Now You Can Burn My Books

Apparently my publisher has started issuing Kindle editions of my books. Two are now available in Amazon’s electronic format: Persuasive Games and Unit Operations.

Readers might be interested to find that MIT Press seems to have taken up a different strategy with their electronic book pricing. Specifically, the Kindle editions do not necessarily cost less than the print books. To wit, Unit Operations currently sells for $10.71 as a paperback on Amazon.com, while the Kindle edition costs the usual $9.99. The hardcover edition Persuasive Games sells for $29.60, while that book’s Kindle edition goes for… exactly the same price.

I haven’t spoken to MITP about this (nor did they notify me that the books were now selling in this format!), but I suspect they’ve made a deliberate effort to think of Kindle books as convenience editions rather than discounted ones. They might even assume that readers will be willing to buy both editions. This might also explain why a Kindle edition of Persuasive Games has appeared before a paperback edition of that book. I’m not sure how I feel about it; Certainly the book has sold well in hardback, and a paper or lower-priced digital edition could eat into those sales. Given the financial state of university presses, I think I understand MITP’s decision, even if I also wish that a more affordable edition of this book existed.

That said, I think that digital book buyers have had the wrong idea about the economics of electronic books. They assume that electronic copies are cheaper to produce and distribute, and that such titles therefore ought to cost much less to purchase. I have first-hand experience in the book business, so I know enough to comment based on more than speculation.

The truth is, books are incredibly cheap to print. Warehousing has come down in price too, and distribution costs have stabilized partly thanks to consolidation in the book retail industry. A book might cost a couple dollars to print and store (and really, that’s a generous figure that assumes very small runs). Distribution discounts can run 50-60%, but larger publishers with more popular books can negotiate. So, a book with a list price of $20 might net $6-8. Naturally, the publisher still has to market its books, pay royalties, and cover its operating costs, and direct sales remove the distribution costs, but let’s bracket all that for now.

As the price of the Kindle edition of Persuasive Games makes clear, publishers can set their price for Kindle books. Amazon pays back 35% of list, although other arrangements probably exist for larger publishers. It’s also worth noting that major distributors have begun bundling ebook services into their overall distribution offerings, taking a cut in exchange for simplifying the process across multiple electronic channels.

Amazon.com wants Kindle books to list at $9.99, and now readers want to pay that much for them (or perhaps they want to pay even less). 35% of $10 is $3.5, or about half as much as the publisher might expect from a print edition (that is, assuming that the book can list at $20. Racing the Beam is a good example, a hardcover book listing at $22.95). So, you can see how electronic books actually bleed money from publishers, even as they add to the coffers of closed-platform ebook manufacturer-sellers like Amazon.com.

That’s the publisher’s perspective. From an author’s perspective, publishers have typically been negotiating electronic rights as a percentage of net proceeds from such editions, rather than a percentage of list price. It seems to me that this net figure is very hard to determine, but will inevitably be much less than one would receive for print royalties. The lesson for authors: seriously consider the royalty rates you negotiate with publishers for electronic rights.

Despite my gripes with the Kindle, I’m not against electronic books. That said, I do think they have a long way to go, and I say that from the perspective of a reader, an author, and a publisher. One idea that I haven’t heard anyone discuss is this: what if electronic books sold for a list price commensurate with that of print editions, but included an option for a print edition of the book at a later time? Given the increasing availability of print-on-demand at industrial scales, this might also reduce the financial outlay of publishers small and large, making it possible for them to take more, or different risks.