The rise of eBooks and the myth of affordability

Major drum roll from the guys at Amazon.com for their announcement that “Amazon.com customers now purchase more Kindle books (eBooks) than hardcover books.” The group went on to claim that for every 100 hardcover books sold, it has sold 143 Kindle books, and also announced that Stieg Larsson, author of the Millenium Trilogy, has sold one million Kindle books.

The statistics given out by the giant online retailer don’t look quite so amazing when put in proper context. In fact, quite a different story emerges that indicates the traditional publishing business is unprepared to embrace the new dynamics eBooks bring to the market.

Amazon refers to statistics released by The Association of American Publishers that shows eBook sales grew 162.8 percent in May and are up 207.4 percent year-to-date (in the US of course). While the growth stats are impressive, closer scrutiny of the figures provides a good dose of reality.

In the month of May 2010, eBooks had sales in the US to the value of $29.3-million. However, adult hardcopy sales stood at a whopping $138.5-million and adult paperback sales at $110.7-million. Then, add in the $58.1-million for hardcover children’s sales, the $39.9-million for children’s paperback sales, and the $40.1-million for religious books sales. The list goes on.

Tally it all up, and it would put eBooks at $29.3-million vs. printed books at $667.2-million for the month of May in the US of A.

So in a nutshell, printed books still outsell eBooks by a mile and then some in a country with plenty of broadband and an established online shopping culture.

The impressive growth stats seem to stem from a combination of lower prices for eBook reading devices, as well as an increase in publicity around these devices. Publishers Weekly reports sales for the much-anticipated and much-hyped Apple iPad stood at 3.27-million for the period April through June.

If not quite the revolution Amazon’s spin doctors are selling, eBooks are definitely on the rise. Still there does not seem to be much monetary incentive to buy them – a look at local retailer Kalahari.net shows it will cost less to buy Stephenie Meyer’s series of Twilight books in print than in digital format. That even factors in postage! On Amazon you can buy a new paperback copy for $6.05 while the Kindle edition retails for $2 more.

Pricing is set by publishers who are definitely failing to pass on savings in production and distribution costs to retailers, and ultimately to you and me. Surely if you can turn a profit at $6.05 on a printed copy you should be able to turn it on a digital copy, minus the percentage you would have spent on printing and distribution?

It should serve as a warning shot to publishers if their writers are playing with online distribution models by themselves. Author Stephenie Meyer recently released “The Short Second Life of Bree Tanner: An Eclipse Novella” for free online for the month of June to July 5th. If you missed it, you can still get it for $7.45 for a printed copy or $11.99 for a Kindle copy from Amazon. Spot the bargain if you can.

Publishing’s distribution model is changing, but its business model has yet to catch up.

Follow Manson on Twitter @marklives