Madeleine Robins July 28th, 2007
The Business section of today’s New York Times has a fascinating piece on the economics of selling Harry Potter. Not publishing, mind, but selling. Think Barnes and Noble and Borders and Amazon made a killing? Not so much: between deep discounts, giveaways, parties, free shipping, etc., most of the major sellers are out of pocket on the season’s Biggest Book. Why would they do that? Goodwill, in part (that’s yours, the buyer’s). Competitive edge (note that Wal*mart is selling the book $.30 cheaper than Costco… I personally would pay an extra dollar to avoid Wal*mart, but that’s just me) and staying in the game. Getting people in the door, where they may buy more books–building a pattern, essentially, of book buying. Amazon, in particular, gets your email address and data, and gets to market less discounted books in the future.
Nothing in this industry is simple; half of the industry is working on a model from a hundred years ago; the other half appears to be pelting down the long hallway toward the future (electronic rights! POD! podcasts!). It’s just kind of illuminating.