The Oxymoronic Notion of Digital Content: Part II

In the previous post, it was argued that the cost of the content of eBooks cannot be reduced much because the making of it is deeply artisanal in nature. Since content is in no deep sense digital, producing it at a high level cannot be automated, which is where important cost savings could have been achieved if any were possible.

On the other hand, the distribution of eBooks, the part of the publishing process the e-retailers handle, is absolutely digital, already largely automated, and should therefore be much cheaper than it is now. An eBook customer’s order is received, handled, shipped, and the payment processed, electronically. There is very little need for human intervention or judgment in any part of this operation. How then can it be reasonable for Amazon to keep over 50% of the billing?

Amazon justifies their high distribution fee by pointing out that it allows them to drastically discount the price of eBooks, which is a fine thing for consumers. Their policy of passing through to consumers most and sometimes all of the fees they charge publishers is of course a business decision they are free to make. But should these discounts to consumers be financed by distribution fees which, in the case of indie publishers, are outrageously in excess of Amazon’s costs?

If the free market is allowed to work, competition will squeeze down the price eBook distributors can charge for their services to an amount that bears some relationship to the cost of providing those services. If the free market is allowed to work. In the long run, even the small fee IPG now charges may begin to seem like too much. If a bricks-and-mortar bookstore with all its high overhead expenses can make a profit buying its stock at a 46% discount from list price, an eBook reseller certainly should be able to thrive on a much, much lower margin.

Good book content, not being in any important sense digital, is not going to get much cheaper. The distribution of eBooks, however, is profoundly digital in nature and at the moment grotesquely overpriced. The distribution channel, not the process of content creation, is where legitimate eBook cost savings can be found.

Curt Matthews
CEO, IPG/Chicago Review Press, Incorporated.

Curt Matthews is the founder and CEO of Chicago Review Press, Incorporated, which is the parent company of Chicago Review Press and of Independent Publishers Group (IPG), the first independent press distributor and now the second largest. Curt has served on the Independent Book Publishers Association (IBPA) board and has also served as its president.