So Amazon have released another of their rare statements regarding their ongoing dispute with giant legacy publisher Hachette.
So far, Hachette and a group of rich authors called Authors United have done a pretty good job at spinning the argument to make Amazon the big bad guy for controlling the terms in the bookstore they own. The one they built from scratch. To serve the digital publishing industry that they pretty much built from scratch.
The post does the maths for those too lazy or uninterested to think it through themselves, and it’s pretty damning.
On one side: Hachette and their quest to keep ebook prices high, and the percentage to their authors low.
On the other, Amazon, that is arguing for ebook prices under $10, where they sell more, bring in more total revenue for everyone, and keep prices lower for readers.
No brainer right? Well, not for Hachette, apparently.
Barry Eisler has done a good job of summarising the two stances, so I’ll quote quoting Amazon:
We’ve quantified the price elasticity of e-books from repeated measurements across many titles. For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000.
The important thing to note here is that at the lower price, total revenue increases 16%.Barry: This is what Hachette opposes. This is what the “Authors Guild” and “Authors United” are fighting to prevent. More money for authors.
Because although the legacy industry offers various value-added services (at least in theory), the only critical service they’ve ever offered — the only one an author couldn’t get any other way — has always been paper distribution.