Posts Tagged ‘E-books’

Wagging the “Long Tail” by self-publishing …

November 7, 2011

TakeAway: Established writers and new writers take advantage of self publishing with the evolution of digital books.

Good example of the Long Tail Strategy. 

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Excerpt from WSJ: “Secret of Self-Publishing: Success”

Self-publishing has been available for decades.

But thanks to digital technology and particularly the emergence of e-books, the number of self-published titles exploded 160% in 2010 from 2006. 

Amazon.com fueled the growth by offering self-published writers as much as 70% of revenue on digital books.

By comparison, traditional publishers typically pay their authors 25% of net digital sales and even less on print books.

A veteran romance author self-published her first e-book in April 2010. She has since cumulatively sold 265,000 units of 10 self-published titles.

Her total take from those 10 titles since last April: in excess of $500,000 after expenses. Previously, the most she ever made from a book was $33,000.

“One of the big differences between e-books and print is the sales cycle … It’s almost inverted.”

A chain store buyer makes a decision as much as six months before a book is published, and then it has no more than six months on the shelf. At that point, the sales cycle is essentially over.

But with e-books, it’s completely the opposite.

“It’s often six to nine months before your book takes off, and you never take it down.”

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E-Readers paying the freight for paperback … hmmm

October 4, 2011

TakeAway: Book publishers have created a new pricing strategy to cover their fixed costs of printing…… increase their prices on e-books.

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Excerpted from WSJ: 
E-Book Prices Prop Up Print Siblings

As physical book sales fall, publishers are having a harder time covering their fixed costs.

One area where major publishers can cushion the blow is by keeping e-book prices higher.

The six major publishers have adopted a new pricing model, known as “agency pricing,” Publishers agreed to set the consumer prices of their digital titles. Under this model, retailers act as the agent for each sale and take 30%, returning 70% to the publisher.

For example, the digital wholesale price was often $13. If Amazon sold the book for $9.99, it lost $3.01 per sale.

But a back-of-the-envelope calculation of a new e-book priced at $12.99 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.

By comparison, 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 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…

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