Sunday, January 31, 2010

Amazon: We're Going to Lose

Macmillan E-books - kindle Discussion Forum
Dear Customers:

Macmillan, one of the "big six" publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.

We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. 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 customers will at that point decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book. We don't believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced e-books as an alternative.

Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!

Thank you for being a customer.

What can I say other than "Bitch, please."

A mission? Give me a fucking break. If Amazon was on a mission to do anything, it was a mission to make publishers their bitches and tell them what they could charge for their product. Which, in the long run, affects the writers' bottom line, because most of our royalties are based on sale price.

I believe that e-books should be priced lower. I don't think that price should be dictated by a single retailer.

15 comments:

Holden Richards said...

It won't be Apple and Sony will have some input on the final price of eBooks along with the consumer.

JD Rhoades said...

Which is why Amazon picked a particularly bad time to try and pull this stunt.

Karen in Ohio said...

This is a massive business mistake, on par with Jeff Zucker's stupidity with the Leno/Tonight Show/Conan debacle, or Toyota's gas pedal fail.

On the other hand, maybe it will help traditional books by throwing the whole electronic book industry into turmoil.

JD Rhoades said...

On the other hand, maybe it will help traditional books by throwing the whole electronic book industry into turmoil.

Turmoil would be preferable to having one company have as much power as Amazon wanted to have with this deal. They were trying to cut not only Apple's throat, but Macmillan's, by driving customers away from Macmillan's "paper" books to the cheaper e-book...that you could only read on Amazon's machine.

Jim Hetley said...

I believe the common term for this is "blaming the victim."

Dana King said...

I don't understand why the wholesale/retail model won't work for books. (Aside from the argument, "We've always done it this way.")

The manufacturer (publisher) sets whatever wholesale price it wants to sell to the retailer (bookseller). The author is paid a royalty based on this amount. The retailer then sells to the public for whatever it wants.

Of course, no returns. Order what you think you'll need. The publisher should be ready to quickly ship more, if needed, and the retailer must be prepared to discount or sell off its remainders to other outlets. (Everything $5.99 or Less, dollar stores, etc.)

We can argue that books are special and they're different, but just about everything else is sold like this. Books are different because a different model sprang up, and that model is showing its flaws more every day.

Joe Konrath said...

Amazon isn't just a retailer. They're the creator of the Kindle--the device publishers want to publish on.

As such, they should be able to dictate price.

And now they're offering authors 70% royalties.

People are going to switch to ebooks eventually. it's inevitable.

Publishers don't want this. They want to keep the price of ebooks high, so ebooks don't sell.

How is that good for anyone other than publishers?

With Amazon's model, authors can make more money.

I can understand being concerned about monopolies, but how is being at Amazon's mercy any different than being at any publisher's mercy, which we all are?

Karen in Ohio said...

They did a good job of marketing the Kindle, but it has a built-in conflict of interest, don't you think?

I think they got greedy and arrogant. Apple and Microsoft have the same disease, unfortunately.

JD Rhoades said...

Joe, as I've said elsewhere, what will bring the price of e-books down and keep them there is having more alternatives, including paper books for those that want them.

I disagree that publishers are trying to destroy the e-book. (Doesn't Macmillans' e-book pricing proposal top out at 14.99, which is still lower than hardcover?)

But they don't want the paper book destroyed either, especially if it's replaced by an e-book format that can only be read using one retailer's device.

Authors are making more money with one facet of Amazon's business: the one that allows authors to upload their work directly. But that seems to be working best for authors, such as yourself, who already have an audience from their ventures in "traditional" publishing. See "more alternatives" above.

But if Amazon becomes the only game in town, that's going to change, I guarantee it.

I keep coming back to the example of WalMart. WalMart does a very good job of using its size and ability to take short term losses in order to become not just the big dog, but the only dog in town, not just for customers but for their vendors as well. Except that, when a supplier starts selling exclusively to WalMart, WalMart starts dictating to them what they'll pay, and the supplier has to eat that or start their business over again with the customer base they've lost. I've seen it happen. I've also, in my rural area, seen it happen in agriculture. If you're a chicken farmer, and Perdue becomes your only customer, you're Perdue's bitch. I don't want to see that happen in publishing.

Karen in Ohio said...

Good analogy, Dusty; Walmart has done more to destroy its competition than almost any other company has ever done. They have singlehandedly turned many once-thriving downtowns into empty dustbowls.

Joe Konrath said...

I like the fact that we can disagree intelligently. Following some of the blogs on this issue, there's some real anger and name calling.

So at Bouchercon, I want to buy you dinner, so that I may convince you to my point of view by numbing your senses with expensive whiskey.

BTW--I'd kind of like to be Perdue's bitch...

Joe Konrath said...

On a semi-related note, I love the Penn & Teller show Bullshit.

They did an episode on Season 5 about the bad rap Wal-Mart gets. It's worth watching. We've all seen The High Cost of Low Price documentary and heard about all of Wal-Mart's underhanded tactics, but P&T take a skeptical approach to the matter, and it's pretty fascinating.

JD Rhoades said...

So at Bouchercon, I want to buy you dinner, so that I may convince you to my point of view by numbing your senses with expensive whiskey.

Works for me!

Actually, I'd love to see you and Scalzi debate this issue, because you're both very smart guys who know how to make your points coherently.

BTW--I'd kind of like to be Perdue's bitch...

Believe me, it ain't as much fun as it sounds. I'll tell you about it sometime.

Gerard Saylor said...

Free booze = politely bitching about Konrath?

Hell, if that's the case you'll owe me a case of single malt in no more than a week.

Joe Konrath said...

Actually, I'd love to see you and Scalzi debate this issue, because you're both very smart guys who know how to make your points coherently.

We disagree on this. And I'm sure it will come up at Romantic Times, because we're both on the same panel. :)