When I lived for several years in the Philippines I got used to drinking soft drinks out of plastic bags or else having to remain at the stall or roadside shop and drink the contents there and then. Taking the bottle away was unheard of because there was a deposit on the bottle and if the vendor was missing any, they had to pay for them. While drinks could be obtained at just about every other house along the road (known as ‘sari sari’ stores, most homes had one to augment income) they always sold the drinks in glass bottles, never in cans. Cans were only available at the swanky gas station chains and city stores. Even beer was sold at a certain price with an allowance made for the bottle in the price if you didn’t have empty bottles to swap for the full ones. Not so much a case of recycling enforced but simple economics. The containers were worth more than the contents.
When a small bottle of soft drink (soda) cost P7, or say 20 cents, the largest part of that cost would be the bottle and the distribution required to get it to the consumer, over a nation of 7000 islands. There had to be a margin of profit in that price, for both the retailer and the manufacturer and possibly also for a middle man agent. How much did the contents cost then? Obviously not much and much less than the bottle and other overheads. A similar amount of soft drink in a can, sold through other outlets, would be quite a bit more expensive, after all the container was then thrown away (although I guarantee all would be recycled and made use of by someone) and it was more prestigious to shop in a 7/11 than the local sari sari. Even the glass bottles had more than one use with 1 litre softdrink bottles used to sell oil and gasoline by roadside vendors. My wife’s favourite aunt actually works in a factory cleaning the bottles before they are returned to the soft drink manufacturer, so there is another pair of hands that has to get paid from that P7 (now P10 but then inflation hits us all, everywhere sooner or later).
So what is the point of this as far as eWriting is concerned? The thing is, we still value the container more than the contents when it comes to books. There are more costs associated in printing ink onto a collection of paper pages and binding them together than there is expense incurred in producing an electronic book. Nevertheless, we still, as a society, seem to think the same words printed on paper are worth more than if we were to read them on a screen or some other device. If the contents cost so little compared to the container and the process required to get the container into the customer’s hands and then back to the factory to be refilled, like with the softdrinks in the Philippines, then I would understand the mindset. The truth, however, is that the portion of the cost of a book that is directly related to the manufacture of the book and even the distribution, is not even half the RRP (recommended retail price). Printing the book accounts for around 10% of the rrp. Here is a break up I found at the blog ‘Kindle Review-Kindle Fire Review, Kindle 4 Review’
The very simple break-up is -
- Author – Creation. 8-15% Royalties.
- Publisher – Being the Curator, Polishing, Manufacturing, Marketing. 45-55% (includes Author’s Royalties). Note that Printing accounts for just 10% of the book price.
- Distributor – 10%.
- Retailers – 40%.
I strongly suggest when you finish reading this you read that blog because it provides a superb overview of the costs of publishing a hard copy book. The contents of the book are more valuable than the container, if we look just at the physical cost of paper, ink and the process of putting the two together. Yet factor in the other expenses such as distribution, marketing, overheads and salaries and the ‘contents’, the bit that represents the creativity and hard work of the writer, is a fairly small segment of the overall cost to the consumer. The writer is lucky to get 15% of the rrp and often receives much less and of course, advances aside, if the book doesn’t sell they don’t make money.
Now we come to eBooks which have no paper and ink needed to be bought and turned into a book. There are still overheads and expenses but surely these are far less than the hard copy version of the same title. So how much is the eBook version worth? The container, as such, is virtually nonexistent. Of course we could say the Kindle or iPad is worth $X but then you can read 3,500 books on my Kindle. This works out about five cents a book, plus the power needed to read the thing, say ten cents a book and that is being generous. So if the book costs $2.99… that is a heck of a mark up. Or is it? You have to sell a lot of books at that price to make a million or two. Mind you, if that book retailed at say $29.99 and you, the writer get 8% of that, that’s just $2.39, about the same as what you get from the eBook. True you need to cover the marketing and promotional costs but putting the book up on Amazon.com is free and so are Tweets and other social media methods of marketing. Even allowing for your ongoing Internet expenses it is still a lot cheaper to sell an eBook at three bucks than to chase a big publishing house to sell your book for about the same return.
Now we just need the reader to value the contents of an eBook as much as they do the container or a printed hard copy edition and we have a revolution on our hands.