They are giving people advances so that they can live while they write the book full time. An example is someone who used to be a journalist can use their success as a journalist to sign a book deal and work on that. It's similar to raising a seed round.
IMO they are going the way of the record label. Some publishing houses and record labels will continue to add value, while larger ones who used to use their brand to add value and had scaled to a point where that is their main value proposition are going to have a hard time, as we are seeing right now in OP.
The publishers and record labels are doing the same thing they were before - curation and editing. The book printers & CD burners are out of the mix, but they were never that expensive anyway. There are still fixed costs associated with a book (editor) or an album (studio time), not to mention the marketing costs.
Are they worth 35% of the profit? I don't think so. But probably more than 0%. I personally think it should be 70% author, 20% publisher, 10% Amazon.
10% is far too little. Amazon is R&D'ing and manufacturing tablet/e-reader devices, handling payment/currency, and all the dirty work necessary to get the device in the hands of the customer in the first place.
If it was, there would be a healthy e-reader market with competing devices and choices for consumers, which would deprive Amazon of business leverage over content distribution.
Barnes & Noble had a brief moment of glory when their first Nook color tablet was cheaper, better and unlocked. Devs were selling rooted Android SD cards on eBay. If BN had opened up the hardware, they had a chance of gaining the scale needed to compete with Kindle. Instead, BN went the other way, locked down Nooks, created their own App Store with poor selection and the rest is history.
Apple has managed to charge premium prices for devices (enabling a market for many cheaper competitors) AND keep leverage on app/content distribution.
Digital publishing needs to separate distribution from payment. Convert "pirates" into "free logistics services" and focus on customers connecting more closely with authors. Why can't authors accept elastic (value-based, pay-what-you-want) bitcoin payments?
A big problem with the competing device market is that books aren't portable between Amazon and alternatives (but they are between the alternatives). So, if you've bought a number of e-books on Amazon, switching becomes much more difficult.
Not exactly. Turns out you can sell via Amazon, or you can sell directly, but if you use the undocumented Amazon-only tool to construct your .mobi, you can't sell that directly. And Amazon is now blocking the output of many/all other ebook construction software so you can't use Send to Kindle or email. USB is the only option to load a book.
Just yesterday I used http://epub2mobi.com/ to convert a public domain ePub file to MOBI, then sent that to my Kindle's email address. It was delivered wirelessly to my Kindle. Are you sure this hasn't changed? Or is epub2mobi doing something to circumvent this?
Do you know which publisher sells for all your favourite authors? I certainly know for some of them, but not others. What about when you just hear about a book from someone? This is why people go to bookstores.
I'd be a lot happier if everyone went to no-DRM or at least interchangeable DRM so you could move to a different e-reader. Amazon and iBooks are the odd ones out. iBooks doesn't have a big marketshare, but Amazon definitely does.
they can, and many try, but for the most part people don't buy books outside of their chosen e-reader platform (ibooks, kindle store, kobo). Amazon has significant value to add that they've built up over time and that publishers can't easily get: recommendations, integration with e-reader devices, a huge amount of traffic, and a huge number of people with one-click purchasing already set up.
I think this is one of those points where a lot of people on HN will think in terms of COGS, but because Amazon is effectively offering your products at such a large market, the 70% of revenue you'll get through amazon is worth a lot more than the 100% you'd get without going through them (and by definition, more than the 30% they're getting).
First of all, ebooks still make up only a fraction of the book market (especially outside the US). Most big publishers will have to support hardcover, paperback, and ebook version in parallel and price them so that they make a profit for everything combined. Hardcover and paperback versions are not going to go away anytime soon, either.
Second, publishers also make losses on books that don't sell and that they have to recover. The majority of books don't actually sell a whole lot of copies, so the fixed costs associated with producing a book can be a pretty high percentage of revenues for the average book.
Finally, publishers provide editing, translation into foreign languages or negotiation with foreign publishers (assuming your agent didn't retain translation/foreign publication rights), production, marketing, accounting and sales services, distribution, and warehousing (for dead tree books).
Note also that you can equally ask what Amazon provides with regards to ebook distribution: In the end, it's just another middleman that got a head start because it was first to market with the Kindle, but is otherwise unnecessary. In some markets, publishers selling directly to readers (on non-Kindle platforms) makes up a significant part of sales.
IMO they are going the way of the record label. Some publishing houses and record labels will continue to add value, while larger ones who used to use their brand to add value and had scaled to a point where that is their main value proposition are going to have a hard time, as we are seeing right now in OP.