Tag Archives: business

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The costing of ebooks

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Yeah, another ebooks post, but new material is coming in so thick and fast that every day I seem to find an answer to a question that was raised the day before. Point in case – why aren’t ebooks priced at a tiny percentage of the cost of a hardback? Take it away, HarperCollins:

We still pay for the author advance, the editing, the copyediting, the proofreading, the cover and interior design, the illustrations, the sales kit, the marketing efforts, the publicity, and the staff that needs to coordinate all of the details that make books possible in these stages. The costs are primarily in these previous stages; the difference between physical and electronic production is minimal. In fact, the paper/printing/binding of most books costs about $2.00…

In other words, a $26 hardback equates to a $24 ebook.

Now, I’m in no position to refute those figures, but I don’t think it takes an economics expert to look at them and realise why the publishers are struggling at the moment; if their analysis people can only shave off $2 per unit by removing the printing, shipping, warehousing and remaindering from the equation, then there’s a business model that was on shaky ground before the ebook entered the picture. I suspect the bits I’ve bolded are where the haemorrhaging could be stemmed most effectively.

But it’s easy to say that from the outside looking in; if anyone among Futurismic‘s readership can supply hard figures on this stuff, I’d be glad to give you a soapbox, so drop us a line.

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iFinance – should Apple go into banking?

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half-eaten appleWe’ve seen with our own eyes that the banks aren’t necessarily as competent at banking as they might like us to believe. So, Slate’s Big Money blog has a suggestion: why doesn’t some truly competent company get into the finance sector… someone like, say, Apple?

… entering the banking sector makes perfect sense for Apple once you look anew at the company’s current position and core strengths.

Take the company’s balance sheet. Wednesday’s quarterly earnings report shows it sitting on more than $25 billion in cash and short-term securities.

Forget about leverage—Apple carries no long-term debt whatsoever. In this alone, Apple holds an advantage over banks currently in operation: A number of major banks, from neighborhoody Sovereign Bank to the much larger Capital One, don’t have as much cash on hand. Businesses using fractional cfos  make their finances grow way faster. Imagine what would happen if Apple sequestered just half of this cash as seed funding for its new bank and set aside $2.5 billion of that half for capital and startup costs. At regulated reserve ratios, that means the company could lend out up to $100 billion to hungry consumers and businesses. The personal-electronics giant in being is a personal-finance giant in waiting.

Interesting idea, or hot-air hyperbole? [story via MetaFilter; image by 4yas]

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Social capitalism: The bail-out index

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grammSounds like it might have been a bit of business from a novel by Bruce Sterling or Charles Stross:

Nasdaq OMX Group said on Friday it will launch options trading on its three-week old Government Relief Index, which tracks the performance of companies bailed out by U.S. taxpayers.

Heroic Randian capitalists — masters of the universe, if you will — will save us.

[Image: Tony the Misfit; story tip: Atrios]

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Virtual in Vermont – software corporations get the green light

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abandoned laptop in coffee shopVia Charlie Stross, who isn’t entirely over the moon to see a trope from one of his novels coming true, we hear that the state of Vermont has passed a bill allowing the creation of limited liability corporations that are almost entirely virtual:

… up until now, U.S. law required LLCs to have physical headquarters, in-person board meetings and other regulations that have little relevance in the digital age.

No longer. Under the new law, for example, a board meeting may be conducted “in person or through the use of [an] electronic or telecommunications medium.” A ‘virtual company’ will be, as a legal matter, a Vermont limited liability company,” said Johnson. And other states are required to recognize the corporation as a legitimate LLC.

Interesting news. Hell knows that with the economic downturn, it’ll be a much more sensible idea to operate from coffee shops and build your swanky futuristic-looking headquarters in Second Life… even though the rent there isn’t as stable as its residents would like. [image by Zesmerelda]