Will the Death of Print Destroy Your Profit Margins?

Monday morning, NY Times reporter Edward Wyatt filed a BookExpo dispatch centered around ebooks which notes, that “[Amazon.com] currently sells most of its Kindle books to customers for a price well below what it pays publishers, and they anticipate that it will not be long before Amazon begins using the Kindle’s popularity as a lever to demand that publishers cut prices.” As he later elaborates:

“Amazon sells most Kindle books for $9.99 or less. Publishers say that they generally sell electronic books to Amazon for the same price as physical books, or about 45 percent to 50 percent of the cover price. For a hardcover best seller like Scott McClellan’s What Happened… that would mean that Amazon appears to be selling the selling the book for about 25 percent below its cost.”

Wyatt’s article got Seth Godin thinking about the publishing industry’s attachment to the trees: “The fastest-growing, lowest cost segment of the business, the one that offers the most promise, the best possible outcome and has the best results… is causing unease!”

I don’t have any real answers here, other than that this underscores the industry’s ongoing search for a new business model. So let’s just open the floor to your comments…

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