Tuesday, April 6, 2010

Paper, Printing, and the iPad

Here's a good overview article on what the iPad (and other e-readers like the Kindle) means in the big picture of publishing. The author clearly summarizes this macro-fact: the biggest expense in paper publishing products (books, newspapers, magazines) are printing and shipping. HUGE amounts of energy (i.e., money) are expended every 24 hours to produce a product (newspaper) that is thrown out at the end of the day! And the whole thing is repeated every 24 hours, world without end. That's amazing. And the same for magazines like Time and Newsweek, except the lifespan is seven days instead of 24 hours. (Books obviously have a lifespan measured in years, so the cost is more gently spread out.)

But think about buying a book for an e-reader. One second before you push "Buy" on your computing device, that copy didn't exist. It is instantaneously generated from an existing digital master—like a cell replicating—and downloaded to your device at practically zero cost to the seller. The more copies sold, the cost-per-copy (web hosting the master copy, tech support, etc.) keeps going down.

While I lament the direction this is going for books, I can't argue with the premise. When you eliminate production and shipping costs, the profit margin per copy for e-books approaches 100 percent after the cost of creating the original. The only good side is that, while Apple and Amazon are currently charging prices for e-books approximately equal to hard copies, this ruse will quickly be realized by buyers and competitors will step in, selling the e-books for less. After all, there are plenty of companies who would be happy with, say, a 50% profit margin instead of a 95% profit margin.

Publishing is changing before our very eyes—literally.

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