No one cares about manufacturing costs

One of the most common refrains I’ve heard during the Amazon/Hachette tussle is that ebooks should cost less to buy because they cost less to make.

Question: Who cares about manufacturing costs?

Answer: Manufacturers. And that’s it.

Let’s say you’re buying a hammer. You don’t care that it costs Black & Decker $5.23 to manufacture it, package it, and ship it. All you want to know is how much you have to pay for it at Home Depot.

Does Home Depot care about the hammer’s manufacturing costs? Not really. They just buy hammers from Black & Decker and sell them to customers. If a shortage of steel causes Black & Decker’s per-hammer cost to increase 10%, does Home Depot care? No. Not at all.

Home Depot is a big company, so they’ll likely push Black & Decker to sell them hammers for less, so they can increase their margin.

That’s business.

Amazon is pushing Hachette to sell them ebooks for less, so they can make more money.

That’s business.

So let’s be clear: There’s nothing wrong with Amazon wanting Hachette to sell them ebooks for less. In their internal negotiations with Hachette, I’m sure Amazon brings up how much cheaper it must be for Hachette to manufacture ebooks than paper books.

But with astroturf campaigns like Readers United, Amazon is suddenly trying to make its customers care about manufacturing costs. Here’s what they write on the site:

With an e-book, there’s no printing, no over-printing, no need to forecast, no returns, no lost sales due to out of stock, no warehousing costs, no transportation costs, and there is no secondary market — e-books cannot be resold as used books. E-books can and should be less expensive.

That last sentence pulls a clever trick by omitting the indirect object, thus confusing cost and price. Are we supposed to read the sentence as…

E-books can and should be less expensive for manufacturers. (cost)


E-books can and should be less expensive for readers. (price)

The first version is logical. Ebooks are almost certainly less expensive to make, although not necessarily as much as one would think.

But does it logically follow that ebooks can and should be priced lower for readers?

I agree with “can.” Anything can be priced lower. That’s a fact. The Kindle Fire tablet is priced lower than it would otherwise be because Amazon is willing to sell it at a loss.

But “should” doesn’t follow logically. “Should” is not a fact, it’s an opinion, and everyone is entitled to her own, particularly about price.

Amazon wants to sell ebooks profitably at $9.99. In order to do that, they need publishers to sell them the books at some number less than that. It’s the same negotiation Home Depot has with Black & Decker. Except that you don’t see Home Depot setting up websites that selectively quote George Orwell to make their point.

Remember, Amazon just wants to sell books. They truly don’t care how much they cost to make, and neither should we.

Threshers, Mergers and the Top Two Boxes

Scriptnotes: Ep. 157

Craig and John discuss the accusations of plagiarism surrounding True Detective — and what plagiarism even means in the context of filmed entertainment. Movies don’t have footnotes, so how should screenwriters give attribution?

Next it’s time for a look at the major Hollywood studios, and what would happen if any of them were to merge, like Fox and Warners seemed poised to do. Following that, we take a look at the test screening process.

Finally, John wants to talk about the Canadian “about,” which isn’t “aboot,” and is a lot more complicated than you’d think.


You can download the episode here: AAC | mp3.

UPDATE 8-15-14: The transcript of this episode can be found here.

Summer Re-run: Psychotherapy for Screenwriters

Scriptnotes: Ep. 156

John and Craig revisit one of their favorite episodes, in which they sit down with screenwriter-turned-psychotherapist Dennis Palumbo to discuss writer’s block, procrastination, partnerships and more. It’s a can’t-miss episode for aspiring writers and professionals alike.


You can download the episode here: AAC | mp3.

The transcript of the original episode can be found here.

Two Writers, One Script

Scriptnotes: Ep. 155

John and Craig look at the trend towards hiring two writers to work on separate drafts of the same project. Is it better to have writers in parallel than serially? Or does it end up with studios ordering off a Chinese menu: this scene, that character, that other set piece?

Both Craig and John just started new first drafts, so we talk about the difference between the Map and the Territory, and how outlines can’t always anticipate the discoveries made while writing.

Finally, we answer a bunch of listener questions ranging from the Peter Stark Program to loving your day job.


You can download the episode here: AAC | mp3.

UPDATE 8-4-14: The transcript of this episode can be found here.

Disney’s corporate synergy, 1957 and today

I love this graphic from 1957 showing how the various elements of the Walt Disney company fit together.

corporate chart

You could make the same chart today.

Here is a partial list of the properties Disney owns in 2014:


  • Walt Disney Pictures
  • Touchstone Pictures
  • Disneynature
  • Disney Animation Studios
  • Pixar
  • Lucasfilm
  • Marvel
  • The Muppets
  • DreamWorks (distribution)


  • Walt Disney Records
  • Hollywood Records
  • Disney Music Publishing


  • Disneyland/Disneyworld worldwide
  • Disney Cruise Line
  • Disney Vacation Club

Theatrical Group:

  • Disney Theatrical Productions
  • Disney on Ice
  • Disney Live

Consumer Products:

  • Disney Store
  • Disney Baby
  • The Baby Einstein Company


  • Disney-Hyperion
  • Marvel Press


  • ABC Television Network
  • ABC Family Worldwide
  • Live Well Network
  • A+E Networks (50%)
  • Disney Channels Worldwide
  • Radio Disney
  • Disney Television Animation
  • ESPN Inc. (80%)
  • Hulu (32%)
  • A+E Networks (50%), includes Lifetime and History


  • Disney Infinity
  • Maker Studio


  • Marvel
  • Disney Comics

Almost every one of these items is a huge business just by itself. Which raises the question: If one were to make a new version of the 1957 chart, would Theatrical Films still deserve the central marquee spot?


I’d argue that in 2014, film properties are probably still worth keeping near the middle of any Disney flowchart. The company makes money in many ways, but feature films are still the key drivers. You don’t get Cars merchandise without the movie.

The success of Frozen is an example of how Disney can capitalize on a hit film by using it in other divisions: Disneyland attractions, TV tie-ins (Once Upon a Time), music, books, merchandise, and possibly a Broadway musical.

As screenwriters, there are pros and cons to this kind of corporate synergy.

Giant corporations like Disney will keep making movies because it feeds the engine — and the better the movies, the bigger the multiplier in success. You can criticize individual films, but the juggernaut franchises have sprung from well-executed movies, and all of these movies began with screenwriters.

The challenge for screenwriters is that it’s increasingly difficult to get momentum on any movie that doesn’t seem to have the potential to work across divisions. An R-rated blockbuster like The Matrix can’t become a theme park ride, so why spend $100 million to make it?

Looking at the list of top-grossing R-rated movies, Warners and New Line made seven of the top 10. With talk that Fox may buy Warners, I wonder if they would still be making those movies post-merger.

Getting 2-Up preview in Highland

Over the weekend, we sold the most-ever copies of Highland, thanks largely to the Mac App Store’s “Explore Your Creativity” promotion.

With new users come new questions to the support desk, including this one I’m surprised never came up before:

Is there any way to see two pages side-by-side in the preview?

There is!

In the preview, right-click (or control-click) and you’ll get a menu letting you choose the layout. Highland defaults to “One Page Continuous,” but you can choose “Two Pages Continuous” to get a 2-up view.


You can find more answers and tips in Highland’s FAQ.

During the Mac App Store promotion, Highland is half-off, just $14.99.