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April 28, 2010


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Eric Muller

I share your concern, Jacqueline. I really want to read "The Big Short" by Michael Lewis on my Kindle ... but can't get it.


In the last issue of the New Yorker there's an interesting article talking about Kindles and iPads, and there's a discussion of this phenomenon. The example the author uses is the book Game Change. Apparently a pretty small number of hardcover copies of this book came out at the beginning of the year. They sold out, but the publishers had decided to wait to publish the e-book, so there was a stretch of time where a person just could not purchase this book. Strange, no? If you're interested in the e-book phenomenon, I highly recommend that article!


If publishers make more unit profit on hardcovers than e-copies, then they are going to adopt practices that drive consumers at the margins to hardcovers. I think it is that simple.

Jacqueline Lipton

But is it true that publishers make more unit profit on hard copies than e-books? I would have thought it would be the other way around because they can still charge high prices for new releases on the kindle, but the production and distribution costs must be much lower than hardcovers.

Steven Lubet

Only a handful of authors can make money by selling new releases at $9.99. For all of its flaws, the publishing industry has a tradition of taking risks on new authors (fiction) and significant-but-not-necessarily-profitable subject matter (nonfiction). The Kindle threatens to undermine that model, and it is not obvious how it will be replaced.

I doubt that anyone wants to see a future in which only best sellers are published. Withholding popular titles just might -- emphasis on might -- be one way to keep the industry alive.

Jacqueline Lipton

So that leads me to ask some other questions, Steve. Is it possible to price Kindle new releases higher than is currently the case and see if Kindle users buy them at higher price points? Also, I assumed that it would be much cheaper for publishers to release books in e-book formats as opposed to hardcover or paperback copies. Is this assumption correct? If most of the cost of production is in design and layout, then presumably the print-run of a physical book may not cost that much more than creating the e-book version? But do the relative costs of the distribution channels impact the publishers positively? Is it enough incentive to create e-book versions that distribution costs for them are so much less (presumably) than those for physical books?

Christine Hurt

I guess Eric and I should join a protest movement. I have clicked the "I want to read this on my Kindle" button for The Big Short about 10 times now.


Jacqueline, I have to, again recommend the New Yorker article. It actually addresses all the questions you raise in your comment, and gives an interesting history about publishers and the Amazon 9.99 price point (and Apple's proposal to raise ebook prices to 13.99). You can read the article here:

Steven Lubet

The New Yorker article is excellent and it answers most questions. But for those with less time, let me respond to a couple of Jacqui's questions:

(1) Publishers cannot, for the most part, raise the price of Kindle books because Amazon has declared a price point that is intended to capture market share. The advent of other e-readers, including the iPad may change this, but for now Amazon controls market access.

(2) If publishers could make just as much money selling Kindle versions, they would not delay Kindle releases. They are stodgy but they are not idiots, so they have evidently calculated that they still make more money on hardcover books that sell for several multiples of the Kindle price. The same sort of calculation goes into releasing paperback books and DVDs of popular films.

(3) E-books are still a very immature market and it is hard to tell where things are headed. Will hard copy books go the way of CDs and, increasingly, DVDs? Or will they continue to find large audiences, as is the case for theatrical releases of films?

Jacqueline Lipton

Fascinating reading, Jennifer. Thanks for posting it!

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