I was at a dinner with some authors, and they wondered why American publishers are still doing hardcovers. I guess they haven't checked their royalty statement, as the average percentage for a hardcover is higher than the paperback (and that's on a more expensive book, to boot). (Hope I got this correct. It's hard being an expert of nothing who makes grand pronouncements).
There's no question that many publishers use the extra money they get from a hardcover to upgrade the quality of the hardcover. I've complained a bit before about see-through paper (and I will again, just watch me), which you almost never see on a hardcover. Crappy, newsprint paper on the trade paperback? I can't think of a better adverstisement for an ebook. Also, publishers usually build more marketing into the hardcover. A recent publicist, on hearing my go-between request for an author to tour in paperback, replied, "We don't do paperback tours."
There's another reason for a hard/soft publication. Publishers doing hard then soft get a second chance to launch a book. This was brought home to me by my dearest Little Bee exploding in paperback and hitting #3 on its paperback publication (officially for next Sunday but nowadays, the ranks get released fairly early), selling in one week (and that's just on Bookscan) about a third of the copies it sold for the life of the hardcover. I hadn't seen so much paperback advertising for a book in some time, but if this means a year on the bestseller list, it was a wise investment.
Hey, librarians loved the book too. Little Bee was picked as Santa Monica's "One City, One Book" program. And I want to give a thank you to Simon and Schuster for not rushing out the paperback. A third of our hardcover sale for this book that came out in February was during the Christmas season. Oh, and can I also thank you for the beautiful paperback jacket that totally pops off the shelves? You can have great sales without a woman's headless body*, imagine that!
Another publisher that used the hardcover to set up the paperback was Algonquin with A Reliable Wife. Though it had very strong sales in some markets, it never cracked the top 15. In trade paperback, it reached #1 on the New York Times.
Are those huge paperback sales from indie bookstores? We're only a tiny part. But did independent bookstores help set up the book in hardcover? Absolutely.
*Not a Chuck Palahniuk headless body, but body parts shown close up with the rest of the body edited off the page. It's very hot in book jackets, particularly trade paperbacks, and nobody's given me a suitable explanation.