Today’s New York Times reports an astonishing fact: Book publishers wholesale their ebooks to Amazon for precisely the same price as their paper books. Amazon loses money on every ebook for the Kindle they sell because publishers don’t discount zero-cost ebooks.
Apparently, the publishers don’t count the paper, storage, inventory, shredding and shipping expenses in their cost calculations.
Either that, or they own a tree plantation or a printing plant.
And of course, they own neither.
Penguin has reported that e-book sales from the first four months of 2008 have surpassed the house’s total e-book sales for all of last year. According to the publisher, the spike is “more than five times the overall growth in sales, year-on-year, through April 2008.” Penguin Group CEO David Shanks said he attributed the jump, in large part, to the growing popularity of e-book readers.
What are publishers thinking? It’s a nascent market, don’t kill the golden egg laying goose.
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I would say it is completely unfair towards the e-book retailers and other service providers not to either discount the books or to provide a good margin on every e-book. Doesn’t the normal rule of any business say this? Going by the Penguin’s statement, it is clear that the e-book sector is growing at a leaping rate; it is all the more unreasonable to ignore the future and to act so discriminately against e-book partners. It is definitely like, as someone has put it – trying to kill the golden goose to get all the eggs at once. The publishers must realize this and nurture this nascent business form.