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Murdoch Says E-Book Prices Will Kill Paper Books
hrimhari writes "The settlement between Amazon and Macmillian got the attention of a known dinosaur. Consistent to his views, Mr. Murdoch wants to defend his book editors by killing the cheaper solution. '"We don't like the Amazon model of selling everything at $9.99," Murdoch said. "They pay us the wholesale price of $14 or whatever we charge," he said. "But I think it really devalues books, and it hurts all the retailers of the hardcover books.'"
To those who modded this Flamebait: Ten media conglomerates control over 75% of the media in the U.S.A., and over 50% of the media in the world. But Fox "News" viewers are some of the worst-informed Americans. Who do we blame but the CEO? And why would we believe different standards would apply to any other media under his control?
As an aside, I was asked to download comment.pl the first time I clicked reply. Then I got a reset connection. Finally, I got a reply form. Coincidence? :)
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
The following book price breakdown from Kindle Review (http://ireaderreview.com/2009/05/03/book-cost-analysis-cost-of-physical-book-publishing/) is instructional:
Book Retail Price: $27.95.
Retailer (discount, staffing, rent, etc.) - $12.58. That's 45%.
Author Royalties - $4.19. Exactly 15%.
Wholesaler - $2.80. Exactly 10%.
Pre-production (Publisher) - $3.55. That's 12.7%.
Printing (Publisher) - $2.83. Translates to 10.125%.
Marketing (Publisher) - $2. That's approximately 7.15%.
Basically the numbers of interest are the retailer (45%), printing (just 10%), and the wholesaler (10%). So it's fairly easy to see that online books can dump wholesaling and printing costs... but that's just 20%, or $6. Retailer costs can drop, but most retailers still need to make a profit, even selling ebooks (servers cost money).
Given the breakdown, I can see how a publisher might charge Amazon $15 for a first-run book, and how Amazon might decide to eat the $5 (for first run books) if it means gaining ebook market share and if it also encourages people to buy older books on which they DO make money. And sells the occasional Kindle.
And if you think Amazon would not decide to lose some money now in order to build up market share, then you're completely forgetting how Amazon became Amazon in the first place.
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.