Dear Mister Bezos: Are You Still All Mad and Stuff?
Posted February 4th, 2010 by Howard TaylerDear Mister Bezos,
I heard that you got all mad at Macmillan over electronic book pricing, or something like that, and last weekend you made all of Macmillan’s titles disappear from your store. Then I heard they came back, and I thought everything was okay.
But they’re not back, not really. I can only get books by guys like my friends Brandon Sanderson and John Scalzi through third-party sellers. This makes me sad, because you still sell my books, and I used to think it was so awesome that somebody could put my comics in a shopping cart alongside cool-awesome science fiction and fantasy from Tor (a Macmillan imprint.) I still get a little thrill when I think that maybe some Amazon shopper will open a box with a Robert Jordan book in it, and it will be sitting on top of The Tub of Happiness.
Today I took down all the ads I run for you guys. My fans might think this is a big sacrifice, but I should tell them it’s really not. It’s pizza-money. I’ll still let you sell my books, though. Making you click all those buttons on your big database would just be spiteful. Besides, I figure that’s why it’s taking you so long to get all my friends’ books back in your store — too many database buttons! I guess you should have patented that “one-click” thingy so it works inside your giant fortress!
Anyway, I hope you’re not mad at my friends the authors. They didn’t do anything wrong, I swear. And please let me know when you’re done being mad at Macmillan, and Tor, and the rest of those publisher people. Then I’ll click my database buttons and make your ads come back, and everybody can be happy and be friends and buy stuff from you.
–Howard
ps. those shirts I bought from you were not shiny enough. I’m sending them back.
Explore posts in the same categories: Industry News, Internet
February 4th, 2010 at 3:14 pm
First off, I want to say upfront that I do not know exactly how the publishing industry works. That said, I DO know how retail works. And, using that as my background in this case, I side with Amazon.
I own a store. If a supplier sells an item for $1.00 and I purchase several cases, they now belong to me. If I want to use that item as a “loss leader” and only charge $.99 for it (a loss of .01), then I can. The supplier may be upset that I am selling their item at below the MSRP of $1.50. If that supplier isn’t happy with my pricing practices and threatens not to sell to me any more, they also have that right. This is what Macmillan did FIRST by publicly stating that they would only let Amazon sell their products months after the initial release. They can do that. It’s their stuff and they can sell it to whom they please, when they please.
But, no one has the right to tell me how to run MY store. I do not think the supplier should dictate my pricing policy. I paid for them, they are now MINE. If I want to sell that item at a loss, it’s my right. Since he now refuses to sell to me and I’ll never have access to new product, then I will have no problem “writing off” the merchandise I already have and tossing it into the dumpster. There will now be more room for other things.
This is, I believe, what is going on with Amazon. Correct? If I’m wrong, please explain (in a civil manner, please) how and where I’m mistaken. As I said, I don’t know how the publishing business works. I do understand that authors are paid royalties based on sales and returns. That’s too bad. But, that’s not Amazon’s fault, it’s Macmillan’s. (Only booksellers can get returns. That’s the rub. If customers could return bad books, maybe the bad authors would be driven out of business..but that’s another topic)
I just hope Macmillan realizes that Disney tried this same tactic with Wal-Mart over their DVD pricing structure and failed miserably. The supplier should have no say in how merchandise can be priced after it’s paid for. Nintendo, in the early 90’s, got into legal trouble by trying to “fix” their prices by (basically) blackmailing retailers i.e. “You won’t be able to sell Nintendo products unless you keep the price of Super-Nintendo at the MSRP.”
February 4th, 2010 at 3:36 pm
I think that’s a good summary of what’s going on at amazon, with the added complication that Apple is opening up shop next door and immediately told all of Amazon’s suppliers that it’s willing to sell for MSRP.
I’m hoping the kindle store doesn’t turn into the Amazon MP3 store in relevance, as I don’t really have a good feeling about Apple monopolies.
February 4th, 2010 at 3:55 pm
I know a little bit about how both retail and publishing works.
Let me point out, though, that digital distribution of files is not the same as the sale of widgets.
If I give you *one* copy of a file, you can sell it a million times. Making sure I get paid for each copy is a matter of contracts and trust. The real-world-object analogy — “If a supplier sells an item for $1.00 and I purchase several cases, they now belong to me.” — doesn’t work, as the publisher did not supply Amazon with cases and cases of books, but merely a single digital file. Sales of ebooks are not a matter of retail, but of digital distribution.
(since money changes hands I can see the source of some of the confusion, but Amazon selling Kindle editions of books *isn’t* retail as we have known it)
Macmillan wants more of a say in how digital copies of files are treated, since they either own the contents of those files or are acting as agents for the authors who own the contents of those files. Their motives have nothing to do with the actual cost of copying a file, but the value of the underlying content and how Amazon’s practices de-value that content while also cannibalizing sales of the real-world object, actual books.
Macmillan isn’t shipping e-books, as there is no ‘book’ to ’ship’ in this case. Amazon doesn’t get to set the price, since they don’t own the content in the same way they own a physical copy of an actual book.
February 4th, 2010 at 5:18 pm
Thanks, Matt.
I understand how digital distribution works, and, as you said, it is entirely contractual. I’m sure that there is a contract for each book stating how much Macmillan receives from each download. Since they get paid the same amount (unless it is based on % of sale price, which would be nonsensical) it doesn’t matter how much Amazon charges. If the contract states you get $1 for each download, if I was willing, I could only charge $.99 per download. I’m losing money, you still get paid. It’s still retail 101.
If Macmillan wants Amazon to increase the prices of their Kindle editions, change the terms of any new book contract with that stated plainly. Which, by the way, is what they implied when they said they’d not release to Amazon until a set amount of time elapsed. Why threaten? Just negotiate new terms in the next contract. If they don’t want to change the terms, just don’t make Kindle editions.
My solution: each publisher should not outsource the sales of electronic editions of their books. Create editions that are compatible with all readers “in house”. If a customer wants a new Dean R Koontz book for their Kindle, go to the publisher’s website and pay their price. After all, the internet is practically everywhere. Shut Amazon completely out of the picture. Set your own price.
Yes, I understand that the operating systems for the readers are proprietary and negotiations for different systems may increase the price, but, that is the ONLY way a publisher will be able to set their prices.
Just don’t tell me how much I HAVE to charge.
Did that make sense? Or did I muddy the waters further? Sorry.
February 4th, 2010 at 6:32 pm
Frankly, I say, let them fight their battle. Any war they wage that results in a lower price will benefit me, the consumer.
I bought some of Sanderson’s books. The hard copies, that is. I can hold them in my hand, and, if I so choose, throw them at someone as some sort of impromptu home defense. I can carry them with me and read them without batteries.
And thing is, I paid WAY less than $14.99. I got a physical item that I can enjoy in ways I cannot enjoy the electronic copy, and I got it for less money than Macmillan is asking to get from their electronic copies now.
I don’t get the sense there. It doesn’t benefit me, at all, to back Macmillan on this. I really doubt it even benefits the authors, as I strongly suspect their contracts are $X per sold copy, and not X%. Even if it did benefit them, I’m not willing to pay a markup like that… sorry.
Way I figure it, if you want to be really forward-thinking and help out Brandon and everyone else…
Tell them not to sign over the electronic rights to their book, and have one of your technicians show them how to set up a ‘buy a book’ button so that people can pay them directly, and download the book.
That way, they could charge a price *greater* than their cut from the publisher, and we customers would still pay far less for the opportunity to read the book.
I mean, I could be wrong. But it seems to be working for you so far…
Or maybe your business model isn’t quite the same. In which case, I say, it seems to be working for Baen, with their Webscriptions. I can get their books electronically, it seems, for less than retail price of a paperback. And it seems they’ll work on any reader, anywhere.
fifteen bucks is just more than I will pay for the privilege of reading a book. I will pay MORE than that to own a HARDCOVER. But I will not pay it just to read. Not now, and not for the next… umm… logarithms here…. 30+ years, given a 3% rate of inflation, and the price of an ebook from Baen.
Or I could, y’know, pirate it. But that’s not as fun as being a mercenary :)
February 4th, 2010 at 8:08 pm
“each publisher should not outsource the sales of electronic editions of their books. Create editions that are compatible with all readers “in house”.”
That’s, in essence, what Baen does – however, they are still looking at Amazon for secondary distribution, simply because of their presence in the marketplace. (Of course, Baen insists on no DRM, which Amazon is as of yet unwilling to do.)
February 4th, 2010 at 11:01 pm
It’s been a long time since Amazon was all shiny and new and I could read news articles trying to explain the concept to people, but I seem to recall that they /never/ own copies of what they sell, electronic or otherwise; they exist merely as a unified point of sale and customer service contractor similar to a consignment shop. Their attraction to publishers is in direct relationship to their degree of monopoly (market share); people don’t want to have to go all over to get their books, so they end up only patronizing a single store, and any publisher who wants to sell books then has to meet that store’s terms.
The end result of this is surprisingly similar to an employer-employee relationship. Any breakdown in that relationship is a danger to both parties, assuming that the employees are sufficiently unionized, so the question becomes first who thinks that they’ll win a lockout/strike and secondly who actually caves when it happens. (The lockout here is Amazon refusing to sell a publisher’s books; the strike is a publisher refusing to sell its books through Amazon.)
As a consumer, I would want Amazon to fight for lower costs in order to cement their natural monopoly for them and to make things cheaper for me; as an author I would equally want my publisher to win so that they can easily afford to keep paying me X per copy sold instead of only offering to pay me X/2 per copy for my next book once the price cuts have finished trickling down the food chain. (Price cuts trickle down to workers a lot faster than price increases do.) Someone like Howard has less to lose because he’s in a better position to do direct sales to his audience, but he has no bargaining power when dealing with Amazon because he isn’t unionized (represented by a publisher).
In reality, I don’t care much either way because I’m a librarian and either buy directly from the publisher (for the library) or read for free (from the library).
February 5th, 2010 at 12:22 am
Being the Cynical, Vicious, Unpleasant Demon-Spawn I am, I’d be perfectly happy to see the entire assemblage of idiots run rings around the tree with each others’ tails in their mouths until they’re reduced to butter.
(Venomous, *and* in some circles Racist — I’m good at this. :) )
February 5th, 2010 at 12:57 am
This is yet more proof that the only publisher of electronic reading material that truly gets it is Baen.
All the other publishers, the movie and TV studios, everyone else barring some software authors and a few independent film makers and a musicians – approaches e-business with the attitude that EVERYONE is a thief just itching to steal from them.
‘Tis my belief that some of the above mentioned business types will not be satisfied until they can charge people for *every single time* a consumer listens/reads/watches content.
Meanwhile the average consumer continues to stick to the concept that once they’ve paid for something, that item is *theirs* to do with as they please, no matter whether or not it exists in some type of tangible object.
Ie, you buy a CD or DVD that disc is YOURS. Play it, break it in half, loan it to a friend, let the dog chew on it, sell it for ten cents on a yard sale. The publisher can’t tell you what to do with it.
To the publisher, that disc is THEIRS. You, the consumer, have not actually bought it, you’ve paid a *license fee* for *their permission* to watch or listen to the copyrighted content on the disc – rescindable at *their discretion* at any time, as if they will come to your house and demand you hand over the disc should you do something with it they don’t like.
The publishers are still stuck on the same fallacy they promoted when they were whining that the Compact Cassette (and the 4 and 8 track tape before that) would “destroy the music industry” and how the VCR would “destroy the movie industry” and again how the CD-R would “destroy the music industry”. Rampant “piracy” (copyright infringement) everywhere!
It’s been 48 years since the Compact Cassette was invented and the music industry is doing fine. 35/34 years since the Betamax/VHS formats hit the market and yet the movies have kept setting record profits year after year. The audio CD and the DVD only made things *better*, the CD-R and DVD-R aren’t responsible for any perceived “downturn”, it’s when the content being produced isn’t what the mass market likes that sales (and thus gross profits) go down.
I’d think that’d be a valuable lesson that EASY access to content improves sales and increases profits.
But nope! Now it’s the text publishers (except for Baen) taking their turn in the seat of pointless whinging about how when people get what they want it’s somehow “bad” for their business.
February 5th, 2010 at 1:08 am
@csadn I remember going to Sambo’s Restaurant in Boise, ID. Started in 1957 in Santa Barbara, CA, it expanded to 1,200 locations by the late 1970’s. Then some busybodies with nothing to do but look for stuff to act offended at went after the Sambo’s chain with lawsuits and various other nasty tactics and by 1982 Sambo’s was back to just its original restaurant in Santa Barbara. I’d love to go there and once again read the Indian folk tale of Little black Sambo and the tigers, while eating some of the best pancakes ever plopped on a restaurant plate.
Some people just can’t stand it when other people are successful.
February 5th, 2010 at 3:57 am
all i can say about this is that clearly money is evil and the possesion of large amounts of it destroys the ability to use reason
February 5th, 2010 at 5:15 am
@bizzybody – about what you said concerning infringement….EXCELLENT!!!!
February 5th, 2010 at 5:23 am
Amazon is not your friend w/ regard to digital content. Macmillan is taking baby steps in the right direction. Comparing them to RIAA is not accurate, beyond the fact that both are publishers. They want to be able to set their price to the distributor? There’s nothing wrong with that. That the distributor should hold paper distribution hostage as part of the negotiation is pure, immature petulance.
Amazon is hurting my friends, not their publisher, with this tactic. eBook issues aside, this is bad business and needs to stop.
I’m closing comments on this post. This is contentious topic. Contentious topics require lots of moderation and monitoring. I need to focus my energy elsewhere now. If you wish to learn more on the issue you could check out what these authors have to say.
John Scalzi 1 2 3
Charles Stross 1
Tobias Buckell 1 2 3
Scott Westerfield 1