A death throws of print kerfuffle
February 2nd, 2010

In an analysis of the MacMillan vs. Amazon dust-up, Charlie Martin writes: “This weekend kerfuffle is really the death throws of a business model.” He says bet on Amazon. His article includes this big picture analysis of what is happening to print:

The key is the mainstream publishers’ worry that e-books will cannibalize the sales of physical books. Mainstream book publishers, along with mainstream music publishers and the legacy media newspapers, are actually primarily manufacturers. The costs of the content, in royalties to the authors, are only about 10 percent of the cover price of the book, and less than that for the record. It’s the costs of setting type or mastering, printing the books or pressing the disks, shipping, cataloging, and selling them that dominates the costs of publishing.

Now, along come e-books and readers, like the Kindle and the iPad. Suddenly the whole business of publishing has changed. You can sell a physical book or an e-book — but each copy of the e-book costs literally one one-millionth as much to produce.


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