All The Many Ways Amazon So Very Failed the Weekend

Leaving aside the moral, philosophical, cultural and financial implications of this weekend’s Amazon/Macmillan slapfight and What It All Means for book readers and the future of the publishing industry, in one very real sense the whole thing was an exercise in public communications, a process by which two very large companies made a case for themselves in the public arena. And in this respect, we can say this much without qualification: oh, sweet Jesus, did Amazon ever hump the bunk.

How did it do so? I’m glad you asked! Let us count the ways.

1. The Stealth Delisting. Look: Wiping out roughly a sixth of your own bookstore product inventory, even temporarily, is one hell of a dramatic statement. If Amazon had given it any sort of rational or at least tactical thought, they could have played it up for all it was worth, starting with strategically-placed rumors to trusted, sympathetic media about the behind-the-scenes struggle with Macmillan, which would build to a more-in-sorrow-than-in-anger corporate decision to put Amazon shoppers first and to stand up to Macmillan, followed by the announcement of a public deadline for the delisting of Macmillan product to highlight the struggle, with a notation that all orders placed before that deadline would of course be honored (hint, hint), and so on. Basically, all sorts of public gamesmanship designed to put the pressure on Macmillan and to make it look like the bad guy. And in the meantime the media would be all abuzz with What It All Means. What drama! What excitement! What corporate theater. Amazon could have spun this its way for a week.

But no. Instead, we got the Foot-Stompingly Petulant Friday Night Massacre: One minute the books were there, the next they weren’t. And everyone was left going “huh?” Was it a hardware glitch? Was it a software bug? Was it a terrorist act in which renegade Amish attacked Amazon’s server farm and poured jugs of hard cider into the machines, shorting out the ones holding Macmillan’s vasty inventory? No! It was one corporate entity having a big fat hissy fit at another corporate entity, and everyone had to figure out what the hell was going on the weekend from bits and pieces that they found on the Internet, which was not easy to do. Which may have been Amazon’s plan all along: Kill every sixth book on your site, hope no one notices! Well played, Amazon, well played indeed.

2. Amazon Lost the Authors. Hey, you want to know how to piss off an author? It’s easy: Keep people from buying their books. You want to know how to really piss them off? Keep people from buying their books for reasons that have nothing to do with them. And you know how to make them absolutely incandescent with rage? Keep people from buying their books for reasons that have nothing to do with them, and keep it a surprise until it happens. Which, as it happens, is exactly what Amazon did. As a result: Angry, angry authors. Oh so very angry.

Amazon apparently forgot that when it moved against Macmillan, it also moved against Macmillan’s authors. Macmillan may be a faceless, soulless baby-consuming corporate entity with no feelings or emotions, but authors have both of those, and are also twitchy neurotic messes who obsess about their sales, a fact which Amazon should be well aware of because we check our Amazon numbers four hundred times a day, and a one-star Amazon review causes us to crush up six Zoloft and snort them into our nasal cavities, because waiting for the pills to digest would just take too long.

These are the people Amazon pissed off. Which was not a smart thing, because as we all know, the salient feature of writers is that they write. And they did, about this, all weekend long. And not just Macmillan’s authors, but other authors as well, who reasonably feared that their corporate parent might be the next victim of Amazon’s foot-stompery. Which brings us to the next point:

3. Amazon Lost the Author’s Fans. The interesting thing about the fans of authors: They feel somewhat connected to their favorite authors. So when their favorite authors kvetched on their blogs and Facebook pages and Twitter feeds about the screwing Amazon was giving them, what did many of these fans do? They also kvetched on their blogs and Facebook pages and Twitter feeds. So in pissing off a myriad of authors, Amazon also pissed off an exponential number of book readers, many of whom followed their favorite authors’ leads in complaining about Amazon, and who themselves were read and followed by an exponential number of others. Even on a weekend, the traditional slow time for the Internets, that’s a lot of pissed-off people.

So, two and a half days of the Internet being angry at Amazon. To be sure, there were people taking the side of Amazon, too. But those people lacked the social cohesion of an aggrieved class (writers) backed up by a mass of supporters — not to mention the relatively high profile of these writers online, which, if you were a journalist looking for reaction quotes while on deadline, made them the go-to sources.

Could Amazon have come out and given its side of the story? Sure, but it didn’t — not soon enough. First it let angry authors define the event, and then it let someone else, rather more damaging to them than the authors.

4. Amazon Let Macmillan Strike First in the Press Release War. Both Macmillan and Amazon took their time making statements, but Macmillan did its first, and when it did, it didn’t bother with any ol’ flack to make a statement — no, to underscore the significance of the event, it trotted out its CEO, John Sargent, who outlined in a calm and businesslike letter to his underlings (but presented as a paid ad in Publishers Lunch) the causes of the incident, as he saw them, and the issues at stake. The letter took time to praise Amazon but also did some interesting rhetorical heavy lifting — for example, labeling Amazon a “customer” of Macmillan rather than a “partner,” which is a fun corporate way of jamming Amazon into an ecological niche it probably would prefer not to be in.

Bloggers and journalists updated their posts and stories to include Sargent’s letter, launching another round of discussion and criticism online, largely at Amazon’s expense — not only because Macmillan was now shaping the rhetoric of the discussion, but because Amazon remained silent, offering no official version of the events for another full day. And when it did:

5. Amazon Flubbed Its Own Response. When Amazon responded, it was not via a letter or comment from Jeff Bezos, or some other major Amazon executive, or the head of Amazon’s publicity and marketing department, or even Amazon’s winter PR intern — no, Amazon’s initial reponse was an Amazon forum post from “The Amazon Kindle Team.” Which is to say, an unsigned comment from unspecified people, not in senior management, tucked away in a backwater of the Amazon site.

And not only a forum comment, but a mystifyingly silly one: the bit in the comment about Amazon having no choice but to back down in the fight because “Macmillan has a monopoly over their own titles” was roundly mocked by authors, some of whom immediately started agitating against Amazon’s “monopoly” of the Kindle, or noted how terrible it was that Nabisco had a “monopoly” on Oreos.

Think on this for a minute, won’t you. Think about the disparity of corporate responses here. Macmillan issued a detailed statement from its CEO discussing the event and his company’s reasons and rationales for acting as it did. Amazon issued an unsigned forum comment written by someone who is apparently a little shaky on Macmillan’s relationship to its own product. Now, which of these two corporate responses seems most appropriate, given the gravity of the situation? Which of these responses appears to be the work of a company that understands what it’s doing on a corporate level and why? Which of these responses, in short, appears to be the work of actual adults?

But enough fiddling with all this inside pool! In the real world, no one actually gives a good healthy squirt about points one through five. So let’s trot out the real, actual stupid thing Amazon did:

6. Amazon Destroyed Its Own Consumer Experience, Without Explanation, For Several Days.

Note to Amazon: Real people do not give a shit about your fight with Macmillan. Real people want to buy things. When your store takes them to a product page on which they cannot buy the thing on the page, they will not say to themselves, “Hmm, I wonder if Amazon is having a behind-the-scenes struggle with the publisher of this title, of which this is the fallout. I shall sympathize with them in this byzantine struggle of corporate titans.” What they will say is “why can’t I buy this fucking book?” Because, you know, they are there to buy that fucking book. And when you don’t let them buy that fucking book, they aren’t going to blame Macmillan. They are going to blame you.

Honestly, now, Amazon: Even if your weekends are slower sales times than your weekdays, how many times over the weekend was a customer not able to buy something they wanted to buy from Amazon? I’m guessing a lot. Do you think any of the frustration, irritation and anger for that is going to accrue to Macmillan? Seriously? Because, remember, you didn’t actually tell the public why you were doing what you were doing for two whole days, and when you did, you buried the explanation down a hole, where no normal person would find it. Do you think all of your customers read author blogs and Twitter feeds? Do you think they are imbued with some sort of corporate Spidey-sense that lets them know when you and a publisher are going after each other with hammers?

No, you silly, silly people! When they can’t buy something on Amazon, what they will think is Amazon is broken. And they would be right. It was. Because you broke it. Intentionally. For days.

(Oh, and: don’t even try the “they could buy from third party vendors” line with me. If you really believed people would, you wouldn’t have left it as an option.)

And all of this is why a final, ironic bit of Amazon fail will come to pass:

7. Because Of the Idiotic Events of This Weekend, People Will Just Want an iPad Even More.

Again, Amazon: Well played. Well played indeed.

393 thoughts on “All The Many Ways Amazon So Very Failed the Weekend

  1. Just in case anyone needs the following disclosure: As an author who has books published by Macmillan (and whose books are at this writing still delisted by Amazon), I am not a wholly disinterested party.

    And yes, by this point, I expect I will be the very last Macmillan author Amazon gets around to relisting.

  2. Didn’t the last post end with “Lets Not Fight Again?” :-) – because although I’m sure that this isn’t even around a 3 out of 10 on a Scalzi whoop-ass, it is the strongest thing you’ve said about Amazon since this thing began.

    I sometimes wonder if cheering for an iPad rescue is like the Mon Calamari cheering the clone army of the republic when they drive off the separatists droid army.

  3. I think (4) was the killer here. Either they thought they could send a message to Macmillan and nobody would notice, or they didn’t think they had any need to make a public statement. I think (5) falls from that.

  4. I’ve been wondering what Amazon is trying to achieve in doing this tactic. It’s like they’re forcing Macmillan and other publishers to sign an exclusive distribution deal with the upcoming ibook store. This whole fiasco sounds more like grasping at straws.

  5. That was quite beautiful, John. Wow. And the disclaimer at the end was icing on the cake. :) Thank you for taking your rage and turning it into clear, passionate, brilliant writing.

  6. Well, I just bought “Zoe’s Tale” from the Sony Reader Store. If I like it I will be looking for more of your books there. It appears that they only have four, though.

    Question: Do authors have any ability to contact ebook sellers and ask “Hey, why aren’t you carrying more of my books? And would you like to?” Or is that entirely up to the publisher?

  7. As a communication professional, I have to agree with this post. Amazon made a hash of this. Of course it will be a quickly forgotten incident, except that it will be relived along with previous amazonfails the NEXT time that Amazon fails. Which it seems likely to do, IMO.

  8. I had NO idea any of this was going on until I saw one of your status messages on Facebook a little bit ago. So naturally I came over here to get caught up. Thanks.

    I’m now considering whether to shift the bulk of my online purchases to B&N, especially if, irrelevantly for you but annoying to me, the BBC Books import that was supposed to ship a week ago really does get delayed for a whole month as Amazon’s email to me suggested, because the UK is so very far away that any books from there cannot possibly get across a whole ocean in a week or two. In which case, why publish a shipping date of January 25th in the first place?

    /tangential rant

  9. After reading lots of posts in the last couple of hours, all I can say at this point is “My Brain Hurts!”.

    OK, looking at a couple of new books that are not delisted, Connie Willis’ Blackout, out on Tuesday, is listed at $14.30 with a digital list price of $26 (and a print list price of $15.00? – Comparing it to the trade paperback release in September, not the hardback being released this week) while Jasper Fforde’s Shades of Grey is at $9.99 for the kindle edition (with a “digital list price of $25.95 and a print list price of $25.95). I also note that Jim Butcher’s Changes, coming out in April, is at $13.47 for the Kindle while First Lord’s Fury, that came out in the fall, is at $9.99. It looks like Amazon is already pricing things similar to what McMillan is asking for for other publishers.

    Of course, I still prefer books in print because if you want to have them scribbled in by the author, it’s not really doable with an ebook unless you burn a copy onto a CD or something along those lines.

  10. Yeah, I’m with Brunswick on thinking this kind of contradicts “Lets Not Fight Again,” but that’s cool, because this is the post I was hoping for.

  11. Side comment to Karen, I just decided to order that specific book from Amazon UK, which seemed to have a firmer idea of when it would get to me (although adding 300 pages to a book when it comes out in trade paperback is a bit of a punch to those who also bought it in hardback (and paid more to get a signed one from Forbidden Planet). In case anyone was wondering, it is The Writer’s Tale by Russell T. Davies.

  12. As someone who owns a Kindle and really enjoys it because its very convenient to get books on (not because its cheap…its not cheap…its freaking expensive…I bought it right after it came out) this crap just pisses me off!

    I owned a sony reader before and loved the hardware (way more than the kindle) but their store was windows only and sucked ass. Amazon’s catalog was larger so I switched So why the hell did they do this? I have purchased a ton of books on my Kindle. Hell I would go the to bookstore and browse and buy the books for my kindle (using my iPhone…not using the kindle because that’s super painful) just because its more convenient to carry them.

    Then they go and pull a sixth of their inventory…why? Because no one will buy the books if they are too expensive? Kindle owners really don’t give a crap about an extra $5 per book because they paid for a damned Kindle! I think this is Amazon freaking out about the iPad. You bet your ass I am getting one as soon as I can and will use it instead of my Kindle. What’s great is I can still use the (free!) kindle app on the iPad so I will have access to the books previously bought but I will not buy another ebook on the damned kindle store after I switch. Ever.

    I’ve met and talked to Jeff and he’s a smart guy and all that but this is just plain stupid.

  13. “If Amazon had given it any sort of rational or at least tactical thought, they could have played it up for all it was worth, starting with strategically-placed rumors to trusted, sympathetic media about the behind-the-scenes struggle with Macmillan”

    I guess the last few A-fails, pulling gay and lesbian titles under stealth, disappearing “Animal Farm” unannounced, the UK version of the current fail, leads me to believe this something to do with the Amazon corporate culture or at least the mindset of its leadership. Don’t explain, just take it down. The term Orwellian gets used a lot in this context, so I’ll try and be slightly different and just say: “how very Soviet of them.”

  14. I’m not sure how many people are going to be described accurately by point #7. Certainly not I. ‘Retaliating’ against Amazon by going to a (differently) closed hardware platform like the iPad? Not gonna happen here, though I’m probably not the typical consumer, as I’m aware of the developer’s problems with Apple platforms. I wouldn’t advise endorsing one set of shackles because of unhappiness with another set of shackles, though.

    I wonder when someone will hack the iPad to run Android. :)

  15. Scalzi Quote: “because we check our Amazon numbers four hundred times a day, and a one-star Amazon review causes us to crush up six Zoloft and snort them into our nasal cavities, because waiting for the pills to digest would just take too long.”

    So tell us … has a certain kitty had a talk with YOU about your drug use lately? ;)

  16. *applaud* I am amazed still by your calmness. Everything you listed here is basically what I was taking away from the situation.

    I tried to separate my responses into two categories: consumer and author. On the one hand, I do appreciate low prices, as I am not willing to spend $27 on a hard back. I am also not going to spend $15 on an ebook (or $10 for that matter). I am quite patient enough to wait for the $7 or $8 paperback which I can tangibly hold and loan and not have stolen from me in the night like certain other books have had happen *cough-cough*.

    On the author side, they are seeing no extra money from royalties as near as I can tell. This is all the publisher trying to not undercut hardback books. Which is brilliant for them (and their authors). But not letting people buy the author’s book? That betrays trust. Who wants a retailer that will suddenly not sell your product for no useful reason? I know I would not.

    But back to the real issue here: Your post captures it all (and I’ve been reading on this nonstop all weekend). Thank you for your measured calmness, your humor (oh dear lords, the humor), and your time spent writing this. It is helpful to those of us watching on the sidelines.

  17. Hmmm. Let’s see.

    Kindle: proprietary to Amazon. Massive vendor lock-in, eInk based (aka good migraine inducer) did I mention vendor lock-in to Amazon.

    iPad: Proprietary to Apple. Massive vendor lock-in. DRM locked down. Must say “Mother May I?” to do anything with it. Did I mention vendor lock-in to Apple.

    Open formats: (Baen, Fictionwise) Read on any [beep] thing you want. No vendor lock in. Forgot the CC# you bought it with? No problem. Change reading devices a dozen times. Still can read what you bought. Did I mention no vendor lock-in.

    A plague on both Amazon and Apple.

  18. This seems like the point where a large scale boycott of amazon needs to be formed.

    It doesn’t matter to me that the situation fixed itself. This is at least the second time in several months where amazon pulled some egregious stunt. First they removed 1984 from people’s kindles, and now this debacle.

    Two strikes and they’re out. It’s dangerous for a culture to allow one mammoth corporation to either remove purchased literature from people or disappear a vast 1/6th-ish swath of literature because of a slap fight.

    I’m going to head back to my local bookstores. At least my city still has a few.

  19. Not a brilliant move by Amazon, but not going to get me to give up on them (a company that has provided fantastic customer service, great prices, and crazy fast delivery for 15 years now). Certainly not going to make me abandon kindle which I charge once or twice a month and is easy on the eyes so I can reward Steve for trying to kill personal computing as we know it. Sorry, Steve, I can tolerate some reduced functionality on subsidized, single purpose devices, but a general purpose computing device where I have to pay to develop and cannot get software without going through you as a gatekeeper? Yuck!

    I’m all in favor of authors (thanks for the great books, btw, John — I own an assortment of dead-tree and electronic copies of your works), and I feel bad if they’re getting a lousy deal, but I’m honestly skeptical that the publishers are these amazing paragons of virtue. The smell a lot like the MPAA/RIAA to me, especially with the whole “disallow text-to-speech” and “require drm” nonsense.

    I’m also all in favor of great local bookstores, but when my local bookstore is a B&N or whatnot, I don’t feel guilty for ordering online.

    Amazon did a pretty poor job of making a coherent case out of this though. I *think* the real issue here is about them being able to sell at prices they think are reasonable (possibly taking a loss in some cases), vs the publisher being able to directly set the price presented to the consumer, which is something I could totally support, but again, no coherent messaging from Amazon.

  20. Effing brilliant.

    (from a fellow Macmillan author)

    I’d been griping about Amazon’s hissy fit over on Murderati; not only did they block my books, but they blocked my ability to order some things I needed this weekend with my Kindle. Even more moronic, they prevented me from using my paid-for Prime membership to order printed books, which weren’t even a part of the dispute.

    I will be buying an iPad, and I’ll be giving the Kindle away.

  21. It may be (or at least I’d like to think) that Macmillan was the poorest choice for this pacifier spit. After all, Tor is a part of Macmillan, so pretty much every science fiction author around was directly affected. And sf authors have, on average, a bigger blog presence, more online sales, more fans who own e-readers, more technical savvy about how e-readers work, and more opinions about how technology in general should operate.

    When you manage to piss off Scalzi, Doctorow, and Stross in one shot, you’re going to have a bad weekend on the internets.

    Not that these folks wouldn’t have blogged about it anyway, but making it personal gave it a whole different flavor.

  22. I suspect Amazon.com’s execs may have indeed considered the “well, they can buy from third-parties on our site” part. Don’t forget, they get a cut of that, while in most cases Macmillan & author don’t. So I wouldn’t be surprised, as an extra middle-finger-to-Macmillan, they did it like that on purpose.

    (I suppose it’s possible it’s just too difficult for them to really remove the books, and this was something much easier to do–just remove their own ‘buy’ links–using infrastructure set up a few AmazonFails ago.)

    Also: Wonderful blistering analysis, John :-) Reason #36 I keep coming back here.

  23. With nice hardware, porting their store to Mac, and switching to ePub, Sony’s Reader is beginning to look like the most open of the lot (and Sony has never been one of my favorite companies) :/

    Problem is, with the way companies are acting, it’s seriously looking like this sort of crap is on the rise, not just Amazon and Macmillan, but the whole corporate lot of them seem to be forgetting the old cliché about biting the hand that feeds …

  24. While a win for Macmillian, it should be good for authors long term. The lower the cut the reseller takes, the more room there is for royalties. Or at least ones agent can so argue, and if downward pressure on prices does in the long run make Macmillian back off this $15 price point a bit, at least there is less pressure on them and thus authors than previously.

    Excuse me if this is kind of off topic, but my amazon prime will renew in 2 weeks, and while I can list off any number of reasons to stop giving them my business, one thing that’s kept me there is the fact that I find a lot of new stuff both through the recommendation engine, and the Listmania lists. I’d love to hear if anyone has any other recommendation engines they like. (I read a lot outside of the SF genre, so blogs like this can’t fill all my needs.)

  25. Excellent post. I’d like to append an important point: Amazon made the Kindle look like a shaky platform. Consumers invest in the Kindle (and not in a small way) because they expect to be able to use it to read whatever ebooks hit the market. If someone sinks several hundred dollars into a platform, they want to know that platform will continue to carry what they want to put on it for a good long time. Amazon’s actions this weekend said, in effect, “At any time, for any reason, we can make it impossible to read a significant fraction of books on your Kindle.” This leaves people wondering if they’ll be able to read the next J.K. Rowling/Stephenie Meyer/Song of Ice and Fire book on their Kindle, or if some “dispute” will make them unavailable.

    It’s like the makers of Betamax saying, “Buy this newfangled home movie-watcher, you’ll love it! Not only will you love it, but we just told Disney they can only release their videos on VHS!”

  26. @28 weasel: There are a lot of SF book review sites out there, which is how I find out about upcoming books (and occasionally, older ones). I presume there are plenty of non-SF sites devoted to other genres, and just new fiction in general. Try Googling book review blogs or something like that.

  27. While I admit I’m a fan of Apple and think that Steve Jobs is brilliant at what he does, I know that their is lots of people out there who think that Apple suck.

    But in this instance I just don’t get all the negative posts about Apple, what happened this weekend had nothing to do with them.

    Even if you would not touch an Apple product, them entering the market has to be seen as a good thing because of the competition it provides, otherwise in a few years the choices that people currently enjoy, just won’t be there.

  28. @28 weasel: In addition to Kendall’s suggestions, a couple other options include:
    — Keeping track of your favorite publishers’ blogs (Tor has tor.com, Del Rey has suvudu.com, etc.)
    — Checking out one of the social library sites (GoodReads, LibraryThing, etc.)

  29. @30 Kendall, thanks. I was hoping for something kind of dynamic, but I’ll look around. gnooks.com seems promising for fiction. Maybe not so much for non-fic as there I am generally onto a topic rather than an author, but most of my non-fic finds come through interviews or other sources anyway I think.

  30. I had an opportunity to live with a Kindle DX for a month through an employer, and I used it maybe thrice.

    To be sure, I am an avid consumer of digital media, but I found the device to be boring and staid, feeling more like an artifact of the last century (though a slim one, indeed).

    Having said that, I am unimpressed with the hi-jinks and shenanigans that Amazon has pulled with the Kindle. My $$ will be backing the iPad (the low end one to start), due to Apple using the ePub format.

  31. What a PR nightmare. Welcome to Amazon. Haven’t we seen this before from them? Whether one party was right or wrong, Amazon definitely could have handled this better. I agree 100% with all your points. Doesn’t Amazon have PR people? Don’t tell me it’s the people who run the forums because that just is (insert curse word here).

    Monday is another day though. Bezos has to come out and explain all the fumbling and apologize. Sure, companies have disagreements. To delist things in the middle of the night? Sounds like someone had a temper tantrum (Amazon).

    In reality though I can’t see spending big money on an iPad. I’m still going to buy stuff through my Kindle. I just might be even more selective and think twice before I do.

    Well done authors. Well done.

  32. Love you dearly, Scalzi, but …

    I see this as so much piss in the pool.

    Next up: Publishers tell bookstores the list price set for a title is the =only= price the book dealer can sell the book for because from now unto forever they are now simply “agents” of the publisher and get a cut of whatever price the publisher has set.

    Bookdealers are no longer independent set-the-price-you-think-is-best-for-your-store book dealers. The publishers set the price. Deal with it.

    Where do the booksellers go from here?

    Want to support your independent booksellers? How does this help?

    I’m not quite clear where writers who are cheering on Macmillan are coming from.

  33. @33 weasel: gnooks.com looks interesting, but I don’t see any explanation about how it works, which makes me wonder just what it’s doing or why I should trust it. With Amazon, I have an idea of how it works and what data they’re using, at least.

    I find Amazon’s recommendations a bit too random for my tastes, but I occasionally go to the ‘all recommendations page. I find I have to shepherd it by marking things “don’t use for recommendations” or else I recommendations on things I don’t find useful, like music or soap. ;-) (Yes, I’ve bought soap via Amazon.) Anyway, we all want something different–hope you find something that fits your needs.

  34. @36 – It’s a mistake to see Amazon as JUST a bookseller. They’re not – they take the place of several entities in the supply chain. Charlie Stross put it well:

    This whole mess is basically about duelling supply chain models.

    Publishing is made out of pipes. Traditionally the supply chain ran: author -> publisher -> wholesaler -> bookstore -> consumer.

    Then the internet came along, a communications medium the main effect of which is to disintermediate indirect relationships, for example by collapsing supply chains with lots of middle-men.

    From the point of view of the public, to whom they sell, Amazon is a bookstore.

    From the point of view of the publishers, from whom they buy, Amazon is a wholesaler.

    From the point of view of Jeff Bezos’ bank account, Amazon is the entire supply chain and should take that share of the cake that formerly went to both wholesalers and booksellers.

    This is complicated further by Amazon pushing not just ebooks, but ebooks in a proprietary format that can only be read on a device they sell and on a few other devices using an application they write. So, please, let’s not equate Amazon with other booksellers – they’re vastly different in many ways from the indie bookstore a mile from me.

  35. @32 cerement – thanks, I’ll check those out.

    @37 Kendall – agreed amazon’s engine needs a lot of sheperding, but overall it works much better than say netflix. One thing that makes gnooks.com look promising is that when I plug an author into the map I see several others close by that I like, so we’ll see how it does.

    @36 Sal Towse – I doubt the publishers can legally prevent amazon from discounting, unless they have a contract to that effect, but they already set the list price for paper books, so I don’t see how this is any different in that sense.
    What really matters here is amazon was effectively trying to keep for itself all of the extra potential profit there was to be had from the cost savings of not producing or warehousing a physical item, and at the same time put apply downward price pressure on the publishers. Macmillian simply used it’s leverage to negotiate a fairer deal. The people who determine the prices at Macmillian are not morons and will doubtless continue to seek out a pricepoint that maximizes profit. (Not necessarily the same as maximizing sales.) Amazon has often been the one throwing their weight around, so it’s only fair that they be on the recieving end once in a while. The regretable part is when authors and readers get stomped on in the process.

  36. jere7my@29: Any computing platform that leaves you and your information at the mercy (nonexistent) of a single supplier is shaky. Doesn’t matter whether it’s the Kindle, Sony(rootkit) reader, Nook, or M$oft Office 97, 98, 99, or whatever. (See Stross in incompatible file formats.)

    I did make a brief experiment with K4PC. Amazon has seen the last of me in their eBookstore.

  37. People are less loyal than they were, I suspect almost no one will stop buying permanently from Amazon as a result of this, if they were already a regular customer.

    I think the whole thing was stupid and that it affected real people is wrong – but it won’t stop me buying from Amazon, due to price, convenience and the interface.

  38. So totally sick of Amazon’s behaviour and will be investigating other options for things Waterstones either don’t sell or need a month to think about.

  39. I have a Kindle. Love it. If Amazon is buying books from publishers at the same rate as any other digital bookseller, they have the right to charge as much as they want for them. End of story.

  40. Loved this post – a neat, eloquent summation of events. But that’s not why I’m commenting. I just want to know:

    Will “I’m not fighting. I’m admonishing.” be the title of the next blog reprint collection? Because it oughta be.

  41. I think this response was a bit too personal and overblown.

    Authors will hate Amazon? Authors’ fans will hate Amazon?

    I worked defense for Planned Parenthood clinics for a while, and we and our fellows saw numerous hardcore every-frigging-weekend female protestors come quietly in to get abortions, then they were out on the screaming picket lines again a week later.

    Customers may have been miffed for a moment, but they will ever so quickly return to get what they want, no matter how much they may publicly profess to revile the seller. Your posting is high on dudgeon and low in real-world savvy.

    To be clear, I am not defending the actions or methods of Amazon or Macmillan, and I agree with you that Amazon’s handling was clumsy at the very best and heads should roll in their PR/communications office. I am simply saying that your damage assessment woefully underestimates the true motivations of the buying public.

  42. Have been watching this whole TGF from the sidelines wearing my best “you have to be kidding me” expression. Still cannot entirely get my head around how Amazon have handled it, even now. They do not like it when people push back, do they? Not at all, at all…

    Thanks for lining it all up in words my tiny brain can understand, by the way.

    NH

  43. Here’s what I think. Amazon was utterly moronic for pulling this stunt, but its not particularly going to stop me from buying from them.

    I don’t use any electronic reader except for my Blackberry, which has an extensive selection of free Baen books on it to keep me occupied during times its impolitic to haul a paperback around.

    The fact that this seems to be making people WANT an iPad is just mind boggling to me, since the iPad is an even bigger boondoggle than the Kindle.

  44. @39

    Amazon will not be able to discount Macmillan books. Macmillan requiring this was the major reason for this whole dispute. Macmillan will tell Amazon how to price the book, Macmillan will then get 70% from each sale and Amazon will get 30%. This is directly from the open letter written by Macmillan’s CEO. In a physical bookstore there is the publisher’s suggested retail price, but I believe the bookseller is allowed to charge basically whatever they want.

  45. this stand-off by mcmillan and amazon just give more reason to the emule-torrent people.
    15$ for a text file is just abuse. Take the control of the books from the publishers another kind of abuse.
    I’m with the authors (ALWAYS) but I just feel that nobody, nor the authors neither the industry are never with the readers.

  46. What’s annyoing me is that this is the SECOND time Amazon did this and it totally failed at handling the fallout AGAIN. Remember the kerfluffle when they delisted queer literature? Yeah, there amazon did the stealth-delist and not-saying-anything-to-anybody thing too.

    Makes me happy that in Germany books and newspapers have a definite set price no retailer can derivate from. Buchpreisbindung FTW.

  47. John,

    Your summation of the bumbling manner in which this whole thing was dealt with is absolute gold.
    I’d not visited your blog for a while (having been a regular visitor in the past), but your insightful and humourous posts regarding this fiasco has made realise what I’ve been missing.
    I’m a born again Scalzian.

  48. Nice work with that scalpel. There’s not an item on that list that has me disagreeing even slightly.

    I was a bit lukewarm about the iPad, but this epic pooch-screwery on Amazon’s part makes me want to buy one, stuff it chock-full of Macmillan books, and send the receipt to Jeff Bezos.

  49. Don’t forget that the iPad is not the only Kindle alternative. There are a passle of other ebook readers on the market. I got my husband a Sony pocket ereader for Christmas and he loves it. I don’t know why anyone would want to buy a Kindle with the mutually exclusive relationship between the device and the Amazon ebooks.

  50. Geoffrey@21: Do we know already that Apple will use DRM in the ebooks they sell? I’m seriously asking, because I’ve been looking and I haven’t found the announcement. Right now, I’m clinging onto the hope that they’ll get ebooks confused with AAC files and not put DRM on them. (i.e., if Apple treats ebooks in iTunes exactly the way they treat music, that’s far more open than any other manufacturer so far.) Of course, it’s just a hope.

    I don’t know if it matters ultimately because iPad runs iPhone apps. There are already a bunch of iPhone ebook reader apps. It’s too late for vendor lock in. Before the iBook store has even opened, there are already multiple places one can buy ebooks to read on an iPad, some of those place even sell DRM-free ebooks.

    Apple can be obsessive in its control. This doesn’t seem to be one of the places where they’ve exercised it though. (Probably because they didn’t care about the ebook market when they first released iPhone.)

  51. You forgot an additional fail:

    8. By capitulating (and who’s brilliant choice was it to even use the word “capitulate”) after just the weekend, they actually also enraged those supporting the Book etailer and encouraging them to maintain a hard line with MacMilllan — “What? Amazon gave in? So easily?”

    Managing to irritate those you chose to the support the publisher/authors and those who chose to support Amazon and the Kindle in one deft move is no easy task.

  52. I think if all of the hard-core Amazon buyers (and I classify my husband in that group more than me) tracked what they were no longer buying at Amazon, it can help.

    Just yesterday, Jim set up a Barnes and Noble online account and spent $25 there that would normally have gone to Amazon. And I don’t think he was the only person to do that in the last two days.

    I don’t think this fight is nearly over. I think Amazon figures it has its monopoly, now it’s time to throw its weight around. The only thing we consumers can do is to make different choices. Don’t buy the Kindle. Buy from other online bookstores. Buy more from people who sell books at conventions. Get back to your local bookstore more often (if you have a local bookstore).

  53. Bravo John, and color me impressed! You pulled off righteous indignation WAAAY better here than in the Ghost Brigades.

    As a Kindle User (Ghost Brigades was my first purchase; see how sad all of this makes me?), I announce that there are no hard feelings. I must warn you, however, that until you relist your books, I cannot buy them, and I’d really like to.

    In closing, may your may shower start off cold unto the arctic until you relist those damned books!

  54. hey carina , does that apply to english books as well. i always by my books from amazone in their original language

  55. In my case I wasn’t really put off by Amazon and this did nothing to affect my desire for an iPad.
    I don’t know why anyone would blame Amazon for a publisher dispute. When I can’t get a book in e-book format, or I can’t use text to speech, I see the book locked to only one Kindle device, or e-books priced like hard covers, I know exactly who I’m blaming, the publishers.

  56. I shall doubt that links from author’s sites will affect the prominence of Amazon in Google searches, and it would take time to work through the system. But when it comes to finding what books there are by an author, Google is there. And one of the things which matters is how many connections there are to a site.

    If scalzi.com does have a lot of weight, in the Google algorithm, for searches related to John Scalzi and books, Amazon are going to slip a little.

    I’m a mere amateur, but I have some fiction out on the net. It was an accident, OK, but I wanted an ethnic name for the main character, and I picked something pretty unusual. And so a search on that name, and the few mentions I made elsewhere of “Wolf Baginski” pop up, with the story, at the top of the Google list.

    Maybe something for an author to think about: pick a character name that stands out a little, gets people to your site, and lets you point them at your preferred retailer.

    I bet Disney wish John Smith had a slightly less common name.

  57. Woah John, I love you like the proverbial fat kid that loves chocolate but you really are too close to this. The number of “fans” of authors is very very small. The number of people that care what authors think is minuscule. However, the number of people that want books for $10 vs $15 is huge – pretty much everyone.

    No one cares what authors think. No one cares what Amazon thinks. No one cares what Macmillan thinks. We just want reasonably priced products. If Amazon’s digging in their heals leads to that then fine. If the books just stay delisted people will be angry. If the price goes up, people will be angry.

    None of the PR matters. Price and availability are all that matter.

  58. I can buy Tor books at Amazon.ca – I just added “Joe’s Tale” to my Cart – but not at Amazon.com. Wonder if that’s due to different contracts?

  59. I sincerely hope that Bezos gets the message two automakers had to go through bankruptcy to learn and Wal-Mart figured out a long time ago.

    Another name for retail company is “consumers’ bitch.” Unless you’re a cable or satellite provider, you cannot abuse your customers and suppliers like Amazon did.

    Now, does anyone know if Ray Banks’ new one is on bn.com yet? Or should I just order it from an indie shop I’ve yet to patronize?

  60. There are the big-name e-readers, Kindle, iPad, and Sony come to mind, but there’s a lot of other stuff, most akin to the Sony hardware, perhaps, with a range of small variations.

    You can pay less.

    You can read PDF files.

    You can annotate with a Stylus.

    But maybe not all of that with the same machine.

    Apple and Amazon have content, and that’s a big advantage, but think carefully about what you need.

    Apple has something more, a certain romantic appeal, a certain repute. You get good stuff, but you have to pay for it with money. Sony’s behaviour on DRM (root kits, for instance) and Amazon (1984, and now this), I pay for their hardware with something other than money.

    Good name in man and woman, dear my lord,
    Is the immediate jewel of their souls:
    Who steals my purse steals trash; ’tis something, nothing;
    ‘Twas mine, ’tis his, and has been slave to thousands:
    But he that filches from me my good name
    Robs me of that which not enriches him
    And makes me poor indeed.

    Unfortunately, that’s Iago speaking.

  61. “…because we check our Amazon numbers four hundred times a day, and a one-star Amazon review causes us to crush up six Zoloft and snort them into our nasal cavities, because waiting for the pills to digest would just take too long.”

    I haven’t laughed so hard in WEEKS. A good way to start my morning, thanks Mr. Scalzi!

  62. Rainier@45 – couldn’t have said it better myself.

    Let me go one step further, the author’s beef is entirely with his publisher. If he doesn’t like the actions of the retail outlet, well that’s just tough luck. Amazon has absolutely no obligation to the author whatsoever and as a result, author comes off sounding like a whiny ranting little child.

    What author solidifies in his rant is (even if not directly said) just how important Amazon is to the distribution and retail channel. If Amazon is as important as being given credit for, then shouldn’t Amazon be able to negotiate whatever price it likes with the publisher? Author is once again getting wound up and directing his anger at the wrong party.

    What happens when a union cannot come to a contract agreement with the employer – they go on strike. In the end, generally the parties come to some mutual agreement and the dispute is settled with each side giving a little to make the other whole. What just happened over the past couple weeks with Comcast dropping HGTV and The Food Network? No difference whatsoever to what Amazon just did, none whatsoever – one night the stations disappeared without warning. Dispute was settled within a week or two.

    In the end, Macmillan will give a little and Amazon will give a little and within a few weeks it will be business as usual.

    Now pipe down. If you need to bitch to someone, pick up the phone and talk to your publisher – they are the only party who has any responsibility to you.

  63. I am not a published writer, I am a very enthusiastic and active and recognized (on the board of the local library, on the board of Philadelphia Great Books, member of three book clubs) reader. And this is exactly the reason why I have said, when asked over the past couple of years, that I would not buy an Amazon Kindle. Amazon is getting a little too big for its britches.

  64. BGriffin@66 – I care what authors think. It’s one of the reasons I read those authors in particular instead of choosing the cheapest books available regardless of who wrote them.

    However, there obviously are a number of people who will pay more for a hardback than a paperback, a number of people who will wait and then pay more for a new paperback than a second-hand one, and a number of people who would rather wait longer and then buy second-hand than borrow from a friend or library. That’s a wide range of responses to price and availability, and with precious little anger.

  65. iPad is just another closed system. If you want a truly open system, but a hardcover or paperback.

    Not sure why people think flocking to Apple is going to solve anything. Ultimately, they’re the ones forcing eBook prices upward.

    I also don’t see why people, and writers in particular, are so supportive of Macmillan. A lot of people are not going to buy eBooks priced > $10 (I’m one of them). That means less royalties for writers and a general diminishing of the eBook market. Worst case, you’re opening the door to further eBook piracy.

  66. Rainier:

    “Authors will hate Amazon? Authors’ fans will hate Amazon?”

    Who said “hate”? Not I. I don’t hate Amazon, and I didn’t say other authors hate it. I did say they were pissed at it, and in that in this particular PR gambit, Amazon lost the authors by their actions.

    If you are going to criticize, please try to criticize on the basis of what I wrote, please.

    Howard:

    “Let me go one step further, the author’s beef is entirely with his publisher.”

    Yeah, no, really not at all. But thanks for trying to reframe the issue in a manner that is neither consonant to the reality of the situation, nor accurately pinpoints the bad actor in this event. Your parting prizes are right offstage.

  67. As long as iPad continues to run Apple apps, it isn’t (entirely) a closed system. On my iTouch I can and do load whatever I like on my Stanza, eReader, and GoodReader apps, and that’s not counting the 5 or 6 other ereaders I have but don’t use regularly.

    Now the iBook reader might be closed to read only Apple-supplied DRM-laden ePubs, we don’t know for sure yet. But if it will read user-supplied ePub books then my Baen library still has a home.

  68. This avid reader isn’t miffed at Amazon. I’m a typical consumer, who does want the best for his favorite authors, but who will buy from Amazon because his local big box book seller is no longer down the road. Even if it was, I like Amazon because it finds books I like and suggests them to me. Besides, I only buy real book, printed on paper. I buy about ten books a month.

    This was a little brushfire, the kind that was out before most people knew it was there. Publishers like to tell us that a paper book, with distribution costs added in, amounts to about a dollar of the price of an average. An e-book saves them that dollar. Is that dollar going to go to the author? Maybe at Baen it does. I would hope the authors would make more with regard to all e-book sales.

  69. Concerning #3, not for me, no. Yes, it is temporarily bad for authors but if a reader really wants the book they can find it at a lot of places so nothing really lost. I see Amazon as trying to keep things cheap for me the consumer.

  70. C. A. Bridges: “As long as iPad continues to run Apple apps, it isn’t (entirely) a closed system. On my iTouch I can and do load whatever I like on my Stanza, eReader, and GoodReader apps, and that’s not counting the 5 or 6 other ereaders I have but don’t use regularly.”

    How long before those eReader apps go the way of Google Voice?

    http://www.techcrunch.com/2009/09/18/google-releases-a-nuke-apple-wont-win-this-fight/

    In this case, it looks like Apple is the one capitulating, as well they should. But that doesn’t preclude them from trying it again the next time an app “duplicates core functionality”.

  71. I loved your first post summarizing what happened and couldn’t agree more with you.

    But this post..I was laughing almost non-stop from point 2 to the end. Beautifully written summary. Thanks so much!

  72. Richard Kilmer@16: The newer Sony eReaders come with Mac software. Plus, if you have the “Daily Edition” with wireless, you can buy direct from the device without a computer. (Though eInk is a lousy way to try to browse a store.)

  73. Wonderful post. Yes, Amazon’s failure was a mind-blowingly multi-faceted PR screw-up (and I don’t expect to see my pre-orders go live again for a while, but, yep, probably before yours). And, as far as BGriffin ‘s comment about people not caring what authors think, I’m guessing 70+ comments on a Monday morning post probably disproves that…

    Oddly, this didn’t seem to hurt my pre-orders this weekend as I had more folks reporting in that they’d purchased through several other online retailers I gave them links to. *shrug*

    It’ll be interesting to see how all this looks again in a couple weeks or months. As a debut author, it’s been mighty educational. ;-)

  74. I really wish I had somehow not known what was going on until this morning, at which point I could have read this post, gotten all caught up, AND had one of my best reading experiences of the weekend.
    I kind of wish I hadn’t been drinking hot cocoa while I was reading it, though. Those stains do not come out.

  75. Nice summary.

    It’s amazing to me how a company can do some things so right and then do other things so inexplicably wrong.

    Time to turn companies over to corporate AIs already. Then they might do something that pleases customers and makes money all at the same time! (I know, radical thought, but I am a writer. It’s my prerogative to daydream.)

  76. I haven’t tracked this carefully, but as a consumer it appeared to me that Amazon was trying to keep book prices down and Apple’s deals have emboldened the publishers to force higher prices. Why should I not be rooting for Amazon here?

    I can see why authors would be upset if their books are delisted for a few days, but I don’t really care, especially if the end result is lower prices. Now it looks like we won’t even get that.

  77. John, you forgot to mention in point 2 that a number of authors responded to Amazon’s move by removing all links to Amazon from their personal blogs and webpages. For a long time, Amazon has been the default “books in print” of the Internet. For many authors, this has now ceased to be.

  78. @36 Um, the authors by and large aren’t cheering Macmillan on. We’re cussing at Amazon for pulling the print titles in an unrelated dispute. That’s not taking sides *for* Macmilllan, that’s reacting to Amazon taking sides *against* us. Biiiiig difference.

    I frankly still don’t know what to think about the core issue of ebook pricing, the proposed agency agreement, etc.

  79. Jake:

    Author Scott Westerfeld can explain it all for you here.

    Jay Lake:

    Exactly so. For authors, the immediate and visceral reaction was “they pulled my books, people can’t buy them on the largest online bookstore now, fuck.”

  80. I’m not sure I get Scalzi’s premise that buyers are going to revolt against AMAZON for essentially trying to keep prices lower. Maybe the 1% who happen to follow the blog of a writer they like. Most people just want low prices.

    I am not a writer, but I’ve been through this a bit as a musician. Record companies want to sell digital music at the same price as physical copies of the music. It just makes no sense. The record company has cut out the cost of making CDs, printing tray cards, shipping product, managing returns, etc; Certainly the costs of studio time and recording have come WAY down. You don’t have to be a music insider to see that they have cut their costs and expect your cost on the consumer end to be lower as a result.

    The problem is not about Amazon. The problem is old media companies having trouble coming to grips with new technology and new business models. Just my two cents. I certainly want Mr. Scalzi and all authors to earn as much as possible. Good luck with it!

  81. Scott@79: Yes, one of the awful things about the way Apple has run their AppStore is it opens themselves up to charges like the one you’re making. However, while you can point to Google Voice (which, unfortunately, was never allowed on the AppStore in the first place), I can point to Spotify, RSS Player, not to mention the sheer number Notes apps, PDF readers, and web browsers. The “duplicates core functionality” argument is silly and Apple seems to have backed down on all cases except the phone related case. (I suspect pressure from AT&T in that case, although that doesn’t absolve Apple of responsibility.)

    Getting rid of ebook apps off the AppStore isn’t just removing one app (like you implied with Google Voice). It’s removing all ebook readers, all PDF readers, not to mention all the ebooks already on the AppStore. There are so many of those that Books is its own category. It would be akin to pulling an Amazon. Apple has now seen first hand what an awful idea that is.

    Ultimately, we have no idea what Apple will do. That’s what makes it so troubling and why charges like the one you imply stick in people’s minds. Their actual track record, though, suggests that they may be sane about this. (Now, if only they will be sane enough to be DRM free…)

  82. bionichands:

    “I’m not sure I get Scalzi’s premise that buyers are going to revolt against AMAZON for essentially trying to keep prices lower.”

    I’m not aware of saying that. Bear in mind that in this entry I’m not talking about long-term economic behavior, I’m talking about short-term PR skirmishes. These are different things.

    Also, and as I’ve noted elsewhere, the idea that Amazon is trying to keep prices down is highly arguable. Amazon is trying to peg prices to a specific point ($10) in order to sell Kindles. There’s nothing to say once that’s achieved, that ebook prices that are currently lower won’t rise to meet that point as well (because publishers would want to recoup lost revenue somehow). So as a consumer, I’m not exactly buying this particular Amazon talking point.

    Bear in mind again that what is of benefit to consumers is very likely a secondary consideration in this slapfight. Amazon is working to sell Kindles and solidify its hold on the ebook market; Macmillan is trying to re-establish terms of its relationship with Amazon and to assert control of the distribution chain. Everything else is an aside, in my guess.

  83. Unfortunately I think more than a few readers are going to have the reaction of #85 Jake – Amazon are the good guys because they’re trying to keep prices low.

    I’m interested in how the media are going to cover Amazon’s pathetic response. That’s where the spin will show. The NY Times didn’t call them out on it at all in their article this morning. In fact they even quoted the line about monopolies with a straight face.

  84. First of all John, I think you nailed it. This entire episode was much more of a PR fail than it ever should have been, and will have lasting negative effects.

    But there’s another thing that concerns me. As I read the various missives by involved parties (admittedly there is probably spin involved), here is how I see the new e-book model that McMillan is employing.

    Basically, McMillan now sets the price, Amazon keeps a percentage of that price, the rest goes back to the publisher. That’s the core of it. Now, depending on how the terms are set, this has the potential to be very disturbing.

    Looking at the retail industry in general, the pricing model is pretty standard. Seller A sets a wholesale price. Reseller B purchases from A at that price and marks it up, and so on down the chain. At any point in that process, any party can choose to manipulate the profit they collect on that item by adjusting the price to the next level.

    In an agency agreement, that power is generally gone, because Reseller B now requires the consent of Supplier A to modify pricing. That’s inherently a flawed model because it eliminates flexibility on the part of future parties. To use a grocery analogy, it would be like a store not being able to use Pepsi as a loss leader because the bottler did not allow it.

    Now I don’t know for sure if this is the case, the agreement may allow Amazon to return some of its percentage as a rebate, for example, but if the model I envisioned above is true, there is some ugliness there, and if it is Apple that is driving that model (which makes sense for them as a hardware vendor), then there is a huge component of AppleFail.

    McMillan gets a fail too, for using the “we’ll delay e-book versions for months unless you agree to our extortion” part of this to get their way.

    In short, there is plenty of fail to go around…

  85. Meh. Everyone will get over it and move on. As for authors being pissed off, I can’t really speak to that since I’m not a published author and have no aspirations toward that, but as long as Amazon sells their books I think authors and fans will be just fine. Any author that’s wants to be pissed at the one of the largest, if not THE largest, online store is guilty of the same petulance as Amazon.

    Amazon screwed up and the sad part is I more strongly agree with their position than Macmillian’s, but again, not a published author. Paying $15 for an electronic book when Amazon often offers hardback books at the same price is simply ludicrous. This is nothing more than publishers desperately trying to hold on to a business model that will slowly, but most assuredly, begin to wane.

  86. #62, You seem to be under the impression that it’s up to John to relist his books at Amazon… They’re the ones who pulled HIM.

    I’m probably going to incur the Wrath of John here, but I’m not real thrilled about Macmillan’s side in this either.

    It SOUNDS like the present model is Macmillan sells Amazon the books for ListPrice/3 (or /2, or whatever) and then Amazon is free to sell the books for whatever they want.

    Macmillan’s new plan is they send the books to Amazon, TELL them how much to sell them for, and Amazon takes a 30% commission.

    So, no sale prices on books anymore, ever?

    I’m probably misunderstanding something about this.

    & I have no problem at all with the dynamic-over-time pricing thing; people are USED to paying less for the stuff that came out last season.
    But they’re also used to below-list pricing on the new stuff, in case you’ve never walked into a Borders or B&N.

    What am I missing here?

    BTW, there are a couple of John’s books here:

    http://www.webscription.net//s-158-john-scalzi.aspx

  87. Jimmy:

    “Any author that’s wants to be pissed at the one of the largest, if not THE largest, online store is guilty of the same petulance as Amazon.”

    We’re suggesting that one’s ability to be pissed disappears in the face of large corporations? I’m not 100% behind that police work, there.

    “as long as Amazon sells their books I think authors and fans will be just fine.”

    But, see. Right now, Amazon isn’t.

  88. In the real world, no one actually gives a good healthy squirt about points one through five.

    And I think that’s the core of the matter. Internet circles are bigger and more populated than before…but they’re still marginal to the general population. If not for Scalzi’s blog, I would be unaware of it (except for maybe Boing Boing). John Q. Public isn’t going to know or care about any of this. They’ll just try to get a book and when they fail, they’ll got to B&N.com or somewhere else.

    As for the PR flack…yes, it IS damaging. It pushes more towards looking at the nook for an e-book reader, if I do get one. I don’t pretend to believe that any corporation has my interests at heart, but the ‘invisible hand’ remains an actor, to some degree. Amazon has gotten music sales from me for that reason…and it works in both directions.

  89. OK, never mind, I take it back.
    It just got thgough to me that Macmillan is trying to prevent the ebooks from undercutting the hardback pricing too dramatically.

    thanks, @ScottWesterfeld

    You managed to jam that piece of info in, finally.

    As you were; these aren’t the droids you’re looking for.

  90. John, from your perspective, as someone who receives royalties, how is the Macmillan agency deal better for you than the current ground state of things?

    Isn’t fixing retail price at list price going to increase the retail price (and likely reduce units) while at the same time reducing list price leading to reduced per unit royalties?

    What am I missing here?

  91. 10:03 a.m. Monday CST — “Agent to the Stars” still isn’t back up on Amazon.com. I dislike e-books and really don’t believe in buying e-books (Amazon or Apple can take your books away from you). But this is ridiculous. BTW, I bought “Agent” in atoms at a real-live bookstore with actual shelves. I read it last year and enjoyed it quite a bit. The whole purpose of Amazon is to GET BOOKS YOU CAN’T GET FROM BARNES & IGNOBLE. Amazon’s shot itself in the foot with an AGM-83 Bulldog.

  92. I would encourage those that are looking for a socially conscious alternative to Amazon to consider Better World Books. Rather than being strictly profit driven they are a B-corp which mean they are a for profit social venture and give a chunk of their profits to literacy projects around the world and use carbon offsets. Check it out at http://www.betterworld.com or http://www.betterworldbooks.com

    -joe

  93. If Amazon was backing some high ideal, such as DRM free ebooks, I’d back them to the end. But they’re not….they’re fighting to sell me crippled books.

    I’ve had Prime for awhile to help feed my book addiction. I’ve debated if it was worth renewing every year about the time it was due, and always done so. It’s actually been a deciding factor in why I’ve bought some things from Amazon rather than another retailer – fast delivery.

    I don’t think I’ll be renewing it this time around. The whole purpose is to help me buy things. But the company has to be willing to sell them.

    I had a preorder in for a Tor book with an April publication date. Canceled that, I’ll just use the Borders gift card I got for christmas instead.

  94. Amadon@7, Richard@16, and Catherine@55:

    You all mentioned having Sony ereaders. Does the glare bother you?

    Does anyone know if any ereaders besides Sony’s allow one to check out ebooks from public libraries? Any hint on whether ipad will allow this?

    I’m not price elastic with books I buy. I read a library copy first, and only buy books I will re-read. I’ll happily pay $15 for a trade paperback because it’s more attractive and durable than a mass mkt paperback.

    I’d like to have the same buying pattern as with print books: check book out from library and buy my favorites. If I like it that much, $9.99 vs $15 wouldn’t make much difference. In fact, if the $15 copy was better edited, or included some graphics (such as maps for Guy Gavriel Kay’s books), I’d be willing to pay more.

    I know this topic is on Amazon, but if Amazon has really failed, those of us who are contemplating ereader purchases need to look at the alternatives. I’m not completely convinced the ipad is the only solution.

  95. As someone who was considering buying a Kindle in the future (like a Kindle 6 or something, not the 2.0 or whatever), I can honestly say that after the events prior to this (the Orwell stuff), the DRM, and now this enormously stupid even, I won’t be buying a Kindle. Ever. They’ve lost my future ebook business for good. I’ll go to B&N or some other company (not Apple, though, because I can’t stand Apple).

    I’m even considering taking all my business elsewhere for good. Amazon isn’t the only place to get a good deal on products, particularly books…they need to realize that. We shop there because we choose to, not because it’s the only option. They don’t have a “monopoly” yet :P.

  96. This whole debacle has made me all the more glad that I decided to go with a nook for my e-book reader of choice. They’ve managed to insult the authors and the fans, many of whom actually want to ensure that their favorite authors get just compensation.

    Granted, both companies were working for their bottom line, period, but Amazon really dropped the ball here. In claiming that they were working for the benefit of their customers, they managed to alienate a large percentage of those customers.

  97. adding to my own post@105, I mentioned buying trade paperbacks. I don’t like to buy modern hardcovers because their bulk and heft make them hard to hold. Older out-of-print hardcovers are much more compact.

    Perhaps the ebook market will separate into mass market ebooks, with basic formatting, and trade paperbacks/hardcovers which include the graphics et al.

  98. Andy at # 104 said, “If Amazon was backing some high ideal, such as DRM free ebooks…”

    I have no idea how increasing ebook sales without DRM is going to happen. Although most DRM cracks fast, most people won’t bother. But what people will do is share ebooks with ease when they don’t have to worry about DRM. It’s so fundamental to human nature to take something that’s free. We also don’t like labelling ourselves as thieves. We’re borrowers. It’s just like going to the library, but it’s a virtual library.

  99. John, I feel bad for you, like I feel bad for my many author friends this happened to.

    But you don’t blame Macmillan at all?

    Interesting.

    I’ve spoken with other Macmillan authors, who were upset with their publisher. They know their Kindle sales, and royalties, will drop off, because Macmillan is the bully here by insisting on price control.

    As if Chevorlet could go into any Chevy dealer and demand what those dealers could sell their cars at.

    As I see it, Amazon played this well. Authors lose a few days of ebook sales, but their print editions can be bought at many other locations.

    My guess is, though, those other locations will also bow to Macmillan’s pricing structure, which is a sad tactic to delay the inevitable; a low-priced ebook future. Just like we have a low-prices digital music present thanks to iTunes, and a low priced digital TV/Movie present thanks to On Demand and Netflix.

    If my publisher started making pricing demands on retailers, I’d be pissed.

    Amazon announced to their Kindle owner base–several million strong–that they they tried to keep the prices down, but were unable to. To a lot of Kindle owners, Amazon comes off as the good guy. And I’ve already witnessed the rallying cry of many Kindle owners who flat-out refuse to spend more than $9.99 on an ebook. In fact, they already had a boycott a while back that proved successful.

    So now, Macmillan will sell fewer books on Kindle. Will those book sales be made up for with paper sales? We’ll see.

    I understand you being annoyed at Amazon. But you mentioned nothing about Macmillan sharing the blame, and I believe they deserve the lion’s share.

  100. This sort of bad behavior is not new for Amazon, not new at all. In early ’08 they removed the buy button from Hachette titles and took their books out of promotional positions: http://www.thebookseller.com/news/61034-agents-pick-sides-on-hachette-v-amazon.html

    Melville House, a Brooklyn indie publisher, has been chronicling Amazon’s ongoing bullying for a while, although for far longer than they even have here: http://mhpbooks.com/mobylives/?cat=57

  101. JA Konrath:

    “But you don’t blame Macmillan at all?”

    I’m not aware of discussing “blame” in this particular entry, actually. I think I’ve made it clear that in previous entries that I understand both parties are playing hardball, so I’m entirely sure what “blame” has to do with anything in that situation.

    I do absolutely believe it was Amazon’s sole decision to delist Macmillan’s titles, however, as I have hard time seeing why Macmillan would want that. So in that sense, no, I don’t blame Macmillan at all for that. If you are suggesting that Macmillan is to blame for Amazon unilaterally delisting Macmillan titles as a tactic in its corporate discussions, I’m likely to suggest you’re incorrect. And giggle.

  102. I simply can’t take you serious, John. If I felt that you could deliver an honest assessment, then maybe I would give you credit. IMO you are biased. I don’t think that anyone is surprised by which side of the isle you come down on. From where you’re sitting, it’s easy to dump on Amazon. This isn’t an overly complicated issue. Amazon doesn’t have to allow other businesses to dictate how they run theirs. Macmillan should be ashamed of themselves. Publishing as an industry is archaic and broken. Maybe they should broker better deals upfront with Amazon instead of giving them a 50% discount on the front end. Amazon buys ebooks from the publisher at 50% of the hardcover price, then prices those ebooks at $9.99 or less. Now Macmillan wants the cost of their own deep discounting to be passed off to the consumer. This also isn’t about author compensation. Many authors have noted that they already receive a higher % royalty on ebooks. Everybody wants the authors to make money. Macmillan is doing the same greedy power grab that they are accusing Amazon of doing. Maybe the publisher should realize that protecting their hardcover market is the problem. Most people don’t want to pay $30 for a hardcover. Especially for each book that they want to purchase. I would sooner go to my public library if I had to read the book right away. Otherwise, I would simply wait until the book goes into paperback. By then, I might have even forgot about it if I can’t get it for a decent price when it first comes out. If their business model is one that derives them profit from only one particular sector, that being hardcover, then it’s an issue.

    Many people will not spend $14.99 for an ebook, and Macmillan will find this out the hard way. Sales are going to have a steep drop. Trade or hardcover, it’s not worth the money. It costs nothing to distribute and manufacture ebooks. Color covers are also not available. The publisher wants the consumer to believe that it costs the same to release an ebook as it does to run a book on the printing press. This is total BS and I won’t buy their titles anymore.

  103. No, I doubt you will be the last author re-instated. You have your reasons and lay them out neatly. The author whose complaint I read who called for a boycott of Amazon because they de-listed her book when all Macmillan wanted was a little more money that would (of course) go to the deserving authors…she is a much more likely candidate for last.

  104. Naomi:

    “IMO you are biased.”

    You didn’t read the disclaimer, did you, Naomi? You know, where I noted I was not a disinterested observer? You know why I put it up, right? To let people know I had biases in this discussion. Right up front.

  105. Does anyone know if Amazon deleted material from the Kindle again like they did with the Orwell book? I’ve seen a few indications that they did (wishlists?), but I don’t have a Kindle myself and haven’t been able to confirm it.

  106. kejia @ #105, I think glare may be an issue with the touch-screen Sony reader? I have the pocket and have no problem at all with glare.

    If you have a local Borders, they have them in-store to play with.

  107. @Sarah – no deletions, but if you had one pre-ordered it may be gone from the order queue.

    @Naomi – Besides the fact John did give a disclaimer, your assertion that it ‘costs nothing to distribute and manufacture e-books’ has been significantly debunked in many places, not the least of which is this blog several times.

  108. Anyone in the Seattle area with PR experience may wish to send their resumés to Amazon; I’m sure something will be opening up there in the near future. (I suggest reading this post aloud when asked about why you should be hired.)

  109. John, a few points.

    1. You are right that the consumers might look elsewhere as a result of Amazon’s delisting. I personally placed an order for 4 books from http://www.bookdepository.com, and I am curious to see how the service compares to Amazon.

    2. Don’t worry about the one star reviews. They’re just jealous. Trust me.

    3. Seek help with the Zoloft habit.

  110. I mostly agree with the sentiment of this article except for the conclusion. Apple is even a larger control freak then Amazon. I will stay away from the iPad because of that.

  111. Regardless of what Amazon did, when I heard what Macmillan was doing they lost my business. As far as I’m concerned 1/6th of Amazon’s library disappeared for me anyway.

    Sounds like overall this was a dickish move for both sides. I just happen to agree with Amazon on this one.

  112. And this is why I am glad I bought a Nook. And why I am waiting for DroidPad. Open and transparent is the only way to go in the 21st century.

  113. If you are suggesting that Macmillan is to blame for Amazon unilaterally delisting Macmillan titles as a tactic in its corporate discussions, I’m likely to suggest you’re incorrect. And giggle.

    I am suggesting that it was a pissing contest, and Macmillan tried to throw around its weight in the first salvo, so then Amazon followed suit.

    Was Amazon right to do what they did to you and every other Macmillan author? That’s a judgment call. But I don’t believe they started the fight.

    Ultimately, you’re right in saying that you weren’t discussing blame. But I don’t think it will be a giggling matter when the end result is Macmillan authors selling fewer books.

  114. @John Scalzi

    “But, see. Right now, Amazon isn’t.”

    True, Amazon is still screwing this up. They could have played it so much better because I still think they have the better claim. However, in the end I think everyone will be happy. Yours and many other authors’ books will be re-listed and life will go on. This corporate pissing match would be laughable if it didn’t mean authors were losing possible sales.

    I guess I really don’t have much of a stake in this because I’m not an e-reader fan (yet). Maybe in a year a two when there is more than one tablet/reader out there. Perhaps Wal-Mart needs to develop an e-reader. Then they can use their satanic powers to push the price down to $4 and only they will make money.

  115. JA Konrath:

    “But I don’t believe they started the fight.”

    Well, to be clear, “the fight” in this case is a single incident over a long set of business negotiations between Amazon and Macmillan, informed by other of their business practices with others and in other arenas. In a very real sense the fight was started by both of them; in another very real sense Macmillan felt obliged to offer its terms to Amazon based on Amazon’s own practices.

    “But I don’t think it will be a giggling matter when the end result is Macmillan authors selling fewer books.”

    Leaving aside the fact you’ve misattributed what I’d be giggling about, I’m not 100% convinced that will be the case. We will see.

  116. All of this silliness simply reinforces my decision not to buy either a kindle or an ipad (how absorbent is it?), but rather stick with print books.

    At least until they stop printing them.

  117. Re: “And yes, by this point, I expect I will be the very last Macmillan author Amazon gets around to relisting.”

    Maybe. I think it would be more fitting for them to offer your books for sale but demand twice the usual cover price. Am I wrong here?

  118. (speaking as an average shmo consumer who spends more time reading free content on the internet -not piracy- than she does reading books anymore so take this with as much salt as you please)

    Of course, the people Amazon *didn’t* lose are the ones who are the 1 in 5 people who are unemployed or underemployed who find out that Amazon was trying to hold prices down. They also probably didn’t lose anyone related to those 1 in 5 people who are unemployed or underemployed.

    From what I’ve seen, reaction outside of authorial influenced blogs and Amazon influenced forums is a whole lot of disinterest. Mainstream people will simply use that cash for beer or DVDs until they can easily access the books again. Or they’ll buy 3rd party. Or they’ll buy used. Or they’ll go to a brick and mortar.

    I think most people haven’t even noticed they were gone to begin with.

    If I’m going to buy a book, I order it from Amazon months before it’s even been released because it’s an author I love and track or I buy it in person at a brick and mortar. (sadly, although I adore your blog I haven’t enjoyed reading scifi for decades) This argument isn’t really going to affect me but when I read about the sides involved, I’m going to side with the guy who is pricing ebooks closer to what I feel they are worth. That said, I don’t buy ebooks because so far no one has listed what I want to read anywhere close to what I feel a DRMed book is worth. In my opinion you can’t compare renting an ebook to the lasting quality of buying a hardback book and the former isn’t even remotely worth what the latter is worth. Heck, the former isn’t ven worth the price of a paperback. So I have no horse in this race until the product I want to buy even exists.

    But the guy I’m definintly *not* going to side with is the guy who wants to rent me a book for just about the same price that I usually pay for a hardback.

    I do hope they stop dicking with you, John, but I’m not hating on Amazon for this.

  119. If MacMillan cared about authors, they wouldn’t be conspiring with Apple to set a minimum price requirement to set in the iBookstore. The minimum price requirement is clearly designed to protect the major publishers from competition from inexpensively-priced titles from small presses and independent authors.

    MacMillan and the other majors are more than happy to screw both consumers and authors to maintain their stranglehold over publishing. Amazon’s most active customers blame MacMillan for this dispute, and so do I.

  120. I think this is a very helpful post (of course); however, if I may, can I caution Scalzi & others against labeling this another example of Amazonfail?

    The reason is that throughout 2009 and into 2010, in the sf/f community, various “-fails” (racefail, amazonfail, coverfail) were attributed to specific examples of racist, homophobic, and other disenfranchising/privileged behavior on the part of writers, publishers, and others. “Amazonfail” as a term originated (early in the morning on Easter Sunday) in the community of users of the term “Racefail,” specifically because it was an example/extension of the kind of privileged behavior that the sf/f community had been calling attention to for months.

    I worry that attaching the “-fail” appendix to new instances of Amazon being an idiot (but *not* necessarily practicing privilege) will trivialize and blur the significance of the original context in which the term “#amazonfail” was used.

    So, yeah, if there’s a way to make that distinction somehow, I think a lot of people might appreciate it.

  121. The Gray Area @109:

    Until it’s DRM free and I can put it on any device I want to use to read it, I don’t really own it. And I certainly don’t want to pay a price that is on a par with owning a physical copy just to rent it.

  122. I agree on Amazon’s PR problems through this debacle and how they missed an opportunity to control the story, but at the end of the day, I’m still with Amazon — eBooks should be priced at $9.99 or less. Most of the people speaking out against Amazon are not eBook buyers — they don’t own a Kindle or another device. They don’t even own the magical iPad. All they know is that their favorite writers are upset, so they’re going to go up against the evil Amazon machine that wants to charge $5 less than the publisher does for an eBook. I AM a Kindle owner, and I do most of my reading on Kindle — in fact, I read more because of the convenience of Kindle. I would not have picked up any of Mr. Scalzi’s fine books if not for the Kindle.

    The problem here is that the publisher does not understand quite how Kindle owners view eBooks — I do not see an eBook as an equivalent purchase to a real physical book. It’s not something that can sit on my shelf or that I can lend out or share with my children — it’s something more akin to a Netflix rental for written material. From my vantage point, $15 is much too expensive for what basically amounts to a book rental. $10 is a fair price.

    Here’s an example: I am not going to re-purchase the Wheel of Time on my Kindle for $15 a volume — I’d love to re-read it on the device, but I’m just not going to do it. I’d purchase it for say $8, or whatever the equivalent paperback price is, yet Tor/MacMillan for some reason thinks that $15 is what I should be paying just because they hired a bunch of artists to make new “digital-only” covers. It misses the point of Kindle — reading for reading’s sake. Not as a collector, not as someone who wants to collect and cherish the books, but as a means to reading the content without going through the hassle of going to a bookstore, not finding the book you’re looking for, going to another bookstore, not finding it again, only to go to Amazon.com to order the book online.

    And honestly, I am just really floored that anyone believes that a retailer is somehow ethically obligated to sell a product for the price the publisher wants to set for it — even if they take a loss by discounting it. That’s how the free market works, yet the publishers seem to want to control the market and force Amazon to adhere to Apple’s iBook higher pricing. They even claim to be taking a loss on this on principle. If I didn’t know better, I’d say that it looks like Apple has been goading them into confronting Amazon just put the iPad on even footing with the Kindle in regards to eBook prices.

    The sad fact of the matter is that the publishing world is broken, and the iPad is going to break it further — a lot of people seem to believe that Apple is the good guy and will somehow save publishing. One has only to look at the music business to see that this will not be the case. There’s an entire generation of kids right now who believe that music should always be free — and they are not buying records. Few young people read, but those few who do are already comfortable with piracy. How long will it be before a big portion of the market stops buying books altogether if they can read pirated versions on their iPads, just like they listen to largely pirated music collections on their iPods? Meanwhile, people like me who would happily pay for eBooks on Amazon’s closed format Kindle are being told that we have to pay more because — well, the print editions have art, editorial, marketing and writing expenses that need to be taken care of, and that’s always how publishing has worked. Except there is a real difference between a hardback book and a paperback, but there is no difference between a first edition eBook and second edition eBook. You can make a case for why a hardback, designed and built to stand the test of time and look attractive on a bookshelf, costs $28 to the more disposable paperback’s $8. But you can’t give any other reason for why a file that is less than one megabyte in size should cost $15 now and $12 a year from now and $10 two years from now except that this is how the publisher thinks they’re going to make money. There’s no binding in an eBook, now warehousing, no shipping, no freight costs, no pulping, etc.

    So at the end of the day, Kindle owners are not going to pay the extra $5 for Macmillan’s books, and the pirates are not going to pay at all. But Macmillan wins the battle against Amazon in the short term, just like the RIAA won the fight against filesharing in the short term. iPad owners may buy a few books as a novelty, but the iPad is not really a reading device — it’s a Web surfing device. People who buy a Kindle buy it to read books. Macmillan and the other publishers aren’t fighting pirates, they’re fighting a legitimate outlet for their books in a world where such outlets are drying up on behalf of a device whose primary function is not to sell books, but to surf the Web and watch multimedia content.

    At this point, I’m really turned off by Macmillan, Tor, and all the writers who whined so loudly about how Amazon acted in a heavy-handed way. These so-called champions of literature conspired to raise eBook prices to enrich themselves, while convincing their mostly non-Kindle-owning fans that raising prices on Kindle owners is a good thing. Ultimately, Amazon needs content — and they have to compete with Apple, so they conceded defeat. It’s a loss for readers and a loss for eBooks.

  123. @ ladypeyton:

    I am one of the 1 in 5 who are unemployed. I think Amazon did a stupid thing. They pulled a goodly amount of their inventory over e-book pricing. I am not an e-book reader at this point, for various reasons, not the least of which is that I would rather spend the $200-$500 that a reader runs for actual books. And Amazon put a serious crimp in that this weekend.

    As to worth, that is rather subjective, isn’t it? I don’t think the latest Dan Brown hardback is worth $20, but I more often than not laid out full retail price for the hard back versions of Bujold’s Vorkosigan series, or any of Daniel Silva’s books. What a book is worth is what a customer will pay for it. Hence the bargain tables at most brick and mortar bookstores.

    In any negotiation, you have to know what your walk away point is, and you better be prepared to stand behind it consequences be damned. Which means that you need to truly think critically and know what response will have the most impact for the least cost. In this case, Amazon could have say, pulled the e-book listings for Macmillan. Which would have made sense. The negotiation was about that topic. It would have inconvenienced e-book readers, and Amazon could have held up its rhetorical hands and said “hey, would absolutely love to sell this to you but, you know, Macmillan. Whaddya gonna do?” Instead they pull ALL Macmillan titles causing us non-ebook readers to get irritated and go to B&N, Powells, Borders, or any of the other competitors that Amazon has.

    Because really no one likes a playground bully who decides that since he got the ball from the recess locker, he gets to decide who plays with it.

  124. Jeff Barus @134: “There’s an entire generation of kids right now who believe that music should always be free — and they are not buying records

    This is demonstrably false. CD sales ARE down….as digital sales supplant them. Digital sales ARE down…because the economy is poor. Kids are downloading fewer songs…but according the NPD, not because they are listening to iPods full of pirated music…but in large part because they either had what they wanted already and not that interested in recent music, had smaller budgets OR were using online FREE RADIO SERVICES much more extensively than previous.

    The aging music industry is not directly analogous to this situation because the music industry faces different challenges and solutions. People have gotten music for free since the inception of radio. Services like Pandora and Slacker make it so you can customize your radio to listen to what you want with or without commercials. The book publishing industry has no such history or functionality, except for periodicals (who are losing money on that model).

  125. @Jeff Barrus:

    Re your quote:

    “You can make a case for why a hardback, designed and built to stand the test of time and look attractive on a bookshelf, costs $28 to the more disposable paperback’s $8. But you can’t give any other reason for why a file that is less than one megabyte in size should cost $15 now and $12 a year from now and $10 two years from now except that this is how the publisher thinks they’re going to make money. There’s no binding in an eBook, now warehousing, no shipping, no freight costs, no pulping, etc.”

    You’ve hit the nail on the head on another measure of e-book pricing with which I do disagree, namely variable pricing. To me, this is how an e-book should be priced:

    If and when a hardback is released, the e-book price should be comparable to the hardback price minus physical production costs. This is where I have no problem paying $15 for an e-book released the same day as a hardback, unless the hardback is released for less.

    When a paperback is released, the same model follows – e-book = paperback price – production costs (or make it easy, $1 less on average).

    That’s fair pricing and currently in line with what people pay now.

  126. Okay that was the most fun post you’ve done this year. (Granted we’re only in Feb., but it was classic.) I think Charlie Stross has had the best view of this situation, and I urge anyone who has questions over what’s gone on, or who thinks Amazon is doing this to defend consumers to read his blog about it and see what you think afterwards.

    But Stross’ dead-on analysis aside and Scalzi’s entertaining post aside, I don’t think the PR aspect of this in any sense was very important. It was only two days, most people have no idea that it even occurred. What is important about the incident for me is its significance, not how it looks to anyone.

    Two years ago, Amazon UK wanted even bigger price discounts from publishers and when Hatchette/Warner resisted, they pulled their titles. Hatchette/Warner gave in after a few days. Now, Amazon, wanting more revenues as the publisher of Kindle e-book versions and a fixed price instead of flexible price system, tried the same blackmail move and Macmillan said no. And Amazon was the one who caved, after two days, and will not be able to try the blackmail move now because of that on any other major publishing company. Meanwhile, the Kindle has sold well, better than other readers so far, but it is no longer the new shiny toy on the block.

    So what this means is that Amazon, while still a wholesale/retail behemoth, has lost their hold on the market for their key product. (Not necessarily the product that makes them the most money, but the central one.) And they didn’t lose it because Macmillan fought with them and won; they lost it because of the natural evolution of both the online retail markets and the new, fast-growing player market, which includes but is not limited to e-books. Which means the e-book market can now get on with it, which is going to result in more e-books, standardized practices, lower prices, and a huge new customer base in a few years.

    And it’s rather heartening that such an intense corporate battle should be fought over books.

  127. AmazonFail hasn’t just sent buyers to other websites . . . at many libraries, when a patron asks for a book and the library doesn’t have it in their collection, the librarian tells the patron where it can be purchased online.

    Guess who wasn’t getting librarian referrals this weekend? Tell the librarians that one of their sources just yanked 1/6 of its entire inventory, and, well, they just might go for a more reliable resource. Especially since most librarians tend to like and sympathise with authors more than they like and sympathise with Amazon.

    You know, there are a lot of librarians out there.

  128. I replaced my formerly-vast “hold for later” cart and wishlist on Amazon with a single item: iPad. Those who have an ear to hear, let them hear.

  129. Great series of columns on this. What is also lost in translation here is that I have ceased to view amazon as a seller of books. I see them as nothing more than a distributor, frankly. They display my books as available from their site (oh, let’s be honest, Ingram and Taylor) right next to those books for sale by other sellers as well as used copies, what incentive is there for anyone to buy a new book, even at their discounted price? It actually HURTS me that they are selling my book and, frankly, I’d pull it if I could. They get a cut from every book that is resold from their site. I don’t. I looked the other day. A used copy at $1.20 versus amazon’s price at $18.00. You do the math.

    PS you only check four times a day. Slacker! Yes, it’s a problematic relationship for sure.

  130. @James #139 –

    Not exactly, as there is no guarantee the price model will be linked to the cost of the current release. Under McMillan’s model they COULD do it that way, or they could just leave the ebook at the hardback price forever, and ostensibly the retailer has no choice in the matter in the agent model.

    I really think some people are missing the point. Amazon acted childishly and with horrible messaging, and yes they need to be called to account for that.

    McMillan, however, has decided to turn the entire retail pricing model on its ear, a scenario which is VERY unlikely to benefit e-book readers (can anyone point out an area where a single price point of control has led to lower prices), which in my book is infinitely worse than just throwing a temper tantrum.

    Anyone who says they are boycotting amazon, or shopping elsewhere should also be doing the same to McMillan until they commit to fair pricing to go along with total pricing control.

    The underlying issue here is that the Apple pricing model is a FLAWED model, and badly so, in that it only works for Apple, which cares about selling hardware and data, NOT market economics, so they were happy to offer a deal that skews to the content providers of books, because any book income is more than they get now.

    I just spoke to someone who had their hands on an iPad who said “The screen is so dim you can’t read it in the sun for more than 3 minutes, and I tried to read a newspaper and the backlight gave me a headache. It’s a pain to turn pages”.

    As an e-reader, I don’t think the iPad holds up for more than occasional use, and e-reading is NOT one of its core functions (not for books). People’s expectations are getting way ahead of them. It’s biggest advantage in this space will be the ability to also run 3rd party apps (like Kindle) which will allow for multi-vendor delivery.

  131. @ Kate

    “As to worth, that is rather subjective, isn’t it?”

    Well, yes, but I believe I claimed from the outset that my comment was completely subjective. I was offering my point of view, not the definiteive answer to the universe.

    “Because really no one likes a playground bully who decides that since he got the ball from the recess locker, he gets to decide who plays with it.”

    It’s fairly obvious, even here in an author’s own back yard, though, that there is disagreement as to who is the bully in this situation.

    The end result is that I will not change my purchasing habits one whit because of this kerfluffle, aside from having the curious desire to go browse at a brick and mortar store because reading about this subject has reminded me that it’s been a while.

    So the family’s made plans for the Saturday morning. %^D

  132. Great post, and SPOT ON. One thing, though – Macmillan is no shrinking violet here. Macmillan “represents” its authors the same way Sony Music “represents” its musicians – by taking huge shares of their income for a service that is questionably necessary in the Internet era. Why do we need the middleman, anyway?

    The reality is, with social media giving writers easy access to their public and high profile retail stores like Amazon and iBookstore, AND the ability for individual authors to publish in a standard, publishable format (ePub) we are approaching a new era where consumers have a much larger voice in who gets published.

    Amazon was forcing prices artificially low, but the coming price war with B&N (Nook purveyors) and iBookStore will bring prices overall lower, IMHO.

    A sad episode, indeed, but a typical fight of the dying dinosaurs at the end of an old industry.

  133. Hi John,

    Just went to Amazon. I was directed to your books with no problem. You seem to be listed.

    I hope this sorts out quickly.

    The Wombat

  134. I think the theory about Amazon freaking out due to the imminent arrival of the iPad has some weight to it, not because it will possibly be a better reader device (in fact, by all accounts, eInk is easier on the eyes that a standard LCD screen) but because of the iBook store, which has locked down deals with five mega-publishers (including Macmillan) to fill the store with their eBooks. It goes without saying that these books will have DRM, but so does everybody else. The eBook format for the iPad, ePub, is an open format which allows a DRM layer, but it will be possible to read non-DRM eBooks as well (you can even write your own books and export them as ePub books in layout programs like InDesign). I don’t know if it is this easy or direct to load non-DRM books into a Kindle (I don’t have one) but I get the sense that it’s a bit more complicated (anybody care to clarify this point?). Also, for all of you Fictionwise fans, those eBooks can already be viewed on the iPod Touch/iPhone, so they will also be available on the iPad (most existing apps will work on the iPad out-of-the-box). So, apart from the actual reading experience, the iPad already offers a bunch of additional features than the Kindle, including (unless this spat is resolved) Macmillan titles. And at a price point just $10 more than the comparable Kindle DX (the screens are approximately the same size). There are many questions to be resolved (will my eyes turn to jello reading on the iPad? will Apple block apps like eReader, Stanza, and Kindle(!) for the iPad? will the iPad even sell? (it could be a complete failure))… But it seems to me that Amazon clearly panicked and a significant reason is that damned iPad… Remember, Amazon and Apple plan to make most of their money from selling their hardware, not on eBook sales (this is how Apple made a killing on iPods). Using a tactic straight out of Apple’s playbook (keeping prices at one price point ($10)) Amazon managed to bungle it very badly and now may have to suffer from backlashes on various different fronts.

  135. @Wombat:

    Scalzi’s books had links throughout the weekend, but if you try to purchase one, you see that they are only available third party sellers.

  136. @48 Matt
    I see nothing in John Sargents letter that directly says amazon can’t discount. That may be the case in whatever contract is drawn up, but it is most assuredly no in the letter. True it says Macmillian will set the price, and amazon will get 30% of that. I’m sure Apple would like it if amazon can’t discount, but if amazon is smart they’d reserve the right to discount out of their own commission, which is what happens typically with physical books.

    The problem till now has been that amazon has been setting the price and then telling Macmillian here’s how much we’re going to give you. (Which was much less than 70%.)

    Also everyone seems to be not reading very closely and thinking Macmillian will price all books at $15. Also ignoring the fact that there are already MANY kindle books priced over 9.99. That’s really just their “bestseller” target.

  137. I have never bought anything from Amazon. I’m one of those old-fashioned folks who remember when dinosaurs walked the earth and like to go into actual brick-and-mortar stores to buy stuff.

    That said, if I was an Amazon customer, the whole circus this weekend would have cured my of it.

    They think we’re all stupid, don’t they?

  138. PW January 25, 2010, pg. 2: “Earlier, Amazon announced that beginning June 30 it will add a new royalty option to authors and publishers who use the company’s self-publishing Kindle Digital Text Platform. The new royalty will be 70 percent, but to qualify, e-books must meet several different standards, including a price that is $9.99 or lower.” What does this do to the publishing industry? Instead of books being filtered through a publisher, books will be filtered through public opinion… one star, two stars… five star ratings? Will the general public care if MacMillian is dropped if there are so much more content to choose from? Consider what the top downloaded books are on the kindle… mostly skewed to books that don’t cost anything, or some books that were free last week, but now cost something. Will authors leave publishers and move to amazon.com self publishing for the royalties?

  139. bud: “Meanwhile, no one calls the absence of Random House and others from iPad iBook store a “bitch slap””

    Because it isn’t. It just means that BDD Random House didn’t finish its negotiations with Apple in time for the iPad launch. I’ve no doubt that RH titles will be available for the iPad pretty soon.

    JeffL: “Not exactly, as there is no guarantee the price model will be linked to the cost of the current release. Under McMillan’s model they COULD do it that way, or they could just leave the ebook at the hardback price forever, and ostensibly the retailer has no choice in the matter in the agent model.”

    First off, $15 isn’t a hardcover price. It’s a trade paperback price, and given that making e-books is still very expensive right now, especially because there is not one standardized format, is not that off the mark. Second, because of the way that the publishing market works and the electronics products market works, Macmillan has little incentive to skyrocket prices. Book publishing works on very tiny margins and has low desirability with the populace, so it wouldn’t work and they know it. Everybody is perfectly well aware that as the e-book market grows, with increased volume, as well as the benefit of no returns issues on e-books, prices will come down. But what the publishers can’t do anymore is sustain the losses Amazon has been having them take on the Kindle versions — versions which they have to pay Amazon to make for them special for the Kindle. Third, the retailers will continue to have plenty of leverage, including Amazon, in both print and e-books. To think that retailers will be helpless just because Amazon caved on this one issue is exaggerating the situation a great deal.

    “Sheltered Existence: “Macmillan “represents” its authors the same way Sony Music “represents” its musicians – by taking huge shares of their income for a service that is questionably necessary in the Internet era. Why do we need the middleman, anyway?”

    The two industries operate very differently. Authors cannot afford in time and money to e-publish or print publish on the scale that publishers can and with the costs that publishers can absorb because they are putting out many authors, not just one. Right now, what publishers do is very necessary to authors.

    Look, there really are no “bad guys” in this — author, publisher or Amazon. Or customer. There are lots of ways, legal ways, to get books for discounted prices, and soon the e-book market will be very large and cheaper. This is just the growing pains stage.

  140. Over on TeleRead, some of my readers have the conspiracy-theoryesque idea that Macmillan is actually out to destroy or at least slow down the e-book market, to preserve the print book industry, and that any claims it will price older books below $9.99 are a big fat lie.

    While that’s a little bit too “grassy knoll” for me, I do have to admit I’ve seen example after example of titles where Macmillan has failed to adopt any kind of “variable pricing” scheme on other e-book stores—and they’ve had ten years of e-book sales in which to do it.

    If they’re really serious about it this time, I hope they will extend those lower prices on older titles to stores such as Fictionwise as well—otherwise they’re only going to help Amazon cement its position as the “low price leader” for e-books.

  141. @ Claire

    “They get a cut from every book that is resold from their site. I don’t.”

    Your argument doesn’t work for me. Should you get a cut from yards sales or charity sales of your secondhand books? Of course not. Amazon developed a successful business model that allows people who’ve already paid and read the book to resell it later. Once I pay for the new book and you get your royalty, our relationship ends. What I do with the book after that is no concern of yours — even if I use the convenience of Amazon to resell my book for a pittance of what I paid for it.

    By the way, many online book sellers allow their customers to resell used books, including Barnes & Noble, Powells, and Books-a-million. Amazon didn’t invent the model, they just made is successful.

    Disclaimer: Yes, I’m an avid Amazon customer.

  142. “The problem till now has been that amazon has been setting the price and then telling Macmillian here’s how much we’re going to give you. (Which was much less than 70%.)”

    weasel, is that not exactly what Apple has done since day one pricing tracks on iTunes at 99 cents? Even in the face of outrage from the music industry? And, just as a matter of fact, iTunes does not carry every record label or artist because they cannot come to agreement on pricing/distribution. A retail outlet cannot be forced to carry any product they do not wish to.

    It is a symbiotic relationship. Either they produce benefits /profits for each other, or one will walk away. That’s just common sense.

    Macmillan is still out to lunch as far as how the digital world works. Eventually they’ll get a clue or begin to wonder why they make minimal digital sales. Sacrificing digital sales and driving customers to traditional book sales or alternative competitor digital products is not a good business decision. In the majority of cases, I think that will be the response of most Kindle customers as well as those using other ereaders. In the end, the market will determine what price it will bear – not Macmillan. It seems to me, opening Macmillan titles to more digital distribution paths (via B&N, Apple, and others) should minimally hold the price at $9.99 if not drive it lower – going higher is outright lunacy. Though digital distribution is not free, it is obviously much higher margin than the traditional paper/physical means.

    Again, in the end, the market will ultimately determine how this all plays out. It should be interesting to watch.

  143. @BGriffin 66

    “The number of people that care what authors think is minuscule. However, the number of people that want books for $10 vs $15 is huge – pretty much everyone.

    No one cares what authors think. No one cares what Amazon thinks. No one cares what Macmillan thinks. We just want reasonably priced products.

    None of the PR matters. Price and availability are all that matter.”

    You SHOULD care what authors think. Without authors – why don’t people get this – there IS no product, when it comes to books. Yes, sure, you can always go cheapie and buy the latest 600-page unedited volume of fantasy that Joe Q Public the heartily unheard of writer has peddled himself and thinks is the next best thing to sliced bread (if not better). But nobody else can write a, say, Scalzi book… except Scalzi. Nobody can write any of MY books except, well, me. If you really don’t care what you read so long as you only pay five bucks for it
    I’m not sure what your reasons are for reading at all – and kicking the authors in the teeth (“no one cares what the authors think”, indeed. We know. More’s the pity.) is not going to help matters at all.

    The writers don’t get that much money out of this. At least give us a little bit of respect.

    (we, um, have a “monopoly” on our books, after all…)

  144. @ Jeff Barrus 134

    While I think you’ve well stated your case about those who are getting more comfortable with piracy (and hats off there!), I think you missed the boat on this:

    But you can’t give any other reason for why a file that is less than one megabyte in size should cost $15 now and $12 a year from now and $10 two years from now except that this is how the publisher thinks they’re going to make money.

    That’s what a publisher must do: make money. It must make money for itself, its authors, and all its asscoated service folks (editors, art providers, indexers, etc), because if it doesn’t, it might as well turn out the lights and go home. So if a publisher wants to try variable publishing, I say: let it. As a buyer I’ll pass the product by if it costs more than I want to pay. Simple commerce, same as it ever was.

    Once in awhile, I’ll pay Macmillan’s $15 price, because some authors are worth that and I already know it. But I’m a lot more likely to take chances on new authors at lower prices.

    (end comment aimed @Jeff Barrus; begin more general comment)

    As for the rest of this, and especially the Amazonfails label. Yeah, I guess Amazon didn’t field their PR A-team on this, but you know what? I don’t mind. I don’t know who fired the first or most dastardly shot in the Amazon/Macmillan battle, and I don’t know how much I should care. The whole thing is a set of business dealings; dealings which take place in rooms I don’t have access to. Was Amazon’s response proportionate to Macmillan’s action? I can’t say. I don’t know the scale of these things.

    In my own life it was a pretty small blip. At this moment I see Scalzi books up in the Amazon store; though not the Kindle editions I know should exist (because I have a few on my own Kindle – and @Sarah 117, no they have not been deleted by Amazon). I’d guess those will be back in a day or three at most.

    I have a hard time with the label Amazonfail. It’s getting old, watching people gleefully jump to point the Instant Finger of Complete Fail at anyone they disagree with. Amazon took a stand here. It may not have been the most popular stand in the world, and they may not have stated their case as well as they could have, but they took a stand. Part of the soapbox they stood upon was built out of unfailingly speedy and polite service – great service, hardly matched elsewhere, given for over a decade to folks like me.

    It was their stand, and while it did temporily harm some authors, that’s how battles work. Collateral damage occurs, and what else did Amazon have to negotiate with? Amazon kept it short and apparently, when it turned out they couldn’t win without harming authors and consumers for a much longer time, quickly capitulated. I empathize with authors like our esteemed host Mr. Scalzi, I do – but I guess I’d ask them all this question: if they had agreed with Amazon’s stand, how would they have recommended Amazon play it? Embargo, or kind words, or something else?

    Call it Amazonfail if you like, but it could have been a lot worse for everyone concerned. Would a better PR pitch have mitigated that? Personally I don’t think so.

  145. Somehow I find it amusing that people who’ve spent north of $249 for a Kindle are freaking out over $5 per book. A few points in no particular order:

    1) Variable pricing, defense of. The practice is defensible because you’re paying for early access. You don’t really think the cost of hardbacks is 3-4x that of massmarket paperbacks do you? Or that the trade paperback costs 2x the mass market version? Pricing is done on a ‘market will bear’ basis, not cost plus. If you want a Kindle version of a new book you’ll pay more, if not you’ll wait and pay less – the difference buys you early access. If you don’t value that, don’t pay for it.. but if that access has value to you you’ll pay for it (payment being the way we express value).

    2) Comments starting with variants of “well, I haven’t followed this, but…”. Please go read some more. Seriously, the first thing people who say that should think is “…so I’m going to go educate myself on the issue.” (rant off:P )

    3) Amazon as the good guy – BS. They’re trying to make Kindle the de facto ebook standard for selfish market reasons. Perfectly understandable when looked at from their interests, but let’s dispense with the “Amazon is on my side” rhetoric. If they carried multiple ebook formats and were warring over this issue with publishers for all of those I’d be more sympathetic to their aims. Their tactics are still infantile though.

  146. That was an awesome analasis. I like how you bottom lined the whole thing for Amazon. Is it just me or did the guys at Amazon come a bit unhinged since Apple decided to play in their pool? The irony from my perspective being that I read my “Kindle” books on my iPhone because it’s more convenient since I always have my phone with me.

  147. This just makes me regret even more that the deal to put Tor books on Webscriptions back in 2006 was banjaxed.

  148. “Angry, angry authors.” Hee. The best part of that entry in Stross’ blog is:

    This is the third time I’ve done this in 12 months, and this time it’s personal — they’ve gone too far.

    Because nothing says “I’m serious!” like crawling back for more, twice. In a month or two, Bezos will send Stross (and others) the CEO equivalent of “you know I love you, Rhianna baby, and that fat lip looks sooo good with your two bruised eyes.” Maybe it’ll be an additional fraction of a fraction on referral sales, maybe Amazon will finally shoot Borders just to watch it die. Maybe there will be an upgrade to the wishlist function somehow, prompting a slew of fan email wondering why there aren’t any Amazon links. However it happens, Stross will be back — until the next time he gets his knickers is a twist.

  149. Amazon took a stand here

    No, they didn’t. On Friday night, with no warning and no media paying attention, they pulled the books. They didn’t comment on it officially for quite a while, and still haven’t done much in the way of public speaking. That’s not a stand; that’s a “Lovely store you have here. Terrible if something should break, right?” (crash).

  150. @KatG – $15 is only the price point they are hinting at, under the agreement, they could choose to charge $30 for an e-book. Suicidal, but possible. If the agreement is written so that Amazon can rebate out of its commission, all fine and good, but we don’t know that until the details are out and the devil revealed.

    Also, the publishers have not been taking a loss on the e-versions, AMAZON has, in order to build the Kindle market. Amazon has been buying e-books at wholesale negotiated prices to this point, its that lack of negotiation in the future that scares me. As I understand it, the reason a lot of books are not available on Kindle is that an adequate wholesale price could not be agreed on, which is the way the system is supposed to work.

  151. @160 Howard – Are you suggesting that somehow because Apple does it too it’s okay? I don’t understand your point.

    I agree the market will sort it out, Macmillian was just renegotiating for a bigger piece of the pie. Which to my mind they should have had in the first place being as they, and the author obviously, do most of the work.

    As I said earlier, the people setting prices at Macmillian are not morons, however much it may occasionally seem so. If Macmillian prices it’s ebooks equal, higher, or simply too close to the paper verisons, I’ll buy the paper versions. No skin of my back. I see this result as favorable, because it leaves more room for royalties for the author, and therefore better odds that my favorite authors can continue to support themselves by writing.

  152. Amazon’s motives seem clear. They are pricing books at a loss to keep others such as Sony and Barnes and Noble from effectively competing with them. By subsidizing their losses with other parts of their business, they want to force other ebook stores to take a loss and eventually drive them away. That would leave Amazon with little competition and in a position to sell more Kindles, and eventually raise their prices of eBooks.

    Amazon has revealed this past weekend what many in the publishing business already know. They are ruthless, bullies, play dirty, and have few friends among the publishers. This weekend’s events begin to reveal their true character.

  153. @gerrymander – well Stross isn’t the publisher now, is he? See point 3 above in my post.

    @168 JeffL – they could but companies usually try to price rationally and their goals are usually either 1) build market share or 2) maximize revenue. #1 results in a low price that’s sustainable, #2 results in a price as high as possible UNTIL the demand is reduced enough so that the incremental revenue is outweighed by the reduction in sales.

    Here and in many other places commenting on this issue people seem confused over pricing strategy and feel it is, or should be, based on the cost of an item. It’s not. It’s based on the value of that item to the market. People in the market will value an item differently, from zero to very highly. At its heart, pricing tries to capture as much of that value as possible as revenue. IF you draw a graph of the number of people in a market vs the value they place on an item, pricing for maximum revenue should result in a price that maximizes the area under the curve.

  154. Yes, Amazon did a poor job of managing the PR on this. That said, I’m completely on their side for entirely selfish reasons. I’m a reader, I buy most of my reading material thru Amazon.com and I use a kindle. I want my books as inexpensive as possible, and of the two, one (Apple, excuse me, MacMillan) is trying to make my books more expensive for their own reasons. Make no mistake, if I pay more for these ebooks, I’m not getting more for my money. If MacMillan wanted to fight the good fight over DRM, and insist on an increase of 50% in price, but in return I got greater ownership of the product, I may not agree with the price/value relationship, but it would be something. As it is, the publisher is simply saying they want to increase the costs by 50%. Any fool who consumes this product would be on the side of Amazon here.

  155. @171 Rick – Agreed, that’s the most likely outcome, what bothers me with this scenario is that McMillan has the option to do effectively hold e-book pricing hostage to sales of paper (i.e. we are not reducing the e-price till all paper copies are gone). I’m not saying they will, who knows, but the potential for severe anti-market behavior exists when price power is concentrated at one point.

  156. Dear author of this article…….trying to get an ipad? This isn’t how to go about it…..the underline of this whole thing is costs to the consumer you smuck-is

  157. I personally experienced #6 yesterday. I had just finished “Wolf Hall” on my Kindle (a Macmillan title for which I would have gladly paid $15), and I browsed to the Kindle science fiction page. In their list of Hugo Award winning novels, I clicked on “Spin” only to be told that the link didn’t exist. I would have bought it then and there.

    One sale down the drain. I’m thinking the iPad is looking pretty good.

  158. I went to buy a book on Friday. I found that I couldn’t. I bought a used copy from Amazon Marketplace instead.

    I’d have done the same if Amazon had allowed Macmillan to jack the prices up to $15, so either way, the author gets screwed.

    I realize you are predisposed to seeing your publisher as a benefactor, but I really think you ought to ask who will benefit when your books are priced at a price nobody will buy them at, and everyone grabs illegal e-book downloads rather than wait for the price to drop.

  159. @173 torgeaux, your perspective seems rather short sighted if you wish your preferred authors to continue to produce works for your enjoyment. A balance between consumer and author is necessary. If minimal cost to you is your prime motivation, why buy any new book? Libraries and used books would provide best value to you.

    General note, books are not widgets. Artistic output is not equivalent to bits of metal and plastic. This is the whole reason copyright came into being in the first place. Without a “monopoly” the creator can not make a living and continue to produce. Thus Macmillian and Sony operate under somewhat different conditions, and it is not unreasonable that their relationships with their distributers are somewhat different.

  160. Mathew:

    “I realize you are predisposed to seeing your publisher as a benefactor”

    ::snort::

    And in one quick comment, Mathew reveals what he doesn’t know about authors.

  161. I just wanted to add a link to Powell’s Books, in case folks would like an alternative to Amazon and B&N. http://www.powells.com/home.html?header=Logo

    Powell’s is an indie, albeit a large one. Their stock has been online for 14 years, and it’s a large one. Yes, they sell used books side-by-side with new books, so authors don’t always get the royalties off their sales, but they do keep the long tail wagging.

  162. weasel: I agree in principle, but disagree in this particular instance. I don’t think selling ebooks at half the price of new hardbacks is bad for authors. There are many who wouldn’t buy a new book at the hardcover price, but who will buy the ebook. The cost of production is lower (anyone who thinks about the cost of converting an already existing electronic document to any or all of the various eformats will realize this) and it’s a new market.

    Will J. Scalzi get less? Sure. But as a consumer, I don’t look at a paperback copy and a hardback copy and buy the more expensive one because J. Scalzi gets more money. I buy which one is a combination of cheaper for me and better for me. I’d like to see Mr. Scalzi be insanely, obscenely rich, but I don’t want to personally subsidize that any more than I have to.

  163. #157 KatG: But what the publishers can’t do anymore is sustain the losses Amazon has been having them take on the Kindle versions — versions which they have to pay Amazon to make for them special for the Kindle.

    Why?

    I’ve used Amazon’s DTP system. Someone with even rudimentary HTML skills can make an attractive Kindle e-book from a formatted Word DOC. If you have the book layout and design already established for the print edition, creating various e-book formats to match — Kindle, ePub, PRC, LIF, LIT, etc — is not at all difficult even with freely available e-book creation programs, much less professional level ones. If you’re comfortable typing in HTML tags you could make a book to submit to Amazon with Notepad.

    Proprietory DRM is what drives the costs up, but if you use Amazon’s DRM — if you really must use it — it’s applied by Amazon when you upload.

    I’m not arguing your other points, just wanted to point out that creating a Kindle book is not something publishers should ever be paying Amazon for.

  164. @182 torgeaux –
    Absolutely, we all have to balance our on needs against prices. And personally I’d say 50% for the ebook version sounds right to me too, as I don’t consider it equivalent value to the physical version. However, the publishers would like us to believe that the physical costs account for much less than that, and want to at least maintain present per-copy revenues. Personally I see a much greater potential savings for the publisher than the pure physical cost, as there are potential models which allow them to reduce the amount by which successful, or profitable books subsidize those that arent. For instance an ebook + print-on-demand model for new authors and physical runs for established authors only. Eventually I think ebooks will dominate and physical will be produced by some sort of POD model. However the role of the publisher, even without the physical production is significant and amazon’s seems to be behaving as though they’d like the pubishers out of the ebook market all together so they can have it all to themselves, while ignoring the important gatekeeping and publicity roles (among others) publishers fill. Long term this seems short sighted to me, but in my experience, corporations, particularly american ones are far too focused on the short term.

  165. weasel: We can agree on one important point…none of the corporations are working for our interests. Where our interests intersect, that’s where we choose sides, so to speak. In this instance, I choose amazon, but that’s because first, publishers weren’t losing money oat $9.99…amazon was. I realize that couldn’t remain long term, as Amazon isn’t in this to lose money. But, they were doing it to push a new format, and to make themselves the big gun in that format. Part one is good for me, and arguably, so is part two. Amazon has proven itself a great, efficient aggregator of services/products. I want them to continue. Frankly, Apple with iTunes is much more a feared beast, as I do not want to be involved with their approach to ecommerce at all.

    In other words, I’d like my cheap ebooks to continue, and anyone who threatens that is not on my side. Right now, that’s MacMillan and Apple.

  166. @ C.A. Bridges 183

    Proprietory DRM is what drives the costs up, but if you use Amazon’s DRM — if you really must use it — it’s applied by Amazon when you upload.

    I did not understand this remark. How does DRM drive costs up? Are you saying Amazon drives up buyer or publisher costs (actual money paid upfront for the ebook; let’s leave aside arguments about resale and lending) by applying their DRM after the upload?

    (Straight question here; nothing in it tries to advance an agenda.)

  167. @182 torgeaux
    I’d like to see Mr. Scalzi be insanely, obscenely rich

    He might stop writing were he obscenely rich. Couldn’t we settle for comfortably off?

  168. @Bryan 188

    How does DRM drive costs up?

    I meant that publishers who pay to create their own proprietary DRM have to pass the cost along. This doesn’t/shouldn’t apply here, since Amazon wraps the Kindle books inside its own DRM.

  169. @weasel

    You said, “For instance an ebook + print-on-demand model for new authors and physical runs for established authors only.”

    As ebooks only account for a very, very small percentage of sales for even established authors, giving debut authors only ebooks and print-on-demand can pretty much guarantee they’ll never grow into established writers. We’re just not to the point where that kind of model can create any sort of sustainable career for an author.

  170. @John Scalzi
    There’s only one way to find out!

    But I am risk-averse!

    You, however, are free to interpret “comfortably off” as you will. If the definition includes a yacht and your own private island, so be it.

  171. @Bryan

    I’m not saying that the publisher doesn’t have a right to make money. I’m all for publishers and authors making money. The thing is that the margins on eBooks are higher because the cost of producing an eBook is next to $0.00 compared to traditional print.

    Once you get past storage and bandwidth — which isn’t much for a file that’s half a megabyte — it’s pure profit. How that’s divided up between author, publisher and retailer really isn’t my concern.

    All these arguments about the costs of typesetting, copy-editing and marketing eBooks that publishers allegedly have to cover ignores the actual Kindle experience — very few of the eBooks I read appear to be anything more than an OCR of the original book. Many eBooks, including Cherie Priest’s excellent Boneshaker (published by Tor/MacMillan) don’t even include the original cover. So corners are obviously being cut here. It’s not like the publishers aren’t already paying for all the copy-editing, marketing, etc. with the traditional print edition of the book. The eBook is just gravy. Acting as though the eBook has an equivalent overhead to a print edition is really pushing the line on credibility. The added $5, no matter what MacMillan and their defenders say, is $5 of extra and unnecessary gravy for their bottom line. I get nothing more for $15 than I got for $9.99.

    I feel like I’ve woken up into a crazy upside-down world where a loud majority of readers on the Internet are begging to raise eBook prices by $5. And that it’s okay for a publisher to bully a retailer into charging what they want for a book — even if the retailer is willing to take a loss and subsidize part of the sale.

    The argument that Kindle owners are willing to pay $250 for a Kindle, then clearly they can afford a $5 increase on every book purchased is absurd. By that argument ff an iPhone user is willing to pay $300 for their iPhone, then certainly they could afford $2.00 song downloads instead of $0.99 downloads. It’s just a dollar difference, right?

    I bought the Kindle knowing that eventually it would pay for itself in savings on full price books and that $9.99 was the base price for new titles. That was a major selling point for me.

    All that said, if publishers released eBooks a month early for $15, then I’d say that’s a pretty fair deal for early access to a title — if the price was dropped to $9.99 after the print edition was released. But you have to give readers something for the price difference. Otherwise, that’s a 50% increase in price for nothing.

  172. Well this just sucks. Already it’s harder to get kindle books because the publishers wish to delay their availability many weeks. I rarely can get any of our book club picks on the kindle. If Amazon is going to function this way then it diminishes their usefulness.

    I like buying/reading books on my kindle. I figure they should be a little bit cheaper than the print versions because there’s no paper/printing/shipping costs beyond the initial electronic conversion. Notice that I only said a little bit cheaper. I don’t expect them to be dirt cheap. The way I figure it is that if I like a book on kindle and tell my friends about it – they’ll have to buy their own copies – no more passing around books. I’ve bought many more books on the kindle than I previously did at the bookstore. Plus I don’t have to have tons of physical books in the house. Already we’re overrun with them since my husband and I read a lot. Some I like to reread, but mostly I’m on to the next thing.

    It’s sad when a large corporation such as Amazon doesn’t know how to play the publicity/marketing game well. It boils down to the death of customer service. Hopefully Amazon and Macmillan can resolve their issues soon. I don’t like having a restricted catalog to choose from.

  173. @Jeff B

    The problem with your response is, assuming that most people do not purchase both a paper and e-book, those costs involved in producing the paper copy either have to:

    A> Be spread over fewer copies of the paper book, either lowering profits or raising prices, or

    B> Be spread over all editions of the book, including e-ditions, like it is now.

  174. JeffL: “$15 is only the price point they are hinting at, under the agreement, they could choose to charge $30 for an e-book. Suicidal, but possible. If the agreement is written so that Amazon can rebate out of its commission, all fine and good, but we don’t know that until the details are out and the devil revealed.”

    It’s not a rebate situation. That’s not the business model. It’s a split of revenues. Please go read Charles Stross’ blog. The real e-book market for book publishing is not really ten years old, even though e-books have been around for awhile. It’s only five years old tops and everything has been wildly disorganized and it’s only 3% of the market. So now that’s changing and things are standardizing. They aren’t going to standardize at $15 and then jerk it up to $30. It’s possible that video enhanced or bundled e-pubs in the future will have higher prices, like DVD’s with extras, but $15 is clearly everybody’s compromise point for initial release of the books. If Amazon goes with $15, they slowly lose the market monopoly they’ve had when they forced the publishers to do $10, so they’re putting it off as long as possible and they’ll put forth that publishers made them, but believe me, they’ve already been planning for the $15 price point.

    “Also, the publishers have not been taking a loss on the e-versions, AMAZON has, in order to build the Kindle market. Amazon has been buying e-books at wholesale negotiated prices to this point, its that lack of negotiation in the future that scares me. As I understand it, the reason a lot of books are not available on Kindle is that an adequate wholesale price could not be agreed on, which is the way the system is supposed to work.”

    Yes, publishers have been taking losses on the e-books because Amazon insisted on the loss price and took the largest chunk of the revenue. They are the producers of the Kindle e-books, not the publishers, and they demand money for it, which costs publishers extra to do in addition to other e-books. And because the market is still very small — only 3% of the market, it’s even more expensive. Because it’s tech, it’s very expensive for dowdy tech-less book publishers to try to arrange. All the price complaints are based on the idea that it’s really cheap for publishers to do e-books. It’s NOT. It’s a technical and wholesale mess. But it’s getting better, bigger and more standardized.

    C.A.: “Why?”

    Because Amazon has stockholders and capital investors which lets it carry huge loads of debt and loss for years in order to build its markets. Book publishers can’t do that. They don’t have the capital, their profit margins are miniscule. They can’t sustain losses as long as Amazon can. When Amazon was the dominant player in the e-book market — only a year ago — they had to, but Amazon isn’t the dominant player anymore. They’re still a big player, but they don’t have as much leverage, and that’s good because then the players can make adjustments according to the market and demand for individual products, not an artificial flat rate that was essentially an R&D gambit.

    “I’ve used Amazon’s DTP system. Someone with even rudimentary HTML skills can make an attractive Kindle e-book from a formatted Word DOC. If you have the book layout and design already established for the print edition, creating various e-book formats to match — Kindle, ePub, PRC, LIF, LIT, etc — is not at all difficult even with freely available e-book creation programs, much less professional level ones. If you’re comfortable typing in HTML tags you could make a book to submit to Amazon with Notepad.

    Proprietory DRM is what drives the costs up, but if you use Amazon’s DRM — if you really must use it — it’s applied by Amazon when you upload. I’m not arguing your other points, just wanted to point out that creating a Kindle book is not something publishers should ever be paying Amazon for.”

    Again, you being able to make a Kindle file is not the same as having to supply thousands of files in multiple formats, many of them specialized, to hundreds of vendors of thousands of books and make sure they’re all error free. It takes time, money and personnel and book publishers are not electronics companies and they don’t have it. And Amazon took advantage of that and the publishers let them because they didn’t have a choice and it was a way to grow the e-book market. But, now publishers are in a better position to do their own production, or at least hire it out at better prices, or have Amazon do it but for a better arrangement. The market is bigger, the technology and distribution is improving, and formats are stabilizing down to a few major designs. Rights arguments between authors and publishers, and publishers and e-producers are getting worked out. So it’s going to work well, but if you are an e-customer, you’re going to have to give it at least another year before they get the basics worked out. And there will be lots of drama about it.

  175. After linking over here, reading through the Amazon debacle, finding a new author, and researching your titles… Your Old Man’s War series will, hopefully, be the first books on my upcoming iPad. Maybe I’ll go go to the bookstore in the meantime and pick up the first book…

    Thanks for the well written article.

  176. @KatG – Re “It’s not a rebate situation. That’s not the business model. It’s a split of revenues”

    That’s exactly my point. Since it is a split of revenues, the only way the end seller can adjust the price now is with the cooperation of the provider (If a book lists for $10, for example on a 70/30 split, the provider gets $7. If for marketing purposes the end seller wants to sell it for $9, they cannot, because now the provider get $6.30, to which they have to agree.)

    The only way to allow for that under this proposed model is a rebate system, where Amazon ‘sells’ the book for the $10, pays the $7 and then issues an instant rebate for the book of $1. That’s assuming the agreement allows that.

  177. Looks to me like Macmillan decided that ebooks would be a good way to try to recreate the old UK Net Book Agreement – an ‘agreement’ whereby the publishers told bookstores what price to sell books at and refused to supply any bookstores that discounted.

    It lasted from 1900 to 1995, when the large bookstores took them on and forced the Office of Fair Trading here to review the agreement. It eventually decided that it was against the public interest to allow publishers to force bookstores to stick to a stated price. Didn’t do much for the smaller bookstores, admittedly.

    Amazon screwed up royally on the PR, but overall I think they have a point. Why should Macmillan dictate their profit margin to them on ebooks?

  178. A very minor point, but tho the people who say that nobody is going to pay £6/$10 for a book next to a 1p used copy (plus £2.75 UK delivery or £6.94 US shipping – which can mean that to buy that 1p copy from a seller in the US is to pay *more* than new) that’s not always true, i like to buy the new copy because you can never be sure what the used copy is like (i have got some terrible used copies from the internet before). I also like new books on my shelves, especially for writers that I favour, paying £2-3 extra premium for new is what I do.

    If i had an eReader I would totally go ebook (at PB price) instead of used for out of print books

  179. #Jeff, #Anne – from what I’ve read,
    Amazon was paying Macmillan $10, and selling for $9… just as part of a strategy to corner the ebbok market.

  180. Pretty well nailed it, John. (And I laughed over the Zoloft thing, too. I suspect all writers are with you on that one.)

    When I stepped back from it on a personal level, I concluded that I was watching two dinosaurs head-butt each other, while all the other dinosaurs stood around watching. What Amazon did was jerkfaced, no question about it. But I’m not thrilled with Macmillan, either. Their track record with pricing ebooks is poor, and their record with actually getting books *into* ebook format is worse. (A sore point with me.) I agree with those who think lower ebook prices, sans DRM, will be better for all of us. My DRM-free books at fictionwise and webscription are selling a lot better than the DRM’d versions at Sony. (Amazon can’t be troubled with getting them into their system at all.)

    Richard Curtis at ereads.com thinks this outcome will be a game-changer. He may be right. But whether it’s a good change or a bad one, I’m not yet sure.

  181. @Wygit:

    Exactly, tho I am not sure about those specific numbers. Under what are believed to be these new terms, that is no longer an option without McMillan’s consent.

  182. I don’t care about the iPad (I mean, I want one, somewhat, but not in a burning kind of way). I don’t really care about the kindle, either.

    I hate Amazon, though. Am I the only person as a consumer, who thinks that their hold on the publishing industry is BAD for consumers? We’re playing right into their hands. Because what happens if, in the future, suddenly they’re the only method available for getting books? They’ve shown no reticence in pulling or shutting down access to titles– and maybe consumers see that as a strike at authors and publishers; I see that as an attack on me as a consumer.

    But then, I’ve been saying this for a long time to anyone who would listen. I know I sound like a conspiracy theorist (hey, full disclosure, I’m an author and a non-big six publisher employee), but as a reader, when a search on homosexuality still gives me “How to Cure your child’s homosexuality” as the first option because they de-listed a bunch of titles containing LGBTQ-friendly situations, when they keep deleting comments critical of Scientology books and pull Scientology-critical books, and pull other titles from the Kindle at random and without warning, I worry about what they’ll try to block me from reading next.

    It’s not censorship–yet. But what about when they’ve eliminated all other competition?

    I’m glad Macmillan took a stand. Everyone else needs to, too.

  183. @vanessa

    No, you are not the only one. I wrote a screed and then deleted it to the person above who was irritated that her pipeline for cheap books was being threatened, because really she’s getting those cheapcheap books on the backs of the independent booksellers who’ve folded, in large part, as a result of amazon’s cut-throat pricing practices. This has had a profound effect on who and we read. The people who are getting contracts, the type of book being written? Those that might be worthy of front-page status on amazon’s homepage. I imagine it’s neither you or me. amazon isn’t handselling my book, which is the case for those independent booksellers who continue to hold on. I no longer shop at amazon because of their response (or lack there of) during the search!fail for LGBTQ authors. I never saw an apology to those authors that they eliminated from their search parameters. Although I did see day after day a blitz of ads for their Kindle2.

  184. @Jeff L – and Macmillan would maybe like for there to be more than one book retailer on the world?

    I know I would.

  185. The latest on Amazon…

    I checked and say an “Add to shopping cart” button for “Old Man’s War”

    Then I saw:
    Old Man’s War [Bargain Price] (Paperback)
    and that the hardback and mass market paperback are still gone. Did they find a remainder shipment somewhere? or are they doing something worse?

  186. @Jeff L

    You’re assuming that Kindle = the death of paper books. I think we’re at least a generation away from that.

    Right now eBooks represent 3% of the total market, but they’re not necessarily cannibalizing print sales. Most of the books I’ve bought on Kindle, I *never* would have bought in print. Kindle has increased my spending on books — and the spending of my friends who also have Kindles.

    At this point, I think we’re all just going to have to agree to disagree. I’m not going to be swayed that a $5 increase in price is good for consumers — especially by people unaffected by the increase. I know I’m in the minority here. All I can say is that this entire discussion has left me a lot less interested in reading books now that I know that authors and publishers are both interested in jacking up the price of a product that has almost zero overhead.

    @Claire Johnson

    Amazon and Kindle are not the reason independent bookstores are going out of business — and Amazon certainly widens the availability of books to the towns in this country that have never had a bookstore save the Waldenbooks in the local mall. Kindle, Nook and other eReaders have the potential of making a lot of small press titles available to the same audience that buys mass market books — it has the power of expanding the reach of important niches like the LGBTQ market to people who do not currently have access to them now.

    Once you take the cost of printing and distribution out of the equation it makes it a lot easier (and a lot more profitable) to publish books that target a narrower audience, or keep old books in print.

  187. @Jeff B – Amazon is reporting that, for Kindle eligible titles, their sales are running about 55% paper, 45% e-book. Admittedly, e-books are a relatively small share of the overall marketplace, but even if you consider those numbers skeptically, it shows that where e-books and print books are offered side by side in a common sales environment, even now, e-books ARE significantly affecting print sales.

    Speaking for myself, the only books I by on paper now are ones not offered for the kindle and that I really want to read, I have gone down from about 250 paper book purchases a year to about 60, but my overall book purchase total has not changed (I bought 233 last year from Amazon total – kindle and print) and probably about 30 from other sources. In 2008, I added 252 titles to my book database, the total difference of 11 is statistically insignificant.

    The one difference the Kindle has made in my buying habits is that I will now buy some books on first release, where I would have waited before if they were issued in hardcover. The issue was not price, BTW, I do a lot of reading on business trips and hardcovers are heavy.

  188. Gotta give you props for a brilliant description of Amazon’s hubris. And, let’s amplify a bit with a description of the numbskulls who populate the Kindle Customer Service office. Getting a problem fixed required several telephone calls, two emails (the first to clarify the garbled response of two price quotes, shipping directions; the second to correct the corrections), three weeks, much to-ing and fro-ing. The original rep refused to give his name, yadda, yadda. I was given dire e-mail threats if I did not return the damaged unit, when I did return the unit, I was mistakenly given full price credit. Received nothing but “welcome to Kindle” emails, when I had been a customer since the first device came out. Sheesh! Now that Amazon has some competition in this area, they might want to spend some time taking care of the customer they do have before we all leave and opt for better service.

  189. wow, sounds like you’re the one throwing the hissy fit…..

    you should have put your disclaimer at the top before making me read your emotionally driven rant.

    clearly you’re biased. i support amazon for standing against greed. greed is destroying this nation.

    i am angry that the moment ebooks begins to go mainstream, they want to raise prices by 50%. it’s like 20-dollar music cd’s all over again. we look back and know for sure the industry was screwing us over, and now another one is attempting to do the same.

    financial exploitation indeed.

  190. @ 186 torgeaux – Agreed, if anything the corporations do happens to work out well for individuals or authors, it’s purely coincidence.

    @192 Jen H. – Sorry, I wasn’t clear. I did not mean to imply that such a system should be implemented today. But further down the road when ebooks account for a more significant portion of sales, which I think will happen, such a system would make sense. I envision that as a transitional phase half way between now and such time as physical copies remain an interest only to only a few aficionados and libraries.

    @200 Anne – True. Mcmillian should not dictate amazon’s profit margin, but neither should amazon dictate Mcmillian’s.

  191. Well, I am a fan of quite a few authors who are published by Macmillan (including Scalzi). However, Amazon didn’t lose me with their actions. Granted, the only time I buy from Amazon is when I can’t find a book any where else. Despite that, my opinion is that both Amazon and Macmillan are examples of your garden variety money grubbing corporation.

    I agree that the only ones hurt are the authors, but I lay the blame equally at Macmillan’s feet for being a bunch of greedy little schmucks.

  192. @213 – Shannon
    Amazon standing against greed??? Wow, that’s a good one. :)

    Here’s a suggestion. Never EVER believe anything any corporation does is not motivated by greed. Hell, for decades our business schools have been teaching business people that it’s their legal obligation to be greedy.

  193. @214 Weasel:

    Amazon never has the opportunity to control McMillan’s margin, because McMillan sets the base selling price no matter what. If Amazon chooses not to purchase the items at that price (under a normal retail model), then they simply don’t buy them until an agreeable price to both parties can be negotiated.

    This response led me on a new chain of thought, which I will posit. On the new model, as I understand it, if McMillan chooses to increase the price of all e-books by $1 (lets say to cover increases in ‘costs’), does that now put Amazon in the uncomfortable position of having to sell an item for one price one day and a higher price the next for no apparent reason, and therefore take the image hit for McMillan’s decision? Also, I wonder which party would be responsible for bearing the cost of database updates. The more I think about it, the more important all the little details in the terms become.

  194. All these people who just want cheap, cheap e-books and don’t really care who or what they read, really piss me off.

    I CARE WHAT I READ. I read only certain authors and I want to continue to read these authors. I don’t read mass dreck and I don’t want to read mass dreck – which apparently a lot of Kindle or e-book readers want to do.

    I fully support MacMillian in their fight to get the authors and publishers more money and I despise Amazon for trying to screw over authours I like to read.

    If you e-book readers don’t care what you read, just as long as it’s cheap, may you be eternally subjected to the slush pile.

  195. If comments on this thread (and the other similar ones) have shown anything, it’s that Macmillan’s smartest move was to publish comparatively few books under the “Macmillan” imprint — given the bizarre inability of people to either spell or capitalize it correctly.

  196. @HA – Your assumption is inherently flawed in that you assume one of McMillan’s goals is to enrich authors. While it is indeed possible that authors might see higher revenues based on a higher overall price point, its also possible that increased price will reduce the number of copies sold (no one knows, which is part of the collective angst here).

    Even our host has pointed out that publishers RARELY have an author’s best interest in mind, in fact, in many cases the publishers interest are best served by purchasing content as cheap as possible.

    This issue is entirely over who gets to set the final retail price and margin of an item for their own (Amazon’s or the Publisher’s) benefit. The authors are screwed in the middle.

  197. @217 Jeff L
    “Amazon never has the opportunity to control McMillan’s margin”
    While I have no inside info, my reading of the situation is that Macmillian at least percieved amazon to be doing exactly that, or this whole situation would not have arisen.

    Really this is just the normal jockeying for position between corporations that was bound to result as they adapt to this new distribution method.

    Also note that even if amazon was paying macmillians price and then selling at a loss, which I do not believe to be the case, long term, that creates an expectation in consumers as to what prices should be that does exert at least indirect pressure on macmillian and other publishers. To say they have had no influence is disingenuous.

  198. @220 Jeff L

    I see it differently. I don’t think the setting of the final price is the main issue, whoever has that control will inevitably seek out the price point that maximizes their profit. Unless we see the details of the final agreement I am sceptical. Most people seem to be operating on the assumption that thus far the model has been exactly the same as the one for paper books, yet it does not sound that way to me.

    The change in the cut amazon gets will be the more significant part of the agreement in the long run. IANAL but if the agreement is such that Macmillian can forbid amazon from discounting out of it’s own cut, I’d be surprised, both that amazon would agree, and that it could stand.

  199. @Weasel 221 – Macmillan (see Reganam, I read it) was certainly concerned with the pricing, and I am sure tried to influence it, but that is different than control, which is what the new terms seem to call for.

    What I see here is that Apple (for reasons of their own), agreed to a model that greatly favored publishers (the agency model). Macmillan then said, in effect, ‘we can get this from Apple, why not Amazon’. Amazon balked, very badly, thus leading to this mess. Now, Macmillan can push prices in a way not aligned with Amazon’s own business model.

    The problem here is that Apple to Amazon is more a comparison of Apples to Oranges. Apple sees books as ancilliary revenue for a device that is not marketed as an e-reader. It will have e-reading functionality, but its primary focus is audio/video and web-enabled content. That’s pretty much how Apple presented it. Any money from books for them is gravy.

    Amazon, on the other hand, is attempting (perhaps wrongly) to maximize overall revenue from a single purpose device that does one job well (at least in my opinion) and for which books and the sale of the device itself if the Primary revenue source. That’s a whole different motivation, and Amazon has shot itself in the foot right now, assuming the final agreement is what we read.

  200. @Weasel 223

    I’ve seen a precis of the Apple agreement from, well, lets not say how I got it so that the person does not potentially get in trouble. It came from material presented to stock analysts.

    The way the iBookstore appears to work is that, like the iTunes AppStore, a content publisher submits a title for approval, sets a price, and it is published to the store. For each copy sold, Apple gets a fixed percentage, the content owner can change the price at any time.

    As I noted above, that works fine for Apple. If Macmillan is using the leverage of holding back ebooks for months to set a similar model in play with Amazon, that would be pretty ugly.

    You noted, and I noted several times, the devil here is really in the details and what Amazon can do with pricing is key. But from their reaction, I have to think that whatever was put on the table would severely curtail their current business plan for e-books. I don’t care how childish they can be, they would not have done this over a few cents per book.

  201. Bullshit. Amazon failed because you iPhanatics are now declaring war against them. Had this happened before the Apple-Amazon competition began, you would be screaming foul against Macmillan. Now, you’re actually cheering that e-book prices will rise 50%. The capacity for you fanboys to not multitask your brains just because your devices don’t either truly amazes me.

    Carry on.

  202. @216: “Here’s a suggestion. Never EVER believe anything any corporation does is not motivated by greed. Hell, for decades our business schools have been teaching business people that it’s their legal obligation to be greedy.”

    And they fail at that legal obligation every day.

    Not unlike Gandhi’s crack about Western Civilization, I think corporations being relentlessly greedy would be a good idea.

    This wasn’t about greed. This was about Jeff Bezos’ ego, pure and simple. My guess is, he doesn’t give a damn about the money.

    If you give the typical American businessperson a choice between lots of control with little money, or lots of money with little control, they’ll take the control over the money every time. This is the lesson of the music business, the movie business, defense contractors, computers (both hardware and software), the auto industry, the financial industry… the list goes on.

    Here’s my own humble suggestion: Dilbert, The Office (either US or UK), and Black Books all have the ring of truth for a reason.

  203. @226 Hal O’Brien
    “And they fail at that legal obligation every day.”

    Generally through ineptitude rather than benevolence.

    “Not unlike Gandhi’s crack about Western Civilization, I think corporations being relentlessly greedy would be a good idea.”

    For the record, if you ever found a country, colony or other government, I do not want to live there. :)

  204. There is another problem with Amazon’s strategy, or lack thereof in this fight. After reading a crapload of posts on the subject and blogs by three different authors, I realized that I missed something by not reading “A Fire Upon the Deep” by Vernor Vinge.

    There was a compelling reference to it on another author’s blog on this whole Amazon fiasco. So I called it up in the Kindle store and it’s not available.

    Now I’m wondering is that because it’s a Macmillan title? So, I call up John’s book, Zoe’s Tale, which I read last week on the Kindle and it’s not available either. While I can see both sides of the argument on the corporate dust-up, as a consumer I’m pissed at Amazon. I want to buy this book and I can’t do it because THEY are screwing with the product that I paid THEM 300 bucks for. It’s just stupid.

    I also agree with the poster earlier who worried about gay and Scientology books being blacklisted. Sooner or later it’s your own ox that’s being gored.

  205. @227: “Generally through ineptitude rather than benevolence.”

    Absolutely. Which is largely my point.

    “Not unlike Gandhi’s crack about Western Civilization, I think corporations being relentlessly greedy would be a good idea.”

    For the record, if you ever found a country, colony or other government, I do not want to live there. :)

    You might be surprised. My premise is, you need an almost Buddhist reconciliation with the world to behave in a way that actually does optimize long term revenue and profits. Being a bastard (or “evil,” as the mythos about Google would have it) is counterproductive… Precisely because sooner or later you get found out, and your customers, suppliers, employees, and shareholders won’t stand for it.

    Current American business practices are much more “smash and grab.” They hardly ever build a foundation for future growth, they’re mostly based on extracted as much cash as possible before the suckers notice. I’m saying that if you were genuinely greedy, and genuinely wanted to make the most money over a lifetime commercial relationship, you’d treat all parties with respect.

    Hence, It would be a good idea.

  206. Sorry I’m on Amazon’s side with this one. Go ahead and price above $10. There are plenty of great authors out there below that price point.

  207. Yay John!

    Good job. While I will likely purchase more ebooks if they were $9.99 as opposed to $14.99, I believe that it’s a free marketplace and authors/publishers should have every right to set their own pricing. Apple doesn’t tell App Developers what to charge – they charge whatever they want and the market decides.

    Never owned a tablet or Kindle btw – looking forward to the iPad though! ;-)

    I used to be an avid reader growing up but now I only read about one book every two years. Sad I know. Hopefully the iPad will change all that. For some reason I believe it will.

  208. @229 Hal O’Brien

    “You might be surprised. My premise is, you need an almost Buddhist reconciliation with the world to behave in a way that actually does optimize long term revenue and profits.”

    Ah, well there’s the problem. It seems to me few if any companies are operating in a “long term” mode. They’re more concerned with daily stock price fluctuations than the long term health of the company. There are any number of reasons you can argue for why this is so, but I think it’s a systemic problem.

    Furthermore I reject the premise that it’s necessary for society to accept the for-profit mega-corp as the only way to accomplish certain goals, and while I do not have a problem with profit in general, I do think there are certain realms/situations in which for-profit operation is immoral, and that corporations are by their nature, at best, amoral. However, this is getting off topic, and I don’t want to turn this into a debate on business structures and macroeconomic models, so I’ll leave it at that. :)

  209. JeffL: “That’s exactly my point. Since it is a split of revenues, the only way the end seller can adjust the price now is with the cooperation of the provider (If a book lists for $10, for example on a 70/30 split, the provider gets $7. If for marketing purposes the end seller wants to sell it for $9, they cannot, because now the provider get $6.30, to which they have to agree.)

    The only way to allow for that under this proposed model is a rebate system, where Amazon ’sells’ the book for the $10, pays the $7 and then issues an instant rebate for the book of $1. That’s assuming the agreement allows that.”

    Amazon buys titles at the wholesale cost, which is a bigger discount than retailers like Barnes & Noble get, because when Amazon started, it started as a wholesaler because the online market was small. They buy the titles at up to a 70% discount of the retail price. This allows Amazon to sell for lower but still retail prices than the bookstores, and in the first years, because of investors, Amazon was able to run at a loss to get up to speed. (Notice a parallel?) So they have higher mark-ups than other retailers, even though they have lower prices. The publisher pays for shipping and sometimes for storage. The publisher pays Amazon fees — which have been increasing — for publicity — all those little displays and search feature things Amazon does. Stock that Amazon doesn’t sell off the top can then be shipped back to the publisher as full refunded returns for which the publisher pays the return shipping. Amazon will routinely try to renegotiate their price discount even lower. (In the occasion of Hatchette in the UK, they negotiated by pulling titles.)

    With e-books, the returns situation is much simpler to unnecessary. But with e-books for the Kindle, Amazon is not simply an “end seller” — they are the e-publisher — the provider of that format. And their position is that this makes them not a vendor but a sub-rights licensor of specific electronic rights. And as a licensor, rather than Amazon buying titles at a discounted price as a wholeseller or retailer, Amazon lays claim to a chunk of the publisher and author’s cut of money as provider as well as the retail. And publishers want to return Amazon back to being an end seller. Stross explains it better:

    “Their stalking horse for this is the Kindle publishing platform; they’re trying to in-source the publisher by asserting contractual terms that mean the publisher isn’t merely selling them books wholesale, but is sublicencing the works to be republished via the Kindle publishing platform. Publishers sublicensing rights is SOP in the industry, but not normally handled this way — and it allows Amazon to grab another chunk of the supply chain if they get away with it, turning the traditional publishers into vestigial editing/marketing appendages.

    The agency model Apple proposed — and that publishers like Macmillan enthusiastically endorse — collapses the supply chain in a different direction, so it looks like: author -> publisher -> fixed-price distributor -> reader. In this model Amazon is shoved back into the box labelled ‘fixed-price distributor’ and get to take the retail cut only. Meanwhile: fewer supply chain links mean lower overheads and, ultimately, cheaper books without cutting into the authors or publishers profits.”

    The problem with this is not that it makes Amazon helpless to make a profit; it’s that it ends Amazon’s special, monopolistic relationships with publishers on e-books. It means that publishers don’t necessarily have to use Amazon as the e-publisher for the Kindle platform as well as the retailer. Amazon loses the extra goodies it was trying to get. It has to pay slightly more in its wholesale discount for some titles because the retail price went up, but it makes a profit. What publishers are saying to Amazon is the trial period with the artificial low prices is over, the market is growing and established, and now we have to make it profitable and more standardized.

    Which is not a bad thing for Amazon, but it loses that monopoly competitive edge to demand that everybody lose money so it could seize the largest chunk of the market and even more of the supply chain. It loses the our e-books are the cheapest — on some books, not all.

    Initially, that is. Amazon will be able to re-negotiate terms. And the publishers want to do reverse flexible pricing, as is done for print books, electronics, clothing, etc., where the price comes down over time or for bestsellers, where the price is flexible depending on the title, as it is with print books. E-books will across the market become cheaper and they will be cheaper for publishers to produce.

    Again, neither side is evil and neither side is completely right and there will be a lot of adjustments and changes in the coming years. Neither side can make the other completely helpless on pricing, but Amazon now has less power to control the price throughout the whole online market, not just for themselves, which is probably a good thing. Amazon has plenty of wiggle room and there will be publicity campaigns where the price of bestsellers drop, etc., and Amazon will make profits. And e-books will range from $15 to $5, the median of which is $10. Over time, $10 may end up being the price point again, when overhead and production costs decrease because of standardization and increased market and increased number of vendors. But it will be negotiated by the market, not dictated by Amazon or a single publisher.

  210. Wow, this tone is incredibly different from those on the Amazon forum, where it’s overwhelmingly Macmillan painted as the bully. Guess it depends on where you hang out!

    Seriously, though, plenty of folks seem ready to lump authors in with the publisher and scorch everybody. I’ve been asking for mercy for the writers, but what can you do with a mob? And, historically, what else should writers expect?

    Scott Nicholson

  211. @232: weasel – It sounds like we largely agree. My point is, there’s a solid business case for such beliefs and recommendations.

    Have you ever seen Dan Pink’s talk at TED? He’s talking about “motivation” in a career sense, but his point about the disconnect between what science knows (particularly behavioral economists finding out how people behave in the empirical world), and what business “knows” is well taken.

  212. @Kat 233

    I sincerely hope that it works out exactly the way you predict (and honestly, it will probably get there at some point). The question is what happens in the meantime.

    I work a lot in the Financial Analyst world (its not what I do, but they have been a lot of the people I do what I do for), and their impression of Macmillan’s position is that the current proposal means that Macmillan wants to dictate the end user price. Now, no agreement is in place yet, so Amazon certainly can negotiate some wiggle room. If that happens, I am fine, but if it ends up with a scenario, even for a limited time, where Macmillan controls the point of sale price across multiple platforms, that concerns me. A lot. And that potential exists, if not likely. Honestly if Macmillan doesn’t have that as a goal, they should (from a business, not an ethical sense)

    It makes me wonder also, has B+N said anything that anyone has seen during this debate? It has obvious implications for the Nook as well.

  213. @233 KatG – excellent post. :)

    @235 Hal O’Brien – I was aware of Dan Pink’s new book, though I haven’t read it yet. I didn’t know he had a TED talk though. Thanks for the pointer.

  214. Ha Nguyen – agreed 100%!! These people who see a publisher as just a useless entity standing between the author and the reader frighten me, and I truly hope they do not become the majority of book buyers in my lifetime. Ugh!

  215. @ Ha Nguyen 218

    All these people who just want cheap, cheap e-books and don’t really care who or what they read, really piss me off. …
    I don’t read mass dreck and I don’t want to read mass dreck – which apparently a lot of Kindle or e-book readers want to do.

    I don’t know how you came to this conclusion, but I don’t see any evidence that it is a right conclusion.

    I own a Kindle and I enjoy it, and I am actually discerning about what I read. I’ve never heard anyone anywhere refer to their ebook reader as a simple conduit to large masses of cheap dreck. That some of us care about the prices of books we read (in any form, electronic or dead tree) says little to nothing about what sorts of reading we enjoy most. It also says little about what we hope the authors cut will be.

    I understand a need to find a culprit somewhere, but be careful who you paint with that tar brush, man.

  216. Scott Nicholson:

    “I’ve been asking for mercy for the writers, but what can you do with a mob?”

    Not worry about them. If people won’t buy digital books unless they are $10 or under, that’s fine with me; there are lots of people who will only buy paperbacks, which are also less than $10. I’m fine with them, too. In both cases, they’ll just have to wait until the price drops.

  217. @242 PVRK

    The article you link to treats books as widgets that compete on little more than price, presumably the author does not ready many books.

  218. maybe this is a little late for the discourse.. but does Amazon really wanna cheese off a group of writers, i.e. sci-fi writers, that have fans which have skills that can possibly be used, in a don’t know, detrimental way to a business reliant on a website….hmmm?

  219. JeffL: “Macmillan wants to dictate the end user price.”

    Well of course it does. So does Amazon. That doesn’t mean that’s how it goes. Apple dictated its end user price to Macmillan and Macmillan went okay, sounds good. Apple came up with it based probably on what they’re going to charge for newspapers and magazines, and on the fact that they don’t want to be an e-publisher. They want to be a retailer, because books are just a small part of the content they want for the iPad and other devices. Nor do they need a monopoly because part of their deal is with Barnes & Noble. Which is actually what I think Amazon is most worried about. Barnes & Noble is their biggest competition in the States, the biggest market, and Barnes & Noble gets to be part of the iStore. But Amazon will deal with Apple too as a wholesale supplier. Everybody is in bed with everybody else. The arguing is over who gets what covers.

    And this doesn’t shaft the customer because there isn’t going to be a lockstep over prices, just more standardization and everyone is trying to cut costs. The bulk of the e-book customers aren’t here yet. They don’t own e-readers, though they are curious about them. And they don’t want to build their own e-files or have to know a lot of tech to use e-books, just download and read like a print book. They don’t want to run around and buy from dozens of different authors, but from one or two stores. And most of them don’t buy a lot of print books. But they are going to buy a lot of e-books. And the publishers and the book sellers and the electronics companies are all getting ready for them, which means revamping an industry that is still partly in the 1800’s. It’s not going to happen overnight. Rome wasn’t built in a day, yadda yadda.

  220. My parents gave me a Kindle for Christmas and I love it. There’s a room in this house which can’t be used. Why? Well, after 6 floor to ceiling bookcases were double filled, there are still too many large shipping cartons of books on the floor. The door can’t open completely. The books caused the largest expense from my last (suddenly forced) move – more than the furniture and whatnots that I retained in the divorce. Still, I have to use that Amazon gift card that my parents gave me with the Kindle somehow. And with ebooks there won’t be another dust gathering system in the house.

    Oddly enough, I’m treating the Kindle somewhat like I treated iTunes for music, in that I’m purchasing copies of books I’ve previously owned and gave away or just can’t find in the house. I’m also reading here and on the Tor.com site re-reads for some fantastic recommendations. Kelly Link, Lisa Tuttle, etc. Unfortunately for me, Jo Walton mentions tons of backstock type books that aren’t available for an ereader, but would seem to be perfect for it – i.e. allow a publisher to get some more mileage out of an old title.

    Then again, I’ve pre-ordered the new Willis book for $14.31. Brand new book, out in HC, don’t wanna wait – no brainer, order the damn thing. When it comes to a book priced cheaper for MMPB than ereader – fie on whomever is to blame.

  221. I don’t like the idea of buying e-books for hardcover prices, which is pretty much where we seem to be with Apple’s new store on its iPad.

    I think Amazon is correct in that people are unlikely to pay more than $10 for a book with no physical presence. I tried a Nook, since they are available in Barnes & Noble stores, and quite honestly found it harder to read than the screen of a computer or iPhone.

    I have a 27″ iMac, the new model, and really love the display quality, so I suspect I would love the iPad display, too.

    Apple doesn’t seem to have a problem approving different bookstores for the iPhone, so I see no problem with buying an iPad and using Barnes & Noble, Borders or any other store’s books with it. Even though Apple’s reader program looks like the most classy one around.

    It is interesting to note that on the music side, I have only seen prices different from $ 0.99 a song twice. Once it was $1.29 and the other time it was $ 0.69. For the overwhelming majority of music I buy, it was $0.99. I suspect book publishers will find that prices around $10 are the profit maximizing figure, even for books otherwise available only in hardcover.

    D

  222. @ Jeff Barrus 194

    All these arguments about the costs of typesetting, copy-editing and marketing eBooks that publishers allegedly have to cover ignores the actual Kindle experience — very few of the eBooks I read appear to be anything more than an OCR of the original book.

    Well, I don’t know what you’ve been reading in ebook format, or what your experience with OCR is. I have run into a few ebooks that had a fairly high rate of typographical errors, but none so bad that I suspect they were the result of a simple machine OCR process with no human editing afterwards.

    If you’ve spent any time proofing OCR’d works, such as for the Distributed Proofreaders project (as I have), you’d know that even at 99% OCR accuracy, the result is 10 or more errors per page – not counting formatting things like footnotes, lists, paragraphs, italics, bolding, etc. In other words, if you were reading ebooks that were the simple result of machine OCR without any hand editing, you’d likely give up before completing the first chapter. It would be pretty doggone ugly. (There are over three thousand characters in this post alone; if it were the product of 99% accurate machine OCR it would have more than 30 wrong characters!)

    This is not me saying I understand the costs of ebook production, because I don’t. I’d want to hear that sort of thing from someone who had produced a few dozen of them, and thus had real experience with the process rather than simply trying to reason it out without benefit of direct hands-on knowledge.

    I recently learned that lesson the hard way, when I volunteered to produce the index for my wife’s (soon to be published, nonfiction) book. I had thought it would be a breezily simple process taking maybe a day or two, where the computer did most of the work. Won’t bore you with the details, but after more than a week on that job, and trying out at least four different kinds of indexing software, I definitely learned that it’s a job for a human professional. One with good tools, yes, but still a human spending real time doing real work.

    I am not one of those people demanding higher prices for ebooks. Even after the above experience, I do cling to the impression that an ebook should cost less than its printed book equivalent. However my personal experience with the process does now lead me to admit that the error bars on my impression are much wider than I had previously thought.

    So to sum all that up, I don’t have a problem with the actual professionals in the publishing field experimenting with flexible pricing models (remember, flexible pricing is how we started this little subthread). They know their costs and financing terms, and I don’t. As I mentioned last time, if they put out a book at a price I don’t like, I can leave it on the shelf, whether that shelf is electronic or dead-tree. Again, that’s commerce, same as it ever was.

    If Macmillan prices a lot of Kindle books at $15, I’ll be leaving a lot of their books on that shelf (assuming, that is, I can find other quality writing at a better price). And they’ll figure out something else. In this Amazon/Macmillan battle, I don’t know who was “right” – if anyone. Pricing is wierd stuff. In a lot of markets it is less about the cost of the goods than it is about the buyer’s perception of value.

    I don’t like that Macmillan seems to be doing an end-run around laws and practices of wholesalers not dictating retail pricing. But at the end of the day, I realize that I don’t have access to their balance sheets, so all I am qualified to judge is whether or not the price of their goods on a shelf is a price I am willing to pay. Their internal costs of production, and ultimately their price setting policies, are their business.

    I won’t tell them their business, and hopefully they won’t tell me mine. Same goes for Amazon.

  223. John, I loved how you described what Amazon did. So I went to Amazon and saw your work — realized that I had already read one of your books, and really liked it. So I plan to buy more of your books. But not, as you might have suspected, from Amazon.

  224. Makes me want a Nook. Glad I hadn’t picked a reader yet.

    I want a false-ink style e-Reader, I don’t understand how anyone could be excited to stare at the iPad’s bright white screen to read a book when they can do with their current laptop. Between this incident and the previous incident where Amazon showed their willingness to reach out to Kindles and erase paid content, I think it’s down to the Nook or the Sony E-Reader.

  225. Nice rant.
    Can’t say that I give the slightest damn – but it did provide a couple of chuckles. I’m going to go read a book now.

  226. I agree that Amazon as managed to make itself look foolish. Very foolish. They botched the PR bigtime. Sure, many consumers will simply not see all the behind-the-curtains silliness though, and will instead cheer Amazon for trying to give them cheaper eBooks. Who doesn’t want their dollar going further? It’s sad, but it’s business.

    The only thing I disagree with is point #7 though. Just because Amazon is being silly, does not mean that the iPad suddenly wins. It’s not a two-party system, and Apple hasn’t got a product that will win on technical merit (nevermind that it’s already WAY behind in the race). They may have an amazing marketing team, but that’s not enough to win customers. Not by a long shot. Long-term, this is a bump in the road for Amazon, nothing more.

  227. Even without the authors and the PR it was the dumbest business move ever. Amazon’s whole brand in books is as the category killer… EVERYTHING. “Earth’s largest bookstore.” Customers don’t even pay attention to publishers… we know titles and authors. All we’d learn is that amazon isn’t amazon any more, it’s now the Kindle Corp stealing for battle with Apple Inc. Meanwhile to find a book, go to xxx.com

    Unlike your local cable company, Amazon doesn’t have a monopoly. There are other online booksellers capable of carrying everything, storing wish lists and gifts lists, etc. etc. Do they think we’d just go somewhere else to buy the books they dropped? No, you’d buy everything at your new online book store, just like I buy from amazon books they carry at the supermarket and Target.

    It’s a great story though… that they’d risk the core value proposition of their brand for this. They must really see the physical book as doomed. But even in music, where most is listened to on digital players, the #1 revenue source is still physical CDs.

  228. I am happy to say that with my new ebook reader I can get my hands on books without requiring either Macmillan or Amazon. The music industry is still in the process of adjusting, so I dont expect publishers to embrace the new reality until the market forces them to do it.

  229. iPad vs. Kindle is apples and oranges. People will read PDFs, reference manuals, and so on on the iPad. But nobody who reads books, regularly, one after the other, 100s of pages a week, none of these people will do it on an iPad.

    I’m talking about the display here. I’m not even getting into 10.4 ounces vs. 24 ounces, two-handed reading, having to move a finger to turn a page rather than squeezing imperceptibly, and so on.

    Admittedly, book readers are a small and dwindling market, so the e-reader aspects will not affect the iPad’s sales, and many Kindle owners will pick one up (to surf the Web).

    I can’t wait for the flood of “reviews” of the iPad’s reader that come out after buyers have read 3 chapters of some book. Come talk to me after you’ve read 5,000 pages.

  230. @190 John Scalzi
    “He might stop writing were he obscenely rich.”
    There’s only one way to find out!

    Unfortunately, it appears that you’ve been placed in the control group for this particular experiment.

    Better luck next time…

  231. Again, the people insisting that e-books should be dirt cheap are expecting publishers to act like electronics companies or Internet companies, which they can’t do. Have any publishers put out their own e-reader device? No. They’ve instead sat back and let the market develop, waiting for more vendors and options.

    The Internet model is to make money off of the electronics companies’ product lines primarily through advertising, secondly through product sales. A lot of companies start off at a loss, held up by investors and offering product free or dirt cheap to grab a large share of market, and once the brand is established, get money off of advertising and if a retail firm, product — Amazon, Google, Facebook. (Of course, this strategy was also what caused the tech bubble burst in 1999/2000 and set the economy reeling.)

    Amazon combined the Internet strategy with the electronics product strategy of selling the Kindle. They wanted to make it like iTunes and iPod, and how much does Apple sell a iTunes CD for? Ten dollars. Because the market was very small, 1%, and because Apple is the king of book Internet and Internet retail, publishers went along with it initially.

    But the music industry makes revenue from multiple streams — advertising and product placement, merchandising and performance tours, radio fees and product sales — far and above what book publishers can dream of. Nor can book publishers make money like electronics companies from piggy-backing expensive product on product, hardware, software, utilities, and services as well. For book publishers, there is only one product, no advertising revenue, and even in the rare instances when there’s movie and merchandising attached, publishers don’t get that money, though they get the sales boost.

    For the electronics companies that are making the devices, e-books are just one minor product, an attractive offering, but just part of the whole operation. Microsoft looked at the market and decided not to even have an e-reader product now, because people were downloading e-books onto netbooks and laptops and multiple devices. So they’re just selling e-books as a software product for their hardware devices. The iPad is set up with color ink for Internet content, not books, and for video downloading, on which they will probably make more money than on text products.

    So Amazon is still the king of Internet retail and the king of Internet book retail, but now that the market is beginning to mushroom, now that the electronics companies are adding e-books to their product lines, they aren’t going to get to set the price for the one revenue stream product, and certainly not if that price produces a loss for everyone that the publishers can’t make up. And people can buy e-books at other places than the Internet as well, so it’s not just about the Internet.

    Publishing needs and has needed new vendors, both in real world stores and the Internet for print and e-books. And now it’s getting them. Amazon is going to have to adapt, and since books are only one part of their business, I figure they will. Their spat with Macmillan isn’t going to particularly hurt them. Their big problem is that Steve Jobs is going around bashing the Kindle. Which is why they wanted to hold on to the low e-book price. But the publishers can get a better price elsewhere, so Amazon has to give if it wants to stock the books. It tried to use its print online influence, which worked before, but publishers can sell print books online elsewhere too (hello WalMart and Barnes & Noble.)

    I don’t think that Amazon has blown its brand name at all. But it does seem to have lost its monopoly.

  232. Authors always get the short end of the stick. But just like the Orwell removals from the Kindle, Amazon seems to keep reminding people how much power they have, and how uneasy it makes everyone feel.

    The good thing is, if you piss enough people off on an internet based platform, they will move to somewhere else. Ask the folks at Myspace.

  233. 1. Everyone is getting all worked up over the price point of $9.99 when most ebooks on Amazon were priced higher than that. Click on any category and do a price sort from high to low and you’ll see what I mean.

    2. Amazon will make MUCH more money under this agreement. See a financial analysis of why this is so at: http://paidcontent.org/article/419-in-amazon-vs.-macmillan-amazon-is-the-winner/

    3. I think this is all really the first salvo in a much larger war to destroy discounting of books. The publishers really hated the extreme discounting going on in the big-box stores last Christmas and they see this as a way to gain control over retail pricing. This action by MacMillan wold never have been possible before 2007 and the Leegin decision. See this legal analysis: http://paidcontent.org/article/419-in-amazon-vs.-macmillan-amazon-is-the-winner/

    4. Authors will make less under the new arrangement: A financial assessment by G Rumple shows why:

    “Last Week: Amazon paid Macmillan 50% of the list price for the book in a wholesale agreement. So if the Book cost $25, Amazon paid $12.50 for it to Macmillan (which is THE ONLY PART THAT MATTERS to the Author), Amazon than sells it for $9.99 at a LOSS of $2.51. Scalzi got 10% of what was paid to Macmillan (not what Amazon sold it for, so the full $12.50) which is $1.25

    New Agent Model: Amazon doesn’t pay for the book, Macmillan puts it up for sale for $14.99. If it sells, Amazon gets 30% of $4.50 of the sale, and Macmillan keeps the other $10.49. So now Scalzi gets 10% of the $10.49 or $1.05 (and no I don’t think for one MOMENT that Macmillan is going to lower their profits/share by giving the author 10% of the $14.99, that would be crazy, but maybe this is what your arguing, if so, good luck with that).

    The author goes from making $1.25 to only making $1.05.”

    5. Personally, as someone who spends about $4,000 a year on books (please don’t rat me out to my wife…) I prefer the ebook format and I’ve taken big fat hardcover history tomes, sold them as used books, and bought the ebook version so I can read without breaking my wrists. I will gladly pay more than $10.00 for an ebook, if the price is 20-25% off the discounted hard cover price. Otherwise, I’ll pass and read something else, or get it from the library. We are witnessing a transition to a new business model, something always painful for those concerned. They need to decide whether to take advantage of the new model or try to bend the old one to the new technology, a strategy that inevitably fails.

  234. I couldn’t agree with you more about 6, that people are on Amazon or any other site to buy things, and if they can’t they won’t return.

    I had a similar situation happed to me, but concerning Amazon Marketplace, not this Amazon/Macmillan feud: a few months ago I found an out-of-print book on AM, which BTW wasn’t not available from Amazon any more, only on AM. I clicked to buy it, wasted my time entering my details, and hey! Amazon tells me that residents from my country aren’t eligible for purchases from AM, only from Amazon! I went ‘WTF?!’, and even wrote to Amazon about this. I received a ‘We’re sorry, and we don’t know when AM will be available to your country, but meanwhile you can purchase from Amazon’ reply (yeah, right, when you don’t offer the book). I’ve never purchased anything from Amazon after this, I found that The Book Depository has no qualms about shipping to my country, and I’ve successfully bought 30 or so books from them since then. And I also discovered that it was actually cheaper than what I would have paid to Amazon.

    I’m sure that after this Amazon/Macmillan thing, lots of people will discover alternate on-line book sources like I did.

  235. I think writers should continually be looking for another medium through which to sell their work. Companies like Amazon and Wal Mart are getting entirely too big for the common good of the people which make them the arrogant exhorbitantly rich monopolies that they are.

  236. As an author (but not a Macmillan one), I THANK YOU for writing this. You’re correct on all points and it was a pleasure to read.

    I live on the edge of nowhere and do more than 50% of my product purchases (other than food and fuel) through Amazon. This is the second time they did something really dumb (think “1984” disappearing off Kindles) and I’m starting to wonder whether I’m dumb for shopping with them.

    As for ebook readers, the Kindle 1984 episode already crossed it off my list. BN can’t seem to deliver the Nook on a timely basis and I canceled my order. I’ll certainly be an iPad early adopter.

    There’s just too much #FAIL out there.

  237. To be honest, this doesn’t surprise me. I’ve noticed a growing change in attitude at Amazon in recent years.

    Their attitude has gradually shifted from – How can we help you! – to – How can we automate this to limit annoying contact with people while still maximizing profit.

  238. This is a PR disaster for Amazon. A small but instructive one.

    For one thing, as you point out, where the hell was Bezos? As the Italians are wont to say, “Il pesce comincia a puzzare dalla testa” (the fish stinks from the head down).

    Question: did Bezos even know about the Macmillan bun-fight? If he did, he’s responsible for Amazon’s failure. If he didn’t, he should have. And he’s STILL responsible for its failure.

    Hard to believe, but Amazon’s corporate culture was caught flat-footed by both the iPad AND the iBook Store. (Like they couldn’t see THAT one coming.)

    This debacle would be one thing if it involved any one of the eight bazillion non-book products Amazon now sells. But it occurred in what was once Amazon’s core business.

    If Amazon can’t even defend the turf they pretty much invented, they’re going to get their asses kicked, again, elsewhere, but good.

    They should have never extended the Amazon brand to non-book or book-related products, or grown the whole company so big so fast. They are now vulnerable to attack from bigger retailers (e.g., Walmart), niche sites and new players (e.g., Apple).

  239. We’ll see whether this was a PR disaster for Amazon. I’m a Kindle user and delighted that Amazon is using its market power to negotiate lower costs for me, much as Wal-Mart bullies suppliers into offering high-quality products at low prices. Few of you are probably old enough to remember the days of K-mart, where low prices automatically meant low quality. Not any more. Wal-Mart and Amazon are my avatars in the marketplace. I have no need of layers of middlemen.

    Amazon didn’t make you sign with Macmillan, and Macmillan has not (to the best of my knowledge) taken the risk to support digital distribution with a device of their own. If the value to readers is in the words, or in the “publishing” (whatever that means in the digital context) then you and Macmillan should weather this and be just fine. If a lot of the value comes from distribution, you may not be. Govern yourself accordingly.

  240. I’m sorry about your rage, but I don’t care less. At the end of the day, that’s my money going out of my pocket.
    My heart is with Amazon. I love my Kindle and I’m not willing to pay more than 9.99$ for an e-book.

    Best of luck with your battle.

  241. I will be SO happy when the pendulum swings back this direction and people discover that, for many reasons, they can never actually replace print books with e-books.

  242. MadLibrarian, I already have. I have more than 200 e-books on my Kindle. I wouldn’t have the space to store them at home, otherwise.

  243. That’s great for text only, but I don’t like reading a screen all day. I like to physically turn the pages, see the full-color graphics, and be able to read during ice storms that knock out the electricity. I wouldn’t want my collection stored as e-books.

  244. Well, I doubt you’re sorry about my rage. Realistically, do you think that if Kindle succeeds in its quest to gain a monopoly on the e-reader market that you will continue to receive books at such a discount? amazon is now buying them at a loss. This is a false market. It’s not in your interest, in the long run, to have amazon own that market. If they did, it’s easy to envision where that path will go. Microsoft has already paved the way for that strategy. There will be newer versions of the Kindle. That will be more expensive and probably better (although not guaranteed, look at VISTA). But that’s almost immaterial because suddenly you won’t be able to buy new e-books that work on YOUR Kindle because the format isn’t compatible. Your devotion to amazon at that point might be tested.

  245. I just can’t get over the fact that so many readers want books to be priced as low as possible, like that’s a feasible way for writers and publishers to make enough profit to continue writing and publishing. Macmillan wants the ABILITY to price brand new releases higher than $9.99, not ALL books. If you don’t want to pay $9.99 for a new release, then wait for the price to go down, just like you would for a hardcover to paperback.

    But, in the end, that’s not even the point. The point is that Amazon took down an entire publisher’s books, print and digital, and it’s hurting the authors more than anyone else.

  246. @Mad –

    And you are welcome to feel that way. That said, the e-book model is a model that is well on its way to common acceptance. It’s resource friendly, space friendly, rapid access and delivery.

    Sure, there are a lot of issues yet to be resolved; DRM, cross platform compatibility, pricing, sharing, libraries.

    My prediction is within 5 years, once some of these issues start to hash out, what will be more common is an e-book base model that utilizes print on demand technology. I.E. instead of warehousing, books will be produced in e-format. If you want a paper copy, one will be produced for you on order, in the format you request (HB, TP, MM) and sent to you immediately. It will take many more years for that to become the norm, but as a distribution model it just makes too much sense.

  247. @Bibliophile:

    ‘If you don’t want to pay $9.99 for a new release, then wait for the price to go down, just like you would for a hardcover to paperback.’

    That’s the point. I won’t wait. I’ll just get another e-book at the price that meets my needs.

  248. @Jeff L and Mad

    Jeff, you are so right. Steven Roxburgh, publisher of Front Street Books and former editor at Farrar Strauss has begun a new company using precisely that model. Namelos.com

  249. @275:

    ‘if Kindle succeeds in its quest to gain a monopoly on the e-reader market that you will continue to receive books at such a discount?’

    If it doesn’t happen, I’ll change reseller. I don’t see the problem.

  250. @Claire

    ‘If you don’t want to pay $9.99 for a new release, then wait for the price to go down, just like you would for a hardcover to paperback.’

    That’s the point. I won’t wait. I’ll just get another e-book at the price that meets my needs.

    So…you don’t actually care what you read? I seriously don’t understand this. If I like author X, say in this case John Scalzi, and I want to read John Scalzi’s books, there is no ‘other e-book’ that meets that particular need. Surely reading can’t be /entirely/ about the price for you. You must care at least a /little/ bit the actual words you’re reading? Right?

  251. @Rochist:
    Are you aware of how many books are out there, and how many of those books meet my needs?
    Or do you think only best sellers meet my needs?

  252. ‘I don’t see the problem.’

    ranks alongside

    ‘there seems to be something wrong with our bloody ships today’

    in the annals of missing the point…

  253. @Claire:

    “That’s the point. I won’t wait. I’ll just get another e-book at the price that meets my needs.”

    Since Macmillan seems to be winning this one, the other publishers will be only steps behind in creating this kind of deal with Amazon. So, I imagine most new releases will have ebooks priced between $12.99 and $14.99. Now, some people don’t want to pay full price for new releases. That’s to each his own. The prices will go down over time.

    Also, Amazon is not trying to keep money in anyone’s pocket. They price low to get people to buy Kindles. Kindles which Amazon has removed paid content from.

  254. Eric: “1. Everyone is getting all worked up over the price point of $9.99 when most ebooks on Amazon were priced higher than that. Click on any category and do a price sort from high to low and you’ll see what I mean.”

    Well that’s the good PR Amazon has done, isn’t it? Of course, people will say that this is the publishers’ fault, but Amazon never intended to do $9.99 on all e-books, just the ones where it would be most effective — bestsellers, genre, etc., and not forever necessarily.

    “2. Amazon will make MUCH more money under this agreement. See a financial analysis of why this is so at: http://paidcontent.org/article/419-in-amazon-vs.-macmillan-amazon-is-the-winner/

    Well, they will per book, but what Amazon is worried about is market share. And they should be worried because Google is going to enter the fray with a likely tablet reader/computer.

    “3. I think this is all really the first salvo in a much larger war to destroy discounting of books. The publishers really hated the extreme discounting going on in the big-box stores last Christmas and they see this as a way to gain control over retail pricing. This action by MacMillan wold never have been possible before 2007 and the Leegin decision.”

    They’ve been dealing with the box stores since the 1980’s. I’m sure they want to reduce the discounts, but they aren’t trying to get rid of all discounts. However, Amazon’s prolonged we can take the loss so screw you tactic isn’t something that the book publishing industry can sustain or is eager to continue when there are other players.

    “4. Authors will make less under the new arrangement”

    It depends on how the electronic editions are handled. As a sub rights different format sale, authors may be getting 50% of net revenues, split with the publishers. If they are treating it as similar to a retail sale to Barnes & Noble where the price is retail discount, they get 10% of the invoice price, which is higher, not the discount price, so more than $1.25. If they are treating it as wholesale deep discount sales, then the author may be getting 10% of net revenues, not the individual prices, or a reduced royalty, say 8% of the invoice price. The likelihood is that very rapidly it will be 10% of the e-books invoice price which is close to the retail price, so essentially 10% on 14.99. But the book price will drop over time, remember, so on a lot of sales, it will be less. But instead of 3% extra sales for authors from e-books, they will in the next few years become an extra 20% in sales in addition to print sales. So even if authors end up getting slightly less for e-books than their print sales, they get the revenue on a vast pool of sales they didn’t have before. And the more e-book sales they are, the better the royalties will be because authors and their agents will negotiate it, use precedent and it will become standardized. Basically, publishing is looking at a whole other bookselling industry in addition to the one they currently have.

    But right now, Amazon still hasn’t put the Macmillan books back up, which means the dispute is still on-going and this is going to be bad for a bit.

  255. 18@tumbleweed – An ereader that has Android? It’s called the eNook by B&N. ;-)

    210@Jeff Barrus – Ebooks have a lot of overhead. Just like printed books do.

    For you to say “All I can say is that this entire discussion has left me a lot less interested in reading books now that I know that authors and publishers are both interested in jacking up the price of a product that has almost zero overhead.” Is equivalent to saying that the work you do isn’t worth the money they pay you because there is no overhead involved.

    You don’t need to get paid for the work you do until after someone buys the widget you help manufacture. There aren’t utilities that need to be paid for your workspace, or rent for the building or those nice vending machines in the cafeteria, right? You don’t need a phone or PC to actually do what you do. Nor do you need the servers that maintain your internet connection or pay the fees that give you blazing fast downloading, right? Let’s talk about the fees you pay for the applications that let you create and design said widget or the costs associated with all of the hardware and people that maintain it and actually make the product. That’s not overhead or cost that needs to be recouped for your over-priced widget now is it?

    Check this site – http://www.tobiasbuckell.com/2010/01/31/why-my-books-are-no-longer-for-sale-via-amazon/ – for a quick class on the overhead involved in getting a book from the author and into the hands of the reader.

    Ebooks still need to be edited and proofed and copy-edited. There’s the artist fee, marketing and advertising, the advance to the author, etc.

    Not only is that done for the printed book but it applies to the ebook as well. Plus, I’m sure, there are extra costs associated with converting the type-set book to the reseller’s format of choice and making sure that it is proofed yet again to make sure that it is legible and easy to read.

    So before you, or anyone else, make comments about ebooks being over-priced keep in mind all that goes into a printed book goes into an ebook as well.

  256. @283 Claire

    Claire honey, as my 90 year old father would say, please get that chip off your shoulder. No one is trying to chisel money out of your wallet. You and only you have the right to decide how to spend your money. No one will be offended if you decide to forego a $15 book for a $10 book.

    But the whole point of flexible prices is that ebook prices can vary by book and over time. It is very likely that only new release bestsellers will be $15.00. If there are truly no sales at $15, a flexible system will allow downward pressure on prices. Many other books will be $9.99 or less. And if you don’t need to read just-released bestsellers, the point is moot.

  257. Rochist@282 – So…you don’t actually care what you read?

    It’s not crazy. Some people do consume as a function of ‘hours of entertainment’. Some people stockpile, and buy more in a year than they will read in a lifetime. Some of these people are assuming that their preferred mode of consumption is both universal and the only logical conclusion, and that assumption is kind of rude, but it doesn’t make it invalid as a choice.

    An ideal economic situation is one where those people are served as well, in the end, as those people like (I presume) you and me who do sometimes want a particular book asap and will pay extra for that. If you take Macmillan at its word – and there’s no real evidence against that, plus it would be the easiest lie to catch them out on ever – that’s what they’re heading for.

  258. @rochrist: Um….yes. Did anyone ever even consider cheap home furnishings before Martha Stewart partnered with Wal-Mart? The cheap, dependable Christmas lights I bought from Wal-mart are much better than the ones I got from Home Depot or Target.

    When I was a kid, I got some generic batteries at K-mart that were dead right out of the package. I’ve never had that kind of cr-p from Wal-Mart. Never had a complaint about a food or product that I’ve purchased from them.

  259. @Katg

    “The likelihood is that very rapidly it will be 10% of the e-books invoice price which is close to the retail price, so essentially 10% on 14.99.”

    But under the agency agreement that MacMillan wants the invoice price would always be 30% less than the retail price because that’s the commission Amazon is guaranteed under this model.

    MacMillan’s president has already said he is willing to earn less money in the short run (less money for authors, too) acknowledging that under the previous Amazon model, MacMillan made more money.

    Personally, I think Amazon has made out like a bandit and gotten good PR. They are now seen (wrongly, IMHO) as in the customers corner fighting for lower prices. Under the new model, instead of losing money on every best seller, they get 30% of the retail price. What a deal!

    MacMillan and the publishers are worrying about the supply chain. Amazon acts as both wholesaler and retailer. That’s what scares the bejeebees out of them. Especially since Amazon is offering a way for authors to earn 70% royalties. I imagine agents are rubbing their hands in glee.

  260. @htwsga

    “Check this site – http://www.tobiasbuckell.com/2010/01/31/why-my-books-are-no-longer-for-sale-via-amazon/ – for a quick class on the overhead involved in getting a book from the author and into the hands of the reader.”

    That’s from the accountant’s point of view and is important ONLY if you sell ONE book. The more you sell, the more those costs become apportioned across all the books and those costs then can become insignificant on a per copy basis.

    Walmart, B&N, Borders, and all the other big stores understand this very well, especially Amazon. Fixed costs are reduced to insignificance with increases in volume. They gain the volume by reducing the price so they sell more. They did not get where they are today by raising the price. That’s what MacMillan doesn’t understand. They need to increase volume by lowering the price and they’ll make more money by selling more copies which in turn then pays the fixed costs.

  261. I gotta tell you, it’s hard enough for me to pay $9.99 for a file that essentially costs the publisher nothing extra to produce (granted they are still paying royalties and the like, but there are no production costs at all). Paying $15 or more dollars is like to just make me wait til the book is in paperback.

  262. Eric Welch @292 asserts:

    ‘That’s from the accountant’s point of view and is important ONLY if you sell ONE book.’

    thus demonstrating a total ignorance of what accountants do, a total ignorance of what a profit and loss account is, and a total ignorance of the industry…

  263. I think the significance missed by the writing and publishing community in all of this is that it shows that books are such a small part of Amazon’s business model these days, Bezos didn’t care about the reaction at first. In fact, I firmly believe the only reason Bezos and Amazon care now is the ego-bruising threat of losing the ebook battle with Apple before the iPad is actually released.

    As author Maya Reynolds so clearly explains in her presentations, Amazon is attempting to create a complete vertical dominance in the publishing and distribution worlds. They missed it in music and video, but assumed it would be easier in books because books are such a small world (recent statistics state that only 5% of Americans read books — any books). And as far as their revenue streams goes, books are becoming less and less important.

    For MacMillan publishing is the entire world, for Amazon it’s a small slice of their world. That’s why Amazon’s response came from the Kindle Team in the forums. Wiping out a sixth of their bookstore did not wipe out a sixth of their income. They can afford to distribute ebooks as loss leaders for the Kindle because they are making so much money off of all those other things sold on the Amazon site (most of which they are only paid to list, not actually distribute or support).

    The publishing business model is changing and for most authors this is going to be a good thing. Direct distribution via e-readers is going to offer many opportunities, just as direct distribution has done for musicians and performers. It will, however, be a period of disruption and change during which adapting is going to be difficult for many of us.

    One thing we can count on, though, is that the physical book is going the way of the landline, rotary phone. Small publishers of beautiful, archival, collectible editions will sell to bibliophiles and we’ll make our great-great-grandchildren wear gloves before touching our antique paperbacks.

  264. Snorting Zoloft? Zoloft is an SSRI which requires prolonged administration to build up to effective levels in the bloodstream for overall effect on mood.

    Try Xanax.

  265. The funny thing is that if I were Amazon I would rather go for being able to sell iBooks as well. Really they are content and Apple is device+user interface.

    Honestly I absolutely enjoy having a real book in my hands, and the same time find it extremely useful to have an electronic version on some kind of multi purpose device (not dedicated). So for me paper+ebook bundling would suit best at a reasonable price. But I do not want to 2 copies. I can give a good book to any of my friends to read it, but giving an iPad or a Kindle would be weird. So online publication from my point of view serves different purposes than paper publication.

    Amazon should stick to the knitting: provide the best book shopping experience on the web.

  266. Carolyn@295 (recent statistics state that only 5% of Americans read books — any books)

    Hmmm?

    In the PDF report on reading from the NEA here – http://www.arts.gov/research/ReadingonRise.pdf – published Jan 2009, based on 2008 survey (and as far as I can see the most recent available) it says on p8

    50.2% of Adults and 51.7% of 18-24-Year-Olds read literature
    54.3% of Adults and 50.7% of 18-24-Year-Olds read any books.

    Which overall is a rise, the first in some time.

  267. Not that any more fuel is needed for the nuclear explosion that Amazon has set unto itself – but here goes…

    It seems Amazon is more content to beg for forgiveness than to actually carry out a (long, long time) customer’s wishes. I recently put in a request to have my accounts deleted, citing that they cannot keep punishing customers for things that are beyond their control. I received this as a response to my request:

    “Hello,

    We are working with the publisher to make their titles available as soon as possible and at the lowest possible prices for our customers. We will e-mail you when these titles are available, which we hope will be soon.

    Just click the link for “new and used” offers for this title.

    I understand that you requested your account be closed, but I hope my efforts to correct this misunderstanding have been satisfactory. However, if you’d still like to close your account, I want to make sure that closing your account wont cause problems with any open transactions or other websites you might visit.

    Here are some things to keep in mind:

    — If you use your Amazon login on other sites, you’ll also lose access to those accounts Target.com, Bebe.com, BenefitCosmetics.com, Lacoste.com, Endless.com, and Amazons international sites.
    — Any open orders you have will be cancelled.
    — Returns and refunds cannot be processed for orders on closed accounts.
    — Amazon Payments account will be closed and cannot be reopened.
    — You’ll no longer have access to your Associates, Seller, and/or Mechanical Turk accounts.
    — If you have an Amazon Web Services account, cancel your subscriptions for any Web Services prior to requesting that your account be closed.

    If you’ve reviewed these items and still want to close the account, write back by visiting the address below:

    https://www.amazon.com/gp/help/rsvp/rsvp-mi.html

    I hope you’ll give us another opportunity to prove the quality of our service to you.”

    I have to ask – is this a canned response to anyone asking for their accounts to be deleted, or is this a pathetic attempt to coerce a disgruntled customer to stay with their service? It’s not up to Amazon to determine if I have given any particular matter sufficient gravity, after all.

  268. @Raven

    It’s semi canned, they do want to double confirm, because the part about refunds and returns is critical. Once you close an account, you can’t return anything. Ever. Bad policy, but still important to note before an account is closed.

  269. Well, I vote with my feet and dump Amazon.

    I buy books off http://www.bookdepository.co.uk based in England because it supplies books to New Zealand and the rest of the world free of postage (unlike Amazon) which I suspect makes a revenue stream off postage.

    As a writer I spend enough time looking and working on computer gadgets and prefer a plain old fashion (as it now seems) paper book.

    Thanks Amazon, I’ll just take my book buying elsewhere.

  270. Jeff: “But under the agency agreement that MacMillan wants the invoice price would always be 30% less than the retail price because that’s the commission Amazon is guaranteed under this model.”

    No, the invoice price is not what the bookseller is paying — that’s the discount price. The invoice price has traditionally been retail minus shipping costs, but often it’s retail price as the basis for the royalty. E-books don’t have shipping, but they have formatting. So the invoice price is not much less than retail.

    What it looks like, however, is that the royalty is on revenue, not units, and for Macmillan is 20%, down from 25%, which means they are doing it as sort of a cross of royalties and sub-rights splits. Agents and authors will negotiate rates and it will standardize. Authors are not getting squashed and their sales totals will go up. And not all the books will be $14.99 and for the whole time. It’s flexible pricing.

    Macmillan is not scared of Amazon being a wholesaler and retailer because Amazon has been that from day one. Amazon built the online retail field from tiny to a significant addition to sales. But Amazon is trying to take a bigger cut as an e-publisher and that is problematic for them.

    Amazon is offering to deal with authors who have the electronic rights to their work separate from their publishing contract who can then license the electronic rights to Amazon for a sub rights split. (I.e. it’s not a 70% royalty, it’s a revenue split.) And the terms for getting that deal are not that advantageous to authors — actually it’s kind of fuzzy what they are — and there’s still the non-Kindle platform issues and who will license, run the rights. Right now, that’s a very small group of authors, made smaller by the fact that Amazon only wants certain kinds of authors, not counting the self-pub operations. Given Amazon’s tactics, I wouldn’t want to sell to them directly as an author. You’d have no leverage at all.

    Look everyone, print books are not going to disappear any time soon, sorry. Most e-books will not be $15. Everyone will make some money on them. And latest statistics have 28% of the population regularly buying books, way less than movies and music to be sure, but not shrinking. E-books are an additional market, not a replacement market. Unless you are willing to have the governments supply everyone with e-readers. (And given that in the U.S., we don’t even want them to have health care, I find this unlikely to happen.) This idea that Amazon is evil or Macmillan is evil or authors get screwed by everybody and must break free and run their own multi-media businesses on the Web — which most of them have no ability or desire to do — is really melodramatic.

    That said, that Amazon is still refusing to list print titles from Macmillan is shitty tactics, whatever the disagreement. And having people who own computers, netbooks, e-readers, wireless service, sattelite t.v. service, cellphones, Blackberries, digital cameras, flat screens, DVR recorders, game consoles, game collections, joysticks, t.v. series DVD collections, iPods with hundreds of dollars worth of downloads, Skype cameras, and thousand dollar speaker systems complain about ebook prices, or for that matter print prices, is getting old real fast. If that’s what is considered an ebook revolution, well then it’s a greedy, spoiled, cold-hearted crapfest.

  271. @KatG 302

    And having people who own computers, netbooks, e-readers, wireless service, sattelite t.v. service, cellphones, Blackberries, digital cameras, flat screens, DVR recorders, game consoles, game collections, joysticks, t.v. series DVD collections, iPods with hundreds of dollars worth of downloads, Skype cameras, and thousand dollar speaker systems complain about ebook prices, or for that matter print prices, is getting old real fast. If that’s what is considered an ebook revolution, well then it’s a greedy, spoiled, cold-hearted crapfest.

    More than a bit over the top, wouldn’t you say?

  272. KatG@302 If that’s what is considered an ebook revolution, well then it’s a greedy, spoiled, cold-hearted crapfest.

    That’s truly beautiful. You can’t see, but I’m doing that slow rise hand clap that either blossoms into a mass standing ovation or leaves me pretending that I was trying to warm my hands.

  273. @Steve

    So educate me and explain how charging more and selling less is a profitable business model.

  274. I’m just getting a little tired of folks talking about how the products for their massively expensive non-necessity electronic hardware (like the $500 iPad,) are too expensive. If you have discretionary income to spend in the current climate, great. It is then your choice what to spend it on. If you don’t want to spend it on books, don’t. But if you’re then expecting sympathy about the prices of this one particular item, that’s pretty ridiculous, in my view.

    I’ve gotten a little more info now about the payouts. The publishers are treating it as a special electronic sale, so they’ve been giving authors a 25% share of net receipts, which Macmillan dropped to 20%. This is very different from a royalty on per unit sold, and so you can’t calculate the royalties on the price of the units. Under a continued net receipts idea, authors will negotiate their share of net receipts upwards or into a royalty per unit sold as the ebook market gets bigger, thus getting more income, and publishers will kick and scream the whole way but do it up until 50% of net receipts or a comparable to retail unit royalty. Certainly Macmillan won’t be able to hold at 20% for long. (It’s hoping the other publishers will try to drop too, I guess.)

    In the agency arrangement, the question is the retail commission being deducted from net receipts or not, and this is not at all clear, but given the battle over electronic rights in the first place, and that pricing will be different in different places, and drop over time and for various circumstances, I’m guessing a publisher trying for commission reduction will eventually have to give it up.

    The agency arrangement lets the publisher be the e-publisher and own the file, so the impetus in this is definitely for publishers not to be at the mercy of dozens of large e-publisher/retailers, but instead handle e-book sales kind of like direct mail. Apple at first was unsure because they want to own their platform, but again, they don’t want to be an e-publisher. Ownership and publishing of electronic files becomes a more complicated issue with DRM and different platforms. But this is definitely a fight over production and costs of production rather than simply revenues. Even if Amazon does initially agree to an agent model, that’s not going to be locked in as the standard yet, for them, or elsewhere.

    So it’s going to be interesting. But it would be nice if they could negotiate without holding authors hostage on either side.

  275. KatG:

    “I’m just getting a little tired of folks talking about how the products for their massively expensive non-necessity electronic hardware (like the $500 iPad,) are too expensive.”

    But they spent all their money on the hardware! They don’t want to have to pay a lot to put anything on it!

  276. @John Scalzi #308

    But they spent all their money on the hardware! They don’t want to have to pay a lot to put anything on it!

    They could admire the big shiny screen. Or they could read the bestsellers of, say, 1892!

  277. Just to note: at around 10 pm EST on Feb 2, a random selection of Tor titles (from Macmillan) are still unavailable on Amazon. I just looked.

    So 5 days in, and Amazon is still intentionally breaking itself.

  278. Tons of other places to by them. Try the publisher’s web site. I just wish that Kodak had had Macmillan’s foresight and forced retailers to raise the price of film. Perhaps then we’d still have a viable film industry.

  279. For those who care, The Fossil Hunter: Dinosaurs, Evolution, and the Woman Whose Discoveries Changed the World, reviewed in the Times and published by Macmillan is for sale tonight 2/2/10 on Amazon for $17.82. It’a available for the Kindle at $14.82. The price for the nook at B&N is $9.99, the hardcover is $23.08 so it appears Macmillan books are indeed available on Amazon.

  280. JS: “But they spent all their money on the hardware! They don’t want to have to pay a lot to put anything on it!”

    And that $20 a ticket for Avatar in 3-D in the theaters is totally different too!

  281. I’ve been periodically checking “Old Man’s War” on amazon to see what pops up: currently a $218 hardcover edition, sold by a third party. Imagine the sticker shock for a first time Scalzi reader who doesn’t know about this mess.

  282. @308 John Scalzi: What is mind-boggling to me, as a reader who definitley has, well, strong preferences about the authors/genres/whatever of the books I read… to see these diehard Kindle-ers on the Amazon forums who seem willing to read just about anything as long as it’s 1. on the Kindle and 2. cheap or free. Do they have no favorite author… series… genre that they’d pay more for? or make an exception to their Kindle-only rule? As someone who loves to read…. I truly cannot imagine not caring at all what I read as long as it was cheap or free… uggh. I mean, even I, a diehard-hates-ebooks person, would probably make a 1 or 2 time exception and make the sacrifice read a book on the computer if it was the only way to finish a series (say, if the hard copy was out of print and impossible to find, or the author lost their publisher and had to self-publish the final book as an ebook, or something like that). I just don’t get it… these people truly seem to have no preference but KINDLE CHEAP KINDLE FREE KINDLE KINDLE KINDLE. *head explodes* They don’t seem to understand why people prefer paper books, why people prefer stuff from major publishers vs independent/self published, and why people would be willing to *gasp* pay more than $9.99 for the next book in their favorite series.

  283. @ Rebecca Herman 317

    I just don’t get it… these people truly seem to have no preference but KINDLE CHEAP KINDLE FREE KINDLE KINDLE KINDLE. *head explodes*

    I don’t know what Amazon forums you are reading (I don’t read Kindle forums very often at all), but please rest assured, the fact that some Kindle owners somewhere say one thing, does not mean that all Kindle owners everywhere are of one mind.

    I am a Kindle owner, and I am discriminating in what I read. I pay for most of the Kindle ebooks I have. The few I have gotten free from Amazon left little impression on me – with the exception of Elizabeth Moon’s Trading in Danger which I think was free, and hooked me well enough that I bought and read the other 4 books in the 5-book series. So sometimes free leads to paid.

    I’ve already argued (in this very thread) that I personally have nothing against authors/publishers trying out different pricing models. I’ll pay the price if I want the product enough. Though I admit I like lower prices when I find them – who doesn’t?

    I do prefer to read books on Kindle. Personally I just find it easier and more pleasant. I paid a second time for Neal Stephenson’s Anathem so that I could finish it on Kindle, and not have to lug the rather unwieldy hardback version around.

    That I like ebooks is not a hatred of other formats; it’s simply a personal preference. I spent more than 30 years reading books on paper only, so I think my preference is pretty well considered. That you hate ebooks doesn’t make you a less worthy person in my eyes. It just makes you a person with different preferences than I. Have you spent as much time thinking openly about my preferences (no matter how I came by them) as I have spent thinking of yours?

    Whatever people think of Amazon, please, let’s not turn this into some kind of referendum on all their customers (Kindle users or no) as well. Some of us are nice folks, I like to think!

  284. Kindle or not, readers or not, we are money-talking here.
    If I would purchase a book a month, I would agree to pay 15$ or even more for it. As I do buy more than a book per month (sometimes even 5 or 6) I prefer to look after the money I spend, so I can read more. I don’t want to limit myself to my favorite author, series or genre only and wait until the next book is out.
    It’s as simple as that (approx):

    (5books*15$)*12months= 900$
    (1book*15$)*12months= 180$

    Having said that, not every book is available on Kindle, therefore I need to buy a papercopy :)

  285. Clair at 271 and Jonathan at 270

    Enjoy the quality of writing in your books when it goes down because the good authors can no longer make a living writing and are forced to go ‘get a real job’ (as if writing isn’t a real job) thereby taking time away from writing those books you enjoy paying so little for.

    kind of like outsourcing technical support…?

  286. Claire @271 said

    ‘I’m sorry about your rage, but I don’t care less.’

    I know that in theory every reader should be a wanted reader but do we have to include the functionally illiterate in that?

    Damn this political correctness…

  287. Rebecca Herman:

    “to see these diehard Kindle-ers on the Amazon forums who seem willing to read just about anything as long as it’s 1. on the Kindle and 2. cheap or free.”

    They’re invested in the technology, not in the content.

    That said, with allegedly hundred of thousands of Kindles sold, these diehards are likely not representative of Kindle owners as a whole. And of course, in a larger sense, there’s nothing wrong with people saying they don’t want to pay more than “X” for a book. They’ll just have to recognize that they might have to wait until the people who pay “X+Y” get theirs first.

  288. @ Stevie 321.
    Good point, LOL

    I’m very happy to see that I am the official scapegoat. It makes me think that it’s soo easy to manipulate people attention. Too easy, I’d say.

  289. From the standpoint of a small business this is the side of Amazon we see all the time. They are not interested in “partnering” with their suppliers as the text hinted. They just want to squeeze us for all they can. This tactic of removing the “buy” buttons has been used before against university presses that chose not to use Amazon’s own print shop. It just didn’t come to the attention of the public because small university presses don’t have the visibility of Macmillan. Amazon’s business tactics can be compared to Hugo Chavez’s.

  290. @boingboing: according to The Writer magazine, fewer than 200 authors in the entire United States support themselves purely through novel writing. Almost all of them have other jobs already.

    I’m pretty sure the solid authors will do just fine regardless of how the marketplace shapes up. eReader technologies will become commoditized over time and any would-be monopolist who squeezes too hard will find the traffic flowing right around him. As unit production costs drop we may even see an explosion of authorship along the lines described in “The Long Tail.”

    But publishers are a more interesting case. We are finding out right now whether they, like the wholesalers of yore, have a place in an efficient-distribution world.

  291. So why aren’t you just mad at McMillian? Amazon is trying to eliminate the “need” for publishers, so that you (the Author), your agent, and your editor can split a big chunk of the sales price of your book, and they get their chunk. The publishers know this, but knowing you have terminal cancer is not the same as accepting death.

    The economics of information can’t justify the cost of maintaining printing presses, paper inventories, distribution warehouses, and postal expenses.

    The “middle men”, be they the book publishers, magazine publishers, or recording companies, are redundant in this new world. But you can’t lay off executives who have the power to spend their corporate assets on protecting their own jobs, so the dying process will be painful, messy, and leave many emotional scars.

    Consider this fiasco with Amazon just one of many such scenes to be played out over the next few years.

    –Chuck

  292. Chuck – as an author, I’m sorry but I would rather have several publishing houses to work with, then have to deal with the might of a few direct epublishers the size of Amazon. Especially if this is the way they deal with a situation not of their likely – simply take the books off the website – what power is that? Too much if you ask me.
    Who’d want to hand their career and livelihood to a company that does that?

  293. Claire @271,319,323

    Hey Claire! I didn’t know you were still here. Who would ever pay even $10 for an ebook if all blogs were as entertaining as this one!

    You wrote:
    As I do buy more than a book per month (sometimes even 5 or 6) I prefer to look after the money I spend, so I can read more.

    OK, say you buy 11 books over 2 months. At the present price that would cost you $110.

    Suppose we had variable pricing. You could buy 11 books for same price:

    one $15 book, two $12.50 books, five $10 books, two $7.50 books, and one $5 book.

    So you would be no worse off. Now you might decide to get seven $15 books or twenty-two $5 books. But the choice would be yours. You would not be locked into one set price. Further, if you really wanted one of the $15 books, but didn’t like the price tag, you could wait until the paperback came out and pay $7.50 for it.

    More importantly, if Amazon does not lock up the ebook market, then consumers will have greater choice regarding price, format, portability than if we were dependent on one company.

  294. Chuck, apparently being yet another person who doesn’t understand that where he sees “middlemen” I see people who do shit I don’t want to do so I can focus on what I’m actually good at, which is writing.

    Also, as the thread continues, I am increasingly seeing people deriding the “middlemen” in publishing as the equivalent of people who say evolution violates the laws of thermodynamics, i.e., very confidently opining on a subject they don’t appear to have educated themselves very much about.

  295. Folks,

    I have a report that a Macmillan title was yanked off a Kindle when the reader had already paid for it. It was a customer’s sister. Boy was she steamed – she was in the middle of the book. I find this VERY worrying, both as a reader and a bookseller.

  296. Let me be clear re my earlier rant that I have no problem with folk like Claire wanting to have cheap prices for books so she can get more books, print or e-book. I like cheap books too. It’s the people who insist that they are owed cheap e-book prices as a civil right, that believe gadgets will lead them to utopia where they rule, and that if the entire market doesn’t give them what they want right now, then book publishing will crumble and we’ll all be sorry, whose droning I find hypocritical and pointless. The people who have bought into the hype used to sell them things, like Chuck, who clearly doesn’t know what it is that book publishers actually do or how book publishing works, and mistakenly bundles it up with magazines, music and Hollywood.

    Let’s be clear, Amazon does not want to be a publisher, nor do they want to deal with thousands of individual bestselling and mid-list authors as publishers. They do not want to turn into an electronics files only store where the only product they ship is the Kindle. What they like to be is a wholesale seller who gets retail prices on a vast array of products, an e-book production printer for publishers with the dominant market share, a wholesale distributor for numerous retail companies, and side businesses as a production printer for small press, self-publishing, online groups and other businesses. Oh, and maybe some of the same businesses Google is running. Amazon is trying to eliminate the need for other middlemen who do what they do, not trying to eliminate publishers, so they can maintain maximum market share of the wholesale market, not book publishing.

  297. @Lauretta –

    Tell her to go to the end of her home pages and check if its there..

    That’s a known bug when a listing is changed, it poofs the back occasionally and expected to be fixed in the next software release.

  298. I had no idea this happened – I’m going to have to go to Amazon and see if my book is still available. BTW, your banner is totally sweet.

  299. @318 Bryan – yep, I am talking about the kindle forums. I went there out of curiosity, and left in horror after seeing people who supported giving 1-star reviews to Kindle books they hadn’t read just because of the publisher/price. Ugggh. It’s probably just as well you do not visit those forums, heh.

  300. @Rebecca – I’ve ignored reviews on Amazon since people starting reviewing books and other things before they had been released in any form.

  301. @John: what does a publisher provide that you can’t provide yourself? Editing? Get a freelance editor. Publicity? Hire your own publicist. Bookbinding/typesetting? Hire a vanity press. The consistent complaint I hear from published authors in writing magazines is how very few services the publishers are willing to perform which they used to provide. A lot gets gaffed off on the agent, who may then gaffe it off on the author.

    I know from middlemen, and the beautiful thing about a complex marketplace is that if they provide real value they’ll survive just fine, regardless of industry. Someone needs to edit the book. Filtering/branding is also useful. Regardless, you as the author should be just fine.

  302. Jonathan:

    “What does a publisher provide that you can’t provide yourself?”

    Nothing, except they do it at no cost to me plus they give me money. And additionally then I don’t have to do any of it, leaving me free to write.

    What I genuinely have a hard time understanding is why people don’t seem to grasp that becoming my own publisher is an inefficient use of my time. It’s like telling a surgeon how much better his life will be if he’d just lathe his own surgical tools and cook the meals for the patients in the recovery room.

  303. @Jonathan: what does a grocery store provide that you can’t provide yourself? Food? Grow your own. Drink? Brew/Squeeze/Milk it yourself. Medicines? Concoct them on your own.

  304. Note to Jonathan @336: “freelance” does not mean that a person works for free. They’re likely just as, if not more expensive than salaried editors and publicists.

  305. @340 Plus (from the POV of one who was freelance and now no longer is, and is kind of happy about it), those poor copyeditors and designers and so on might actually enjoy working for a company that gives them access to nice things like sick days and health insurance.

  306. @ hugh (I’m agreeing with you and adding on, not disputing you. I think that might not have come across!)

  307. @ Rebecca Herman, 334

    I went there out of curiosity, and left in horror after seeing people who supported giving 1-star reviews to Kindle books they hadn’t read just because of the publisher/price.

    Great point. Yes, this is a real problem for Amazon – the reputation and review engine turning to trash because people game it according to rules of their own. For reasons which, if they stopped and thought about it, are just plain stupid and unreasonable.

    It’s part of a larger problem, imho – now that we all have our own internet microphone to yell into, what will we say? And why? A lot of people are bringing amazingly shortsighted strategies and tactics to their online pursuit of Life, Liberty, and the pursuit of Happiness. I suspect it’s gonna take generations for the common man to really understand the internet and find collaborative, rationally self-serving ways to use it. On the bright side, I also suspect it’s a self-correcting problem, in the long run. Back on the glum side, that long run is probably longer than I’ll live. C’est la vie!

    In the meantime I have learned that the shorter the review, the less worthy of attention it is. And still I have been led horribly astray on some books bought on the strength of Amazon reviews alone.

    But again, don’t let the antics of the vocal few blind you to the basic sense of the many. Multiple sources say more than two million Kindles have been sold. That some Kindle owners are pricks does not mean we all are! It’s a great device for a real reader.

    Same @John. Many of us see the technology as a nice way to get at what we’re really after: great content.

  308. @343 Brian: Yeah, I got started as an Amazon reviewer. I now have a blog. I used to still post my reviews on Amazon in addition to the blog, but I’ve stopped doing that for now, because I don’t want to be associated with people who would resort to such juvenile actions and abuse the review system this way. Perhaps if Amazon ever decides to be stricter with their review system, I will post reviews there again…. and yeah I’m not neccesarily saying all Kindle owners are that way, but the vocal minority who post heavily on the Kindle forums scare me, as someone who loves printed books and doesn’t enjoy e-books, they scare/freak me out.

  309. Never buy from Amazon They are the worst on-line retailer I’ve ever used. They don’t deliver the product and don’t respond to complaints. In fact, they don’t even acknowledge that a complaint has been made.

    Before you buy anything from Amazon, consider flushing your money down the toilet. At least then, you’ll know where it went.

  310. James Smith Joao Pessoa, Brazil:

    Well, we’ve reached the bottom of the barrel. Thread over. Who could respond to such a delightful, accurate and on topic post?

  311. Fascinating.

    @John – Lets be clear here, there are “middlemen” and there are “service providers”. So as an author I would contract with a “editor/agent” who would provide manuscript editing, connect me up with an illustrator perhaps, and shop my work around. And for that I would cede a share of the revenue.

    That doesn’t change in this new world, using ‘tokens’ in the form of printed books goes away as it becomes all electronic though.

    As an impenetrable wall between authors and readers, the role of the publisher is in serious danger.

    Editor/Agents become more like venture capitalists, they ‘fund’ an author and they have pretty clear deliverables and its fairly easy to track a work based on electronic distribution.

    The last time I looked at the Springer-Verlag book contract it was pretty insanely impossible to understand (but with legal help got through it!)

    Its less clear how this plays out in the periodical market.

    But at the end of the day, if “Bob” can offer you better editing, is hooked in with all the e-book retailer channels, and is willing to pass on more of the retail price to you, the author, he starts winning more business. And if the book you wrote and “Bob” put into circulation for you does just as well as the book “Macmillan” put into circulation for you, well the Bobs of the world will put Macmillan out of business.

    From what I’ve read and seen, I expect that to come to pass. But extrapolations in systems with rational actors are difficult since the system changes as it gets threatened in ways that are not easily extrapolated!

    The next milestone I’m looking for is a ‘best seller’ title that is self “published” and only available electronically. This year perhaps.

    –Chuck

  312. John,

    Thanks for another informative post. After reading through some of the comments, I see some people saying that an author gets 10% of the discount price, invoice price or some other variation of the book price. 10% seems like a ridiculously low cut even if it was based off of a Publishers full list price.

    I know that each author’s contract is different, but in general would you say 10% is really on the low end?

    [not asking about your contracts directly, please don’t take it that way, but maybe you have discussed this topic with other authors and agents so you have a general idea of what the average industry rate is].

    Thanks,
    Don

  313. Yeah torguts, like you are so good. The topic IS about Amazon or didn’t you notice?

    I just tossed in another tidbit about the topic. I could also have mentioned how their ebooks are wildly overpriced. After all, you’re not removing something from their warehouse that has to be replaced. You’re buying an electronic copy that costs them little or nothing to send to you. They still have their original that they hope to sell many other copies to others.

    Yes, the author should get a royalty. And yes, if a publisher has placed the book with Amazon, they are entitled to something, too. Does that justify $14.95 per book? I don’t think so. Especially when their customer service isn’t just poor, it’s non-existent. I have never ordered anything from Amazon when I didn’t have a problem. But I’ll never have another problem. I can’t even get them to respond to “Cancel my account” messages. Amazon just doesn’t care. Is is any wonder they are having problems with publishers?

  314. John, I can’t imagine how frustrating it must be to have your books unpurchasable on Amazon.

    Two quibbles with your piece:

    1. Macmillan’s titles aren’t even close to being one-sixth of Amazon’s inventory. Macmillan is the smallest of the Big Six, so Macmillan’s titles aren’t even one-sixth of Big New York Publishing House titles. Add to those titles the (literally) millions of independent, academic, professional, public domain, etc titles that Amazon sells, and you begin to see how the number of Macmillan titles is pretty small potatoes–and pretty minor the Macmillan problem is, at least for a few days, to Amazon.

    2. Writers will make less under the arrangement Macmillan proposed to Amazon, and which appears to be the way that the other Big Six houses are headed (Hachette announced yesterday that they support this model). If you don’t understand this you haven’t actually run the numbers. It’s pretty simple math. Have your agent explain it to you. The explanation is sure to include phrases such as “long term health of the publishing industry” and “not a sustainable model”–the kinds of phrases that ought to make you reach for your wallet to make sure it’s still there. Bottom line is, Macmillan will make LESS per copy on Kindle downloads of new releases under a new agency model than it has been over the past year under the “old” model. Your publisher has fought this fight in order to MAKE LESS and in order for YOU to make less.

    And yet I don’t see you ranting about that…

  315. James Smith João Pessoa,

    I am surprised to hear all your complaints about Amazon, despite the topic at hand. I have ordered probably 50+ items off of Amazon in total and I have always been impressed the customer service, the speed w/ which I get the books, the cost of the books including shipping costs, which are generally 33% cheaper then the brick and mortar stores.

    I hope you can find another online retailer to support your needs, because I think the writing is on the wall for brick-and-mortar media/content retail companies. I see Borders, Blockbuster, Barnes and Noble, Gamestop and other stores like these all going under someday (or being forced to change their business model).

    Don

  316. Don, I can only report my personal experience. Amazon failed to deliver and has not even sent an automated reply to repeated complaints sent from their “Contact Us” feature at their web site.

    To me, it seems like many successful companies, they have forgotten who needs whom in their business.

    I already have 800+ ebooks for my tablet PC. (far superior to the over-priced Kindle and even the new iPad) I was able to find them all for free and have never even considered paying the outrageous prices for ebooks charged by Amazon.

    As for anything else, I can get it on eBay who has a perfect record of customer service with me. So Amazon, if they ever stoop so low as to respond to a customer, can just cancel my account and I’ll never darken their server again.

  317. Tim Bigby,

    Your point 2 may be correct under current terms, but it’s not nearly as clear as it would seem—I’ve been seeing this spread-sheeted using actual contract language and it’s actually pretty murky. Further, Macmillan is simultaneously talking about increasing its royalty percentages on e-editions of its books, in no small part due to what is going on with its plans for the new pricing model: http://www.authorsguild.org/advocacy/articles/macmillan-e-royalties-at.html So it looks like this will actually result in higher author revenue on a per-book basis.

  318. Tim

    as an addition to Kelly’s comments, take a look at Amazon’s ‘form’ on pulling product starting with Bloomsbury in early 2008.

    Refusing to sell Harry Potter books is so profoundly irrational that no author could ever feel confident that Amazon is not going to run amok…

  319. So, basically James you either have limited yourself to only reading project Guttenberg titles or you have basically admitted to piracy of e-books, which means depriving the author of this blog his fair share of the income because you were unwilling to pay?

  320. Jeff L Obviously you know nothing at all about the legal availability of ebooks on the internet. Considering the level of your ignorance, perhaps you should learn a few things before you accuse someone you don’t even know of piracy. Try searching for Free ebooks and you might learn something that would prevent you from looking like such an arrogant idiot

    Project Gutenberg is a wonderful service and I have been able to get a few nice books from them. They are far from the only source of free ebooks and there are entire web sites devoted only to listing those places.

    But it’s much easier to insult other people that to educate yourself, isn’t it?

  321. Um, besides the fact that my cousin’s office partner is a specialist in literary copyright law and that I’ve done fairly extensive research work for him tracking down pirates and other unauthorized distributors.

    True, there are tons of collections of ostensibly free material out there at the amateur level. And if you are happy with that then more power to you. But even most of those were not released under any form of license, and more than a few writers have been surprised to see their works on those sites.

    A few examples:

    Let’s go to the #3 item on google when I used the terms you suggested – about 1/4 down the page, I find disclaimers like this:

    “And obviously it gets copyrighted ebooks much like YouTube gets copyrighted videos. I am not sure if they are doing anything to deal with them, but the fact is there are plenty of them on Scribd.”

    This is a supposedly clean site.

    So then I went to another site’Many E-Books’, and figured lets see what I find there, first title. Hmm, a title by George Barton, also offered for sale on Amazon.com. Now, to be sure, I can’t guarantee that Many E-Books doesn’t have some odd rights agreement that the author has allowed them to give his book away, but given its being sold somewhere else, I have to wonder. I’d contact the author but apparently for a writer of 12 published stories he has no web presence whatsoever. And according to their own about us page they are basically redistributing PG books.

    My point being is that I strongly suspect that even though you went to ostensibly ‘clean’ sites, you will find that the site operators aren’t anywhere near as vigilant as you might expect them to be about obtaining the rights for the non pg books they distribute..

  322. Since we seem to have devolved to insults, this will be my last response to someone with the apparent intellectual capacity of a 4 days deceased hamster.

    I say that because apparently my claims MUST be false because I posted them here. But, since he posted them here as well, his claims are undeniably true. It’s funny, but in my experience, the people who turn to threats of violence often are the ones who have the most to hide from rational debate. Oddly enough, these are often the same people who’s one bad experience makes them feel they should condemn an entire vendor to the universe at large. I have to wonder that if your communications to Amazon were anything like your last post, we may in fact have found the reason they did not respond.

    Just to make things clear. I am not claiming that all 800 titles you may have happened to download are pirated. I AM fairly confident that many if not all of those that are not from Project Gutenberg and are from an otherwise published author whose books are currently for sale via other mediums stand a very strong chance of not being obtained from sites with the actual rights to distribute them. That, by definition is piracy, whether or not the end reader assumes the source to be clean.

    I will say that while doing some of this research, I have noticed that many more authors are specifically allowing redistribution, which is a good thing and should help reduce the problem.

  323. You made the claims, you must provide the proof. Because you consistently evade doing so, the obvious conclusion is they are false and you are a liar.

    My communications to Amazon were calm and even pleading. It was not one bad experience. If you had the wit to comprehend my post about it, you would have understood that ALL of my experiences with Amazon have been bad. But, sticking to the facts doesn’t seem to be your way, does it?

    Now, you are starting to back off and become even more evasive of your clams. No doubt because you know you have no proof but that doesn’t stop you from committing libel on the internet does it?

    Just so you are clear, I am a writer myself and have written a screenplay, technical manuals, instructional books, numerous magazine articles, and a novel. Much of which is still unsold and others available via download from internet sites. (www.smashwords.com search on my name) so I am probably far more aware of the effects of piracy and more concerned about writers being compensated for their effort that you ever thought about.

    What you think of as insults I see as simple statements of observed fact. You ARE an arrogant asshole that makes unfounded accusations about people you don’t know.

    And yes, I do invite you to provide proof, an apology or have a life-changing experience.

    Maybe you should spend a little more time doing research and a little less throwing out lies and showing your ignorance.

  324. For the record, I’m a die-hard Kindle-er and I don’t side with Amazon, and I still buy shitloads (literally – metric shitloads) of paper books. I’m also interested in reading many, many things that aren’t available on Kindle, and aren’t cheap.

    I think a lot of people are under the impression that buying a Kindle is like converting to the church of Amazon.

    Fuck Amazon. I love my Kindle, but I don’t give a shit; I can buy used books, hardcovers, paperbacks, whatever. Reading is the deal, writers are the deal – they’re what matters.

    My owning a Kindle doesn’t change my thoughts on that. I bought a Kindle because I’m a nerd, and I like the idea of being able to “beam” books to myself whenever I have the whim – not because I love Amazon.

  325. Jesus Christ, James – seriously?

    We’re threatening to kick peoples’ asses now?

    You’re gonna fly this guy to your house to get his “skin in the game” ?

    My god, what a lovely gem of douchery you must be.

    You are, by far, the most hardcore internet thug I’ve ever met in my life. I pray that you never fly me to your home and fight me with your fists. Or worse yet – BUS me to your home, and fight me with your fists.

    Lordy, lordy, how will I sleep knowing that there are such cunning predators as yourself wandering the internet. I may never come back here, in fact.

    People will ask me whether I’ve read an article, or checked out a webpage, and I’ll just shake my head, sadly, and say “no, man, I don’t go back to the internet anymore. There’s this real bad dude there that’s gonna totally fly me to his house and whoop me if’n I show my face around there again…” And they’ll laugh, but only because they don’t understand how hardcore you are.

    And of course I’ll be forced to avoid airports and bus depots at all costs. Every time I get near one, I’ll look sympathetically at the passengers and wonder how many of them are being flown to some violent end at your hands, and on your dime.

    My, my, what a black existence I have before me. Perhaps…yes…perhaps I should just end it all now.

  326. I, for one, am glad James was here and made his (rather bizarre) threats. Why, if not for that, we never would have gotten to see Pickles’ truly spectacular snark!

  327. I think we’ve had quite enough excitement in this particular thread. Everyone calm down. I went up and deleted one particularly egregious comment, and from this point forward I’ll be deleting others which indicate to me people have forgotten how to be grown-ups with each other.

  328. Mr. Scalzi. Thanks for creating this forum. Many of us have enjoyed the posts. I’m only surprised at how long it took before Godwin’s Law reared its ugly head. I look forward to reading a couple of your books. I was not familiar with them before.

    Best…

  329. Re freedom of speech, and net nazis, I am reminded of a favourite quote from Hubert Humphrey:

    ‘The right to be heard does not automatically include the right to be taken seriously.’

  330. @John Scalzi – Don’t know what you have written but won’t be buying any now for certain.

    Big deal – a commercial dispute has you book of the list for a week! And you shed big tears!

  331. russ: C’mon…what has this single author done to cause that reaction? Sure he’s on the opposite side of the argument from me (and I assume you), but given his effective lack of power to impact this situation, why would his venting on his own blog cause you to have that reaction? Really?

    Boycott macmillan? Sure. Amazon? Sure. An individual author? Can’t see it.

  332. I realize it’s a bit late to point this out, but MacMillan doesn’t entirely have a monopoly on it’s titles, as there are wholesalers out there. I know Ingram carries Old Man’s War, for example.

    Yeah, I know it’s print, but still.

  333. Scalzi is a guy who thinks it’s acceptable behavior for someone to accuse someone else of a crime (piracy) with no proof but it is unacceptable to take exception to this behavior. Even if an opportunity (at the accused expense) is given to show proof or apologize before taking action.

    Then he restricts freedom of speech by deleting any comment that he doesn’t like. For someone who claims to be a writer, this is amazingly strange behavior.

    Get the picture?

    “If freedom means anything at all, it is the liberty to tell others what they don’t want to hear.”

  334. But as Oliver Wendell Holmes pointed out

    ‘The right to swing my fist ends where the other man’s nose begins.’

    I think the principle also applies to threats of physical violence…

  335. So, Stevie, then falsely accusing others of criminal activity is fine with you?

    The fact that it was never even tried to be proven true doesn’t tell you anything? No, I suppose not. That would require thinking.

    And giving the accuser an opportunity to prove the charges or to apologize, all at the total expense of the accused doesn’t count either?

    The more I hear about this, the more I see that there are a lot of really stupid posters on here. But reacting thoughtlessly is far easier than comprehending and thinking, isn’t it?

  336. James Smith João Pessoa:

    You got a comment deleted because you were being an aggressive dickhead to one of the other commenters, and I don’t appreciate that. Beyond that, see the comment policy; it should help you understand who I moderate and why. And quite obviously, if you don’t like it, don’t comment here.

  337. [Deleted because James Smith João Pessoa clearly doesn’t understand that just because he wants to be an asshole on my site doesn’t mean I’m obliged to let him. So now he’s done on this thread. I’ve tolerated you enough, James. Come back when you’ve learned manners — JS]

  338. I’m really tired of the dick waving. To the publishing companies and Amazon (although it isn’t just them… titles were scrubbed from the B&N site as well), I say this: put ‘em back in your pants.

    I don’t care about a behind-the-scenes pissing contest, and I loathe stupid stunts. I know that at the midnight hour on March 30th when I downloaded a Patricia Briggs’ Silver Borne (which is excellent,btw) because I just couldn’t wait to start reading it– even though I knew my reserved library copy would be available in 1-2 days at most– I checked on my pre-order of Changeless by Gail Carriger. Yep, still due out March 30th in stores and April 1st for e-book format.

    Unfortunately, I woke up to find a not-so-funny April Fool’s day surprise. No book. I spoke with an Amazon rep. and discovered it wasn’t a glitch with the format of the book that had to be fixed. There was no future date that I could expect the book given. I contacted Orbit publishing. They wouldn’t comment or respond. And I blame them as much as Amazon, which everyone seems to be hating on. (Both parties need to man up and quit with the pissing contests.)

    If I knew that it wouldn’t be hurting the author, I would have cancelled my order for the book — and I was mad enough to do it, but it had been past 7 days so I couldn’t return my kindle version of Soulless — the marvellous first book in this particular series. So, I might as well tough it out. (note- I had already read it via the library. I only purchased the ebook version so I could have the set.)

    My opinion for what it is worth — as I can’t figure out what all the in-fighting and bickering is about:

    > e-books are not hurting the sales of hardcover books as much as publishing houses want to believe. If I collect a book in hardcover, I will buy the book in hardcover. If not, I get it from the library and wait to buy it in paperback. The alternative, which actually would help sales— as the ebook price of just released hardcovers is higher than the paperback price would be when released— is to buy the e-book.

    > e-books should not cost as much as a regular book as I cannot loan it out, sell it or trade it or donate it later. They have less value. No chance of getting it signed by the author or admire the cover artwork.

    > If the publisher’s want to set a later date for the e-book version, fine… but don’t keep switching it or delaying it. Or make it available for the same day at the same price (if it is paperback anyway)… whatever. *I still cling to my above belief about pricing.

    > I don’t really buy e-books to save money (at least not for paperback copies) as I can get them easily and at a better price than the list price, usually. It is to save space – both in my home and in my suitcase.

    For the record, I buy books in all formats: hardcover, paperback, kindle format, and audio. I even own many series in multiple formats. I have no interest in the iPad as I want an non-backlit e-reader not a hand-held computer. I mostly read Urban Fantasy, but I will now search out something by Mr. Scalzi to read. Thank-you for letting me rant. Have a nice day.
    —DEW—

  339. This most recent piece of idiocy seems to be coming from the publishers, as it is affecting many venues, not just Amazon (Fictionwise, Diesel, B+N, Sony have all been identified.

    Apparently, as a result of the terms under which the iPad and iBooks are operating, the prices at which their books can be sold to other mediums is restricted and new contracts need to go into place. This has not been reported on as widely as the Amazon issue (yet), so if anyone has other details please advise..

  340. Mr. Scalzi,

    I love your books. I want you to be fairly compensated for your work.

    But I won’t go back to paper format. And Amazon, for all its warts, is my favorite place to shop. I love my Kindle, and I will find ebooks to read on it. I hope they will include yours.

    a sincere fan,
    doug baxter

  341. I heartily agree with what Dana said in comment #385. I had not paid too much attention to the publisher’s in this regard before but they now have my full attention particularly Macmillan, HarperCollins, Simon and Schuster, Hachette Book Group and all their subsidiaries. I have a Kindle. I find that it is much better for reading and does not irritate migraines as the Ipad can do. The Ipad and Nook are already appearing to have DRM issues as well different from what we were originally told. What a surprise.

    I am an avid book reader and collector personally as is all my family. I also impact students and their reading as an educator and librarian.
    I support the authors and I like to support independent book stores.

    The reality with the ereaders is we don’t own the books, they are licensed to us and not permanently when you read the licenses. I buy them or lease them for space, to quickly access new releases before I can get to the book store to buy the hardcovers which I will still also buy to have permanently, for travel, and for checking out new authors and titles for review before recommending them for library purchases or for personal purchases in physical paperback or hardback format. Since the e-versions are licensed, I do have a problem with the huge over-pricing, lac of access, and control issues I now see going on a result of the publisher agency model politicking and politicking by Steve Jobs with Apple and Bezos with Amazon. And I am a big consumer of products of all of these groups.

    I have also noticed faulty tax formula software collections overcharging by a half penny in sales tax by the agency model publisher groups in internet sales and now that they have my attention I am ready to bring them all to the attention of my city’s mayor in Houston and to the state comptroller and get audits done to make sure our state and city are getting proper tax revenues sent from these groups. I am also going to be giving an earful to the publishers and Apple. Have already done so for three to four hours worth to amazon at higher levels. I will also be contacting all my favorite authors represented by these publishers who are now causing me problems at times accessing author work and trying to control and play political games at pricing and marketing but also doing so very inconsistently and playing all kinds of favoritism games rather than using good business practices. I also am researching LibreDigital to see if they have a role in some of this with marketing ploys on driving up prices of internet sales on collusion with the afore-mentioned publishing houses four of which are their clients in marketing and using software for digitalizing ebook services and business practices, according to the LibreDigital website. Well now you have some of your readers’ attention like mine… It was not a smart thing to do.

  342. Pardon my lack of editing in my previous post. I did have a few typos and errors. My apologies.

  343. It’s almost May and this fight is STILL going on. The only people getting screwed here are the authors and consumers.

  344. Wow! I guess ignorance is bliss, and I mean my own as well. I hope all works out well for you with this FUBAR situation by Amazon. My family buys a ton of books from them, including textbooks for nursing school… we will NOT, however, be buying anything from them until they fully restore their entire list of books to the server. As an aspiring writer (yes, I sent in my entry) it is enlightening to read many of your responses on this thread. I feel a little bit of solidarity on this issue would be nice, and I realize you haven’t called for a boycott or anything, still, I just discovered Old Man’s War and am excited to read all of your books ASAP.
    I think the point some people are missing is, it wasn’t a matter of agreeing with one side or the other, but more so that Amazon did it in a sneaky manner, giving no fair warning to the people who create the product Amazons sells; namely, the authors.
    That being said, please don’t hate my grammar, etc…lol.. I don’t edit…

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