According to the New York Times, Amazon is paying the wholesale (paper) price to publishers for its Kindle-compatible ebooks.

Publishers say that they generally sell electronic books to Amazon for the same price as physical books, or about 45 percent to 50 percent of the cover price.

Brilliant! Obviously because this business model worked out so well for the music business!

Seth Godin wonders what's in it for the publishers (other than obscene profit margins), pointing out that book publishers aren't in the tree-growing or papermaking or offset printing or shipping businesses. He concludes,

Many businesses act as if they have a stake in their suppliers and other vendors. Instead of scaling the part of their business that can move quickly and well, they defend the part they don't even own.

This is somewhat out of left field, but Bill Steigerwald comes to the same conclusion about mass transit:

For most transit agencies in the United States, if they were to write a mission statement that is reflective of what they do, they would indicate that they exist for the purpose of serving their employees and vendors.

You could say the same thing about public education. Steigerwald's article also contains a fascinating short history of the Tokyo subway system (profitable, largely privately-owned, answering to supply and demand).

UPDATE: Seth Godin adds in a subsequent post, "The pricing of [Kindle] books is whacked. $9.95 is a publisher-friendly price, not an author-friendly or reader-friendly price."

Labels: business, japan, kindle, publishing