A Failure of Logic in Legacy Publishing

So I try to keep up with publishing news, if only because what's happening in the industry has a direct impact on how I sell my books. I need to keep abreast of what's going on if I want to be successful. That's true of any business.

One thing that we keep hearing over and over again when publishers try to defend their $12.99, $14.99 and $15.99+ ebook prices is that ebooks are nearly as expensive as hardcover books to produce and sell (because the physical book represents a very small percentage of the total cost), and therefore they need to price ebooks high if they want to remain equally as profitable.

I'm gonna call bullshit on this one.

First of all, I'm not talking about publishers who are selling their ebooks for $9.99. Those are the smart legacy publishers who know they can cash in on the marketing machine they have access to, and the names of their authors, to make more money. It's good business.

I'm talking about those publishers who sell their ebooks for more than $9.99.

Let's do the math real quick.

A publisher selling an ebook for $9.99 on Amazon, taking advantage of their 70% royalty option, is going to make $7.00 on each sale.

A publisher selling an ebook for $14.99 on Amazon, is only getting 35% of each sale, making only $5.25 on each sale.

A publisher would have to sell an ebook for $19.99 to make the same profit as a $9.99 ebook. And you're telling me they'll sell the same number of copies?

Like I said: bullshit.

Publishers prices ebooks high to protect the market share of print books. Because they know how to market print books. It's where they have a distinct advantage over indie publishers. They know how to get books into stores, and they know how to tap into readers of paperback and hardcover books.

Ebooks are like the wild west. Indie publishers and authors are on an almost level playing field when it comes to ebooks. And that's threatening to legacy publishers. Suddenly, instead of having competition coming from a handful of other big publishers who do things the same way they do, they've got competition from tends of thousands of little guys who can do pretty much whatever they want in terms of marketing and promotion. Those little guys have no overhead, they have no offices to pay for or employees to pay, and they're much more agile because of it.

So, the next time you hear some legacy publisher claiming that they're ebooks are priced at $12+ because their costs are high, call them on it. Call it out for the bullshit story that it is.