I haven't slept, and I went on a mondo hike today that I was in no way prepared for (which was actually really nice after being chained to my desk to push out Trust for so long), and I'm exhausted and should probably just turn the computer off and go to bed.

But, although I'm sure I am far from the first, I want to talk about two things I saw in Passive Voice the other day. (No, not today. I'm a little behind, OK?)

Thing #1: Barnes & Noble had crappy financial results, and is still losing oodles of money.

The interesting bit with the numbers: They're still maintaining that magical 27% market share in e-books! Let's tout that number some more! 27%! 27%! Rah! Rah! Rah!

But, hey, they're still losing oodles of money. Hmmm....

Yeah, that number's not worth much. Their financial results reflect my earlier point that e-books and e-book readers are not, in fact, the same thing. B&N has decided that those two businesses together constitute The Nook Business (which at least answers a lingering question on that front), but expect them to try to highlight whichever business is doing better and to ignore whichever business is doing worse. (In other words, expect press releases that go, "Business is great! We lost a billion dollars!" There are a lot of those.)

The other thing about that number is that, in the best-case scenario (you know, the scenario where they're not just making the number up out of whole cloth), it applies only to e-books produced by traditional publishers. B&N has not done a good job promoting self-published writers, but however this is hurting them, it's not going to be reflected in that magical, unchanging 27% figure. It going to be reflected in their financial results, though. (I will note that I find it...curious...that that market-share number never seems to change. They very quickly took this big hunk of the market, and just as quickly, their market share completely stagnated. That is...odd.)

Thing #2: Another claim that it costs almost as much to make an e-book as to make a paper book--80% as much.

This ones a little weird, because it's someone reporting (favorably, which is hysterical--he knows it doesn't add up, but he loves it and even calls it "smart") on another story that I can't read because I don't subscribe to the New Yorker. Obviously I think the overall claim is worthy of great scatology, but the main thing that struck my eye was this quote of a quote:

E-books are cheaper to produce, by about twenty per cent per book, because they do away with the cost of paper, printing, shipping, and warehousing. They also eliminate returns of unsold books—a significant expense, since thirty to fifty per cent of books are returned. But they create additional costs: maintaining computer servers, monitoring piracy, digitizing old books. And publishers have to pay authors and editors, as well as rent and administrative overhead, not to mention the costs of printing, distributing, and warehousing bound books, which continue to account for the large majority of their sales.

This doesn't make any sense. For starters, the author is including "the costs of printing, distributing, and warehousing bound books" in the cost of making e-books, which is like saying that your Kia cost almost as much as your Ferrari because you have to include the cost of buying a Ferrari in the cost of buying a Kia. He also includes the cost of maintaining computer servers, despite the fact that you totally don't have to.

But what I found really interesting is the line, "E-books are cheaper to produce, by about twenty per cent per book, because they do away with the cost of paper, printing, shipping, and warehousing."

Do you know what's not necessarily counted in the cost of producing a book? The cost of paper, printing, shipping, and warehousing! Depending on who is talking, production can mean what you do to get a book ready to be published: Line editing, copy editing, book design, layout, proofreading, cover art.

I could see e-books being 20% cheaper to produce if you don't count the cost of printing. I could see it if you count only the costs incurred to get a book ready to be printed or uploaded.

What do I think happened here? I think the reporter made some assumptions about what was meant by production, and the PR people just kept their mouths shut about what they actually meant.

I think I'll stick with the Wall Street Journal for my business news. The New Yorker guy clearly does not know squat about venture capital, either--it really cracked me up that he and I made the exact same analogy but meant such different things by it. (Another thing that really cracked me up was Mira's reponse to the article.)