

Bezos defends model of keeping 65% of (kindle) book revenue - credo
http://www.nytimes.com/2009/12/06/magazine/06fob-q4-t.html

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tokenadult
"New York Times: What do you say to Kindle users who like to read in the
bathtub?

Bezos: "I’ll tell you what I do. I take a one-gallon Ziploc bag, and I put my
Kindle in my one-gallon Ziploc bag, and it works beautifully. It’s much better
than a physical book, because obviously if you put your physical book in a
Ziploc bag you can’t turn the pages. But with Kindle, you can just push the
buttons.

New York Times: "What if you dropped your Kindle in the bathtub?

Bezos: "If it’s sealed in a one-gallon Ziploc bag? Why don’t you try that
experiment and let me know."

A good interview for giving a glimpse into the personality of an entrepreneur.

~~~
fnid
That follow up question and the end of the article makes the author look like
a complete bozo. They should have edited it out.

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sachinag
I disagree. The point is to get an insight into the subject. The last question
and the way that Jeff concludes the interview is very helpful there.

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teeja
Yeah it sure does. Why do you keep so much? Because I can.

I want to stick a picture of Bezos in a zip-loc bag. And then drop it into the
toilet. And then send Jeff to the beach.

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mattmaroon
"There are more items in the book category than there are items in any other
product category. One of the things it was obvious you could do with an online
store is have a much more complete selection."

Interestingly books are perfect for online sales for other reasons, they have
a high markup and a high price to weight ratio. The former made them easy to
discount beyond B&M bookstores (who, by the way, would happily order you any
book they don't have in stock and get it rather quickly, even in 1994) and the
latter made the cost of shipping not untenable.

Books in 1994 (and even today) were one of the few things you could sell for
30% less than the chains, add in $2 for shipping, and still both make a profit
and decrease the cost for the consumer. There really aren't many things that
fit that description, and I think it's why they were online shopping's first
killer app.

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aaronblohowiak
... and you don't have to try them on.

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MikeCapone
It might be more than the amount of royalties that most paper book publishers
give, but distribution costs are so much lower with e-books that they could
probably afford to give even more than 35%.

Right now they don't have to, but as competition heats up for e-books, it
wouldn't be surprising if royalties went up (unless there's a cartel
situation).

~~~
jbellis
Book publishers also provide things like design, layout, and editing.

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MikeCapone
Anyone knows if the people who are self-publishing for the Kindle (basically
uploading the finished product on Amazon) are getting more than 35%?

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anigbrowl
Well, I'm not 100% sure he's referring to the Kindle here. Amazon Also
operates CreateSpace where you can send them your text/ music/ movie plus
cover artwork and have them turn it into a book/ CD/ DVD, which can be sold
either through Amazon.com or your CreateSpace 'e-store' - not very
customisable and crap looking, but you do keep a larger share of the revenue.
If intended for sale, copies are then produced on demand, as they are ordered.

I have used the service a few times for short runs of things that needed a
professional look but only a small number of copies, and the quality is good.
There's an adjustable pricing scale whereby the printing/duplication cost is
fixed and then Amazon takes their large percentage based on the profit above
that, so it's less good value than having your copies pre-printed and selling
them yourself (eg CDs if you are in a band), but being able to offload all
your fulfillment and distribution to a retailer with very high brand integrity
(ie that so many people trust with their payment info) is worth it in my view.
If you have a niche market and know how to reach it, it may be a better deal
than trying to interest a publishing company.

Incidentally, it's also a handy thing for cheap specialist printing, eg
documentation or a pile of disparate research material that you'd like to have
in book form but may not need that many copies of, for which a regular
printing company would charge a ton in setup costs.

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psranga
With a physical book, since it (1) costs money to make the book, and (2) rapid
iteration of content is difficult, there's a huge infrastructure (editors,
agents, proofreaders) to select the "good" from the "bad".

With electronic publishing, you just let the crowd do the selection. And it
costs virtually nothing to store each additional book.

I hope we move to a web-like world for e-books where an author can publish and
charge for a book after eliminating the middleman.

Think about it: without the "Amazon tax", e-books would cost only 33% of what
they do now (eliminating Amazon's cut).

Also the percentage-based commission makes no sense. It costs Amazon the same
to store/tranfer a book that costs $100 and a book that costs $10. A $1/book
"shipping fee" would be more reasonable.

The situation is ripe for an execution-oriented company like Google to move in
and kick Amazon.

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ippisl
I think it's the perfect time for authors to organize and to do something to
push the future book platform to their direction.

If they organize they would have a huge marketing clout , and combine that
with some company that works with some business model that they like , and
offers distribution etc... could make a very powerfull offer.

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DenisM
My guess is that book publishers will get roaylly pissed if ebooks got too
disruptive (too cheap or too much oryalty going to authors) and then would
strong-arm writers into not doing any digital sales at all.

It's better to wait till more books are sold in electronic form than dead-tree
form and then dictate your own conditions to publishers.

At least that's what I want to think, Bezos seems like a nice fellow so I feel
like finding a good reason for him keeping 65%.

~~~
pwnstigator
Digital publication is going to kill the B&M industry, at least as it exists
now, anyway.

The purpose served by the publishers, for the author, was to invest in a
young, talented author's career. Publishing houses knew that they were losing
money, but the purpose of doing so was to build a relationship so that, once
the author had built a reputation and was a money-winner, the investment would
pay off.

Now, advances are at McDonalds rates and publicity budgets are nonexistent.
The only thing they have to offer is distribution, and that can be handled
electronically.

~~~
njharman
I disagree the B&M's provide services that people like. Browsing, reading,
social space. Been to an Barns & Noble lately, very much like Starbucks. In
that they are selling a lifestyle and environment more than they are selling
coffee. When books are distributed and produced digitally they will get POD
and service the niche that still wants paper.

Publishers and distributors, they are Dodo's. They cost more and aren't as
good as digital distribution/production.

~~~
potatolicious
> Been to an Barns & Noble lately, very much like Starbucks.

Question: why can't Starbucks replace them then? It's a serious question - why
can't Starbucks' have a e-book kiosk, where you can browse and buy books for
your Kindle/Sony Reader/Nook/etc? Seems like that would include the best of
both worlds - the environment to socialize and read, and the efficiency of
digital distribution.

~~~
ryanwaggoner
Why on earth would I want an "e-book kiosk" when I can browse and instantly
purchase books on my laptop, my phone, and my Kindle.

Effectively, the Kindle makes everywhere a bookstore.

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richardburton
_And Amazon keeps 65 percent? That sounds like a lot. Does it? You’re an
author, what does your royalty check look like? Are your royalties 35
percent?_

I think it'd be incredible to allow more authors to self-publish on an
entirely open e-book platform. We've started to see this move in the music
industry (e.g. - Nine Inch Nails grossing $750k from their own music sales -
<http://www.techdirt.com/articles/20080304/162842435.shtml> ) and I think it
could be coming to publishing too.

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Eliezer
Is it possible to sell PDFs (or some other format) on your own website, and
let the users download them onto their Kindles directly?

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hexis
Sure. PDFs are natively supported in Kindle 2's and DXes. You can convert
PDF's to a supported format for older Kindles. Also, you can sell .mobi files
and they work just fine on any Kindle.

Once you have a file, you can put it on the Kindle over USB for free or you
can send it to an email address Amazon gives you for file transfer (15 cents
per some amount of file size...I forget how much). The Kindle store uses DRM,
but the Kindle certainly doesn't require it on the files it will let you read.
It's like an iPod in the pre-iTunes Plus era.

~~~
ryanwaggoner
Just a note: PDF's are not natively supported on the Kindle 2, just the DX.

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kogir
The latest firmware addresses that. Only the original kindle lacks PDF support
now.

[http://www.amazon.com/gp/help/customer/display.html?nodeId=2...](http://www.amazon.com/gp/help/customer/display.html?nodeId=200324680)

~~~
ryanwaggoner
Oh nice...I need to update :)

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protez
The authors get the pure profit of 35% from "revenue", not "profit." That
seems huge. That means the profit of those authors may be better than Amazon,
which has to cover the expenses on development, distribution, marketing,
maintenance, or any other costs relevant to Kindle business.

~~~
teeja
Authors usually have houses and bodies and cars to feed, educations to pay
for, possibly children, and no social life for months at a time. Their
creativity and life are invested in their work.

Amazon invests in a web page (form) for the author and supports that with the
same software and hardware that sells diapers and plastic race cars. Anyone
could do that, but Amazon's just _prominent_.

Repeat: _anyone_ could do that ... and giving Amazon a run for their money
would make them underdog media darlings. I'm fairly sure you could open a new
"DIY author" bookstore on _Twitter_ and make pretty decent money at it,
depending on what authors you could get on board.

Bezos appears to be getting cocky. He's about due to become the Gates of
online retailers.

~~~
protez
Yes. You're right. Anyone can copy some webpages overnight and sell every kind
of stuff tomorrow. That's the very nature of online retailers. However,
because of that homogeneity, prominence is all that matters. People can
remember only one or two places of a category as they're so similar to each
other. That's why Amazon can charge that fee and authors and publishers are
happy to bring their books in Kindle editions. Plus, it's distributing all the
platforms necessary to read and purchase the books. In essence, it created a
new market. Amazon definitely deserves its current margin and I don't think
most of authors can be better off with "DIY" stuff even if that means 99%
margin. If not, Kindle business is total nonsense and couldn't come into the
current status at all.

