Dear Consumers Who Apparently Think the Current Drama Surrounding eBooks is Like a Football Game

Please stop, seriously. You’re driving me a little bit nuts.

Amazon is not on your side. Neither is Apple, or Barnes & Noble, or Google, or Penguin or Macmillan. These are all corporations, not sports teams, and with the exception of Macmillan, they are publicly owned. They have a fiduciary duty to their shareholders to maximize value. You are the means to that, not the end. The side these companies are on is their own side, and the side of their shareholders. This self-interest doesn’t make them evil. It makes them corporations.

Amazon wants you to stay in their electronic ecosystem for buying ebooks (and music, and movies, and apps and games). So does Apple, Barnes & Noble and Google. None of them are interested in sharing you with anyone else, ever. Publishers, alternately, are interested in having as many online retailers as possible, each doing business with them on terms as advantageous to the publishers as possible. All of them will work for their own ends to achieve their goals. Sometimes, their corporate goals will work in your immediate personal interest. Sometimes they will not.

At all times, the public-facing goals of these corporations are only a small number of their total goals. It’s the goals that don’t affect you (or don’t obviously affect you) that will often have the most significant long-term implications.

Each of these companies are interested in making it appear that they are on your side, or at the very least, will wish to validate your choice to be on their side. Please be smarter than that. Recognize that they love you for your money. Recognize that they have entire corporate departments at their disposal to distract you from the fact that they love you for your money. Recognize that they are happy to use your desire for affiliation to help further goals that not only are you not necessarily aware of, but ultimately may not be in your interest. Recognize that things these corporations do that you see as immediate gains can lead to long-term losses, and vice versa.

In other words, ditch the simplistic binary framing. You’re not watching a sporting event, with simple rules and clear-cut goals. It really is more complicated than that, and your understanding of it should reflect that. When you reduce the players and tactics down to a simple “us vs. them” framing, you lose a lot of the reality of the situation. You also look like you’re not actually following what’s really going on.

(Disclosures: I publish with Macmillan and with Penguin and with Amazon. I am sold by Amazon and Apple and Barnes & Noble and Google and Macmillan and Penguin, the latter two of which have retail fulfillment through their company Web sites. I own a Nook, an Android Phone, an iPod and an iPad. All of these disclosures may indicate why I have increasingly little patience for binary framing.)

91 thoughts on “Dear Consumers Who Apparently Think the Current Drama Surrounding eBooks is Like a Football Game

  1. As an addendum, I would note that the Department of Justice, which is suing Apple, Macmillan and Penguin for collusion, is ostensibly on your side as a consumer. Whether its actions represent a net gain for consumers in the long run will be a matter of considerable debate for some time.

  2. I don’t think they’d sue without some kind of substantive evidence. No administration’s Department of Justice wants to look foolish. For that reason (that is, I’m an Obama supporter) I hope the present Department has something solid.

  3. But corporations are People! (Wait, so was Soylent Green…But that’s digression fodder for another time.)
    Are you implying that these “people” are sociopathic?

  4. John,

    I am more concerned with where ebooks and libraries are headed as i have seen a couple of articles recently that indicate publishers may become more restrictive or eliminate books from library lending. Do you have any thoughts on that issue?

  5. Thank you. So, so well said. My fiduciary concern is with my wallet and the income I spent is on items that I like and authors that I prefer, NOT on what the publishers or the corporations determine. Believe me, if I can find a cheaper option, I always will. So, as a whole that’s where my allegiances lie, not on a particular company, e-reader, device, method, software, etc., etc., etc.

    Of course, in my book, er…(in my house), your books are still on my shelf… That did not come out right, but you know what I mean.

  6. OK. So now you have forced me to reveal my own lack of intelligence because your point is lost to me. Of course these corporations want to make money. So don’t we all. I am just not sure where you wanted to take me with your argument. By the way I own and have read with great delight all of your books and truly enjoy your blog. Thank you.

  7. Indeed. The whole ebook pricing thing is about what it’s all always been about: big corporatations seeking to maximize their profits and advance their self-interest.

    As a writer who does business with some of these corporations, and as a consumer who enjoys products from all of them, I am not a factor in any of this, none of them are my friends or my champions, and although their decisions and actions often affect me, they are not thinking about me, for good or ill, when making decisions or taking action.

    I just keep shaking my head at all the people framing this situation emotionally, ideologically, and/or in a “hero vs villain” perspective. In the words of the Corleones, it’s just business.

  8. Loyalty to brand is replacing loyalty to nation, ethnic group and religion. That’s probably why people get so worked up about this stuff.

  9. But who should we root for then? If 24 hour new coverage has taught us anything it is that when something big is going on where we don’t have all the facts, that we should cheer for someone.

    As always the clear winner in something like this is the lawyers.

    While I was able to purchase books cheaper prior to the ‘agency deals’, my selection was inferior. Now I find the prices are still quite reasonable, and I can purchase a wider selection of books I’m intererested in. My main concern is that it still remains possible for writers to write books I’m interested in, and to receive a fair compensation for that effort, that is where my interests lie. As prices change, I just adjust my purchases to fit my budget.

  10. Amen, Mr. Scalzi! If the managements of companies I contract for are price-fixing in violation of the law, I want them to be held accountable for it. If the managements of companies I regularly buy lots of products from are price-fixing in violation of the law, I want them to be held accountable for it. I think every single writer I know (or know only in the pixel-world, like you) feels the same way.

    But I also want a lot less of the uninformed chat from the peanut gallery, especially from those peanuts who think they know more about the profession I’ve worked in for 25+ years than I do because they read something on someone’s website once.

  11. Gottacook:

    “I don’t think they’d sue without some kind of substantive evidence.”

    Go look up what happened to the DOJ in 1982 when the DOJ brought suit against IBM (or, in 2001, when it did the same with Microsoft). Not every suit brought has merit (or, alternately if it has merit, meets a certain legal standard for action).

    Kurt Hayes:

    As all this is self-evident to you, my kvetch does not apply to you. Which makes me happy.

  12. Hmmmm. Good points. I root for noone.

    But I do get peeved that back catalog titles all got jacked up once Apple got their way. They knew they could not go head to head with Amazon on pricing with the wholesale model. So they got it changed so they would not have to compete. And that’s weak, IMHO. Illegal? Dunno, that’s for the lawyers.

  13. To the extent that I care about this as a consumer, the main thing in my mind is that Amazon would be very happy to see physical bookstores go the way of the dodo, and I like physical bookstores. Ergo, when Amazon underprices its ebooks (to the point of losing money on them) in an effort to move more consumers to the Kindle, I see this as Amazon strong-arming its way toward a result that I personally don’t like.

    To the extent that I care about this as a writer, I’m interested in a marketplace in which there are multiple viable pathways to publishing. I want to see large traditional publishers, small press, and self publishers all thrive. This may not be possible, but in general, I see my own preferences as slightly more in line with the publishers’. Amazon’s behavior suggests that they would be willing to spend whatever it takes to muscle everyone else out of the publishing/bookselling business, and in general, I see this as a bad thing.

    Of course, you shouldn’t root for one side or another because you see one side as the good guy and one side as the bad guy, but if you look at the situation and form an opinion based on the behavior of the parties involved, and a general desire for where you’d like the publishing industry to be, is that really “binary thinking”?

  14. I left a comment on http://www.macmillan-speaks.com/2012/04/11/a-message-from-john-sargent-3/ and it’s awaiting moderation (sic). So, I shall copy/paste.

    April 12, 2012 at 7:19 pm
    I have a word for you people and I shall capitalize it so you know I’m serious. BAEN! This is how you do ebooks. No excuses, no DRM, any device and… no amazon (B&N, Apple, etc.). They are seriously doing it right and will be standing in the ashes selling books. Treat your customers right and not like thieves and you’ll do fine.

    I love John’s (and a lot of others work) but principals are principals dammit and I won’t budge.. Baen is the best for consumers.

  15. That it’s so complicated is one of the very reasons why it’s so frustrating that the DOJ actions here are so one-sided. All this seems to do is open the floodgates for Amazon to price dump again, with the further step of turning the publishers which have accepted the settlement into the contractual instruments of their own slow demise, providing Amazon the product which Amazon will sell below cost.

    Are any of these possible actions the publishers can take, since apparently they are barred from setting a minimum retail price (which Amazon is allowed to do with its own products, such as Kindles in Best Buy, etc.) or setting up favored pricing agreements (which Amazon is allowed to do, and in fact being able to lower prices to match is part of its default KDP contracts) or this area of “retaliation”:

    1. Say fine, if you want to sell e-books at paperback prices, we won’t be able to release the e-book at all until the paperback is out, or at least until after the initial hardcover sales period is over
    2. Stop doing e-book business with Amazon at all (example: Baen, Pottermore, etc.)

    Re: “They knew they could not go head to head with Amazon on pricing with the wholesale model.” — Well, gee, it’s hard to compete with losing money on each sale. That’s why predatory pricing is illegal in lots of places.

  16. Kurt, if John’s point is lost on you, I venture to suggest that it’s not because of a lack of intelligence, but rather because you probably have better things to do with your time: There’s been much discussion all over the internet, publicly and privately, for the past day or two about the DoJ case, and much of it is framed on the erroneous assumption that this is a good guy vs bad guy scenario; that Amazon is the champion of the writers/readers and Apple+5 are their enemies, or vice versa; or trying to figure out which of these entities is on “our” side and which is not, blah blah blah.

    In terms of ebook pricing, I agree with John: corporations were pursuing their own various business interests, period.

    In terms of the DoJ: Yes, this may be about protecting consumers, but I’m not convinced. I suspect this is more about Apple than it is about publishers or ebooks. (When has anyone ever cared what publishers do? Had DoJ ever even -heard- of Hachette before it started doing business with Apple?) I think DoJ pursuing Apple in this matter could conceivably be like the feds getting Lucky Luciano on tax evasion; it may not be what they REALLY wanted him for, but it was what they could get him on.

  17. There are complexities here, but the motivations aren’t necessarily hard to parse. The large publishers really want two things: 1) To defend their higher margin physical book business, which is very difficult when the price of the ebook is dramatically lower than the hardback–so they REALLY want ebook prices more in line with hardback prices. 2) To limit the power of Amazon, as they have a deep fear of the power Amazon brings to bear in future negotiations due to their market share.

    The pricing thing is probably more important of the two. As publicly-held companies, clinging to those analog dollars rather than give in to digital dimes (to use Jordan Zucker’s term) is extremely important. Otherwise their operating margins drop, and, well, that’s not pretty on Wall Street.

    Amazon is certainly no angel, but is it fair to complain that Amazon is discounting an ebook bestseller 25-30% when Barnes & Noble is discounting the harback by 40%? In both cases the publishers still get their money. Of course, this goes back to my first point: Discounting an already cheaper ebook puts the hardback business of established publishing houses in real jeapordy. (Publishers themselves predict hardback sales to decrease at least 5% this year).

    So this is not a case of one evil versus another evil or one evil company against one angelic one. This is the case of an aggressive digital business having conflicting goals with an established legacy business. We’ve seen this before–in the newspaper business, the music industry, and it’s happening now in Hollywood. Of course Hollywood’s solution is to hold back digital releases (for the most part) until they make their theater and DVD sales. Publishers would probably love embracing the Hollywood strategy of a delayed digital release (and they have a history of that via paperbacks, too), but it appears that ship has already saled.

    Regardless, Hollywood is under immense pressure to shorten to day & date releases of digital movies from consumers, so even that solution would probably have been difficult for publishers in the long run. And that’s probably the biggest takeaway in my mind–what we’re seeing is entirely natural. As I said, this is the tumult of a legacy business trying to navigate digital waters. It’s always going to be full of anger and misunderstanding.

    I remember watching the president of Buena Vista Distribution at CES basically throwing up his hands when asked about how to maximize profits in a business with DVDs, movie theaters, VOD, subscription delivery, and cable releases. He said that every move, every single move, to bring common sense to these schedules led to Disney losing money. So the default was to move slowly and carefully He didn’t say it, but I felt his “slowlly and carefully” would probably be defined by most people as “not moving at all.”

    I think if we really want to help consumers, limit Amazon, and disrupt ebooks in a healthy way, we should put all our attention into attacking DRM and a lack of cross-platform standards rather than Amazon or publishers.

    Disclosure: In the past month I’ve bought hardbacks, paperbacks, an emagazine subscription via Amazon, an ebook via Barnes & Noble, an emagazine subscription via Weightless Books.

    And I wrote a few stories.

  18. @A Wallace:

    Baen books is how I got started reading ebooks, they’ve been doing ebooks LONG before Kindle, I’m not sure when they started, somewhere around 2000.

    I sure that all the major players are aware of Baen, however they have reasons to not follow that model. I really don’t know why not, but I suspect right now despite a FAR superior service model, Baen books on their private ebook site are not getting the same exposure as Amazon Kindle books. They are probably worried about casual sharing and wish to keep that low (true pirates aren’t hurt by DRM at all).

    If you really want to take a look at a positive move towards a better model by a truly major player, look at J.K. Rowling. She actually seems to be following the Baen model in terms of policies, but used her superior leverage to get deals with Amazon & Barnes and Noble.

  19. Re: A Wallace: “BAEN”

    Here’s the thing — I also think they’re doing it the right way, absolutely, but they are also perhaps the very definition of a special case, with a dedicated fanbase for Baen as a brand. (Side note: Wouldn’t it be cool if Amazon would link to Baen’s external ebook store to sell ebooks, like Amazon now does for Pottermore? Instead of pretending those e-books don’t exist, as it now does for all of the IPG e-books?)

    But when people bring up Baen’s $6 e-book pricing as an example of a publisher who isn’t so greedy as those evil publishers and their $15 e-books, I do have to point out that Baen also sells $15 e-books: http://www.baenebooks.com/p-1626-no-going-back-earc.aspx

  20. I am increasingly dependent on ebooks if I am going to read, because my vision is fading. I would rather not pay more than I must, as a consumer. Yet, I want my favorite authors to keep producing more of my drug of choice, which means I want to pay a fair price.

    On the other hand, I own stock in Apple, write about Apple technology, make ebooks for others in a variety of formats, and my royalties are tied to the price of the book in question.

    Bluntly put, I make more money under the agency model.

    Moreover, the role of the author in the DOJ filing is noticeably missing. They seem to be laboring under the impression that the author drops off a ms. and is paid by the retailer. The language in the three documents seems startlingly derived from the Kindle boards, with it’s hostile references to gatekeepers, bricks and mortar stores, and traditional publishing. These are all linguistic markers. The DOJ seems to be missing the point that authors are paid royalties, and that royalties are tied to the price of books, and that books are not all interchangeable widgets; books are not commodities. I am not interested in any old book, but in particular books, and I am willing to pay for them.

  21. Understood. As a reader, I’m kinda fed up with all of them. I didn’t like Amazon’s ham-fisted publisher bullying, their occasional “mistake” that removes thousands of books from their catalogs, or their purchase and deliberate abandonment of possibly the best multi-format ebook reading app (Stanza) to force more people to stay in their garden. I didn’t like the publishers’ insistence on keeping ebook prices unreasonably high — proper level is obviously debatable but I maintain it should not be equal or higher than the hardcover price, especially when the paperback comes out — or the amazing lack of quality-control for those prices.

    Mainly what the battles do is make me want to buy more ebooks directly from the author. And when I can, I do.

  22. I kind of wonder if the DOJ just thought it had a chance to be the “good guy” here– its image has been tarnished lately (fairly or unfairly) by various scandals and analyses of dubious worth. So a chance to fight for Lower Prices might have seemed like a fairly straightforward thing, if you ignore or gloss over the complexities of the situation (as the news media tends to do).

  23. re. DOJ

    The DOJ’s job is to represent the consumer, not the authors, the publishers, or the distributor. In their view, any collusion to keep prices high hurts consumers. You could argue whether that is true or not, but that is the operating imperative of these kinds of *consumer* protection laws.

  24. This argument extends, of course, to the second-oldest profession, and it is approximately as applicable.

  25. Not joining the digital age. Sticking with the treebooks from the legacy publishers for the balance of my days on this orb. Been staring at screens for decades of my worklife. Yep, all the way back into the seventies. Late sixties when the “screens” were teletype terminal printouts. No desire to read anything electronically, save for this blog, MS.Com for news, and a few emails now and then. So, are the digital publishers not playing nice, or are they just being corporations doing their fiduciary duty to their shareholders? John, you seem to suggest the latter. And Amazon? Big market share, but has Amazon ever really put any significant profits on the bottom line and paid dividents of note? Last I heard, they have not. My biggest worry is that the digital side of the publishing business will put the legacy treebook side of the business out of business before I am six-feet under. What think ye? How many more years of treebook stores can I count on before they fade into history?

  26. Gary, there will most likely be physical books for quite a long time. Now whether you’ll be able to buy them from a local store or will have to order them via a POD or limited inventory storefront online is another question.

  27. Sony, my friends.
    I have a sony ereader and can read any kind of ebook – with the fine exception of the proprietary Apple/Amazon – luckily, Sony has all the books I like. I also buy straight from Tor.I can check out ebooks from the Seattle Public Library too.

  28. Hey, Scalzi, aren’t you a player on one of the teams? Maybe not a starter, but a solid role-player for one of the big teams in this drama?

  29. blarkon says:
    “Loyalty to brand is replacing loyalty to nation, ethnic group and religion. That’s probably why people get so worked up about this stuff.”

    On the plus side, no brand wars have gone nuclear. On the other side, the collateral damage is still pretty bad.

  30. In a legal action, rooting for a side doesn’t matter much. Hopefully the evidence and the law will support a just result.

    It would be ridiculous to have to choose a Blu-Ray player that could only play discs from a particular store. I don’t have object to the idea of copy protection per se, I just object to availability of content being limited by what hardware I buy, because I expect to buy new hardware in a year or three. Publishers might actually do better to sell DRM-free books and let people read them on whatever hardware they choose.

  31. Regardless of which companies eco-system you subscribe to, the big problem with the digital age is the subversion of the concept of copyright to protect the walled gardens of major media companies. The subversion of copyright is done by tying it to DRM and making it illegal to break a digital lock even if the purpose of breaking that lock is ostensibly for fair use purposes. Want to rip a DVD to watch it on an Android tablet, congratulations you just violated the DCMA. Want to watch a Blu-ray you purchased on Linux, whoops there you go again breaking the law.

    Copyright needs to be fair to both producers and consumers of content, right now it is far more weighted towards producers IMHO. Consumers should have rights to time shift and format shift legally purchased content, not giving consumers this ability stifles innovation.

  32. As with most things these days (maybe always has been), it’s all one giant dirty game and every player is as corrupt as they can get away with.

    The DOJ has it’s own reasons for its efforts – which don’t include putting any of us first. They are looking out for the consumer? Really? Seriously?

  33. Mine Host: “…in 1982 when the DOJ brought suit against IBM” isn’t correct – that’s the year the antitrust suit that had been brought by the Johnson administration’s justice department during its last days (January 17, 1969) was finally abandoned after 13 years by the Reagan administration’s justice department (January 8, 1982). See the “background note” at http://www.hagley.org/library/collections/manuscripts/findingaids/ibmantitrustpart2.ACC1980.htm.

  34. There are many moral demands that might effect an effort to maximize investment. Many people demand that corporations engage in certain behaviors before being willing to buy from them, or people will boycott certain companies that do not meet concerns that go beyond what is purely legal. We may be more likely to support corporations that engage in philanthropy that we also support. We might not engage in business with a corporation that is following the letter but not the spirit of the law.

    This is because we consider a certain value in human society, from other people and through the tools like corporations that are created by them. We demand ethical behavior, and most corporations spend lots both buffing their image and trying to do good because of it.

    Surprisingly, sometimes people within corporations, may actually use that structure to better meet their own ends than that of the shareholder. They will give the shareholder enough to make them happy, but often accepting a certain level of non-maxized profit. Sometimes these may not even be completely egocentric but actually altruistic.

    To let it lie with a maximization of profit, it just a grotesque model of the way corporations work. It is economics without humanity. It might be the theoretical ideal but it is seldom the truth.

  35. I’d say the DoJ isn’t on the customer’s side, with this one. The government is on its own side. I’ve seen too much abuse of the law by state and federal lawyers to say anything other than, “I hope they don’t send people to jail over this.” Section 1001 allows the government to send anyone to jail that a DA wants to send to jail.

    http://library.findlaw.com/2004/May/11/147945.html

  36. John, I think the DOJ anti-trust suit against IBM is a bad example. IBM settled an anti-trust lawsuit with Control Data in 1973 out of court. IBM had nearly put Control Data out of business in the late 1960s by falsely telling customers they were about to release a faster computer than the one Control Data had actually released. Part of the settlement was that Control Data could not give DOJ the index to their evidence. I suppose the Reagan administration also played a factor in dropping the case, it had been going on for 13 years, with a company obviously not willing to settle. The suit effectively prevented IBM’s predatory behaviour during the time the lawsuit was active, and by the time the DOJ dropped the case, the entire computer market had changed dramatically.

    I’m not a big fan of Amazon, I don’t own a Kindle, and I don’t like how their ebook platforms make it hard for their customers to buy from anyone else. At the same time, I’m no fan of the agency 5 publishers because I believe their ebooks became dramatically more expensive for me because I could no longer buy their books heavily discounted during Fictionwise’s great sales. That, and I lost several books because I thought I had bulk downloaded them from Fictionwise when I actually had not, and didn’t realize it until after they were no longer available due to issues between Fictionwise and the ebook distributers after 4/1/10. (Yes, I realize I am to blame for not noticing, and Fictionwise/B&N is to blame for not signing new contracts with the publishers after 4/1, but I’d probably still have access to them all if the publishers hadn’t changed their marketing contracts.)

    About the only positive thing I can say about the agency model is that after it went in place, the publishers who were dragging their feet, especially your publisher Macmillan (Tor), finally started releasing ebook editions for all new book releases. That, and some of the ebooks which were priced at parity with the hardcover long after the MMPB was released finally dropped to MMPB prices.

  37. Though all of what you said is unreservedly true, you’re missing a subtle but important nuance: While none of the publishing houses, booksellers or even the Justice Department is “on my team,” I can still be a fan of one of them.

    In my case, specifically, it’s Amazon. I’m aware they want to keep me in the ecosystem, and I’m also aware that the terms Amazon wants to set will likely injure, cripple or perhaps even kill the publishing houses. However, in the time I’ve been giving them my business (nearly 10 years now), and especially since I bought my first Kindle about a year after they first came out, Amazon has acted in ways that benefit me.

    I’m in no way convinced they’re entirely on my side — I know it’s a business and Amazon’s primary goal is to make money. But, as the business that deals directly with me, Amazon seems to have my interests in mind to a far greater extent than the publishing houses. I don’t want to see authors destitute and I don’t necessarily want publishing houses crushed by the almighty foot of Amazon, but as a newspaper editor I feel about them the same way I do about my own company at times. That is, it’s time to actually figure out what your product is, what your audience is, and find a way to your business to it.

    I must confess to having almost NEVER paid the full price for a hardback book. In my mind, the proper price for a book hovers around $14-$15, trade paperback range. That was the price established for me, and it seemed consistent with hardcover pricing ($25-$30). When I first started buying ebooks after I acquired my Kindle, the $10 price again seemed to be exactly the right price. The fairly consistent difference between the hardcover and softcover prices implied the reason was physical — hardcovers are studier and therefore cost more. Thus, since there was no physical manifestation of the book, it should be cheaper than the softcover. When agency pricing was established, I found myself buying fewer and fewer ebooks unless they were the select few that still hung around the $10 mark.

    So while I’m aware this isn’t the only field everyone’s playing on, this also IS a binary sporting event, and in this case I’m rooting for the home team. It doesn’t mean I necessarily like the moves the front office is making, I also still want to see the outcome on the field that pleases me most. In this case, that’s Amazon allowing me to buy more books for less.

  38. Improbable Joe @ 10:49 pm: In the acknowledgments of many of Scalzi’s books–perhaps all of them?–he thanks his agent. I imagine that guy’s job exists because while Scalzi and his publisher’s interests align to a large extent, they aren’t exactly the same.

    Alex @ 11:13 pm:

    In a legal action, rooting for a side doesn’t matter much. Hopefully the evidence and the law will support a just result.

    That’s what is both amusing and annoying about these discussions: People decide what to believe about the factual allegations in the lawsuit based on the side they’ve taken. It’s as though, once you determine (for example) that the publishers’ interests align more closely with your own than Amazon’s, that makes it impossible for the publishers to have broken the law here.

  39. I use amazon because they are convenient and don’t hate their customers. They have no DRM so I can put my purchased music on any device, and their Kindle app can be used on my iPad and my phone. Price is less of a concern than is being locked down to one device or one company. BTW even though my last 20 or so books have been digital I still prefer paper and ink, but my laziness combined with want-it-now-edness has lead me to eBooks ….. Even though less time is spent reading because now I can surf the interwebs with my book device.

  40. I don’t care if they’re “on my side” or not, they provide me an invaluable service while pursuing their own, selfish ends. And that’s how the real world works.

  41. You’re dreaming if you think Amazon’s Kindle books are DRM free o.O. That’s actually my biggest beef with ebooks… Please. Save in proprietary format if you wish (there will always be hackers who can break them, I’m not really worried about that). What I really resent is when it’s made nearly impossible to store back up copies of ebooks you have paid good money for. If you do not have a Mac or a PC (I have Linux), it is nearly impossible to /just/ download a copy of your kindle books to have a backup in case your ereader goes POOF and/or your account gets closed out, or any of a half dozen things. I can read my Kindle books, but I can’t save copies of them. (I may break out my friend’s Mac and see what I can do.)

    That’s the kind of thing that drives me away from and toward other vendors to see what my options are. Please, let me download my own copies without regard to the presence of a reader. Make it easy for me to pay, dl, and start reading, even though I have a Linux. Let me store my own back up copies. Etc.

    I think it’s best that there’s a variety of options out there, because I shudder to think of how limited it would be if it was only [Insert your favorite/most hated company] selling ebooks…

  42. @dasherman: You wrote what I was thinking, though more eloquently than I could manage.

    Amazon are not saints, but they’re also not trying to subvert an emerging industry in order to preserve an existing cash cow. They’re not even trying to subvert an existing industry, they’re advancing a new one, albeit trying to score a monopoly.

    We’ve seen this play out over and over to the detriment of consumers, and so far only the music industry seems to have moved past their hissy fit and given people (mostly) what they want. I can go to several different online music stores and buy MP3s of music for a reasonable price. I can play those MP3s wherever I want. I can back them up how I want. I am confident that in 50 years time, I’ll still be able to listen to them. They’ll be archaic in one way or another, but I am not concerned about the longevity of the product I’m buying. They’re the same as CDs, only smaller, easier, faster, and cheaper for everyone.

    If the publishers were fighting for an open standard with no DRM and with a promise that buying an ebook gave customers the same rights as buying a paper book, I’d be on their side. They’d be trying to do what people want. They’d be preserving the status quo, both in rights and price. But that’s not what they want. As far as I can tell, the publishing industry is hoping to keep prices the same while eliminating fair use.

    They force the use of DRM. I can’t lend books to my friends. I have absolutely no confidence that I’ll be able to read my books in 50 years. I treat ebooks as throwaway reading – good for one read, and if I get anything more out of it in the future I’ll feel lucky. Why should I pay the same amount for that as a hardcover book?, They’ve got a lot of gall trying to charge the same amount for a bucket of bits with zero marginal cost as they do for a physical book that’s nicely bound and made of real materials and must be shipped around and needs complex inventory management.

    I’d ignore ebooks entirely if it weren’t for the fact that they *are* better in some ways. They’re smaller, easier to carry around, more convenient, and better for the vision impaired. I love ebooks. There’s no reason for them not to be superior to paper books in almost every way, if it weren’t for greed.

    Why treat customers like this? It never works out well in the end.

    Note that I’m not opposed to DRM as a concept, as long as it provides me with a product that’s superior despite the controls. For example, I buy games on Steam all the time. Steam gives enormous advantages over buying a box in a store, and so I happily trade my first sale doctrine rights for the benefits.

  43. We can only trust in Scalzi! Also thanks for demonstrating why the us vs. them mentality sucks.

  44. It’s like saying “John Scalzi is not on your side. He has a fiduciary duty to his family to maximize profit from his books and other writings.”

    So?

  45. Is it OK if I root for the lawyers?

    Keep it tied up in court as long as possible, and drain all these corporations of as much money as possible.

    Plus, I work for a law firm, and most of the lawyers I know are good people.

  46. Woo! That’s a hot and spicy-flavored rant, and it may be regretted tomorrow. Tasty and interesting dish, though. People do tend to have an unfortunate tendency towards binary. You can lead them into making entirely wrong decisions by framing the appropriate binary question. You should start by questioning the questions.

  47. I can understand people who tend towards binary opposition being a fellow human and all, but for the life of me I can’t understand those who take peverse joy in imagining entire industries being ‘destroyed’. Especially when ‘destroyed’ really equates to ‘still exists, just survivng on an even thinner margin than before.’

  48. A very well-written article John, thanks for adding your perspective.

    I think this suit is not about consumer protection, it’s about the DoJ focusing the power of the government on a part of commercial sector that is successful and not beholden to the government.

    “Tutto nello Stato, niente al di fuori dello Stato, nulla contro lo Stato”

    In any case, I love Baen ebooks, the site has caused me to purchase or borrow many books from my local library. I purchase a lot of books from my local bookstore, because I love having them within walking distance and hope to have them arond for years to come.

    I will eventually buy an e-reader, but I am hesitant to buy the equivalent of the Betamax. thanks for the tip about the Sony.

  49. “Recognize that they love you for your money.”

    That’s okay. I love them for their stuff. And I willingly give them money to allow that stuff to continue existing (which, in my mind, means that significant chunks of that money needs to go to authors, copyeditors, editors, agents, cover artists, etc. in addition to the publisher and retailer). I’m usually willing to pay more than the minimum price to try to ensure there’s enough profit to encourage everyone involved to continue making more of that product. (And when I want to pay the minimum price, well, that’s what library book sales and used book stores are for.)

  50. Not to nit pick but sports teams are not on your side either. Despite the NFL being offically a non-profit orginization (!!! yes, it is!) all sports teams are for the enrichment of the owners wallets and egos. They care less about you than Apple, or Barnes & Noble, or Google, or Penguin or Macmillan. Oh sure, they will wear a uniform proclaiming some geographical connection but unless they need 100′s of millions for a new stadium/arena they could just as well be in Tanzania.

  51. @Clarence Rutherford:
    Except for the GB Packers. They’re owned by the city.

    Onpoint:
    Get rid of the agency model. Allow retailers to compete, however, REQUIRE them to only put an approved agency model DRM. No proprietary formats. The power Amazon has now is because if you own a Kindle and you’ve purchased 25 books, you’ll lose 25 books on switching to a competitor. So, you never, ever switch.

    Of course, the complete destruction of DRM would be better, but I know that isn’t happening anytime soon. It took years for the music industry to realize the waste of money – it’ll take the publishing industry just as long.

  52. Lauren and also Aunti Laura

    “I am more concerned with where ebooks and libraries are headed as i have seen a couple of articles recently that indicate publishers may become more restrictive or eliminate books from library lending. Do you have any thoughts on that issue?”

    It is not that publishers “may become more restrictive or eliminate books from library lending,” they already have. For example, no library in the world can buy one of John Scalzi’s ebooks (except for Book of the Dumb) to lend to their customers as his publisher refuses to sell ebooks to libraries. So yes, I am interested in his thoughts on that issue as well.

  53. I agree with everything stated. My concern for it all is ME. I want ebook prices to go back down to where they were and stay there. If the prices continue to right I will return to buying my books from second hand bookstores (Half Price Books) which will benefit neither authors or publishers. Because of low ebook prices I will may times buy from Amazon a ebook that I could readily get a couple dollars cheaper secondhand which puts money in the pockets of authors and publishers. But raise then a few dollars more and I will go back to used books. It really is that simple for me.

  54. Yes, sports teams are profit seeking enterprises. They are not on the fans’ side. They love fans for their money. The team itself is there to distract you from the fact that they love you for your money. It’s true, though, that if all you’re paying attention to is what’s on the scoreboard at the end of the game, you’re not seeing a complete picture of the competition going on in front of you.

    The difference between this and sports is deeper. Clubs in the same league may compete for a larger share of fan dollars, but at some point they have an interest in making sure other clubs survive to preserve at least a semblance of competition. A league with one team is not a league at all. This is more like the competition between leagues—each side would be perfectly happy to completely destroy the other.

    Scalzi’s right that there aren’t simple rules and clear cut goals, because what we’re talking about is not a game. It’s a war.

  55. I liked your statement, “Self-interest doesn’t make them evil.” So true. Many people today think it’s wrong to want to make money. It’s like they’ve forgotten how most of us survive!

  56. “I liked your statement, “Self-interest doesn’t make them evil.” So true. Many people today think it’s wrong to want to make money. It’s like they’ve forgotten how most of us survive!” – Us in the 99% should remember that as well.

  57. Am I a horrible consumer because I just don’t care? I enjoy my Kindle and I’ve never had a problem with any pricing Amazon has used for the 100s of books I’ve purchased. Sometimes they are 99 cents and sometimes they are $14.99 as new releases. As long as they are available I really don’t mind what pricing model anyone uses.

  58. I’m looking at how this mess is going to affect me, but my concern doesn’t end at my wallet. I’m concerned that the economics of booksellling are going to shift in ways that limit the number of books that can find traditional publishers.

    Publishers want to make money at selling books. The cheaper the book, the more copies they have to move to make a profit. So if Amazon artificially deflates the cost of books, publishers will buy fewer manuscripts, focusing only on those they know they can turn into blockbuster hits. Best-selling authors like Scalzi will probably ride out that change just fine. But mid-list authors and those who already have trouble getting their awesome books to a wide audience (such as writers of color (especially those writing from a non-western perspective) and LGBT writers) might get locked out.

    Self-publishing may be getting easier, but it’s still Hard Work, both for the authors and for the readers trying to separate the diamonds from the rough. As a reader, I want awesome writers to be able to focus on writing awesomely, and I don’t want under-represented voices to be shut out for want of the cash it’d take them to hire their own editors, copyeditors, designers, cover artists, marketing, publicists, etc.

    None of which is to say that I’m on Macmillan’s “side,” per se. But Macmillan is interested in selling books. Amazon is interested in selling Kindles. I don’t want a kindle. I do want books. And I want a publishing ecosystem that has lots of good books in it. Which, to me, makes the situation a bit more complicated than who’s offering me the cheapest books, and whether or not they’re going to continue to do so once they’ve finished their little power-play with the other giants stomping around my library.

  59. John, no argument but can you help me understand some context of the debate. What are retailer’s current powers are with hardcovers and paperbacks today? I mean, are B&N, Walmart, etc. on an agency model or do they control pricing?

  60. Some interesting thoughts throughout. About all I can say other than that I think Mr. Scalzi is fairly on-target with the direction of his missive. I doubt it will shake anyone out of their brand-loyalty trance, but I always admire someone making the effort.

  61. Annalee: “I’m concerned that the economics of booksellling are going to shift in ways that limit the number of books that can find traditional publishers… if Amazon artificially deflates the cost of books, publishers will buy fewer manuscripts, focusing only on those they know they can turn into blockbuster hits.”

    Publishers have been doing exactly this for a long time, long before Amazon.

  62. I find it hard not to turn this into an “us vs. them” situation, but that’s probably because it’s difficult for my to separate my self interest from this situation. As an employee of an independent brick’n’mortar, it often feels as though my livelihood is at stake, and it’s always because of the same goddamn company. Long story short, Apple, MacMillan, et al, may not be on my side, but Amazon is definitely against me.

    When Random House adopted the Agency model a couple of months ago, we were jumping for joy. With all of the big six on the agency model, we could FINALLY compete with Amazon. When I heard about this lawsuit, not a week later, I was honestly baffled. I have a marginally better understanding now of the grey area that the collusion case occupies, but it still seems kind of backward to me that publishers are being accused of anticompetitive practices. They’re not the ones who have been actively trying to kill my industry for years.

    So I suppose my problem isn’t that I think the lawsuit is a football game. My problem is that I think it’s a farce.

  63. Dear authors who think that… Your agent is not on your side, your editor is not on your side, your publisher is not on your side, your bookstore is not on your side, and so on, and so on.
    However, we, the customers *are*

  64. Hah, yes! I’m so tired of Good Corporations and Bad Corporations. Doesn’t anybody ready their history books? Ford Motor Company got sued by its shareholders for not maximizing profits back in the 1910s (20s?). And they won, because a corporation, as you say, has a fiduciary duty to its shareholders. Mind you, modern corporate law has shifted a bit, but corporations still exist to make money.

  65. this bit is wrong though “The side these companies are on is their own side, and the side of their shareholders. This self-interest doesn’t make them evil. ” It does make them evil, and it is also fundamentally wrong – the companies are vehicles through which the company executive realise their personal goals – the company, the shareholders, and the customers are tools to that end

  66. Greg, could you perhaps provide some reasoned arguments for your statement “It does make them evil, and it is also fundamentally wrong”? I’m not seeing the basis of your position.

  67. I’ve been thinking about this issue some more, and I wanted to add to my earlier comment. I don’t believe that B&N loves me for anything other than my money, and I also firmly believe that, given the opportunity, they would be doing exactly what Amazon is doing. On the other hand, I think consumers benefit most from a competitive market in which the competitors are effectively equal. Right now, the ebook market (I would say) is in no way competitive, so I buy from B&N as much as possible. Not because they’re a Nice Corporation, but because I want to do some small part towards making the competition more equal. I freely admit that I don’t buy enough books to tip the scale by the slightest bit by myself, but, well, that’s no reason to do nothing. :)

  68. @BW – sure, within the limits of posting replies on a blog here are some thoughts. Firstly companies have no intentional stance, they are organisational/legal/etc structures. Hence companies can take no sides, although their human constituents can and do. Secondly, companies (as structures) encourage and impose hierarchical orders on human relations that embody narrow and/or extra-human concerns. It is inevitable within such structures for people to use others as instruments for their own advantage – this is the lived experience of everyone who works within corporate structures. Furthermore corporate structure privileges those people who have no problems with identifying with non-human non-local goals and manipulating others for their own advantage. Now this would be fine if you thought the use of others as tools is both natural and necessary, but I don’t see any evidence for that position. If you think that dehumanising people is wrong and unnecessary (let’s be emotive here and say ‘evil’) then corporations as a form of social organisation are also evil as they encourage dehumanisation by their very nature.

  69. @Greg: That sounds rather akin to calling a gun evil. Death is fairly dehumanizing, after all. It’s a tool, nothing more. Calling it evil is assigning the motive of the user to the tool itself. Though I do sometimes think my computer hates me….

  70. @shannon – not really the same at all – company structures as implemented and mentioned here are of necessity dehumanising whereas guns (arguably) are not. Of course the view I express here only holds if you prefer equitable human relations and don’t like disproportionate aggregation of power and privilege within particular persons or communities.

  71. I definitely prefer to avoid equitable human relations. As a good corporate minion, I use my lunch break to go out and taunt the homeless people on the street corner. My boss gives me $100 whenever I make one cry. That’s how I paid for my second Mercedes.

    And let’s talk about disproportionate aggregation of power. All those corporations with three shareholders and $20,000 in annual sales. Whew! Gotta watch out for them, they’re vicious.

  72. Bruce: “I don’t like how their ebook platforms make it hard for their customers to buy from anyone else.”

    Sorry, that’s simply not true. Every Kindle has a publicly-available email address, and any email address that’s been approved by the Kindle owner (not Amazon) can send books to it by email. In fact, that’s exactly how Baen and many other forward-thinking publishers do it. If the book is downloaded, rather than emailed, getting it on the Kindle requires plugging in the USB cable and dragging the file over, just like a USB thumb drive (it effectively *is* a USB thumb drive at that point).

    Browneyedgirl65: “You’re dreaming if you think Amazon’s Kindle books are DRM free”

    Only if the publisher/author puts it there. That’s one of the options you get when you upload the book to the Kindle portal. If your Kindle book is encrusted with DRM, it’s because someone other than Amazon insisted on it being there.

  73. @shannon – haven’t really got a rejoinder to that level of sophistication or knowledge. i didn’t even realise that Amazon was such a small company. Please ignore my previous comments

  74. Christian@ 5:19 am:

    Your agent is not on your side

    Maybe I’m being naïve here, but I thought an agent was someone you paid to represent your interests, making it their job to be on your side.

  75. Blarkon said: Loyalty to brand is replacing loyalty to nation, ethnic group and religion. That’s probably why people get so worked up about this stuff.

    This is an easy statement to make and I might have agreed with you a year ago, but having spent 8+ months overseas in Australia, including going to two different Comic-Cons here, I’d have to say that it really isn’t the case at all. I think people in America just take for granted their American-ness (as do people in Australia or other countries take for granted their own values).

    Extra fun is trying to explain to an Australian lawyer or a pair of 70 year old grandparents why some people don’t think we should have healthcare run by the government, why we have so many guns, why Sydney has so many more Chinese people than the midwest, why you’re not as likely to have seen Jewel Stait in person if you live in the middle of the U.S., etc. And I’m not even in that foreign of a country.

  76. Annalee says: “I’m looking at how this mess is going to affect me, but my concern doesn’t end at my wallet. I’m concerned that the economics of booksellling are going to shift in ways that limit the number of books that can find traditional publishers.”

    This is going to happen no matter what the publishers do (short of somehow managing to lock up every bit and making it illegal to self-publish). The technology doesn’t favor the traditional publishing model anymore than it favors the traditional record company or newspaper. All three of these types of businesses are going to need to adjust how they work and where they make money in order to survive. I think what took them so long to realize this is the fact that they are the billion dollar industries so they didn’t understand how they need to move out of the way for a faceless competitor like the Internet.

    What I think people are leaving out of this reporting as well is that, illegal or not, the pricing tactic Apple and the publisher’s used bought them more time to adjust their businesses to compete better with Amazon. And the self interest of corporations will nearly always push them towards bending or breaking the law when they have to, even though no individual would do so on their own.

  77. I’ve seen the assertion that Amazon engages in predatory pricing, but does anyone have actual proof about this? Note that old fashioned bookstores and grocery stories have priced NYT best sellers at or below cost, in order to draw buyers into the store — but they make money via the other items that the customers buy. It’s a similar tactic that grocery stores have used when the advertise a low cost for milk in an advertising flyer. They’re betting you won’t go to one store for milk, and another store for eggs, etc.

    Amazon may be selling some books below price, but that’s not automatic proof of predatory pricing. Otherwise grocery stories which advertised loss-leaders would be guilty of predatory pricing as well, and that’s obviously silly. If Amazon is making money as a whole on books, it makes it very hard for the predatory pricing accusation to stick.

    And in fact that’s what the proposed settlement terms from the DOJ require do for ebooks — it allows resellers like Amazon to discount, so long as on a per-publisher basis, the reseller is making profit as a whole.

    Furthermore, if this is the only way to force publishers to remove DRM, or to force the stupid publishers who continue to assist Amazon by locking customers into the Kindle platform, I as a consumer will be all for it. It may put some of the publisher that some of my favorite authors work with out of business, but maybe it will cause them to change to more enlightened publishers…

  78. Hey – you all went crazy on this subject but I have to add to the crazy. Yes they are all corporations and they are out of themselves. However, when I bought my ereader I decided I wanted to support Barnes & Noble cause I like having a real bookstore to go to plus read ebooks. Amazon has no place I can touch things. So.. there you have it. Support your local or corp brick & morter bookstore

  79. @tytso 8:26 AM

    Amazon isn’t selling *some* books below cost. They are selling *all* books below cost. They can do this because they have no intention of making money on books; they get their money from shipping, advertising and non-book products. In that sense, books are a loss leader; Amazon expects to gain market share by enticing customers with cheap books, and gain revenue from those customers in other ways, outlined above.

    Despite your assertion, old fashioned bookstores CANNOT do this. The most we can do is discount a minority of high-profile titles. We don’t have Amazon’s resources because we’re bookstores, not general online marketplaces. If we tried to match their prices, we would be out of business. If we can’t match their prices, we lose business anyway. Under the wholesale model, brick and mortar retailers are faced with a catch 22. Under the agency model, we can actually compete. Amazon, of course, has done everything in their considerable power to kill the agency model, in their continuing efforts to kill us.

    So, yeah. Predatory.

  80. Thought this was a cogent piece. I’ve got some extensive views on the topic, too extensive to copy/paste, so here’s a link: http://www.nerds-feather.com/2012/04/tsop-part-ii-ebook-pricing-and-doj.html . There’s a link to this article, as well as another one of John’s, in there. Pretty interesting to see what various authors are saying about it, though most I’ve found seem to come down on the side of Apple and the publishers, rather than Amazon and the DOJ. Whether that’s the right choice or not is another issue.

    Suffice to say, I personally think in the debate, there’s a missed opportunity to better compensate authors for their work, and a possible solution to all this that isn’t being talked about.

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