For those people who are interested in ebooks and the technology market the past few days have been 'interesting' to say the least.
It started when Amazon pulled all the ebooks published by Macmillan from their Kindle store.
Speculation ran rife – it eventually seems to have boiled down to Macmillan wanting to set the price of their ebooks and adopt an 'agency' model while Amazon wants to keep the status quo.
I shall leave it to the wonderful John Scalzi and Charlie Stross to explain.
Do I think Macmillan (or anyone else) will be able to sell $15 ebooks? They could; after all, they sell $25 hardcovers (and similar amounts for ebooks, depending on the retailer). Now, some people won’t spend that much for a book, so they pick up the book later when it’s an $8 paperback. That’s fine, too.
Likewise, I think it’s fine to attempt to charge $15 (or more) for an ebook for a brand-spankin’ new release to service the folks who just can’t wait, drop it to a lower price point (say, $10) later on in the run, and then drop it again to $8 or so when the paperback hits.
That’s how I would do it, in any event. Would it work? Hell if I know. But that’s not to say it (or some other pricing scheme) is not in a publisher’s interest to try. And to be blunt about it, it’s in my interest as an author as well, because, you know what? My royalty is a percentage of the sale price. I have a mortgage, I have a kid to send to college, I have an addiction to games that allow me to shoot zombies in the head. I’d like money for those, please.
It’s not unreasonable to test the market and see what it will bear.
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. They do this by buying wholesale and selling retail, taking up to a 70% discount from the publishers and selling for whatever they can get.
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.
I suggest that you read both blog posts (and the comments) to get a full handle of the situation.
I have two things to add to this, one is where I see Apple in all this, and another about my experience with Amazon.
Firstly, I suspect that this has a lot to do with the Apple iPad, while it's not confirmed I suspect that Apple are going to follow a similar pricing systems with ebooks as it's App Store. This is the 'Agency' model where the owner of the book lets Apple list it on their store and then the money is split 70%/30%, Apple getting the 30% for the running of the store.
The important part of this is that the publisher sets the price. If they want to charge £25 for an ebook and the market supports that then that is what they will do – if they want to sell the same book for £2.99 then that may end up making more money for the publisher (and ultimately the author).
It's all about the free market and finding what price the market will bear.
Take, for example, the successful experiment by my publishers The Friday Project. They sold 65 times the number of ebooks at £2.99 rather than at the RRP. And didn't cannibalise physical book sales either.
There are good arguments that ebooks shouldn't cost as much as physical books – but allowing publishers to set their own prices ultimately lets the market, by which I mean 'people who buy ebooks', affect the price.
(I don't intend to get into 'windowing' at the moment – while important it is somewhat tangental to my above discussion)
If Apple don't follow this model for their EPUB book store, then people will continue to make their books into standalone apps that do sell under this model…
How does this affect me?
Well, as I think that Amazon are seeking to monopolise the ebook market and protect practices that are unfair and anti-competitive, I shall simple stop buying from them. I have a Sony Reader (well, I have two) and while the back catalog of books for that device is smaller, I suspect that this might change. I suspect that publishers will stop looking at the proprietary Amazon format as a good deal and will instead move to the more open EPUB format that can be read on more devices (including the Sony Reader the Cool-ER and the iPad).
What is interesting is that Amazon are opening up the Kindle to it's own 'App store' – I would be very surprised if one of the first applications isn't something that allows you to read EPUB files on the Kindle, something that is impossible at present.
It also wouldn't surprise me to see Amazon ban such an application*.
Because of this anti-competitive, protectionist and downright icky behaviour, I shall no longer be linking to, or affiliating myself with Amazon. Rest assured that they will be quaking in their boots at the thought of the pennies that they will be losing from me.
Well, they won't – but at least I'll feel better.
As an aside – I note that Amazon are selling my two ebooks on their Kindle store without the permission of me, or my publisher. My publisher has already asked for them to be taken down (when the book was launched), as of Sunday the 31st of January this has not happened.
I know I can be bloody minded – but if I were my publisher I'd be phoning the lawyers on Monday morning…
My books, as always, are available for free download in multiple formats (including Kindle) from Manybooks.net
Please don't buy them from Amazon for $12 (or whatever the cost)
As I said – interesting times, and it'll be even more interesting to see how this all shakes out. After all, who would have thought that Apple would be the one supporting a free market?
*The problem is that the DRM that Amazon uses is not allowed to be used on devices that can use other DRM formats – which may lead to new and interesting legal battles.
UPDATE: Slight edit to make it explicit that Amazon shouldn't be selling my ebook, they are fully able to sell the physical edition of my books.