Thanks to e-books, publishers’ revenues are down but profits are up
March 31, 2012 | 9:31 pm
The other day, I mentioned a survey showing that the growth of e-books has reduced the overall value of the book publishing market in the UK, and wondered what the figures might look like for the US. While the figures don’t measure precisely the same thing, Laura Hazard Owen reports on PaidContent that some figures released in publishing conglomerates Bertelsmann (Random House) and Pearson (Penguin) show that, thanks to the broad adoption of e-books, publishing revenues are lower but profits are higher.
In other words, publishers are making a better profit even though they’re taking less money in, because they’re paying less money out in costs. But it’s not that e-books are cheaper to make that seems to be driving these savings, however—it’s the fact that, unlike paper books, they can’t be returned to the publisher, with the attendant warehousing and shipping costs that brings. (Though presumably some unspecified “continued cost-cutting measures” have been helping, too.)
Owen hopes that this increased profitability will lead to higher e-book royalties for authors. I imagine consumers would hope that it will instead lead to lower e-book prices for them. Of course, what it’s likely to lead to is higher share prices for the conglomerates and no other changes whatsoever.