Oh, hi there! So, it's been over a week since the kids went home, and you might think that I've been hard at work! So very hard at work that I haven't even had time to post about it!

Ha-ha-ha! No, of course you haven't thought that, and I haven't been. Part of it is that I've been catching up on other things, part of it is that my time has been kind of broken up (which tends to prejudice me to working on short-term projects rather than this HUGE one), but mostly it's because it always takes me a while to get back into the writing/editing mind-set after a break. I'm slow to get started, once I start I'm slow, and then I get faster and faster until the project ends. It's weird.

I'm not the only one with dysfunctional adjustment patterns. Today's Wall Street Journal contains a fascinating little breakdown of why e-books from traditional publishers are so expensive.

Basically, traditional booksellers are accustomed to making a certain amount of money per book, and they're set up so that they need to hit that revenue target. From the article:

a hardcover book priced at $26 and sold under the traditional wholesale model will return $13 to a publisher. Subtract 15% for the author royalty, or $3.90, and that leaves a gross of $9.10, says publishing executives. Mr. Shatzkin says that it's appropriate to then deduct about $3.25 per copy for shipping, warehousing and production, leaving a gross per unit sold of $5.85, from which publishers must pay for returns and inventory.

In other words, the industry's expecting to make a little less than $5.85 per copy sold. And they can get that from an e-book! From the article:

a back-of-the-envelope calculation of a new e-book priced at $12.99 on Amazon or through Barnes & Noble Inc. under the 70%-30% agency pricing model suggests a return of $9.09 to the publisher in the form of sales. The publisher then typically has to pay the author 25% of net sales in the form of a royalty, or $2.27. This leaves a gross of $6.82. Subtract 90 cents for digital rights management, digital warehousing, production, and distribution, and that leaves $5.92.

 

So they can get a similar return! Whoo-hoo!

Oh, but there's a catch--the e-book has to cost $12.99. That's...kinda pricey for an e-book, no? At least, judging from the article, a lot of readers seem to think so.

Meanwhile, Amazon is trying to set up a free e-book lending service. They would make money because you'd have to join Amazon Prime to get it.

Hmmm..... On the one hand is a business that can't make money off a book that costs less than $13. On the other hand is a business that can make money off a book that is free. Which do you think is going to make it?