Amazon.com removes Macmillan books from site!!

[IceCreamEmpress]

The big publishing houses are claiming that they cannot sell e-books for $9.99 profitably, but they DO sell mass-distribution paperbacks (which, although cheaper to produce than hardcovers, are more expensive to produce than e-books) for that much or less.

You are missing the point entirely.

There is a value, for some people, to buying a book when it comes out. That's why most people buy hardcovers, according to market research--the "buying soon after release" is a larger selling point for hardcovers than "likes the format."

So this is why publishers have routinely published the higher-priced hardcover first, then the lower-priced paperback. It's the same reason that car manufacturers drop the prices of the 2010 car models when the 2011 car models become available.

Macmillan wants to retain that advantage--to give people a choice to buy the new Dan Brown book or whatever for $24.95 list hardback or $14.99 list e-book during its first weeks and months of release. Then, when the $8.99 paperback becomes available, they may or may not choose to drop the e-book price to match that or go lower than that.

Amazon says "Nah, we're the biggest retailer, and we're going to set your prices or not carry any of your products."

"First, if Macmillan is issuing some e-books priced at $5.99, clearly the claim that they cannot make a profit issuing them at $9.99 is untrue.

Again, you are missing the point about TIMING.

"Second, if they are pricing the books from $12.99 up "at first release, concurrent with a hardcover," the obvious reason why they are doing so is to avoid competition between their two products. The same reason why some other publishing houses are delaying e-book issuance for some months after issuing the hardcover (although evidently Macmillan isn't one of those). It has nothing to do with the cost of production of the e-book, and to suggest that it does is disingenuous. Both the pricing of paperbacks, and the lower-end pricing of e-books issued by publishing houses, prove that what you're saying about cost of production and pricing necessity is untrue.

Again, you are missing the point that TIMING and the calculation that there is a market of people who are willing to pay a premium for quick access to new releases ARE A PART OF THE ENTIRE PROFIT AND FEASIBILITY PROJECTION PROCESS.

The actual per-unit physical production cost is only a small fraction of what it costs to put a book on the market. Yes, e-books have a somewhat smaller per-unit production cost, but it's not as much smaller as your argument implies.

 

[AryaT92]

Amazon answers Macmilian!

Amazon Answers: "Ultimately....We Will Have to Capitulate"

Could publishers have triumphed so quickly with their strategy to use Apple's entry into the market to move to an agency model for selling ebooks? (Note that the etailer says "ultimately." Immediately after posting this "announcement," disabled Macmillan buy buttons had not been restored yet.) Early Sunday evening, The Amazon Kindle team has just posted this to a forum on their site:

Dear Customers:

Macmillan, one of the "big six" publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.

We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, we will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books. Amazon customers will at that point decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book. We don't believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced e-books as an alternative.

Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!
​

As reported previously here, other major publishers do in fact have plans for pursuing "the same route," so this may be just the first chapter.

 

[Deleted member 42]

Leaving aside the rest of the argument, why is being new to Absolute Write important in this context?

Just that he doesn't understand the cultural expectations of the community. He's a new guy in an established community; navigation can be tricky.

 

[Deleted member 42]

While I do understand that there are other costs involved, this pricing gives the appearance of being way out of balance. Though, technically, I'm getting the same thing no matter what form it is--the actual reading material--the physical product is not the same. I keep looking at the eBook and thinking, "It's an electronic file, and it costs how much?"

I understand that this seems insane.

Part of the problem is that we think when we are buying a book we are paying for the object. And we are.

But most of the cost for that object is, well, not really ephemeral, but it isn't the paper, the ink, or the binding. It's the contents, the text.

I used to tell people to think of book as something that meant "container." The word book itself in English means "Beech," as in the tree, because the wood of the tree was used to make tablets for writing.

But book can mean "clay tablet," "scroll," "codex manuscript," "printed codex book." These are containers for text--"tupperware for text," as I've sometimes said.

The differences in cost for the container are not a large part of the cost of making the book, the cost of making the thing we want to read.

The amount in terms of the price that the retailer gets, the author gets, and what's left for the publisher, are what Amazon is grabbing. Moreover, it looks -- and this is me not being sure of myself-- it looks and sounds to me like Amazon is in some cases asking for exclusive ebook rights. I know for a fact that for two books I would get royalties on we're saying no because Amazon wants an exlusive deal.

 

[Deleted member 42]

And just as a reminder--e-books don't account for that much in sales--a few hundred copies vs. thousands of paper copies.

Yes. Ebooks are for people who can afford computers, phones, and ereaders. They are a tiny portion of sales, as much as I love them.

Ebooks, even after twenty years, are still for early adapters, geeks, and bibliophiles with discretionary spending who want to buy books.

 

[eqb]

The differences in cost for the container are not a large part of the cost of making the book, the cost of making the thing we want to read.

Even though I am a fairly savvy tech person, and even though I am an author, I do confess my first reaction to $15 was, "Say what?"

It's entirely illogical, yes, I know.

But logically, I see the costs of producing a book. (And I'm getting an education in that over the past twelve months.) Really, as Medi says, there are many costs involved in making a readable, entertaining book, and the printing part is the least of it.

 

[Deleted member 42]

The old razors vs. blades phenomenon. Razors are cheap, blades are expensive. Without one or the other the device is useless.

I do think that's the model Amazon is using; it's the model of Xerox (sell the copier, but control the paper and ink) and that ink jet printers in particular used (the printer was free or under 50.00; the color cartridges were anywhere from 40.00 to 90.00).

The idea was if the manufacturer controlled the razor blade production, or the ink cartridge, they had a customer for, well, a long time and could count on the customer having to buy from them because of patents.

So Amazon brings out an ereader that uses a proprietary file format, and DRM.

Except.

The content that goes in the file isn't controlled by Amazon.

It's licensed to publishers. It's owned by writers.

And Amazon, and the Kindle aren't the only options. They aren't even the option with the largest amount of users. (5 million is nice but not that many in terms of the other options afforded ebook readers).

So Amazon has sort of made a strategic underwear gnomes sort of error.

 

[san_remo_ave]

...strategic underwear gnomes sort of error.

Is "strategic underwear gnomes" a technical term? Because if it is I wanna start using it at work!!

 

[Deleted member 42]

By the way, if someone ever offers you a tour of a "Web press plant" (it has nothing to do with the Web, but it's where a lot of mass market paperbacks are printed), go.

Jump at the opportunity. It's amazing. Get a tour, then ask if you can have lunch in the cafeteria and talk to the people who work there. Talk to the people who run the press, and to the people who do the pre-flight checks, and to the stock room people. Ask if you can talk to the marketing/sales people. Ask if you can watch the "chekers," the QA people in the warehouse.

At both the plants I went to -they had slots for books that were going to be hitting shelves in a year or eighteen months. At one they were printing a Danielle Steele book that wouldn't be shelved for months. And they knew that there was at least one other printer with a contract for the book--because they suggested the printer when they didn't have a free slot.

It's an entirely different view of books and publishing.

 

[kuwisdelu]

I understand that this seems insane.

Part of the problem is that we think when we are buying a book we are paying for the object. And we are.

But most of the cost for that object is, well, not really ephemeral, but it isn't the paper, the ink, or the binding. It's the contents, the text.

Yep.

The problem of selling a digital product in a world that—while having embraced the internet age—is still thinking by-and-large in physical terms.

 

[veinglory]

The thing is, publishers sell at the price point they can get away with. I am not sure what business this is of Amazon's? They let third party sellers on their site sell preXmas toy gerbils for a billion dollars--but get all het up about ebooks?

 

[thothguard51]

Sorry to interupt a very educational thread, but in another group I belong to, a HC writer stated that Amazon has agreed to terms with HC that all new ebooks from HC will sell at the $14.95 range. When I asked her where she heard this, she said Publishers Marketplace reported this. I don't have a subscription to PM so I could not confirm, and I see nothing about this in PW. Anyone else hear this news????

 

[Deleted member 42]

I think she's confusing Harper Collins with Macmillan, and not understanding the Macmillan response, which is here:

http://www.publishersmarketplace.com/lunch/macmillan_30jan10.html

Harper Collins is a News Corp/Rupert Murdoch company.

 

[Slushie]

The thing is, publishers sell at the price point they can get away with. I am not sure what business this is of Amazon's? They let third party sellers on their site sell preXmas toy gerbils for a billion dollars--but get all het up about ebooks?

Feels like a power grab, don't it?

#

No matter how many we're-fighting-for-teh-consumer press releases we see from Amazon, they're hypocrites as long as they DRM their products.

ETA: and by products, I mean ebook inventory.

 

[veinglory]

No matter how many we're-fighting-for-teh-consumer press releases we see from Amazon, they're hypocrites as long as they DRM their products.

And their own forums show their customers were very upset about zhu zhu pet ripoffs--but they were just patted on the head and told 'caveat emptor'.

 

[thothguard51]

Thank you Medi, the MacMillian letter says alot without pointing fingers...

 

[kuwisdelu]

I'll be interested to see what their price point on the iBookstore will be.

 

[Deleted member 42]

I'll be interested to see what their price point on the iBookstore will be.

Mr. Jobs has said:

"The prices will be the same," Jobs told Wall Street Journal reporter Walt Mossberg in a brief Flipcam interview. He also took a quick dig at Amazon: "Publishers are actually withholding books from Amazon because they're not happy."

See this.

Mac cult specific sites have the video with transcript. He is, I think, alluding to Macmillan as one of the publishers who are not happy.

 

[kuwisdelu]

Mac cult specific sites have the video with transcript. He is, I think, alluding to Macmillan as one of the publishers who are not happy.

I frequent a few of those

The cult ones, that is.

I wonder since they're no longer on Amazon, so there's no "same." Hmm.

 

[thothguard51]

Is all this good news for smaller publishers. Will they be able to increase their presence or pricing to follow, or will they continue to offer their stock for less in hopes of picking up customers unhappy with the higher prices...

Oh, the times, they are a changing...

 

[Deleted member 42]

I frequent a few of those

The cult ones, that is.

I wonder since they're no longer on Amazon, so there's no "same." Hmm.

Well, Amazon has kinda sorta said they'll re-list Macmillan titles. It's an odd, disingenuous statement that amusingly uses the word "Monopoly" in reference to Macmillan (which is bitterly ironic in the context, as well as inaccurate with respect to Macmillan). I think Amazon didn't expect the backlash. Me, I'm still removing links from my sites after the April "removing queer history books but not porn" amazonfail.

I note that of the "Big" publishers, Random House who is very keenly in favor of DRM is missing, and that Amazon has mistreated Hatchette, Penguin, and Macmillan.

 

[JulieB]

Scott Westerfeld has a very nice blog post on the issue: http://scottwesterfeld.com/blog/?p=2138

 

[thothguard51]

Why is it the author is the one who always gets screwed, and no one ever says thank you when they are finished screwing us. I keep wondering where publishers would be if authors banned together and refused to work with them unless certain conditions are met. Oh, thats right, its each man for himself in this game. Just teasing, sort of, as we are somewhat in competition with each other, even though there is room. But seriously, the vendors are getting serious, the publishers are getting serious, the reading public is getting serious. Where are the authors in all of this? Damn, I should have started all of this 25 years ago when it was so much easier...

 

[Gillhoughly]

That's hilarious. Looks like he's been lurking here; I recognize some wordage that might have originated with me.

I can agree with him on some points, but remain PO'd with Amazon for disabling Macmillan sales.

They're still disabled. Just checked one of my titles. Thanks a heap Amazon. You still suck.

Better believe that all Amazon links on my site will be deleted, with B&N, Borders, Booksamillion, etc. filling in the gap.

I'm aware that there are many complexities to the pricing issues that I don't know about, but Amazon simplified things. Because they're playing chicken with Macmillan, I'm not making money on my Macmillan titles on their site.

All this so they can pimp their damned Kindles. Well, guess what--they've got competition: anyone see this article?

"To strengthen that moat as Apple enters the market, Amazon will have to cut the Kindle’s price by at least 20% to bring it well below the iPad’s. That means lowering the price of the base Kindle to $199 and the 9.7” screen Kindle to $399. The new iPad coincidentally has a 9.7” screen. Amazon will cut the Kindle price and that means it will probably do no better than break even on its e-reader/e-book business for the next year and perhaps longer. That is the sacrifice it will have to make to keep Apple from taking the market away."

Gosh. The big bully is no longer the only muscle on the street. You'd think they'd be happy for the price increase Macmillan wants.

Sure, the readers get screwed, but again--more people buy paper books than e-books.

That may change as the old guard dies out and computer-raised kids take over, but I don't expect a massive shift to happen too terribly soon.

For what it's worth, I looked over a recent royalty statement.

My e-book sales account for .0335% of the total sold of that title in a 6-month period.

.

 

[Deleted member 42]

more people buy paper books than e-books.

That may change as the old guard dies out and computer-raised kids take over, but I don't expect a massive shift to happen too terribly soon.]

I don't think it will happen any time soon. The printed codex book has two thousand years of beta testing. It is completely debugged. It is portable, self-contained, rarely malfunctions, and if made even with recycled low acid paper has a life time expectancy (assuming normal non-abusive use) of fifty years or more in terms of archival standards.

Plus humans are hard-wired, like our rodent and primate kin, to hoard. We like physical, tangible objects. Licensing a file for use in specific conditions (DRM or not) doesn't really meet the same need.