Simon and Schuster sold fewer books last year than the year before, but corporate profits rose.
No, they didn't jack up the prices on their product.
They sold more e-books.
Digital content, i.e. e-books, don't cost as much to produce. There's no paper, no ink, no union-wage-earning typesetter, no binder, no packager, no box.
There's also a smaller royalty for the author, and that's all to the good for the publisher.
For Simon and Schuster parent CBS Corporation, the fact that 15% of their revenues came from digital sales suggests a swing towards e-books and away from hard copies.
When times are hard, as they are now, people who crave reading material will gravitate to the lower-priced e-book, even if it means waiting a short time until the electronic edition is available. CBS will be studying ways to minimize their costs of producing digital content because it's apparent that digital is becoming an important source of profit. And it's that profit that covers the loss on other CBS products, including all the books that turn out to be less than blockbusters.
For authors, and their agents, it means smaller advances and royalties as e-books outpace the more lucrative hard copy.
A few literary agents have put on e-publisher hats of late, betting on the increasing popularity of e-books. They're all about increasing their clients' income, and their own along with it.
Electronic rights are trending higher in importance as the e-book grows in popularity.
You can bet there's a battle ahead, as traditional publishers hear the patter of little literary agent footsteps following close behind.