Is Amazon's Kindle a harbinger of doom for the hardcover? Is Apple's iPad? These and other pressing questions continue to vex the world's brightest minds.
Digital books don't get returned.
But when it comes to the question of, "Is publishing going to have to change or die" the answer should be simple.
Ken Auletta of The New Yorker just wrote a story about the future of books. In it, he broke down where the money goes, and revealed why the current publishing model is bound to morph.
Traditionally, publishers have sold books to stores, with the wholesale price for hardcovers set at fifty per cent of the cover price. Authors are paid royalties at a rate of about fifteen per cent of the cover price. On a twenty-six-dollar book, the publisher receives thirteen dollars, out of which it pays all the costs of making the book. The author gets $3.90 in royalties. Bookstores return about forty per cent of the hardcovers they buy; this accounts for $5.20 per book. Another $3 goes to overhead costs and the price of producing and shipping the book--leaving, in the best case, about a dollar of profit per book.When one-fifth of your take goes to returning the unsold merchandise, chances are you aren't built to last.