Originally Posted by vinea
...That article also lists the cost estimates from other sites like Bookfinder:
Book Retail Price: $27.95.
Retailer (discount, staffing, rent, etc.) $12.58. Thats 45%.
Author Royalties $4.19. Exactly 15%.
Wholesaler $2.80. Exactly 10%.
Pre-production (Publisher) - $3.55. Thats 12.7%.
Printing (Publisher) $2.83. Translates to 10.125%.
Marketing (Publisher) $2. Thats approximately 7.15%.
Don't like these numbers? Google up some alternatives and we can discuss...
Happy to go with these numbers, time for some sums...
In order for the publisher and author to keep the same amount of cash from that $27.95 book as an eBook sold using Apple's existing 30/70 revenue split the cost to the user would be $13.91.
That's a little less than 50% of the hardback RRP (and yes, I know a huge amount of books are discounted, but it's still a saving to the reader).
That's the royalties, pre-production and marketing elements making up 70% of the sale price.
Whilst actual costs per book for the pre-production and marketing will vary dependent on volume sold, it is fair to say that on average if the price point is lower then more units would be sold, so those costs would reduce on a per unit basis. Basically (for the sake of simplicity), let's just say they remain at a similar % level of the cost of sale, regardless of the sale price...
So when the softback comes out, there's no good reason to thing that the e-quivalent iPad book wont cost 50% of that RRP as well.
The publishers see the same return on their investment, the authors see their royalties retain the same cash value and increase as a % of the sale price, and I get cheaper books.
As for Amazon losing money on every book sold, it is possible (I guess due to the wireless modem delivery system), but Apple make a slight profit out of serving up larger files at lower prices, books are gonna make them money.