A writer friend of mine sent me two very interesting links today - one from Cory Doctorow’s blog and the other from John Sargeant, CEO of Macmillan publishers, as it appeared here in the Publishers’ Lunch.
Essentially, the disagreement stems from the value of electronic books for the Kindle system, but it has far reaching implications for all aspects of the publishing industry. Amazon, and here in Canada, Chapters/Indigo have long had a reputation of throwing their weight around against the publishing industry. All fascinating…
I almost asked for a Kindle for Xmas. Now I’m happy that I didn’t. I think that ebooks are already overpriced at ten bucks a pop, and that Amazon is just trying to gouge readers with this price raise. Plus, if I buy an item, I want to actually own it and be able to use it as I see fit. This doesn’t include cracking digital media and then reselling it, but it does include being able to transfer it from one of my devices to another. For instance, I bought my husband an electronic dohickey which will play vinyl LPs, and also record those LPs to MP3 files. As I understand it, Kindle ebooks don’t allow for transfer to any technology that might be developed in the future.
That’s certainly Cory D.'s biggest concern - at present, the format is proprietary, and therefore, the Kindle can’t play anything bought from anywhere else, nor can a Kindle e-book be read on anything else. I’d rather pay $15 for an e-book that I actually own and can do with as I please than $10 for a book that’s essentially rented.
Also, pulling all the books from a particular publisher is the kind of tactic that makes me leery of the big box/mail order stores in the first place.
I’m not in any kind of hurry to get an e-reader, and even if I ever do, I’m not giving up my print editions. (Mind you, I said that about the iPod - the only reason I got one was they were giving them away (to anyone even vaguely associated with a university) with the purchase of a new computer. “Bibbly-shuck t’ing!” thought I, “what kind of cabbage-bum creature would use this?” About a month later, I discovered podcasts and the rest is history…)
Actually, Amazon is trying to keep the price at around $10. Macmillan, the publisher, wants to see the price go up. So your ire should be directed at Macmillan, not Amazon.
You’re right on the latter, but not the former. Kindle books can only be read on Kindle-approved devices; right now, that’s the Kindle, the iPhone app, and the Windows-based Kindle reader.
But it can indeed play books bought from other sources, provided the other source doesn’t have DRM that won’t allow it to be played on other devices. So if you download a book from Gutenberg, for example, it works fine on the Kindle.
It also plays mp3 files, provided they’re DRM-free.
None of this should surprise anybody. Whenever a retailer sells a product below the standard wholesale price it sets off a war in the industry. Amazon admits that it is losing money on Kindle editions. It’s using them as a loss leader to lure customers to the site so that they’ll buy products with a higher markup. Anybody who thinks that Amazon is the white hats here is mistaken. They’re taking the money out of your wallets in other ways. They have to or they’ll go out of business.
What the proper price point is for an electronic edition of a book is a different issue. Nobody really knows what that is yet. And the price of a book is hugely important because authors get their royalties based on the book’s official price, not on what a store sells it for. If you lower the price, then the author gets less. If the author keeps the same amount on a lower price, then the difference comes directly out of the publisher’s pocket. Somebody gets hurt. You can argue that it’s cheaper to publish electronic editions and so the publisher should get less, but how is that an argument that you would want to take to a publisher’s boss, since all major publishers are teeny tiny insignificant pieces of multinational corporations who’ve been complaining for years that they should return 10% and only return 4%? If you cut a price in half then you half to sell twice as many copies just to get to the same place. Will that happen? Not always.
Yes, I know that as customers your only thought is CHEAPER. But if CHEAPER puts everybody out of business then you’re only hurting yourself. You’ll become like all the fools who proudly stated that they never watched NBC and only watched Conan on YouTube and how stupid NBC was for canceling him.
Yes, that’s a huge part of this controversy - what will it do to the writers? I know a few published writers, and all of them have day jobs, despite good reviews, a loyal fan base, an ongoing publishing contract…
Here is an excellent answer to the question “What’s the average salary for a writer?” from Yahoo Answers.
Anything that makes it harder for a writer to earn a living is a bad idea, as far as I’m concerned.
You have a contradiction there. If the author’s pay is dependent on the official price of the book, the fact that Amazon sells them for $10 does nothing to that payment. And it doesn’t hurt the publisher either, because Amazon is paying them what ever the agreed amount is. If Amazon contracts for books with an official price of $15, and pays $11 per book to the publisher, the publisher and author get the same amount of money whether Amazon sells the book for $25 or $1.
The battle is over what the basic list price and royalty structure of electronic editions is going to be, not what is now. The publishers don’t want Amazon to be the one who decides it, by default.
Well, apparently Amazon has conceded, for the moment at least.
Fuck Amazon in the ass for this statement:
Fuck you, Amazon.
They have a monopoly over their titles because they are THEIR titles, assholes. They (and their authors) own the copyright, and they can decide whether they want to sell them or not. For you to imply that this is some sort of nefarious plot on Macmillan’s part is pretty fucking low. Macmillan is using its market leverage here, exactly the same way that Amazon uses its market leverage at every available opportunity.
I realize that Macmillan isn’t some small business looking out for the little guy, and they probably screw their authors just about as much as most large entertainment corporations screw their artists, but for Amazon to play the poor, out-muscled corporate underdog here is pretty fucking lame.
This isn’t a good time for Amazon to pull shit like this. Apple has already announced their iBook store will work the same way as their app store. In other words, the publisher will set the price and Apple will accept a commission, rather than Apple informing the publisher of the price and also informing the publisher will be forced to sell the book at a steep discount.
On the other hand, I think publishers who think that ebooks can realistically be sold for over $10 are fooling themselves and are going to price themselves out of a growing market. I’ve been in epublishing for 5 years now, and I watched it grow from the nichiest of niche markets into one that’s a multi-million dollar year industry. No, that doesn’t even begin to touch how big the New York pubs are, but my point is, there’s already a growing market there, there’s already price structure that’s becoming more common, and there’s already standard royalty rates. It doesn’t hurt me if a book is sold for $10 rather than $15, because 35% of $10 is greater than 4% of $15. But that sort of royalty rate is not standard in New York, and so while small presses and epublishers will go along with Kindle’s price structure (and do well with it) the bigger publishers are going to resist and resist hard. I’ve seen agents and editors cite the needs of the author when it comes to ebook pricing, as though they simply haven’t realized (or don’t care) that that problem has already been solved.
So in conclusion, Amazon is in the wrong. But they’re going to keep flexing their muscles on the market, hoping that one day the publishers, writers, and consumers won’t be paying attention. Publishers should be allowed to set their own prices, I believe, even if they are going to price themselves right out of the market (because nothing the publishing industry EVER does makes any sort of sense at all.) Macmillan clearly doesn’t understand the market that’s already been growing and thriving for the better part of the decade, but Amazon shouldn’t have the right to strong-arm a publisher. Who do they think they are? Barnes and Noble? Borders? (I shudder at the thought of Amazon ever getting the same sort of power as one of the book retailers or Wal Mart.)
The comments on that thread are hilarious. I don’t read ebooks, therefore I’m against this pricing policy! It really is Conan all over.
I’m not sure I get this. If Apple is going to be selling books for the same $15.00 that Macmillan wants Amazon to sell its books for, how does this hurt Amazon?
And why aren’t the people who are hammering Amazon hammering Apple? Oh. Never mind.
Of course I agree with you when you write “nothing the publishing industry EVER does makes any sort of sense at all.” I say that all the time and nobody ever seems to believe me. Yet it’s completely true. Being a writer is like being a deckhand on the Titanic.
It hurts Amazon because they’re not going to be the only game in town for much longer. They had a virtual monopoly with the Kindle and that’s why they think they can do shit like this and get away with it. But that’s going to change sooner or later (probably sooner). iBooks might very well develop into something like iTunes, except THEY won’t be pissing off all the publishers and getting involved in stupid little price wars that attract negative publicity. Sure, Macmillan probably won’t sell any ebooks for $15, because people simply won’t pay that regardless of what the publisher thinks, but at least they’ll have the freedom to set their own prices (and maybe adjust to what the market will bear once they see that there are plenty of other publishers selling at half that and doing just fine).
Isn’t Macmillan basically trying to unilaterally change Amazon’s business model and the way bookstores and publishers have interacted since before Barnes ever laid eyes on Noble? Since when are booksellers agents? They are retailers, and can discount their products however they want to, right? The same people who complain that Amazon won’t let you sell your ebooks don’t seem to realize than Macmillan is telling Amazon they cannot buy Macmillan’s books for $11 and sell them for $10, even if Amazon wants to. Could they do this with bound books? I don’t like Amazon acting like a 5000 lb. gorilla, but they’re just trying to stick with the status quo here. Macmillan is trying (and apparently succeeding) to force Amazon to do adopt a fundamentally different business model. Amazon has every reason to resist, and is right to do so since Macmillan’s model, while it might work for Apple, will hurt Amazon, consumers, and ultimately Macmillan itself.
This is exactly what happened with WMA and m4a. Customers didn’t want songs that were controlled with digital rights management. That went on for a few years but now that’s pretty much a thing of the past.
I think you’ll see the same in the years to come, especially as libraries start offering ebooks as well