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Posted on February 15th, 2011 by Barry Collins

The true cost of publishing on the Amazon Kindle

Amazon Kindle in hand

Ever wondered why newspapers and magazines published on the Amazon Kindle rarely contain photos? I’ve downloaded several copies of The Times and The Telegraph on my Kindle, and you’re lucky if you get more than one photo in the entire newspaper. The only periodical that appears to include photos or diagrams with each article as a matter of course is the magnificent Economist.

True, the 16-level grayscale screen hardly lends itself to stunning photography, but newspapers prospered for a century or two with black-and-white photos, so it’s hardly a problem unique to the Kindle.

The answer lies buried in the terms and conditions for Kindle periodical publishers. Scroll down to the section where it reveals how the revenue for publishers is calculated and you’ll find the devil is most definitely lurking in the detail.

The amount of revenue each publisher earns for their Kindle newspaper/magazine is calculated thus:

(Price – delivery costs) x 70%

“Delivery costs?” I hear you cry. This is the wonderful world of electronic publishing: Amazon hasn’t got an army of paperboys popping the newspapers through letterboxes each morning.

It does, however, pay for “free” 3G connections in the souped-up version of the Kindle, and someone has to pay for that data. And that someone is largely (70%) the publishers, particularly those who want to include anything other than plain text in their periodicals.

Amazon charges 10p per MB for delivery of newspapers and magazines in the UK. By Amazon’s own estimates, a “typical newspaper” with 100 articles and 15 to 20 images would have a file size of between 0.5MB and 1MB – or around 10% of the overall revenue, considering most newspapers sell for 99p per day. It would be an even greater share of the publisher’s profits if users signed up for a cheaper subscription.

For a magazine like PC Pro those costs would be significantly greater. Each issue of the magazine has somewhere around 75 new reviews – each with a picture – plus dozens more articles and features. An issue of PC Pro with around 150 separate articles, and 100 photos would likely incur delivery costs of 50p-60p an issue. We can pop a magazine in the post to subscribers for significantly less than that.

What’s more, Amazon says that “delivery costs apply if we deliver content via a paid distribution method, such as over Whispernet” – which could technically include downloads made over Wi-Fi, which come at a tiny fraction of the cost of 3G distribution. We’ve asked Amazon to confirm if Wi-Fi downloads are charged or not, but the company hadn’t got back to us at the time of publication. (Update: Amazon has got in touch and confirmed that only newspapers/magazines delivered via 3G are liable for the delivery charge.)

Setting the price

Of course, people (with some justification) expect electronic publications to be cheaper than physical magazines/newspapers. But even if publishers were prepared to take a hit on the Amazon delivery costs, they have absolutely no control over how much their newspapers or magazines cost in the Kindle Store.

“Amazon.com determines the Kindle edition price,” Amazon’s T&Cs state. “Publishers will receive an email notification with the pricing details prior to launch of the publication.”

So if Amazon decides to publish PC Pro at the bargain price of £1.99 per issue, not only are we taking the hit on the delivery costs, but we’re severely under-cutting our print magazine too. (Update: And as Dennis Publishing’s chief technology officer reminds me, VAT is charged on electronic magazines, but not on paper.)

Conversely, if Amazon decides to push for maximum profit – The Economist costs £9.99 per month on The Kindle store, almost £20 more expensive over the course of 12 months than a print subscription that also gives access to the digital editions (excluding Kindle) – the publisher gets in the neck from angry customers. Check out the number of people complaining about the price of The Economist on the Amazon reviews, which average at only two stars out of five.

No wonder most newspapers and magazines have decided to play it safe with minimal images, or avoid publishing on The Kindle at all.

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Posted in: Newsdesk, Online business

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20 Responses to “ The true cost of publishing on the Amazon Kindle ”

  1. Melvyn Says:
    February 15th, 2011 at 8:44 am

    What are the distribution costs for the Zinio issue of PC Pro? AFAIK, there are no bandwidth or 3G costs that the publisher has to pay but the reader still pays more than if they buy a subscription to the print edition. You can argue for the convenience of the digital issue but given that it comes without a cover DVD and without distribution costs you’d think the price could be a great deal lower. Or is there another hidden element that I’ve missed?

     
  2. Peter Ward Says:
    February 15th, 2011 at 12:02 pm

    An interesting piece. Very tricky business all round really, as ISPs want a cut, content Publishers need to make a return, and Kindle \ iTunes \ etc also want their share.

    Sadly it seems that Joe Public is the last to be considered by anyone. As ever in our Capitalist paradise: The customer comes last….

     
  3. George Says:
    February 16th, 2011 at 1:00 am

    As the kindle is a black and white device with limited resolution, just how much space would a reasonable number of photographs and graphics, using 4 bits per pixel, need?

     
  4. Dave Lyon Says:
    February 16th, 2011 at 7:45 pm

    It’s only a pricing problem because ‘traditional’ magazines are trying to take a product made to beckon from a shelf and shoehorn it into an electronic device. A lot of those size-intensive graphics are ads that must be included to make up for printing and shipping costs by the publisher.

    This sounds like another industry that’s grappling with change. If there was a different version of the magazine with ad content kept to what was needed and only useful images instead of huge spreads meant to entice someone to buy, that kindle download wouldn’t be as big. You don’t need as many images once you assume that on the kindle the reader has already bought the magazine.

     
  5. Marc Says:
    February 16th, 2011 at 9:06 pm

    @George…
    According to wikipedia, resolution is 600×800 = 480,000 pixels x 4bpp = 1,920,000 bits = 240,000 bytes.
    At 234KB per full-screen image, 50 images per issue (more or less because not all images are full screen), and 1000 subscribers means 11,425 MB of data for that issue. At $0.15 per MB that’s still $1,700 just for 3G charges.

    However, if (price-delivery)x0.7 is what the publisher gets, than Amazon is also paying 30% of the delivery charge as that’s all pre-profit splitting costs.

    Seems fair, but I can understand that at the business level it could make more “cents” to use print media.

     
  6. j Says:
    February 16th, 2011 at 9:27 pm

    Well, the device is 800×600px. If your image adds up to 800×600px, and is a fairly complex (photograph), black and white, mid res jpg or 4bit gif, you’re probably talking 150kb. If it is not very complex (a chart or graph, a lot of whitespace), probably closer to 50kb each.

    So each full-kindle image will cost between 1/2 and 1 1/2 p.

     
  7. Adam Keck Says:
    February 17th, 2011 at 5:18 am

    Amazon charges an ad hoc fee to deliver personal PDFs over Whispernet. Maybe they should charge the publishers a minimal flat delivery charge and charge users an ad hoc fee for 3G periodical delivery. That would cover photo costs for publishers and create incentives for users to use cheaper Wifi delivery.

     
  8. keithrider Says:
    February 17th, 2011 at 9:18 am

    What a disincentive to go green and buy ebooks, etc. Until the cost come down to a realistic level, I will still be buying paperbacks. For the size of a book and the time it takes to download one, its a real rip-off.

    KJR

     
  9. Luke Says:
    February 17th, 2011 at 10:01 am

    @PcPro: The “publishing for the Kindle” attitude seems pointless. You publish for your readers, who will then read your electronic magazine with whatever device they wish. If Amazon is not convenient and I can’t download PCPro from whispernet, well, whatever. Broadband->Calibre->Kindle, or Wi-fi->Calibre->Kindle. Or… magazine in HTML5->tablet? An easy-to-read-in-direct-sunlight screen is not enough to make up for all the kindle’s flaws.
    Advice: stop wasting time with amazon and paper. Go digital and let the kindle die its slow death.

     
  10. Glyn D Says:
    February 17th, 2011 at 10:04 am

    I subscribe to ‘The Times’ on Kindle.
    At a tenner a month, its equivalent to about two weeks of weekday purchasing – but delivered every day, where I am. Even if that is France or elsewhere.
    The lack of pictures, crossword isn’t great, but the economics aren’t in it’s favour.
    What would be interesting would be if they could deliver a ‘fat’ edition if you were on WiFi, and a ‘thin’ edition on 3G.

     
  11. Lance Hayes Says:
    February 17th, 2011 at 10:35 am

    It might be cheaper to post a magazine out but surely it would still be cheaper to send electronically once all the paper and printing costs are factored in?

     
  12. Marc Nicholson Says:
    February 17th, 2011 at 12:34 pm

    Surely the cost of a digital version is almost nil as the printed version is made from the digital version? IE: you need to have a “digital version” to create a paper version!
    I understand that Amazon and the Magazine want to make a profit and cover costs, but if you add that all up it would still be a lot cheaper than paying a subscription fee for a paper copy!! Are the magazines trying to maximise profit at the expense of the consumer, or is Amazon doing that to the Magazine publisher?

     
  13. Stephen Bennion Says:
    February 17th, 2011 at 12:44 pm

    The kindle has highlighted a number of historical issues.

    Royal Mail Postage is subsidised by adverts in the form of generic mail shots, most of which ends up in the recycle bin unread but does keeps a lot of people in a job.

    Newspapers and magazines in print format are zero VAT, electronic downloads of the same magazine will attract VAT at 20% on the grounds you are paying for the convenience of not having to walk into a newsagents to buy what the tax man thankfully doesn’t regard as a ‘luxury’ item.

    Newspapers and Magazines are subsidised by having adverts to ensure what they sell, us the buyer, can afford to pay it. The more adverts and the larger the circulation numbers the greater the revenue they can charge for a given advert which explains why some daily newspapers are given out free. It also keeps a lot of people in a job.

    Remove the adverts from electronic newspapers and magazines and the lost revenue from the removed adverts will push up the cost of the electronic publication. Less get sold and not only are you charged the ‘true’ cost on smaller circulation numbers but you also pay VAT and the ‘delivery’ cost.

    As to the solution – without higher prices and a lot of people out of work I honestly do not know.

    I also like reading from a magazine than of a computer screen I see all day long at work

     
  14. Ralph Hubner Says:
    February 17th, 2011 at 7:27 pm

    Living in Sweden, I cannot get a normal daily paper so I have a subscription to the Independent on my Kindle which I can download at about 8.00am every morning. So very happy with that. Re the absence of illustrations, well, I know what David Cameron looks like, I know where Egypt is, etc, I do not really need a photograph or map to help me understand that. The point is, if the writing is good, are photos all that necessary?

     
  15. Canuck Says:
    February 19th, 2011 at 10:41 pm

    I have an idea — why not publish on the Web? Look it up on your Wikipedia “app” if you’re not familiar with the concept.

     
  16. Bryce Says:
    February 20th, 2011 at 3:54 pm

    I think you have to mostly blame the telcos for this. They charge exorbitant rates for 3G access, and that cost has to come out of Amazon’s side or the publisher’s side.

    That’s the only reason it is in Amazon’s interest to minimize the graphics. People want the pictures, people are disappointed when they don’t get the pictures. So I suspect that Amazon isn’t charging much more for bandwidth than it actually costs them.

    As it was mentioned, content coming from wi-fi doesn’t incur the same charges, because bandwidth is rapidly approaching the point where it’s “too cheap to meter.”

    The telcos have been fighting against public wi-fi for years, with great success. The charges this article is talking about are pure wealth extraction by these companies.

     
  17. Bill Peschel Says:
    February 23rd, 2011 at 6:57 pm

    Here’s a question: Amazon is charging a fee for delivery over 3G. Is this applied to all deliveries? After all, if I download a book over my cable modem, Amazon isn’t getting charged for that. Is it passing the savings on to the publisher? Or is it pocketing the cost-savings?

     
  18. Nick Says:
    May 25th, 2011 at 10:03 am

    While the delivery cost can seem high, i there an option to publish on your own website and offer subscriptions in that way?

    After all, Amazon came up with the infrastructure. If we don’t want to use that, we need something else.

     
  19. Ebooks for Kindle Says:
    June 23rd, 2011 at 7:06 am

    I think that so many people are using Kindle, that you will just have to adapt your mag to fit the kindle format or risk missing out on a growing market.

     
  20. Omar Sebti Says:
    October 11th, 2012 at 11:00 am

    I stopped using Amazon subscription for cost reason. I moved free content using websites like https://Webtoread.com.
    I believe that the business model of Newspapers and Magazines on mobile devices is not mature. (I found it amazing that depending on the device you have almost to by news and books from the device company expl : IPad – Apple / Kindle – Amazon / kobo : Kobo …)
    I would like to be able to choose the best device and the best publisher separately without the boundaries of format or limited access…We are lacking of anti trust law about that, what our law makers are doing ???
    I also start to be fed-up by all the war between device/content distributor Apple/Google/Amazon/Samsung I got the impression that they are not woking to innovate and make user experience better at the best price but just about how to milk-us again and again (I will not be suprised if we find hidden agreement between these guy to keep the price high for us …)
    How come in most of the case we do have to pay more for a book in ebook format that printed one.
    Well, will probably go back to printed version : Sorry for the trees.

     

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