Amazon Is Losing Money on Each $9.99 Ebook

Kindle-pencil Publishers Weekly confirms something I've long suspected:

Currently, publishers make as much money on Kindle editions as print editions, since Amazon, the largest e-book retailer, pays the same discount for e-book editions as it does for print—off the same list price, whether bound book or e-book. (An Amazon spokesperson would not comment on the discount issue, but a number of publishers confirmed that Amazon pays the standard discount—which is, with some fluctuation among houses, about 50% off list price—for Kindle editions.)

Amazon, which sets the price for everything it sells, is, as many people interviewed point out, losing money on a majority of Kindle editions. Although the price point for Kindle editions varies, the dominant one for hardcover bestsellers is $9.99, a price one publisher called “a killer.” (The e-tailer is pricing some of its Kindle bestsellers even more aggressively, with titles like Stephenie Meyer's New Moon, currently #4 on the Kindle bestseller list, at $6.04.) At $9.99 Amazon is selling its Kindle editions at, generally, a 60% discount; Amazon sells its print bestsellers at, on average, a 45% discount. The reigning price point in the Sony e-book store, with variations, is $11.99.

This is obviously a move to build up market share for the Kindle, something I suppose Amazon is in a position to do since it is one of the few book retailers to actually be in the black at this time. This also means that $9.99 ebooks are untenable over the long run, unless publishers choose to give Amazon a steeper discount in the future.

As Publishers Weekly notes, if this tactic works then eventually Amazon won't have to rely on publishers to give the discounts it wants–it will be in a dominant enough position to demand whatever pricing it prefers. So, in other words: hope that competitors manage to capture a sizable portion of the market.

For more info, readers should see my interview with Ted Striphas, where we touch on Amazon's already dominant market position and what that might mean.

Incidentally, I finally saw my first real-life Kindle on public transit earlier this week. I also saw five people with non-electronic books, myself included.

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You saw 5 people carrying one book each, but the Kindle person was carrying a library. I have 22 title and 6 periodical. each of my newspaper subscriptions have about 16 issues to them.
So, you wanna to try to carry the paper version of that on the subway?

I’m still waiting for someone to explain why an average reader wants to carry a library around with them.

Several years ago, I was on the subway with a copy of a mostly-read New Yorker, rifling through the dregs with the intent of disposing of the publication en route, when the train got stuck, as sometimes happens. I sat for four hours, reading and rereading and pretending to further re-read some bullshit poem, doing whatever it took to avoid eye contact or invasive ads. Ever since, I’m known to carry around at least a full day’s worth of reading material whenever I go further than around the block. And I know, this translates to A Book and A Magazine (or Two), but these days I do keep a backup dozen books on my iphone, just in case.
Of course, when you inquire about “an average reader,” you probably intentionally left out “who also happens to be a crazy woman.” But maybe not?

eBooks wont probably change the quantity or the quality of “average reader” personal library. However, it is a huge step for the writers. They can now bypass publishers and get a decent return on their work. Scribd gives 80% return. And our ebook online shop ( 90%.
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