InsideMobileApps InsideSocialGames 10,000 Words FishbowlNY FishbowlDC LostRemote TVNewser TVSpy AgencySpy PRNewser MediaJobsDaily UnBeige

Expert Explains Why E-Books Are So Expensive

j0396222.gifWhat’s a fair price for a digital book? Following GalleyCat’s ongoing discussion of that million-dollar question, one e-book insider wrote in with a few theories about why these new books cost so much.

Here’s our expert’s breakdown of the average book’s cost to distribute and sell online: “The large publishing houses’ cut is generally 45-55% of the book’s list price (this is split with the author whose cut is 15% of list price). Distributors are generally taking 10% or more of list price. Amazingly, the less expensive the book, the distributor cut can grow pretty dramatically because almost all distributors include a minimum charge. DRM providers are generally taking 3-5% (and in the case of less expensive books even more) of list price. The credit card processors, even with micropayments, take 3-6% of the sales price.”

Taking those numbers into account, our expert concluded that these overhead costs will keep driving e-book prices higher and hurting e-book retailers:

“When 65% of list price is already spoken for by the publisher, the distributor, and the DRM provider, there is not a whole lot of room left. I’ve heard that the average discount on eBooks is 15%. The only person who feels the pain of that 15% is the retailer. So when you add in (lets use a round number) 5% for credit card processing, you are talking about a best case 15% margin on eBooks. Add in the costs of support personnel and a general staff, you’ve got to sell a lot of books to even break even as an eBook retailer.”

Mediabistro Course

Writing Outside the Mainstream

Writing Outside the MainstreamStarting September 18, build your freelance career in African-American, Latino, or LGBT publications! Using a combination of writing exercises and targeted research, you'll learn how to generate salable story ideas, write pitches, build relationships with editors, and position yourself as an authority in your market. Register now!