for free in the Kindle store, but most newer books aren’t nearly as cheap in digital form as you probably expected. How can publishers charge almost as much for a handful of bits as they do for paper, ink, glue, printing, warehousing, shipping, shelf space, and everything else that goes into producing meatspace reading material?

Flame off: Fat-cat book pushers aren’t to blame. Not entirely.

“People vastly overestimate how much a publisher saves,” says Erik Sherman, an analyst and author who studies ebook economics. Turns out, the physical aspects of book production can account for as little as 15 percent of the cost of the title. The rest can be divvied up among the author, editor, designer, marketers, publicists, distributors, and resellers. A lot of fingers dip into that $14.99 money pie before the house takes a slice.

“People would have heart attacks if they knew all the costs associated with digital publishing,” says Maja Thomas, senior vice president of the Hachette Book Group’s digital division. Tacking an e onto a book requires antipiracy software, digital warehousing, extra legal support, and programmers to adapt each title for Android, iPhone, Kindle, and all the other formats. That’s on top of the regular costs of turning a manuscript into a finished product.

But don’t go hug a HarperCollins exec just yet. “Publishers do price ebooks a little higher than necessary, because they’re concerned about devaluing people’s perception of books,” humor writer Larry Doyle says. “They’re worried that if they sell the digital editions for too little, they’ll have to lower prices for the paper editions as well, which would undercut their main source of revenue.”

Other outlets are already proving they can sell books for less. Apple recently opened the door for authors to sell their work directly to readers through its iBooks store. Apple takes its standard 30 percent cut, leaving an unheard-of 70 percent for the author. (Amazon offers a cut-out-the-middleman option as well but gives as little as 35 percent to the author.) Sure, the quality of the product might suffer, but with a juicy margin like that, it’s not hard to imagine well-known writers going rogue.

It’s too early to tell whether self-published, digital-only titles will have any effect on the publishing industry. For now, only an estimated 11 million readers choose ebooks anyway. But as more bibliophiles abandon pulp for pads, publishers will have to figure out a pricing scheme that works better for everyone. If they don’t, Doyle says, “they’re screwed.”

Authors: Rick Broida

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