Day 5 of Amazon’s boycott of Macmillan books (and authors)

This is day 5 of Amazon’s boycott of Macmillan print books and ebooks. (See my two previous blog posts if you are still catching up.) There has been no statement from Amazon other than Sunday’s unsigned post on the Kindle forum, and the “Buy” buttons have still not been restored.

John Scalzi’s new post, “A Call for Author Support,” highlights the damage this is doing to authors and notes that the best way to support authors is to buy their books. You have lots of choices as to how/where to do this.

Dennis Johnson at MobyLives has a good roundup of the latest reactions to the ebook war.

Kassia Kroszer at Booksquare continues to post new links of interest.

K Tempest Bradford has a post about “ebooks, eReaders, and why you need to keep up with the tech.”

And be sure to read Laura Miller’s excellent Salon piece on some of the less-understood elements of all this.

Update 1: The New York Times “Bits” blog has a new post titled “Macmillan Books Still Mostly Absent from Amazon.com,” which notes that “the battle is still raging… ‘We are talking,’ said John Sargent, chief executive of Macmillan, of discussions with Amazon. An Amazon spokesman declined to comment. Amazon is most likely withholding the books to maintain its leverage in negotiations, trying to get the best possible terms under the new agency model. Stay tuned.”

Update 2: Nicola Griffith has commented below that “Amazon wins, no matter what,” and she has linked to an interesting paidContent.org article by James McQuivey titled “In Amazon vs. Macmillan, Amazon is the Winner.

Agent Nathan Bransford’s new post, “What Should an E-Book Cost?“, discusses in detail the costs of producing ebooks and print books and various pricing issues.

Update 3: Tech writer Glenn Fleishman’s article, “Is the iPad a Kindle Killer?“, directly compares the Kindle and the iPad. Here’s his take on the Amazon/Macmillan ebook war:

For major publishers, Amazon pays 50 percent of the list price of the current cheapest print format book. If a book is only in hardcover – a new release like a Dan Brown blockbuster – the cover price might be $30 and Amazon pays $15. When that book goes into paperback format and sells for $12, Amazon pays just $6.

However, Amazon wants ebooks to be cheap, and thus charges $10 for books still available only in hardcover. It subsidizes the price of these books to set the overall price low, and reaps its profit margins from cheaper books for which it makes its full 100-percent markup – or even more. Since Amazon is the dominant ebook seller, it may be marking up books higher that are cheaper for it to license…

As I write this, Amazon is fighting a public battle with Macmillan… Macmillan wants to set a higher list price for newly published books as they appear in electronic form (that $13 to $15 mentioned earlier) and give Amazon 30 percent of that list price. If Amazon doesn’t want the new terms, Macmillan would offer a far smaller catalog than it currently provides when it starts its new ebook pricing system in March 2010…

Macmillan is in part trying to prevent the erosion of revenue from the big push for new big books in hardcover. If Amazon can sell such titles for $10, even at a loss, even if Macmillan makes $15 from Amazon selling at that price, it sets the wrong expectation, and overturns some of the economics for both blockbusters and mid-range books. (The blockbusters’ margins make possible more interesting books that sell vastly fewer copies.)

Amazon balked, and not only pulled Macmillan’s ebook titles, but also stopped selling all Macmillan print books temporarily. That’s the biggest hissy fit I’ve ever seen a company pull…

On the face of it, this seems like a bad deal for consumers. Wouldn’t you rather pay $10 than $15 for a book? Absolutely. But in the long run, Amazon would achieve a de facto control over book pricing, which would hurt small and large publishers.

But it’s not that Macmillan wants to sell books for $13 to $15 forever; rather, “Pricing will be dynamic over time.” That is, Macmillan can price books in response to demand, instead of being stuck either in whatever pricing system Amazon wants to impose, or the heavily discounting books off cover price in print.

With more control on the supply side, Macmillan can reduce prices as demand lessens. Those who desperately want a book immediately might pay $15 at its launch; Macmillan would also guarantee print and ebook editions would be issued at the same time. If you can wait, you might pay less and less…

This is good for readers, writers, and publishers, as well as the ebook distributors including Amazon and Apple. More books will be sold this way, and more revenue directed at the creators, not the middlemen….

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2 responses to “Day 5 of Amazon’s boycott of Macmillan books (and authors)

  1. Amazon wins, no matter what:

    http://paidcontent.org/article/419-in-amazon-vs.-macmillan-amazon-is-the-winner/

    The wouldn’t have picked this fight if they hadn’t been sure. I feel, I really feel, for those authors.

  2. Andrys Basten over at the blog ‘A Kindle World’ had a very interesting suggestion for something Amazon could do for its customers in the interim. Have a peek.

    Macmillan titles are desired among readers, so we’re suffering too. Discouraging readers seems like the dumbest possible thing for a reader-dependent industry to do, in this day and age.

    I personally feel fortunate that enough of Neal Stephenson’s work that I have not yet read is available in e- to allow me to weather what I hope will be a decent chunk of the storm. And of course, I am lucky that Macmillan is not Stephenson’s publisher.

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