People buying Kindle ebook readers don't translate into ebook sales, according to Cnet.
When Amazon launched its ebook reader, it claimed the gadget would mean the end of old style ink and paper books. However, while the use of ebooks is increasing, it's looking like punters are not interested in the type they actually have to buy.
The list of 'best-selling' Kindle titles is dominated by free books such as public domain copies of "The Adventures of Sherlock Holmes" and "Pride and Prejudice".
What this seems to be saying is that Amazon's customers think that $11.99 for new releases and best sellers is too much to pay for an ebook.
In turn, this has some observers wondering why the price is so high and the answer is actually historical. If a book costs $18 on the shelf, it would probably cost about a $1.80 to make, the writer would get less than $1.80 in royalties and the publisher would collect about $5.50 for profits, marketing, administration and editing. The rest of the money goes to pay a distributor to get the books into the shops.
But Amazon is not a publisher, it is a distributor and it collects between 50 and 60 per cent of the final book price. While the book publisher would probably be happy to sell an ebook for under $10, Amazon would be losing a huge wad of the money that it would be collecting from distributing traditional books. Amazon seems to have addressed this problem by keeping the price of ebooks close to the levels of hard copy books in the hope of getting the best of both worlds.
But publishers are reportedly starting to become dissatisfied with Amazon's approach. The recent recession has bought many distributors crashing to the ground. Book shops are unable to pay the high margins that distributors have demanded, and many have closed. Amazon on the other hand, which has a fraction of the costs of a traditional distributor, has thrived.
Now publishers are starting to ask themselves, why do we bother with distributors, particularly when it comes to ebooks that we could sell ourselves?
All it will take is a publishers' agreement, a set of standards and a tame manufacturer of ebook readers and Amazon's Kindle experiment could be toast.