Wow, this really angers me. I have been willing to put up with the annoyance of dealing with proprietary formats and DRM for the convenience of being able to carry my library with me on trips, but if I can't get new books, then I've just spent $300 on a useless piece of hardware.
Posted by mr_porteiro_head (Member # 4644) on :
As neat as the Kindle is, there's no way I'm going to buy a piece of tech that the company is allowed to control after I buy it.
So, what's a good alternative to amazon.com for buying books? Barns & Noble?
Posted by Belle (Member # 2314) on :
I'm enjoying my Barnes and Noble Nook...I read plenty of reviews and many people complained it was slow and clunky...but I find it works beautifully and it supports ePub format and eReader so there are tons of free e-books I can download as well as buying from the Barnes and Noble store. I loaded some articles I needed to read for a class in pdf format on it and it was great to have them so portable. The formatting wasn't great - some words were broken across lines of text which was kinda weird, but I could change the font so I played with it a bit until it was more readable. I only had one glitch when trying to download a book, and re-starting the Nook fixed it.
I haven't loaded any music on it yet, but I have loaded pictures...my screen saver is the drawing of the Doors of Durin.
I've had it a week and I absolutely love it...it's very easy to read and I love the fact that I can load pdf files on it. I'm taking online classes for my master's degree and there are quite a few documents posted online I need to read. Putting them on the nook makes them a lot easier to read than if they were on my laptop.
So...I like it as an alternative to the kindle. The main reason I didn't use a kindle was being so tied to Amazon.
Posted by theamazeeaz (Member # 6970) on :
Not carrying the physical books is pretty annoying of Amazon, but that's one way of negotiating with people. Well, I guess you can still get them through sellers.
Posted by andi330 (Member # 8572) on :
Because I used to purchase hardcover books almost exclusively (I only bought paperback if there was no hardcover version of the book I wanted) I am willing to pay about 1/2 the actual hardcover price of a book for the electronic version. In general, that comes to about $10. This article seems to indicate that the actual reason for pulling the book was that Macmillan told Amazon that they could continue to set the price where they wanted, but then Macmillan would withhold publication of the ebooks for 7 months after hardcover release. It was then that Amazon pulled their books.
I suspect, that Macmillan, and other publishers need to learn a hard lesson. We had an earlier discussion about the fact that several publishers were planning to hold back their ebooks. This was presumably because publishers were hoping to get two bites at the apple. They wanted to sell both a hardcover version and an ebook to consumers who read the ebooks. Here's the reality folks, I may like your books, but I don't usually like them enough to buy more than two copies, my ebook version (or hardcover if there will not be an ebook available) and possibly an audio version. If you force me to wait, or to pay more than I am willing, there's a library right up the street where I can get almost any book I want with little issue (and I can get pretty much anything I want at all, I just have to be willing to wait for an ILL to come through if my branch doesn't carry it). Ebooks have a much lower cost than paper books, as there is no cost to print, bind or deliver the books. Why do you want me to pay the price of a hardcover to get it? No thanks Macmillan. The library is free.
Posted by Shmuel (Member # 7586) on :
I really want to know why the publisher's get a say in what Amazon charges for ebooks to begin with. My understanding is that, with physical books, Amazon (or any other bookseller for that matter) buys their copies from the publisher, at which point they can sell them for whatever price they want as long as it is not more than the cover price. With ebooks, of course there is no physical copy. Shouldn't the model be somewhat similar though? This probably isn't how it works, but shouldn't it be something like for every copy of an ebook that is sold Amazon pays the publisher $x.xx? If that's the case, there shouldn't be any say in the actual price of the book beyond a similar cover price. So Macmillan could say our "cover price" for our ebooks is $14.99, but as long as Amazon pays them their per copy rate, they couldn't actually dictate the price Amazon charges.
Edit: In fact, the article I linked to in my first post indicates that this is about what happens. Amazon pays Macmillan 50% of the hardcover list price, and they get to price the book however they want. So basically that means that Macmillan wants to be able to say, yeah, you get to pick the price, but we won't release the book to you for an extra 7 months unless you price it the way we want. They're trying to make an end run around their contract and they aren't actually going to make any more money off of it. At least not from Amazon. The speculation is that the prices are going to be higher on the iPad, and that they will make 70% of the sales price on each ebook sold.
Macmillan is essentially trying to force consumers to pay a higher price for their ebooks, something they would never consider doing with physical hardcover or paperback books. Not only that they would be forcing customers to go to the iPad to get the earlier releases. If Amazon refuses to carry their books, physical or electronic, due to what they perceive as unreasonable demands regarding their pricing practices, then it's Macmillan's loss. You can actually still get their books on Amazon.com in physical format, you just have to go through a seller.
[ January 31, 2010, 01:59 AM: Message edited by: andi330 ]
Posted by Stephan (Member # 7549) on :
Publishers should get whatever amount off of the ebook they would have gotten off of the physical book, minus the cost to actually make the book.
Posted by Scott R (Member # 567) on :
quote:I really want to know why the publisher's get a say in what Amazon charges for ebooks to begin with.
Because Amazon isn't a publisher; they don't (generally) do the legwork of finding, editing, and marketing the work. Amazon is a distributor.
I'm a little on the fence about this subject; Amazon has made some missteps in the past related to Kindle books (MPH mentioned their idea of them owning material downloaded from their site after download; someone else mentioned DRM). But the publishing model is a dinosaur. A bloated, flatulent dinosaur that I'm not certain is good for authors any longer.
Posted by Scott R (Member # 567) on :
Here are some quotes (mostly from the publishing side of things; as far as I know, Amazon hasn't commented officially):
quote:Co-head of the William Morris Endeavor books department Eric Simonoff, whose clients include Douglas Preston (author of the January Tor release Impact), told us: "The current model of Amazon selling Kindle editions as a loss-leader is fair for publishers and authors in the short-term but as we have told Amazon we don't believe it is sustainable in the long term. Something had to give to prevent the ongoing devaluation of e-books. Macmillan is the first to draw a line in the sand but we expect not the last."
quote:One senior publishing executive called the move by Amazon "fairly draconian" but added that their company had not received any threats of similar action from Amazon. As we've said before--though consumers have not yet gotten the message--the agency model that publishers are trying to implement with Apple and across their customer base actually lowers the publishers' proceeds from each ebook sale and gives more profit to sellers versus the current loss-leading model behind the $9.99 price point.
Another senior publishing executive said that "Amazon may 'spin' that the consumer is at the heart of the decision, but really their goal is a monopoly position in books. Publishers don't want a monopoly - they want consumers to have choice through a number of partners and channels. They want digital pricing which allows bricks and mortar retailers to survive and thrive alongside a growing digital market." That person added, "This reaction proves what Amazon's true motives are. It is a signal to any other publishers not to change the model and weaken Amazon's pathway to a monopoly. I hope authors, agents and publishers see what these motives are and stand by Macmillan."
Here's Macmillian's rep, John Sargeant to authors and illustrators about the fiasco:
quote:To: All Macmillan authors/illustrators and the literary agent community From: John Sargent
This past Thursday I met with Amazon in Seattle. I gave them our proposal for new terms of sale for e books under the agency model which will become effective in early March. In addition, I told them they could stay with their old terms of sale, but that this would involve extensive and deep windowing of titles. By the time I arrived back in New York late yesterday afternoon they informed me that they were taking all our books off the Kindle site, and off Amazon. The books will continue to be available on Amazon.com through third parties.
I regret that we have reached this impasse. Amazon has been a valuable customer for a long time, and it is my great hope that they will continue to be in the very near future. They have been a great innovator in our industry, and I suspect they will continue to be for decades to come.
It is those decades that concern me now, as I am sure they concern you. In the ink-on-paper world we sell books to retailers far and wide on a business model that provides a level playing field, and allows all retailers the possibility of selling books profitably. Looking to the future and to a growing digital business, we need to establish the same sort of business model, one that encourages new devices and new stores. One that encourages healthy competition. One that is stable and rational. It also needs to insure that intellectual property can be widely available digitally at a price that is both fair to the consumer and allows those who create it and publish it to be fairly compensated.
Under the agency model, we will sell the digital editions of our books to consumers through our retailers. Our retailers will act as our agents and will take a 30% commission (the standard split today for many digital media businesses). The price will be set for each book individually. Our plan is to price the digital edition of most adult trade books in a price range from $14.99 to $5.99. At first release, concurrent with a hardcover, most titles will be priced between $14.99 and $12.99. E books will almost always appear day on date with the physical edition. Pricing will be dynamic over time.
The agency model would allow Amazon to make more money selling our books, not less. We would make less money in our dealings with Amazon under the new model. Our disagreement is not about short-term profitability but rather about the long-term viability and stability of the digital book market.
Amazon and Macmillan both want a healthy and vibrant future for books. We clearly do not agree on how to get there. Meanwhile, the action they chose to take last night clearly defines the importance they attribute to their view. We hold our view equally strongly. I hope you agree with us.
You are a vast and wonderful crew. It is impossible to reach you all in the very limited timeframe we are working under, so I have sent this message in unorthodox form. I hope it reaches you all, and quickly. Monday morning I will fully brief all of our editors, and they will be able to answer your questions. I hope to speak to many of you over the coming days.
Thanks for all the support you have shown in the last few hours; it is much appreciated.
All best, John
Posted by TomDavidson (Member # 124) on :
Personally, I want to pay about $5.99 for a first-run ebook. I will side with whatever company is more likely to make this possible.
Posted by andi330 (Member # 8572) on :
quote:Originally posted by Scott R: Amazon is a distributor.
I would accept this as a valid argument, if and only if, publishers already did the same thing with brick and mortar bookstores, which they don't.
Brick and mortar stores buy their books at specific prices, they then have the option of setting the actual price for the book at whatever they want so long as they do not exceed the cover price. I expect they could actually attempt to sell for more than the cover price, but since publishers put it right on the book, they likely wouldn't get many sales that way. This article, indicates that Amazon has a sales model that encourages authors to publish ebooks directly to Kindle.
quote: On Wednesday it announced it would improve the royalty terms for authors or publishers who publish e-books directly onto the Kindle — essentially beckoning authors and their agents to split off e-book rights and sell them directly to Amazon.
Under the new terms, Amazon says it will offer authors and publishers who set e-book prices below $9.99 a royalty rate of 70 percent of the digital list price (after delivery costs, typically about 6 cents a book) — an obvious echo of Apple’s offering.
I think this is what has companies like Macmillan so scared about pricing. If authors start negotiating ebook rights separately, publishers will lose out on the money that they currently make from those sales. Attempting to force Amazon to change their prices by withholding ebooks 7 months after publication (essentially turning them into paperbacks) may only encourage authors to look into publishing ebooks directly through Amazon, since many authors are likely aware that the longer people have to wait for the ebook version, the less likely they are to buy it.
After all, by the time it's available for Kindle, I may have already read the book by checking it out of the library, and decided I didn't like it. Then instead of buying it when it was first available, they've lost my sale all together.
Posted by Tstorm (Member # 1871) on :
As long as it's not encumbered by DRM, I think the $6 range is pretty agreeable.
Posted by Mucus (Member # 9735) on :
Personally, the consumer in me can't wait till we get the equivalents of Steam (in terms of aggressive pricing) for books and movies.
Posted by Sterling (Member # 8096) on :
I guess a better question might be, with so much of the work a publisher does taken out of the equation with a strictly digital distribution, will authors eventually get more than a typical 10% of a book's sale?
It sounds like MacMillan is being unreasonable, but the issue definitely highlights some frightening things about Amazon- the monopolistic and anti-consumer qualities of the Kindle and the monolithic power of Amazon as a first-line bookseller to get its own way.
Posted by Loki (Member # 2788) on :
This is disappointing, as pointed out by a commenter to this article, Macmillan has a poor track record of actually lowering the prices of their ebooks, even after releasing the paperback book.
quote: Ted R. Says: January 31st, 2010 at 1:27 am Macmillan is on record for what they consider the proper window for reducing ebook prices:
The Sword-Edged Blonde $14 for the ebook (http://tinyurl.com/yc92nmc) $6.99 MSRP for the paperback that was released last June (http://tinyurl.com/ye8d8do)
Not enough evidence? How about:
Flashforward $14 for the ebook (http://tinyurl.com/yznn5sf) $7.99 MSRP for the paperback that was released in April 2000, nearly ten years ago (http://tinyurl.com/yz9cs85)
I could go on and on and on. Is it any wonder that I trust Macmillan (and most other publishers) about as far as I could spit them? Amazon isn’t the White Knight in this but they’re pure as the driven snow compared to the price-gouging publishers.
Not only that, but ebooks have no resale value, which immediately devalues them over both a paperback and a hardcover book. When I'm finished with a physical book, I can take it to a used book store for credit, sell it on ebay, list it for trade on paperbackswap.com. Even ebooks that have no DRM can't be resold, so there is no potential for regaining any of my expense for purchase if I decide I don't like or want a book any longer. For this reason alone, ebooks should not cost the same as a physically bound book.
In addition, publishers choosing the price of their books rather than retailers prevents competition. If Macmillan and other publishers get to pick their own prices, it is unlikely that consumers will find bargains. There won't be "sale" items similar to what you can find in a brick and mortar store.
This being the case, I will not purchase an ebook from Macmillan that does not match the lowest "new" price for the same book. If it's out in paperback, I will not pay more for the ebook that the cost of that paperback. Since I don't have room in my home for any more physical books, that means that Macmillan and its subsidiaries will lose my business on any books that they do not price competitively to their own pricing.
Posted by Scott R (Member # 567) on :
quote:Originally posted by Loki: Update: Amazon caves
The key word is "ultimately." It's interesting to see Amazon use some of the same terminology that the publishers are using-- accusing the publishers of having a "monopoly."
I'm sorry, I don't buy it. Amazon is the eight foot tall, robber baron pretending to be a martyr.
quote:it allows Amazon to grab another chunk of the supply chain if they get away with it, turning the traditional publishers into vestigial editing/marketing appendages
Any publishing company who doesn't realize that this is what they are deserves what's going to happen to it.
Posted by andi330 (Member # 8572) on :
quote:Originally posted by Scott R:
quote:Originally posted by Loki: Update: Amazon caves
The key word is "ultimately." It's interesting to see Amazon use some of the same terminology that the publishers are using-- accusing the publishers of having a "monopoly."
I'm sorry, I don't buy it. Amazon is the eight foot tall, robber baron pretending to be a martyr.
Ok, so let's dispute a little of what he's saying in this article though, because it's not as simple as he's making it out to be either.
First, he points out that Macmillan wants to start the prices high, and then gradually decrease them over time. All well and good, except as this Washington Post articlepoints out, most consumers think that $9.99 is too much to pay for an e-book, and the most popular price point for Kindle books is $0.00.
Second, he states that Amazon's desire to charge $9.99 for all e-books is price fixing. Never mind that with the publishers dictating to all e-book sellers what the prices for their books will be, publishers such as Macmillan will be doing the same thing, only they will be price fixing at a higher price, and there has been no indication that authors will be getting more money from the sale of each e-book, indicating that this fight is not about getting the authors more money, and will likely not benefit them much, or at all.
Third, he attacks DRM, despite the fact that most publishers don't want to sell DRM free books and that Amazon recently made the DRM free option easier for larger publishers to choose (it has always been a choice for the independent booksellers).
That's all I'm going to say about Buckell's arguments at this point. Now, on to Macmillan. They claim that they're new pricing option (with Amazon and other e-book sellers getting a fixed 30% of the book price) will allow e-book sellers like Amazon to make more money. Amazon currently takes a loss on most of their best seller and new books, since they currently pay the publishers about 1/2 the list price of a book in order to sell it online. Ender in Exile was list priced at $25.95 which means that Amazon paid Macmillan (who owns Tor) $12.975. This means that selling it at $9.99 meant approximately a $3 loss for Amazon. But that should be their choice!
Book and mortar booksellers like Barnes and Noble, took losses on sales of the newest Harry Potter books when they came out, because they hoped that by encouraging customer's to come in to their store and purchase this new book at a great price, buyers would purchase other books that were not so reduced in price. Publishers didn't get angry or upset about these reduced prices.
Macmillan's argument that they will benefit from the price changes doesn't stand up to scrutiny either. Again, using Ender in Exile as an example, at the time it was released, Amazon would have paid Macmillan $12.975 for the book, but if they would now set the price for Ender in Exile at $14.95 for a new release, under their new pricing point, they would receive 70% of the selling price or $10.465. Meaning Macmillan will actually make LESS on the sale of each e-book than they did with their previous pricing point.
It's all about them wanting to control the prices, not about how much they will make. If it were about what the publisher is making, they would have set up the new pricing in a way that earned them MORE per book, rather than less.
Posted by andi330 (Member # 8572) on :
quote:Originally posted by TomDavidson: From Stross' article:
quote:it allows Amazon to grab another chunk of the supply chain if they get away with it, turning the traditional publishers into vestigial editing/marketing appendages
Any publishing company who doesn't realize that this is what they are deserves what's going to happen to it.
They don't all even edit well. Some of the novels I've read recently have had some really abysmal spelling errors in them. All throughout the books. And I can't even spell.
Posted by Scott R (Member # 567) on :
quote:Never mind that with the publishers dictating to all e-book sellers what the prices for their books will be, publishers such as Macmillan will be doing the same thing, only they will be price fixing at a higher price, and there has been no indication that authors will be getting more money from the sale of each e-book, indicating that this fight is not about getting the authors more money, and will likely not benefit them much, or at all.
Well-- the publishers should have more of a say in what the price of a book is; they are the ones (as Buckell pointed out) that take the biggest risk and invest the most in the book.
Note that Buckell thinks that the sweet spot for books will be <$5.
I tend to think that this rift will push more authors and agents into thinking of new ways to exploit the e-book; and it's about time. Hopefully, authors won't just lump e-rights into their contracts; hopefully they'll begin to take charge of electronic rights the way that foreign rights are controlled.
Posted by fugu13 (Member # 2859) on :
quote:Well-- the publishers should have more of a say in what the price of a book is; they are the ones (as Buckell pointed out) that take the biggest risk and invest the most in the book.
is at tension with
quote:I tend to think that this rift will push more authors and agents into thinking of new ways to exploit the e-book; and it's about time. Hopefully, authors won't just lump e-rights into their contracts; hopefully they'll begin to take charge of electronic rights the way that foreign rights are controlled.
After all, if authors unbundle ebook rights from first publication contracts, then the original publishers will have no say in the ebook prices, despite taking almost the exact same risk, initially.
Also, I disagree that publishers should have more say in the price of the book because they take more of the risk. They should have say in what they price the book to others, but then those others should be able to price the book as desired, provided they then pay the publisher any owed fee. Publishers are not experts at marketing books to the general public, especially ebooks, and making them in charge of the price decisions is a quick way to make customers unhappy -- you can see this already with the > $10 price points they're advocating.
I'm pretty certain that the Real Reason (TM) for the fuss is about ebooks cannibalizing non-ebook sales (of new hardcovers, especially). Which will happen, and which publishers who try to fight will only see total sales erode in comparison to those who are willing to work with new delivery mechanisms.
Posted by Scott R (Member # 567) on :
quote:Publishers are not experts at marketing books to the general public, especially ebooks
I'm not sure how you come by this conclusion.
Dan Brown and Chistopher Paolini vehemently disagree with you as well, with many adverbs, adjectives, and arguments stolen from more intelligent writers.
Posted by Shmuel (Member # 7586) on :
Scott Westerfield's take. ("Hey, Amazon. When cutting off publishers, don’t start with the one that has the most science fiction writers. We will blog you dead!")
Hmm, maybe if I rephrase: Publishers are not experts at selling books to the general public, especially ebooks.
The selling of books to the public is a much more cooperative effort than has been put forward. Macmillan's take seems to be that, as the publisher, they will tell the world's largest book seller how best to sell books sustainably.
edit: perhaps a horrible analogy will help. Publisher strategy nowadays, especially for titles like the ones you mention, seems to consist mostly of the strategy of a mediocre slugger; at every moderately feasible pitch, swing with all your might. Of course the mediocre slugger gets home runs, and probably more than most batters, but that doesn't mean he's a good batter. Amazon is extremely experienced, with extensive real-time data based on how customers actually react, at figuring out detailed strategies to get customers to buy new things that they already wanted, even if they didn't know it yet.
[ February 01, 2010, 09:21 AM: Message edited by: fugu13 ]
Posted by DarkKnight (Member # 7536) on :
quote: Amazon.com says it will give in to publishing giant Macmillan and agree to sell electronic versions of its books even at prices it considers too high.
quote: "We want you to know that ultimately, however, we will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books," Amazon said in the posting.
Posted by TomDavidson (Member # 124) on :
quote:John Scalzi on how Amazon has made this into a PR disaster, and might have avoided doing so.
I don't know that it was a PR disaster. Certainly authors seem to think so, but most non-authors I know side pretty firmly with Amazon on this one. And let's face it: most published authors are pretty firmly in bed with the old-fashioned publishing model.
Posted by Scott R (Member # 567) on :
:agrees with Tom:
DK--
That's not capitulation. You still can't buy Macmillian books off Amazon. (The "capitulation" is the same thing someone posted earlier, and was excoriated by Scalzi.)
Posted by Scott R (Member # 567) on :
quote:Publishers are not experts at selling books to the general public, especially ebooks.
I agree with this-- the evidence is a bit too strong to disagree. From my point of view, e-books took the publishing world completely by surprise. The fact that they've fumbled, fuddled, and fussed over them is testament to the fact that they are, by and large, dinosaurs.
Wait. I think I already said something to that effect...
Posted by Shmuel (Member # 7586) on :
quote:Originally posted by TomDavidson: I don't know that it was a PR disaster. Certainly authors seem to think so, but most non-authors I know side pretty firmly with Amazon on this one. And let's face it: most published authors are pretty firmly in bed with the old-fashioned publishing model.
I have a foot in both camps -- I work in publishing, but I'm all about embracing new models -- and this particular tactic has made me switch from diehard Amazon fanboy to wanting to have nothing more to do with them.
But perhaps you're right about the wider reading public.
Posted by Scott R (Member # 567) on :
Interestingly, you can't get OSC's Ender's Game off of Amazon, but you CAN get Intergalactic Medicine Show...
Posted by TomDavidson (Member # 124) on :
quote:I work in publishing, but I'm all about embracing new models...
New model: advertise books less, don't allow retailers to send unpurchased books back to you, and charge $6 for an ebook, $1.50 of which goes to the author.
My gut feeling is that Tor learned the wrong lesson from their "free ebooks to celebrate our launch" bit, which according to a few blogs I've seen was also used as a sort of internal experiment: how many ebook readers are there out there, based upon demand for free ebooks?
The problem I had is that I downloaded far fewer of their free ebooks -- many of which were several years old -- than you might expect, mainly because most of them I had already purchased in paperback or read at a library. Using those numbers to figure out whether the market for first-run ebooks is price-sensitive or simply capped in the low four digits is IMO a fairly dangerous use of "statistics."
Posted by andi330 (Member # 8572) on :
The other problem with Macmillan's argument is that not ALL Kindle books cost $9.99. I have bought several of the Dresden Files books for Kindle for less than $9.99. Amazon does drop their prices over time.
Now, as for one final reason why e-books should not cost the same as print books. The argument has been made that the publishers take large risks in optioning and publishing books. This is true, I cannot argue with it. However, the publisher is not taking these risks for the purpose of publishing e-books. They are taking the risks for the physical books, and for most of them, e-books are an afterthought. It costs almost nothing extra to make the book available in various e-book formats, and so it should not cost the same as a physical book.
I'll wait for prices to drop before purchasing any e-book from Macmillan. If they don't, I guess I won't be purchasing their books. Every shelf in my small grad student apartment is full, so physical books can't come to live here unless I give up another book that I already own. Since I'm not willing to do that, the local library will have to do for books whose price I don't like. For the first year ever this year, I received no books for Christmas, because there was nowhere to put them. I already purchased the Kindle, and have no desire to change to a different device at this time, and with this new model it appears that it wouldn't make a difference anyway. So Macmillan may have just lost all of my business. And I'm not the only one. The blogs of readers seem to support amazon on this, and there's already a $9.99 boycott tag on Amazon. Any Kindle book priced above $9.99 is being tagged by users with a 9.99 boycott tag, encouraging users not to purchase e-books that are priced above $9.99
Posted by Scott R (Member # 567) on :
quote:It costs almost nothing extra to make the book available in various e-book formats, and so it should not cost the same as a physical book.
The publishers seem to agree that an ebook should not cost the same as a physical book. How much it should not cost the same is the dispute.
I don't really see the >$10 price as being feasible in the long run; I think that publishers are going to come down eventually.
Posted by andi330 (Member # 8572) on :
Except that since I can usually get a hardcover copy of a brand new book for $15 at bookstores like Barnes and Noble, that argument doesn't hold up. They want people to pay the same price they would pay for the physical book, which is unrealistic.
Posted by Shmuel (Member # 7586) on :
quote:Now, before I go any further, let me clarify one thing: I absolutely believe $15 is too high a price for e-books. I believe and have said many times that the publishing industry threatens to strangle the baby e-book market in its crib with everything from DRM to refusing to allow text-to-speech features in e-readers to trying to impose antiquated release windows for e-book editions, and that includes the idea that a digital copy of a book should cost $15. That said, it's time to let the market decide what it's willing to pay.
Posted by fugu13 (Member # 2859) on :
It would help if the person knew what "market" meant. A publisher dictating a price, regardless of how much they try to "adapt" that price "as the market demands" is not letting the market price the book. The person is advocating for command and control by publishers, not market pricing.
Out of curiousity, why do you agree with it? I see pretty significant evidence that Amazon is the one adjusting prices to deal with market realities, and the author of the article offers no evidence to the contrary.
Posted by Scott R (Member # 567) on :
From the Agents:
quote:"The AAR strongly believes that the future of the digital book market requires a business model that is sustainable over the long term, and is fair to retailers, publishers and our authors. To be in the best interests of our clients, such a model must respect the high value of book-length work, and adhere to the long-held practice in all media (and most retailing) that new and exciting work bears the highest prices. We have never believed that a model that incurs a per unit loss on every sale, and sets an unrealistically low price on the most popular bestselling books, can possibly be in the best long term interests of our clients or the publishing industry. Therefore we applaud Macmillan's stance on e-book terms; and Amazon's stated intention to work within Macmillan's model. We hope and assume other publishers will soon follow suit.
"It is unclear at the moment the extent to which the 'agency model' sales terms will work to the advantage of our clients. But it is clear that having access to our authors' work used as a weapon in negotiation is an unacceptable turn of events that we roundly condemn. Regardless of the content of the negotiations between Amazon and Macmillan, about which we have no information beyond what has been reported publicly, we believe that Amazon's punitive choice to stop selling print editions of work by all Macmillan authors was a blow to the industry and to authors. We certainly hope to see Amazon rectifying this situation with regard to our Macmillan authors immediately. We and our clients have been hugely supportive of Amazon's innovative, indeed groundbreaking efforts since its inception, and we hope that going forward the spirit of partnership between Amazon and our authors can be once again something we can depend upon."
Posted by fugu13 (Member # 2859) on :
I hope they're aware that this just isn't accurate:
quote:To be in the best interests of our clients, such a model must respect the high value of book-length work, and adhere to the long-held practice in all media (and most retailing) that new and exciting work bears the highest prices.
If by "exciting" we mean "best-selling", then standard practice in the book-selling industry is clearly to offer the "new and exciting" works at a significant discount compared to "new and not as exciting" works (the ones not on important best-seller lists). See Borders, B&N, Wal-Mart, Target, and Amazon as examples.
That viewpoint seems to be a very significant bit of cognitive dissonance on the part of Macmillan and the AAR.
Posted by Scott R (Member # 567) on :
The overall qualifier is "To be in the best interests of our clients..."
I don't think that the statement the AAR made is inaccurate from that standpoint (also, note the historical and general frame of the statement: "long held" and "all media").
Posted by fugu13 (Member # 2859) on :
Of course they think it is in the best interest of their clients.
But it is not a "long-held practice in all media (and most retailing)". Lower prices on the best-selling new items (compared to new items that are not as popular) have been a standard practice for quite some time (hundreds of years, maybe thousands, for certain sorts of items). Their statement is a misrepresentation of reality.
Posted by Scott R (Member # 567) on :
quote:Lower prices on the best-selling new items (compared to new items that are not as popular) have been a standard practice for quite some time (hundreds of years, maybe thousands, for certain sorts of items). Their statement is a misrepresentation of reality.
Are you saying that it's more likely that new items will be discounted than older items?
I just don't see the evidence for that, fugu. Video games, music, movies, even hardware like computers, washing machines, etc-- newer items fetch premium pricing.
I'm tempted to say that the same is true of books, historically. But I really don't have the data to back it up.
Posted by TomDavidson (Member # 124) on :
quote:That said, it's time to let the market decide what it's willing to pay.
"The market" is not the publisher talking to the retailer. "The market" is the reader talking to the retailer. The reader doesn't care one whit about the publisher; the publisher provides a third-party service that promotes and edits the book, but otherwise should keep its nose out of something like pricing over which it should have no say whatsoever.
quote:Are you saying that it's more likely that new items will be discounted than older items?
Certainly the most popular ones are. Borders and Barnes & Noble, for example, explicitly discount their bestsellers in a way they do not discount their backlist paperbacks. Some of these discounts are quite severe. Amazon, of course, often discounts them so much that they lose a significant amount of money per book.
Oddly (or, really, not so oddly), this only bothers the publisher when it's done for ebooks.
Posted by fugu13 (Member # 2859) on :
You should check out the prices on the newest, most popular DVDs sometime. Or the hottest new CDs. Indeed, you might consider that the price of viewing a movie in-theater or listening to a song on the radio is a lower pricing compared to the cost of purchasing the item in question.
I should have mentioned that this mostly applies to situations where the cost to duplicate was low compared to the cost to produce in the first place divided by expected sales.
However, you can see similar outcomes in some other sorts of things: the hottest new razors or inkjet printers, for instance, are often among the cheapest.
edit: as Tom mentions, Borders puts 30% off or better stickers on most hardcover bestsellers (but not on other new hardcovers), and B&N gives a 40% off discount to members on hardcover bestsellers (again, not on other new hardcovers).
Posted by NobleHunter (Member # 12043) on :
The hottest, new items are discounted, sure. But many more items are not. Bestsellers make up a small fraction of the number of titles and probably an even smaller fraction of authors. Saying that all books should be treated like them neglects the fact that there are specific reasons retailers discount those titles and not others.
The industry believes that discounting those few titles is to their benefit. Discounting all titles would be problematic for all aspects of the industry. Amazon is banking on selling Kindles to offset their losses now, and hoping the costs of production will come down as ebooks become the main distribution method.
Posted by TomDavidson (Member # 124) on :
quote:The industry believes that discounting those few titles is to their benefit.
So does Amazon. Interestingly, they aren't allowed to do so.
Posted by fugu13 (Member # 2859) on :
I'm pretty certain Amazon is selling Kindles to offset their losses. What's more, I'm pretty certain that sales of other books to people who buy a Kindle because of the availability of reasonably priced bestsellers offset their losses, which is entirely sustainable, even if the price drops.
The reason for this is, I know Amazon is a company that is extremely data-driven. They're paying attention to what people actually do in response to prices, not wishful thinking.
What, you think all those companies selling the latest Harry Potter book at a loss were delusional?
Posted by BryanP (Member # 7772) on :
The thing I don't understand about all this is, how is $9.99 for an ebook too little? There's no printing, binding or shipping involved. I mean I don't know what the profit margin is with a traditional hardcover, but after all the expenses and the cut that goes to the retailer, is it more than $7? Cause under Amazon's preferred method, the publisher gets $7 and Amazon gets $3. Sounds pretty good to me, it's not like it costs a lot of money to ship an ebook to Amazon. So unless the profit made by the publisher on a regular book is greater than $7, I don't see why they'd complain about the price point. You concerned about devaluing books? Well guess what, an ebook just isn't as valuable. I don't see why I would pay $14.99 for an ebook when I can get the physical edition for, in the case of many popular books, only a couple of dollars more. Is Amazon being a bully about it? Maybe, but they've also found a business model that seems to be making them and publishers a lot of money.
It's sort of like the music industry complaining about Apple setting the price of a song at $0.99 while almost single-handedly getting people to actually pay for music, rather than steal it. But it's too little! No, it's actually just right and at this point you're lucky you're selling anything at all.
By the way, what is the relationship between Tor and Macmillan?
Posted by TomDavidson (Member # 124) on :
quote:The thing I don't understand about all this is, how is $9.99 for an ebook too little? There's no printing, binding or shipping involved.
For certain books that aren't expected to have legs, the printing is a small fraction of the development cost.
Posted by NobleHunter (Member # 12043) on :
The profit margins of the publishing industry are tiny. Right now, the costs of actually making a book are being borne by the print editions. So the revenue that pays editors, authors, agents, etc. comes from print books, often hardcover editions.
I think the publishers are concerned about what will happen when the market for print books collapses, which it will. If fiat pricing has made $10 the ceiling for book prices then they may not have the revenue to cover costs. Especially since it has been demonstrated that people will pay more for books. Baen offers ARCs at $15, which people are apparently buying.
Why should publishers accept unnecessarily low prices? Especially since all they're asking for is the ability to be flexible in the pricing, not that all books must sell for $15.
Posted by TomDavidson (Member # 124) on :
quote:Why should publishers accept unnecessarily low prices? Especially since all they're asking for is the ability to be flexible in the pricing...
Well, not necessarily. What they're asking for is for other people to be less flexible in the pricing.
Posted by NobleHunter (Member # 12043) on :
How so? Macmillan was asking for a greater range in prices of ebooks, doesn't that make them more flexible than Amazon, who was asking for a smaller range?
Posted by TomDavidson (Member # 124) on :
I guess it depends which attribute you're actually testing for flexibility. Macmillian wants to restrict the ability of vendors to price books; Macmillian, however, would prefer that their books be priced with more variation than one prominent vendor would like. I don't know which is more flexible from your POV. Posted by NobleHunter (Member # 12043) on :
I'm inclined to think the producers should set the prices of the products. Since authors can't, (yet anyways, regardless of how this squabble turns out, traditional publishing is doomed) I think publishers are the next logical step in the chain.
Posted by Hobbes (Member # 433) on :
quote:I'm inclined to think the producers should set the prices of the products.
May I ask why? It doesn't really make a lot of sense to me to both sell a product to a middle man and demand they resell at a specific price. Why would it better to have the publisher retain control of the product after first sale?
Hobbes Posted by NobleHunter (Member # 12043) on :
Because without that control, the retailer can push for lower prices, perhaps beyond what the producer can afford. I'm pretty sure WalMart has done this, for an extreme example.
Also, the value of an object depends not only on the costs of creation, but also the price at which is it offered. If all books are offered at a price that does not cover costs, then their value may fall below the costs of creation. That's very bad for producers.
ETA: the value also depends on what people think they should be paying for it, which often has no connects to the cost of creating it. Cellphones are a perfect example of this.
Posted by Orincoro (Member # 8854) on :
quote:Originally posted by NobleHunter: The industry believes that discounting those few titles is to their benefit. Discounting all titles would be problematic for all aspects of the industry. Amazon is banking on selling Kindles to offset their losses now, and hoping the costs of production will come down as ebooks become the main distribution method.
Nobody would expect them not to do this. This is the way new platforms *have* to be launched. Nobody can expect to produce hardware or sell in a new market at anything but a loss for some time. That's why every gaming platform is sold at a loss, often for several years, as was the ipod at the beginning, as are most new product lines that bank on developing an emerging market. The idea is not to make a billion dollars this year, but to set yourself in a position where it will be possible to make 10 billion in ten years. You can sell everything at a loss at the beginning as long as you can bankroll the project for a number of years. Unfortunately, Amazon runs into the small problem of authors and publishers who are not themselves huge corporations, and who don't fit well into that long term plan- the writers have to make money *now*. The same money they've already been making, because they're the ones who gave up decades of their lives dedicating themselves to their craft, and may just now be seeing the light of day.
Posted by Mucus (Member # 9735) on :
quote:Originally posted by Orincoro: ... This is the way new platforms *have* to be launched. Nobody can expect to produce hardware or sell in a new market at anything but a loss for some time. That's why every gaming platform is sold at a loss, often for several years ...
Here's somebody
quote:Nintendo President Satoru Iwata promised from the very beginning that the Wii console would generate a profit on day one. While Nintendo has not disclosed exactly how much it costs them to make the Wii console, a new report in the Financial Times cites Nikko Citigroup analyst Soichiro Fukuda who estimates that Nintendo's gross profit per console is 1,500 yen in Japan, 5,600 yen in the U.S. and 8,500 yen in Europe. That equates to about $13, $49 and $74, respectively.
quote:Originally posted by NobleHunter: I think the publishers are concerned about what will happen when the market for print books collapses, which it will.
I'm skeptical. The current publishing structure may collapse, but there will always be a market for ink and paper books.
Posted by fugu13 (Member # 2859) on :
quote:Because without that control, the retailer can push for lower prices, perhaps beyond what the producer can afford. I'm pretty sure WalMart has done this, for an extreme example.
Quite a strange complaint, given Amazon manifestly hasn't been doing this. They've been paying the stated prices. Also a strange complaint, because I don't see how the publisher setting the price would prevent Amazon, as a large retailer, exerting pressure to make the price lower.
Publishers want higher prices because their business models will be less and less profitable as time goes on. What they neglect to understand is two-fold:
1) trying to set price norms like this will not change that, and will quite possibly make profits decline faster.
2) the right answer is to change the business model more fundamentally, not try to fortify the existing one. This has played out in numerous other industries, repeatedly. Check out the history of disk drive manufacturing, sometime.
Heck, if authors do manage to make non-bundled ebook rights a contract norm (as advocated, somewhat strangely, by one of the big defenders of the publishers in this thread), then publishers will just have the rug taken out from under them entirely. Why on earth would an author let their first publishing house keep the ebook rights when that publisher is requiring a price point that will drastically reduce that titles' ebook sales?
This reminds me, I really should get around to starting that small publishing company I've planned out in the past.
Posted by NobleHunter (Member # 12043) on :
If people are willing to pay $15 for an ebook, and under some circumstances they are, setting the price ceiling below that could quite easily make profits decline faster.
Many readers are willing to pay a premium to get the books they want immediately. That's why hardcover editions have persisted, people are willing to pay more to get the book as soon as they can, even if they know that waiting will get them a better deal.
Of course the business model will need to change, but I prefer that change to be controlled by the producers, or those closest to them, rather than the retailer.
Posted by TomDavidson (Member # 124) on :
quote:I prefer that change to be controlled by the producers, or those closest to them, rather than the retailer.
Why? The retailer has the closest relationship to the buyer, who is the party who should have the most power. The smart thing for a producer to do, in a world without distribution inefficiencies (i.e. the Internet), is to become a retailer -- for precisely this reason.
Posted by rivka (Member # 4859) on :
quote:Originally posted by NobleHunter: Many readers are willing to pay a premium to get the books they want immediately. That's why hardcover editions have persisted, people are willing to pay more to get the book as soon as they can, even if they know that waiting will get them a better deal.
That's only part of it. Some readers prefer hardcovers, and don't consider MMPs a "better deal" at all.
Posted by Scott R (Member # 567) on :
quote:if authors do manage to make non-bundled ebook rights a contract norm (as advocated, somewhat strangely, by one of the big defenders of the publishers in this thread
Er...no. Assuming you're talking about me, I'm pro-author, and I'm not a fan of Amazon. But where I've had questions about your analysis (and I still think you're wrong about AAR not understanding the issues), I've raised them.
That doesn't mean I'm pro-publisher. I said from the outset that the publishing industry is a bloated, flatulent dinosaur. I've implied it is trying to maintain the status quo in a way that is not healthy.
I think that Amazon is close to becoming THE E-publisher; and I think they will shortly make a convincing case for selling e-rights separately, or at least change the way that they're sold so that e-rights are more like foreign rights: a bigger slice of royalties for the author. As one individual on the previous page noted, Amazon is offering 70% royalties to authors for their e-books.
Posted by Scott R (Member # 567) on :
quote:The smart thing for a producer to do, in a world without distribution inefficiencies (i.e. the Internet), is to become a retailer -- for precisely this reason.
I don't disagree, but Ingram would pitch a fit.
And the publishers don't have the kind of money it would take to invest in this effort.
Posted by fugu13 (Member # 2859) on :
quote:If people are willing to pay $15 for an ebook, and under some circumstances they are, setting the price ceiling below that could quite easily make profits decline faster.
Amazon has no problem paying publishers the desired amount > $9.99, and has been. So publishers aren't taking the hit, amazon is, and they have the data to suggest it is worth it.
quote:Of course the business model will need to change, but I prefer that change to be controlled by the producers, or those closest to them, rather than the retailer.
The idea that the change can be controlled by the producer is fallacious. Trying to act like they control it will only lead to a greater failure to adapt. Find and read a copy of The Innovator's Dilemma and you'll understand this better.
Of course, the change isn't going to be "controlled" by amazon, either. They've noticed people have limits on what they'll pay for ebooks, but that if you can get them buying ebooks at that price (even at a loss), they'll buy enough more to make up for it. That is reacting to a change that is already in progress, not controlling it.
[ February 01, 2010, 09:01 PM: Message edited by: fugu13 ]
Posted by NobleHunter (Member # 12043) on :
What I meant is that the process of adaptation could be controlled by the producers, though perhaps the suggested book will rule that out to.
And if ebooks are sold at a loss, how will buying more ebooks help? I seriously doubt sales of books from the backlist would cover those losses. Amazon is really trying to increase its market share so that when the shift to ebooks is complete they'll be in a position to set the prices to where ever they want.
Posted by Scott R (Member # 567) on :
From what I understand from several others, that's exactly what seems to be motivating Amazon-- the idea that they'll take the losses now in order to have full control over the distribution channels later.
I'm not comfortable with that idea. It smacks of the problems of comics distributors (Diamond)-- a system in which the distributor all but dictates which comics are successful.
Then again, Macmillian was willing to go along with Amazon's monopoly, as long as they were willing to let the idea of flex pricing play.
Posted by fugu13 (Member # 2859) on :
Most ebooks are not sold at a loss. The very newest books are, but most are not. Even the $0 ebooks generally pay for themselves through ad views when purchasing. That people buy the newest bestsellers at a loss seems to grease the wheels of ebook purchasing; I doubt there are many people who put just bestsellers and $0 books on their kindle, to the exclusion of others.
quote: Amazon is really trying to increase its market share so that when the shift to ebooks is complete they'll be in a position to set the prices to where ever they want.
I seriously doubt it. While they'd certainly enjoy it, they pretty clearly aren't going to dominate the ebook reader market that completely. Also, as they've noted, people will choose not to pay more than a certain amount for an ebook, and that amount is, even for popular books, around $10. They won't be able to set prices significantly higher and survive. People will just buy different books and hard copy books if the prices go above that.
After all, Amazon is a major player in a number of markets, and they use that significant market power to offer lower prices to consumers. They've found that works rather well. The idea that they're out to raise prices as high as they can is the sort of reaction the publishers would have, and thinking it would be a good idea for the implementer (such as Macmillan wants to be) reveals a fundamental misunderstanding about internet sales and distribution.
Posted by TomDavidson (Member # 124) on :
*nod* For my part, I suspect Amazon's real motivation is that they know people like me won't buy a Kindle unless we can get ebooks significantly cheaper than we can get paperbacks.
Posted by BryanP (Member # 7772) on :
quote:Originally posted by TomDavidson:
quote:The thing I don't understand about all this is, how is $9.99 for an ebook too little? There's no printing, binding or shipping involved.
For certain books that aren't expected to have legs, the printing is a small fraction of the development cost.
Okay, sure, the printing costs rise as a percentage of total costs the more books that are printed. But I'm still curious how the profit margins compare between ebooks and printed books. Because I suspect that publishers are either trying to unrealistically maximize profits (by overpricing ebooks) or attempt to prevent a devaluation of books whereby people think they can get a brand new (e)book for $9.99 so why would they pay for a $25 hardcover?
If the profit margin really is greater for printed books then I have an easier time understanding Macmillan's stance, even if I think it's doomed in the long run. I'm not saying I would never pay $15 for an ebook (I bought a Nook mainly cause I don't have room for lots of books with my current living situation), but I would certainly buy more books at $9.99.
Posted by andi330 (Member # 8572) on :
I just noticed OSC's notice on the main page urging people not to buy from Amazon. All respect to you Mr. Card, but I believe that Amazon has the right to sell their books, all of their books, regardless of format, at whatever price they choose. Edit: I also believe that if Amazon believes that Macmillan is being unreasonable in their demands, they have the right to stop doing business with them. I'm not going to boycott them because your publisher wants to force them to change their prices for one specific format of books.
Thank you.
[ February 02, 2010, 12:38 AM: Message edited by: andi330 ]
Posted by TomDavidson (Member # 124) on :
A lot of Tor authors are in the habit of obsessively checking their daily Amazon ranking. Being removed from Amazon may well have felt like having their livelihoods and favorite hobbies extracted from them with tweezers, without warning. I would expect them to be bitter for a while, whether or not it's particularly rational of them.
Posted by andi330 (Member # 8572) on :
I can understand his being upset. Particularly as I can't tell that any of his books are even available for Kindle at all, so it probably seems to him that he was punished for something he isn't involved in. But Amazon is a retailer and retailers should get to price things however they want, as long as they pay the wholesaler, or in Amazon's case publisher, the price agreed on per book.
Then again, the Women of Mystery explain that publishers don't view the book business as retail.
quote:But Macmillan doesn't see books as retail products. It's not clear how they do see them, but that's not their fault--it's the fault of the publishing industry as a whole, which has never conformed to the rules of retail and doesn't see why it should now. Rather than consider changing to a traditional retail model, Macmillan wants to go to yet another new model, the "agency" model, wherein they would be able to dictate the prices for ebooks (licensed? sold? it's unclear). And those prices would be--according to Sargent--$14.99 for the ebook when the hardcover comes out.
Which in my opinion is foolish, because regardless of how they want it to be, book sales are a retail business, and trying to treat it in some other way is what is going to be the downfall of the major publishing companies, much as it has been for the newspaper outlets, who have all lost a lot of money and circulation as the availability of news on the internet has become prominent.
Self-published Allen Harkleroad states that he's tried changing the prices of his e-books to more than 9.99 in the past himself, it didn't improve his sales.
quote: Electronic books are a “funny” species. While they contain the same content as print counterparts, consumers are reluctant to spend the same amount as they would on a print edition. I’ve tested pricing on the Kindle versions of my books and have found that if I set pricing above $9.99 my sales suffer. If I set the pricing at $9.99 or less I tend to sell more books. FYI, Consumers end up setting the prices on eBooks, and quite frankly it’s a stretch to convince consumers to fork over 15 bucks for a digital edition.
Frankly, I doubt most publishers really understand how to sell books. I doubt this because, for the most part, publishers don't sell books. Retailers sell books, and give publishers the numbers. They do that a variety of different ways, often by offering deep 30-40% discounts on new books. I can't remember the last time I paid the actual hardcover price for a book. Though I do remember that when I bought White Knight by Jim Butcher, I had to return the first copy and exchange it because it had a bad binding.
And as rivka pointed out in a response to Noble Hunter above, when I was still purchasing physical books, I bought mostly hardcover, not because I couldn't wait for the paperback though. I bought hardcover because the books I purchased, I fully expected to read many times, and paperbacks tend to fall apart over time. Hardcovers just last longer.
Oh, and Mr. Card, if you don't want readers to buy from Amazon, you need to remove the audible.com banner from your home page. After all, they're owned by Amazon.
Posted by scifibum (Member # 7625) on :
I think Card's probably justified in thinking Amazon overreacted. After all, Amazon caved pretty fast, so they probably decided the same thing.
Posted by theamazeeaz (Member # 6970) on :
The thing is, I wouldn't pay more than a mass-market paper-back price for an ebook.
I own a lot of books, but I would say that I don't buy enough books to recoup the cost of a Kindle, etc over two years.
Posted by andi330 (Member # 8572) on :
quote:Originally posted by scifibum: I think Card's probably justified in thinking Amazon overreacted. After all, Amazon caved pretty fast, so they probably decided the same thing.
I don't know that they overreacted. In fact, I think that if they held out for longer they might have gotten somewhere. Maybe not. It's a moot point because they didn't. However, if you're referring to my comment regarding removing the audible.com banner from the front page, I stand by it. I don't support and won't support an Amazon boycott, for the reasons stated above. However, if this site and the owner of it is urging a boycott of Amazon, any advertisements for Amazon and its companies should be removed. Amazon owns and operates Audible.com, and if the site is going to urge a boycott of Amazon, the banner urging people to support the site by purchasing from Audible should be removed.
Posted by kacard (Member # 200) on :
Memo from the Authors Guild for those interested in their perspective:
The Complete Authors Guild Memo
Subject: The Right Battle at the Right Time
Macmillan's current fight with Amazon over e-book business models is a necessary one for the industry. The stakes are high, particularly for Macmillan authors. In a squabble over e-books, Amazon quickly and pre-emptively escalated matters by removing the buy buttons from all Macmillan titles (with some exceptions for scholarly and educational books), in all editions, including all physical book editions. Thousands of authors and titles are affected; hardest and most unfairly hit are authors with new books published by Macmillan that are in their prime sales period.
Yet if Macmillan prevails, the eventual payoff for its authors (and all authors, if a successful result ripples through the industry) is likely to be significant and lasting.
For those of you who may have missed it, here's the story so far:
Last Thursday, Macmillan CEO John Sargent informed Amazon that beginning in March, it would offer Amazon access to a full range of e-book titles only if Amazon were willing to sell books on an "agency" model that would pay Amazon 30% of e-book proceeds and allow Macmillan to set its own retail price for e-books. (Currently, Amazon buys e-books as a reseller at a discount of 50% off the retail list price and sells at the price it chooses.) Macmillan's price under its agency model, in many cases, would be higher than the $9.99 ceiling that Amazon has been seeking to impose on the industry.
If Amazon didn't find the agency model acceptable, Sargent said Macmillan would expand its "windowing" of e-book editions. "Windowing" is the practice of waiting until a particular edition of a new book has been on the market for a while before making cheaper editions available. Publishers have for decades waited until the hardcover sales window has closed before opening the sales window on paperback editions, for example. This helps protect the sales channels for hardcover books. Windowing e-books is similarly believed to help protect a publisher's sales channels for physical books. The risk with windowing is that some owners of e-book devices are angered that low-priced e-book editions aren't available as soon as books are released in hardcover form.
This was a bold move by Macmillan. Amazon has a well-deserved reputation for playing hardball. When it doesn't get its way with publishers, Amazon tends to start removing "buy buttons" from the publisher's titles. It's a harsh tactic, by which Amazon uses its dominance of online bookselling to punish publishers who fail to fall in line with Amazon's business plans. Collateral damage in these scuffles, of course, are authors and readers. Authors lose their access to millions of readers who shop at Amazon; readers find some of their favorite authors' works unavailable. Generally, the ending is not a good one for the publisher or its authors -- Amazon's hold on the industry, controlling an estimated 75% of online trade book print sales in the U.S., is too strong for a publisher to withstand. The publisher caves, and yet more industry revenues are diverted to Amazon. This isn't good for those who care about books. Without a healthy ecosystem in publishing, one in which authors and publishers are fairly compensated for their work, the quality and variety of books available to readers will inevitably suffer.
Macmillan's move is timely because, at the moment, the e-book market is still far smaller than the physical book market, but the e-book market is growing quickly. The longer Macmillan waited, the more difficult the transition.
Amazon didn't wait for March, when Macmillan's new policy is slated to go into effect; it decided to hit Macmillan immediately and comprehensively, removing the buy buttons for nearly all Macmillan titles, in all editions. This is a direct attempt to use its clout in the physical book industry to enforce its business model in the e-book industry. In some ways, it was an unusual exercise of power for Amazon. The company has used the tactic of turning off buy buttons on several occasions before, but, with major publishers it's usually selective, and doesn't turn out the lights on nearly all titles. That treatment is reserved for smaller publishers. (Authors receive no advance warning of Amazon's treatment of their titles, nor can they do anything about it.)
Amazon, it appears, overreached. Macmillan was a bit too big a foe, and Amazon's bullying tactics were a bit too blatant. (For a flavor of media reaction, see this story in Fast Company.)
Sunday evening, Amazon announced that it would have to "capitulate" to Macmillan, "because Macmillan has a monopoly over its own titles." (By this definition, nearly every company exercises a monopoly over its products.) We're all still waiting for that capitulation: Macmillan's books still weren't available on Amazon on Monday evening.
If Macmillan does indeed prevail, the economics of authorship in the digital age are likely to improve considerably. We may go through some rough stretches to get there, however.
You'll be hearing more from us on this matter soon.
Posted by andi330 (Member # 8572) on :
I appreciate this opinion, and, this will likely be my last post in this thread for a while because the conversation seems to have hit a brick wall (unless of course something changes). One last thought though, is this.
Publishers and authors seem to be selectively ignoring a simple fact. Or maybe two. Or maybe, despite all the posts in this thread, I'm still, as a consumer just not understanding their viewpoint. Regardless, here are the two things I think are being ignored or forgotten.
The first is that the overwhelming majority of e-book readers already find 9.99 to be too much to pay for an e-book. Requiring Amazon and other e-book retailers to up their prices to the equivalent to hard cover books when they are first released (and $14.99 is about the price of a new bestseller hard cover with the discounts offered by all the major retailers these days) is not going to improve sales. It will certainly worsen them in the beginning, because many readers will refuse to purchase e-books at the higher price. Some of the readers will wait and purchase the book later when the price drops. Some may purchase a hard cover instead. But some will read the book at their local library and decide they don't like it, losing the sale forever. Others will download pirated copies of the books and stop paying for them all together.
Second, Amazon and other retailers are not an "agency" at all, and they are certainly not seen that way by the public. To the public, Amazon and other e-book retailers are just that, retailers, and the public understands retail to be something very specific. That a retailer purchases a product from a distributer at a set price. The retailer then can decide what price they want to set, and if they choose to take a loss, then that is their choice. In a post on the first page of this thread I used some math to show that the publishers are actually going to make less money on best-selling hard covers than they make under the current model. How the publishers can argue that making less money is good for their business and their authors is beyond me. Less money to the publisher means, as far as I can tell, less money to the author so I don't see the improvement for "everyone."
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