Amazon & Hatchette

AmazonAmazon is a book seller and a good one, selling a lot of books – both physical and e-books of a lot of books as well.  Hatchette is a publisher of books, that in turn sells books to Amazon, who in turn sells them to us, the end consumer.  Somewhere way on the other end is the authors of the books.  Each entity in this chain gets a small part and there are, to be sure some other pieces like distributors and such.  Recently Amazon and Hatchette have not been able to agree on e-edition pricing…

This has led to an all out war it would seem between the two.  The most recent steps have seen Amazon no longer selling not only the e-editions from Hatchette, but also no longer selling physical copies either.  This is of course the cause of the uproar, at least to the extent that the public has really become aware of the problem – so score one for Amazon on that front.

Amazon has argued that e-books do not cost nearly as much to make (no physical form, electrons are cheap by definition).  The also have a lower overhead, as without the physical form there is no cost for delivery and best a minimum cost for storage, compared to warehouse size spaces for a physical book.  They further say that there is no cost for returns and disposal there of, as there are if a physical book does not sell out, which is often the case.  Because of this, they really want a sub $10.00 electronic of the book – which in theory (and practice) would result in more books sold.

Hatchette on the other hand, skips right past all the cost savings and counters that there are still editorial expenses, both from layout perspective and from the proofing that goes back and forth with a big publishing house.  They further argue that there are marketing expenses that are not being considered either.

Me personally, I think Hatchette is being greedy.  There is no cost comparison at all that can stand when you take the physical form of an actual printed buck out of the equation.  At a lower price point, the book will most likely sell more copies.  Even if it doesn’t though, if a book in physical form cost $10.00 and the e-book cost $1.00 to make per copy (editing and layout included) then the markup is crazy.  At $10.00 the mark up on the e-book is 1000%.  The markup from $10.00 to $19.99 for the physical book, is right at 50%.  Now, if, and that is a BIG IF by the way, the author got the difference in that, I would grudgingly be more willing to agree to that.  The reality is though, the author is not going to much, if any of that difference.  It is the publisher who walks away with an extra bonus.

My opinion, I don’t necessarily agree with the tactics of Amazon – because ultimately the authors are the ones loosing – that at to a lesser extent the public.  Though I guess the public can vote with their dollars at other booksellers, for at least the physical copies.  But I do agree with Amazon thinking the publishing is being greedy and trying to take more than the appropriate share of the pie.

** – Image is Amazon logo.

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