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The True Cost of Publishing On the Amazon Kindle

Posted by samzenpus on from the cost-analysis dept.

Barence writes "Ever wondered why Kindle newspapers and magazines don't have many photos? PC Pro has done an analysis of the costs of publishing on the Kindle and discovered that Amazon effectively taxes newspapers and magazines for including more images. Amazon applies 'delivery charges' to publishers at the cost of $0.15 per MB/10p per MB. At those prices, PC Pro claims it's cheaper to mail out a physical magazine than have it delivered electronically on the Kindle. What's more, publishers have no control over the price of their newspaper or magazine: Amazon sets the prices itself, leading to huge customer complaints for titles such as The Economist."

46 of 236 comments (clear)

  1. Now you know by Overzeetop · · Score: 4, Insightful

    An now you know how they can make the 3G whispernet free. They get somebody else to pay for the connection.

    --
    Is it just my observation, or are there way too many stupid people in the world?
    1. Re:Now you know by The+End+Of+Days · · Score: 3, Insightful

      Well, duh. How many people really thought it was an altruistic contribution from the bottom of Amazon's heart?

    2. Re:Now you know by Lord+Ender · · Score: 2

      Really? Who pays when I use it to access Wikipedia? Not that it matters... the Kindle web browser crashes if you use it to access anything more than short text files.

      Eventually I'm sure competition with Nook will drive publishing costs down to insignificant levels. BN should be jumping at the opportunity to sign up The Economist and other rags amazon pushes out with their prices.

      --
      A slashdotter who didn't build his own computer is like a Jedi who didn't build his own lightsaber.
    3. Re:Now you know by ArhcAngel · · Score: 2

      Well they are doing a fairly decent job already. In fact on the Nook Color the magazines are amazing and do not lack for photographic content. Of course I have to tether it to my phone when I'm not near a hotspot but I don't mind.

      --
      "A person is smart. People are dumb, panicky dangerous animals and you know it." - K
    4. Re:Now you know by johan_from_cape_town · · Score: 2

      Well it makes sense. I am a international Kindle user (from South Africa) and whispernet works like a charm here. As far as I understand Amazon uses the AT&T network and the reason why it works is because Amazon actually uses pays roaming data charges - and data roaming is expense in most countries ( I think it is in the region of $0.01/KB, e.g. approx $10/MB). So they might have a better deal than consumers get, but $0.15/MB does not look so bad if you have to compare it to other data roaming charges.....

  2. No surprise there by AndyAndyAndyAndy · · Score: 5, Insightful

    Too many precedents have been set lately by allowing manufacturers/distributors to control content. And not just in publishing, either.

    --
    It's always confirmation bias!
    1. Re:No surprise there by hedwards · · Score: 2

      If you don't like it just stay out of the ebook market or go with one of the ebooks that supports the epub standard. Personally I've got my Nook and I haven't had any trouble loading it up with free content, books checked out from the library or other stores than the official B&N store. It is a bit of a hassle buying elsewhere, but it's not really that hard, most of them support Adobe Editions. My main complaint is that it isn't supported by Linux or anything outside the Mac/Windows world.

  3. Smallest Violin by MightyYar · · Score: 4, Insightful

    Between EVIL Amazon and EVIL Apple, I'm running out of tears for the publishing industry.

    </sarcasm>

    --
    W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
    1. Re:Smallest Violin by SuricouRaven · · Score: 3, Informative

      The usefulness of an auction site depends upon the number of users - thus it's almost impossible for a small site to succeed, just because it's small. A similar situation applies in places like social networking or IM services: People won't join unless their friends already have. It's not impossible to break into such a market, but it requires a great deal of luck, excellent management and a lot of capital.

      This doesn't apply so much to publishing, but you still have the traditional barriers to entry there: Publishers arn't going to be interested in your distribution system until they consider you a serious contender, which means you need either a ton of money to spend on marketing or the backing of an established and respected player.

  4. The Real Reason... by domulys · · Score: 2

    ... is that images and photos look terrible on a Kindle. Amazon doesn't want you, as the reader, to dwell on that fact.

    1. Re:The Real Reason... by Anonymous Coward · · Score: 2, Informative

      And they draw slowly - an image the size of the screen ( 600x800, I think ) takes well over a second to render. Not that the kindle was meant to show really show pictures, of course, since it's main selling point seems to be the appearance of the text on the page.

  5. Costs by Elder+Entropist · · Score: 4, Insightful

    "At those prices, PC Pro claims it's cheaper to mail out a physical magazine than have it delivered electronically on the Kindle." But that doesn't include the costs of actually printing the physical magazine. Not to defend Amazon though. They're clearly trying to make a buck before commoditization of the industry drives prices down.

    1. Re:Costs by cdrguru · · Score: 2, Informative

      The printing costs almost nothing. Today, the mailing of a magazine probably costs more than the printing does.
      Do not believe that physical printing costs much - it doesn't - and doesn't factor into the prices of books and magazines much at all. It is heavily outweighed by the costs of the editorial staff.

    2. Re:Costs by Chemicles · · Score: 2

      But that doesn't include the costs of actually printing the physical magazine.

      Which is why the article very clearly states that it's "cheaper to mail out a physical magazine", instead of saying "cheaper to print out a physical magazine and mail it".

    3. Re:Costs by canajin56 · · Score: 2

      Your "dial-up" connection is using AT&T's 3G network?

      --
      ASCII stupid question, get a stupid ANSI
    4. Re:Costs by cdrguru · · Score: 2

      While it might have been true that a magazine would cost $5 to print in 1960, most magazines are printed much cheaper today. I don't know specifics about magazines today but it is a rare book today that costs more than $2 to print. You cannot tell me that it costs more than $1 to print People or Time, and I suspect the target is more like $0.75.

      There might be some specialty magazines - think Architecture Digest - that cost more to print and are printed on heavier, high-quality paper. These magazines are almost collectables in their own right and are printed to last. People, Time and a lot of others are printed the cheapest way possible on thin low-quality paper.

      The mailing cost for a magazine can easily be over $1. Given postage rates in the US today, even a bulk mailer is going to get stuck with high costs. When first-class mail was $0.15 in the 1970s you could probably get your thick copy of Popular Mechanics mailed for $0.25 or so but mailing rates have gone up. And today the bulk mailers are supporting a lot more of the USPS operation than first-class mail.

  6. Not really a moving narrative by shogarth · · Score: 4, Interesting

    There are two things to consider here

    1.) Amazon is handling the distribution. If their formula is unreasonable, that is something to kick around but they do need to cover those costs.

    2.) The publishers probably cannot "pop it in the mail" for less. The article's author is forgetting about or intentionally ignoring the printing costs.

    At the end of the day, the question has to be "Is the publisher getting a better or worse return?" This article (and most others on this subject) neglect that issue entirely. It's easy to bash at Apple's or Amazon's costing formula. It's much harder (and would display a lot of the publishers' proprietary data) to discuss the real fiscal impact on the publishing industry.

    1. Re:Not really a moving narrative by MozeeToby · · Score: 2

      [...]but they do need to cover those costs.

      $150/GB is inexcusable. If a typical magazine contains 10 MB of pictures (which doesn't seem out of the realm of possibility) then you're talking about $1.50 just to deliver the images to the user for each issue. That's significantly more than it costs to print and deliver a physical copy to the reader, as is evidenced by the number of magazines that can be had for less than $18 per year.

    2. Re:Not really a moving narrative by dorre · · Score: 2, Interesting

      At the end of the day, the question has to be "Is the publisher getting a better or worse return?"

      This is not the only question to ask. I am really surprised at Americans (I am not sure you are, but I see this argument a lot) who say 'well if you dont like apple/amazon/evil-megacrop restricting what content they are distributing you can always get it some other way, it's not like they have a monopoly'. In fact, they DO have a monopoly and I am going to explain why:

      A monopoly is when you have 100 % control of the market. While amazon do not control all electronic distribution. They do control the distribution to all Kindles. Basically you can take everybody who owns a kindle and consider them a separate market. And this market they control. To a 100 %. This is the same thing apple does, google and everybody else wants to do this.

      This is really the new black. Do not be a monopoly. Create a market (for e.g. stupid apps). Do not conquer the whole market because then you will be regulated. When someone complains about you locking up your market you can always say they can go buy a nokia or whatever.

      I think it is really important to realize that these companies are trying to create monopolies that do not look like traditional monopolies. This is no conspiration theory. It's just nobody likes the free market and if you want it free, it must be regulated.

    3. Re:Not really a moving narrative by Ephemeriis · · Score: 2

      1.) Amazon is handling the distribution. If their formula is unreasonable, that is something to kick around but they do need to cover those costs.

      Of course they need to cover costs. I think the problem/complaint comes from a belief that it should be cheaper, since it's all digital.

      2.) The publishers probably cannot "pop it in the mail" for less. The article's author is forgetting about or intentionally ignoring the printing costs.

      I dunno... How much do you honestly think delivery costs on your average periodical? How much do you think printing actually costs?

      Once you've considered the editorial staff, creative folks, journalists, assorted management... The cost of actually producing and distributing a periodical probably doesn't amount to much.

      Which is what ruins the idea that it should be cheaper to distribute it digitally. If production/distribution isn't where your costs come from, then saving money on production/distribution isn't going to help you much. And if it actually costs more to produce/distribute digitally? You're screwed.

      --
      "Work is the curse of the drinking classes." -Oscar Wilde
    4. Re:Not really a moving narrative by bark · · Score: 4, Informative

      By the way, the magazines that can be had for less than $18 per year are actually subsidized by advertising. The true cost of printing + mailing a full length (around 100 pages / perfect binding / good paper / good printing) magazine is around $5 - 10 per issue per customer. Add in production/design/content costs, and the actual cost of a single magazine can be anywhere from $20 - 30. If you take a look at the sale prices of unsubsidized (ie magazines with no ads) - you can find that the cheaper magazines use poor quality paper, while the really glossy ones (which are usually high art / high fashion mags) costs around $30 per issue.

      Hope this clears up some things.

    5. Re:Not really a moving narrative by bark · · Score: 2

      And yes - this business model makes absolutely no sense in the absence of outrageous advertising prices. Which is why the publishing industry is going down down down.

    6. Re:Not really a moving narrative by Ferzerp · · Score: 2

      I don't know about your last point. You can put arbitrary files on your Kindle by default.

    7. Re:Not really a moving narrative by cdrguru · · Score: 2, Informative

      Nobody except the "high art" magazines are using good paper these days. You are thinking of an era that has long passed us by. Good paper can be seen with Architectural Digest and a few (very few) others. The rest are using the cheapest paper and cheapest printing techniques possible.

      No way does it cost Time $5 to print and deliver a copy. Perfect-bound books can be printed in large quantities for $1.25 each, so I would say Time is probably no more than $0.50 to print and maybe $0.75 to bulk mail it.

  7. Define 'cost' by emagery · · Score: 2, Interesting

    Oh, come on... money is not the only resource by which one survives. In fact, it was never meant to have any meaning beyond measuring the value of resources and labor, period. That considered, resources on this planet ARE finite, and I find much more value being able to inhale my entertainment in digits rather than in paper. I can have a single metal and plastic kindle (which, btw, can be powered off a freakin' hand crank (as I did last night when the apartment complex was without power due to a failed upgrade by maintenance.)) replace 10s of thousands of paper items over the course of its useful lifetime. Me, I like to breath oxygen and have the luxury of, you know... EATING FOOD... things that I cannot take for granted in a world that is well beyond sustainable cultivation practices in most every regard. Define 'cost,' because going without a survivable future is too high a price to pay, at least if you ask me.

  8. Re:Please. by tm2b · · Score: 4, Funny

    Dear Users,

    You are obviously unclear on the dynamics of our relationship.

    Love,

    Amazon

    --
    "It is our blasphemy which has made us great, and will sustain us, and which the gods secretly admire in us." - Zelazny
  9. Not "allowing" anything by SuperKendall · · Score: 5, Insightful

    Too many precedents have been set lately by allowing manufacturers/distributors to control content.

    Amazon (and Apple) are not being "allowed" to control content. They have managed to build something desirable to put content on.

    They have figured out how to make devices on which people enjoy reading content. A great part of the reason WHY people enjoy reading content on those devices is because of the way the systems have been set up - in Apple's case extreme ease of purchase for applications or content you wish to buy, in Amazon's case that plus free always-connected status.

    Neither of those things is free to provide, and content PRODUCERS are welcome to sell content elsewhere or even make competing devices if they so choose. But the truth is there is great value in the path to readers that Apple and Amazon provide, and there's nothing wrong with paying for that.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
    1. Re:Not "allowing" anything by sqlrob · · Score: 2

      What cage is the Macbook Pro in? (other than the battery)

  10. I think the problem is in the 3G... by Anonymous Coward · · Score: 2, Interesting

    I think the problem is in the 3G carriers pricing...

    1. Re:I think the problem is in the 3G... by DrgnDancer · · Score: 2

      I seriously doubt Amazon is paying $150 per GB in 3G charges, or anything close to it. AT&T currently charges $30 a month for a regular old, low volume of sales, consumer to use 5GB a month (Unlimited if you're grandfathered in), I don't they exponentially increase that for a huge, high volume partner. I see several cost centers involved in what Amazon is doing: The 3G on the device, the Internet pipe for their servers, the storage, the maintenance and coding... I'd be shocked if all of that added up to even $20 a gigabyte. I do think this all costs Amazon a bit more than some people are thinking, but nothing like $150 a gig.

      --
      I don't need a million points of light, just two points of multi-mode fiber and a 10 Gig-E router.
  11. I want PARAGRAPH BREAKS and proofreading! by ljw1004 · · Score: 4, Informative

    I bought my first Kindle book last week -- "Selected Stories by Philip K Dick"
    http://www.amazon.com/dp/B0027MJTNS

    I'm very unhappy with the Kindle experience.

    There are typographical errors on 50% of pages (usually missing spaces between punctuation). And most importantly, the Kindle edition simply LACKS those "blank-line paragraph breaks". In the physical copy I can tell that time has jumped forward or we've switched planet by that half an inch of whitespace. But on the Kindle, it all just flows together and I have to slow down, stop, reverse, and figure out that there should have been a break there.

    1. Re:I want PARAGRAPH BREAKS and proofreading! by CRCulver · · Score: 5, Insightful

      The Kindle doesn't lack these things. The edition of the text that you bought lacks these things. Blame the publisher who converted the text into Kindle format, not the manufacturer of the device.

    2. Re:I want PARAGRAPH BREAKS and proofreading! by cruff · · Score: 4, Interesting

      Indeed, even recently published material that you would think would be available in digital format to begin with seems to have OCR style errors in the Kindle edition. Either that or editors and proof readers aren't doing a very good job. Oh wait, that's always been the case for a lot of publishers.

    3. Re:I want PARAGRAPH BREAKS and proofreading! by MikeBabcock · · Score: 2

      You've just learned why the free preview feature in Amazon's store is worth a second glance. Click for a free download of a few chapters of material, read through to verify the content styling and presentation before purchasing. Amazon lets you treat each digital book almost as you would the physical store version, flipping through the first bit before buying it.

      Unfortunately I tend to judge books by the middle chapters when browsing at a brick & mortar store, but still, free preview is a great feature.

      --
      - Michael T. Babcock (Yes, I blog)
    4. Re:I want PARAGRAPH BREAKS and proofreading! by 93+Escort+Wagon · · Score: 2

      Indeed, even recently published material that you would think would be available in digital format to begin with seems to have OCR style errors in the Kindle edition. Either that or editors and proof readers aren't doing a very good job. Oh wait, that's always been the case for a lot of publishers.

      Admittedly, this is subjective--but with the current titles I've read on the Kindle (e.g. The Hangman's Daughter; Steig Larsson's trilogy) I haven't noticed a higher frequency of errors than I've been accustomed to finding in recent (last 10-20 years) printed books. I do find a significant number of errors in the older public domain books that mostly seem to trace back to the version on Project Gutenberg.

      Frankly, I've been of the opinion for the last couple decades that most publishers are no longer employing editors in any meaningful sense. It's anecdotal; but look at the length of current novels versus what was generated 50+ years ago. I remember reading Robert Penn Warren's foreword to his classic "All the King's Men" - he stated his editor had him cut the first several chapters of what he'd written (and BTW he ultimately agreed it was the right call)! I really can't imagine anyone having spent any time proof-reading J. K. Rowling's rather rambling Harry Potter books and coming to the conclusion "this writing is great - no need to tighten any of this up!"

      --
      #DeleteChrome
  12. Nook is no better for end users by Just+Some+Guy · · Score: 5, Interesting

    I'm not sure how Barnes and Noble's pricing structure works, but it's no better there for the end user. For example, here's most of a message I posted on B&N's Nook forum:

    I was playing with the store on my Nook and was really impressed by the magazine prices. For example, I picked "National Review" at random and saw that it cost $3.95 an issue, or $4.95 for a subscription. "Wow," thought I. "These magazines are early adopters, expanding their readership through cheap subscriptions in a digital form that has approximately zero distribution costs. How clever of them!"

    Looking at the bn.com page for the magazine, I found the catch: that's $4.95 per month.

    Holy cow. First, that's $59.40 a year. I could subscribe to the physical version for $29.50 (and apparently get a free book as a gift). Second, I have never, anywhere, ever seen magazine subscriptions priced monthly. They are universally priced annually. Upon reviewing the Nook screen, sure enough, there it is at the top: "Monthly Subscription: $4.95". I missed that in favor of the large-font, glowing "Subscribe for $4.95" button on the touch screen. Tapping that button gives the prompt, 'Would you like to buy "National Review" for $4.95?", again with no indication that you're buying a monthly subscription.

    I love my Nook, but I'd never pay for a small, electronic, black-and-white version of a magazine when I could get the colorful, ergonomic dead-tree version delivered for half the price. Their subscription model is miles away from making sense for me.

    --
    Dewey, what part of this looks like authorities should be involved?
    1. Re:Nook is no better for end users by RyuuzakiTetsuya · · Score: 2

      gasp, the National Review is a giant scam con job?

      where's my fainting couch?

      --
      Non impediti ratione cogitationus.
  13. Re:I 3 my kindle by BitZtream · · Score: 2, Insightful

    Kindle + calibre + torrents = awesomeness. Screw paying for anything.

    So you think we're going to be impressed by the fact that you're nothing more than a petty thief?

    What are you going to do when your boss says 'screw paying for your time'?

    Ignorant shits like you give them a reason to push for DRM.

    --
    Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
  14. Crappy OCR is the bane of e-readers. by wiredog · · Score: 3, Interesting

    When you read the Note on the Text for the ebook of LoTR, which was excellently done, you see how much effort it takes to get a good copy. "The Victorian Internet", OTOH, is a crappy OCR. Much of the action took place in "Rritain", and sometimes entire words are rendered as "????" when the OCR broke down.

    --

    Best Slashdot Co
  15. Re:...why? by steveo777 · · Score: 2

    Any file transfer done with the Kindle's Wifi connection is free. It's just the 3G data that you'll have to pay for. You get free 3G for browsing, etc. But all the Whispernet services have chareges associated with them. IE, if you email a document to get converted and have it delivered over 3G, you'll have to pay for it. But if you email it and have it delivered by Wifi, no charge. Same with books. The only time you pay a delivery fee is over 3G.

    I email documents that I have to review for work to Amazon for conversion all the time and never pay a cent. I also forward articles that I'd like to read later via instapaper's website. Amazon makes it painfully simple to prevent getting charged for anything by setting a set limit on how much of a bill you're allowed to rack up at any time. Set it to zero and you can't accidentally spend $10. So there really isn't any reason to get bent out of shape. Amazon isn't being (too) evil here. Somewhat like with phone subsidization, they're fronting the cash for your 3G connection, but you only pay if you use it.

    Whether or not it's a fair price should be the question. When compared with, say, a cellular data plan, it's about 3-4x's more expensive per MB. When compared to texting plans? Well, let's say it sits much closer to cellular data fees. It's a convenience charge. It's up to you whether or not you want to pay it.

    (Also, I have a Kindle 3, so I'm not sure what they do with Kindle 1/2 users.)

    --
    This sig isn't original enough, it's time to come up with something witty...
  16. Re:I 3 my kindle by KeithJM · · Score: 3, Interesting

    Ignorant shits like you give them a reason to push for DRM.

    I'm certainly not going to defend the guy who's pirating books, but I don't think this gives an excuse for DRM. Quite the opposite -- this method will circumvent any DRM they apply. I don't want to pirate books. I just want to buy a book and have permanent ownership of it. I want to back up the file and put it on laptop, or ipad, or phone, or even print a copy out if I feel like it. I'm willing to pay pretty much the cost of a hard-copy book to do it. With or without DRM, the publishers already depend on the customer's goodwill to not steal from them. Why don't they try to maintain that goodwill by letting us buy the product that is already available if we were willing to steal it?

  17. They can by SuperKendall · · Score: 3, Informative

    Why can't users just connect to their home network at download the content from the publishers' websites?

    They can. Nothing is stopping anyone from doing that, in fact on a Kindle or iPad you can load PDF or ePub files on it yourself if you like.

    But for the same reason I fly instead of walk to New York, people like to get content through automated feeds and directly on a device wherever they are.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
  18. Re:Cheaper than SMS by NoSig · · Score: 2

    If you take the (almost zero) mass of the electrons that carry the information for SMS messages, you may even find that SMS messages are more expensive per pound than gold. Anything that comes within orders of magnitude of SMS data prices are beyond the pale.

  19. Re:I 3 my kindle by sqlrob · · Score: 2

    Given that he's actually doing it, what's the DRM accomplishing?

  20. Where have you been? by SuperKendall · · Score: 2

    They invented paper?

    Paper is still desirable for content I plan just to read once?

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
  21. Re:I prefer book form for long text, even electron by halowolf · · Score: 2

    Well I own an iPad, and while I can buy books from Apple and Amazon (which I have), I can also load on books and documents from other sources and read those too. In fact there is a document interface in iTunes that allows exactly that.