the market fast enough.

Sounds good to me.

Actually, if Amazon could cut the price but still had to pay the publisher, that wouldn't over-bug me, probably. I can see where it would over-bug publishers, though -- they would rather not see returns (so they don't care if a store sells physbooks more cheaply), but for ebooks... It might create expectations. And Amazon's still eating even more of the pie than with its physical books (it demands a 55% discount, IIRC, for physbooks; not, effectively, a 65% discount).[1]

On the other other hand, I'm slightly suspicious of this long-term thinking theory. Are publishers that well-known for long-term thinking? >_>

Amazon selling for more than you list is a different matter; if it weren't Amazon being a virtual monopoly, the go-to for All Things Book, then it wouldn't be an issue. Don't like the price? Fine, order it elsewhere. I suppose if they had to list the "our price, suggested retail price" prominently, it wouldn't be an issue there, either...

Mmph. I want to see what Apple does for the iPad's bookstore. Right now, I feel like I've got grody old oranges and shiny vaporware, and I don't entirely trust that comparison.

Footnote 1: Actually, that's what this should be looking at. Amazon is NOT A PUBLISHER. It tries to claim both sides of the coin, mentioning "royalties" in their Kindle contract with self-publishers (and presumably big publishers as well?), but at the least, when dealing with Macmillan? Amazon is a STORE. It's not paying royalties, it's demanding discounts, and discounts steeper than the usual, for less work on Amazon's part, frankly. I do hear they put things in Kindle format, but once that's done, it's done; there's no stocking, no shipping, no taking-the-book-out-of-the-crate-and-shrink-wrapping-it-for-the-customer.

I have somewhat more sympathy for Macmillan, actually (though I've heard they give poor royalties to their authors), in that context.