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E-Book Pricing for iPad: The Math

1 March 2010 1,324 views No Comment

We had discussed the pricing of eBooks at length some time back – The economics behind Apple’s iBookstore. From a publisher’s point of view, the NYTimes makes a case today. Taking the case of a $12.99 eBook, the split they come up with is: $3.90 for Apple, $9.09 for the publisher. The author royalty is calculated as $2.27 to $3.25. This leaves $4.56 to $5.54 for the publisher (assuming 50 cents for digitising the book, and 78 cents in marketing costs).

Source: Math of Publishing Meets the E-Book

This comment summarizes the discussion very well:

“If you want bookstores to stay alive, then you want to slow down this movement to e-books,” said Mike Shatzkin, chief executive of the Idea Logical Company, a consultant to publishers. “The simplest way to slow down e-books is not to make them too cheap.”

Maybe, the publishers should learn from Apple, on how to manage product cannibalization.

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