>Latest update (Jan 31) — See Below
Updated @ 4:35 CST — See Below
Maybe it’s the phase of the Moon. Maybe it’s an alien virus that’s caused it. But, whatever the case, the lunatics have escaped their rooms and are now running loose. Worse, one started the shouting and hysteria followed and I’m tired of it.
What, dear reader, am I talking about? I’m talking about the Amazon – Macmillan situation. In case you haven’t heard, last night Macmillan books (from, as far as I can tell, all their imprints) disappeared from Amazon.com. This includes e-books as well as hard copy books. Not included are those hard copy books sold by Amazon associates or Amazon.ca and other non-US versions of Amazon. Almost at once, twitter was a-flitter with conspiracy theories and accusations being flung at the evil that is Amazon.
Now, I’m not saying Amazon isn’t at fault. It may be. But, as far as I can tell, there is nothing to support that supposition except for one line in a NYT article, to-wit: Amazon is expressing its strong disagreement by temporarily removing Macmillan books, said this person, who did not want to be quoted by name because of the sensitivity of the matter. This unnamed person is supposedly someone “in the industry with knowledge of the dispute”.
Okay, call me a skeptic, but I have problems putting a whole lot of weight behind an unnamed source. I have further problems accepting as true an assertion from the media where they don’t have a secondary source to back up what their unnamed source claims. There used to be journalistic standards in this country but that’s a different issue and gets too close to politics — something I’ve promised my fellow MGCers I’d try to avoid.
Let’s look at the issue without the histrionics that have filled Twitter and Facebook and other online networks. Did Amazon delete the books? Yes. That’s undeniable because they aren’t there. But that’s not the real question. The real question is why did Amazon delete them? Is this a ploy by Jeff Bezos and Amazon to keep Macmillan in line, perhaps even to punish it for signing with Apple’s iPad? Or is it an attempt by Macmillan to force Amazon to increase e-book prices from $9.99 for best sellers to the $15.oo mark it prefers? Or perhaps it’s a bit of both. That’s more likely the truth.
Don’t be fooled by the blogs saying Amazon refused comment or couldn’t be reached for comment, etc. Guess what, the news broke well after business hours Friday night. There was no one in the office to comment, in my guess. But that doesn’t play nearly as well in print as saying Amazon refused comment or couldn’t be reached for comment, etc. And, gee, no one from Macmillan has commented either but you don’t see anything being made of that.
So who are the ones being hurt by the removal of these books from Amazon? Readers and authors. Readers because they can’t get their e-books in Kindle format and at a reasonable price. Sure they can go to Barnes and Noble or Sony or Fictionwise and buy the book but, guess what, those sites have DRM as well. Which means they won’t work on a kindle unless you break DRM. So, those folks out there yelling about Amazon having DRM and that’s evil and they need to do what other e-book sellers are doing need to look at the facts again. Beyond the DRM issue, price becomes an issue. I checked several titles last night and even if I could have bought the books in a Kindle-friendly format, I wouldn’t have. Why pay more than $20.00 for an e-book when I can go out and buy it for half that price at the local used bookstore? Oh wait, that’s what Macmillan wants me to do. They want me to buy the hard cover of the book and not the e-book. But, if I buy the discounted book at the resale shop, the authors don’t get anything for it.
I’ve just demonstrated one way authors are being hurt by this current situation. Another way is that, with their books gone from Amazon.com, they are losing potential sales. That’s reality. Another reality is that some of these same authors are pissing off potential buyers by blaming Amazon without any real proof that they are the ones at fault and by removing their Amazon author pages as well as removing their Amazon client buttons from their websites. Come on, guys, take a step back. Take a deep breath and think for a moment. And quit acting like a bunch of lemmings following the crowd over the edge of the cliff just because someone said to jump.
What does all this mean? It means that, as I’ve said before, publishing is changing and the major houses hate it. They hate the fact they no longer have the control of the buying public like they used to. They hate the fact they don’t control sellers as they once did. In short, they hate change. The sad thing is, because most publishers — and all too many authors — have no grasp of the economics at play right now, there are going to be many more losers in this battle then there has to be. We’ve already lost most of the mom and pop bookstores because the publishers liked the way the big box stores could order more books and potentially sell them. So what happened, the big box stores cornered the market and could dictate terms to the publishers, hitting the publishers in the pocketbook, hard. Then, with the advent of the internet and e-commerce, they failed to adapt and develop their own on-line sales presence, leading to Amazon.
Now, the furor is over e-books and their pricing. Publishers refuse to realize they can sell more e-books at $10.00 than they can hard cover books at almost $30.oo. What will their next battle be? Will they pull their books from the shelves of stores like Walmart and Target because they sell the “best sellers” for $10.oo and discount paperbacks? How does any of that help the reading public and the authors?
Okay, I can hear some of the authors out there grinding their teeth and sharpening their pencils to stab me through the heart because I’m advocating lower prices for e-books and taking money out of their pockets. No, I’m not. Okay, most have their royalties based on sales price instead of cover price. However, they have continued to sign contracts that give them the same, and in some cases lower, royalty payments for e-books as they get for dead tree versions of the books. They are listening to the pabulum their publishers feed them instead of looking at the economics of the situation. And it is to their detriment as well as the detriment of their fans.
The times, they are a-changing and instead of yelling about what’s wrong and pointing the finger of blame, everyone — publishers, authors and readers — need to understand that publishing will never be what it once was. It can become better, but only if it doesn’t shoot itself in the head. Right now, I’m afraid too many publishers are caressing the gun, looking down the shiny barrel and wondering what would happen if they pulled the trigger. Whether Macmillan pulled the books from Amazon in an attempt to retake pricing control or Amazon pulled the books to maintain that control, it really doesn’t matter. All that does is that no one is the winner here, at least not in the short term. What happens in the long run remains to be seen.
In the meantime, let’s check our facts, verify our sources and let sanity return.
The NYT article cited above has been updated. The interesting points, imo, are as follows:
Motoko Rich, my colleague, spoke with a person who had a direct conversation with a person at Macmillan familiar with the conversations with Amazon. Macmillan offered Amazon the opportunity to buy Kindle editions on the same “agency” model as it will sell e-books to Apple for the iPad. Under this model, the publisher sets the consumer book price and takes 70 percent of each sale, leaving 30 percent to the retailer. Macmillan said Amazon could continue to buy e-books under its current wholesale model, paying the publisher 50 percent of the hardcover list price while pricing the e-book at any level Amazon chooses, but that Macmillan would delay those e-book editions by seven months after hardcover release. Amazon’s removal of Macmillan titles on Friday appears to be a direct reaction to that.
If this is true, I don’t blame Amazon one bit for taking the stance it has. To start, for Amazon to maintain the pricing as it currently is — something the majority of those posting on the kindle boards seem to want — they would have to agree to wait 7 months for the e-book. Now, paperback editions of most hardcovers come out before then. E-book readers will either not buy the book at all, wait and buy the paperback book or buy an e-book from another seller and break the DRM. None of which will help the author, the publisher or Amazon. If Macmillan believes this tact will increase the sales of hardcover books, they are mistaken. Worse, the ill-will they are creating may have long reaching consequences for them and for their authors. Will they — and the other publishing houses who believe as Macmillan does — please hire someone who understands the technology, the market trends AND the economics of the situation?
At 2:22 PST, the following post was put up on the Kindle boards by the Kindle Team:
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.
I’m not, personally, happy with this resolution and if I were Barnes & Noble and other e-book retailers, I’d be wondering how long before Macmillan and the other major publishers try this same tactic on me. I’m hoping that, as one commenter suggested, this is not so much a capitulation on Amazon’s part but a warning to Macmillan that they are looking at possible SEC violations. You have to wonder since they did use the “M” word. — Amanda