Amazon, Apple, Macmillan and Me.

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.

John Scalzi

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.

Charlie Stross

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

Blood, Sweat and Tea

More Blood, More Sweat and Another Cup of Tea

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.

11 thoughts on “Amazon, Apple, Macmillan and Me.”

  1. I must say, you and I have a rather different take on the Amazon/Macmillan situation.What Macmillan wants under the agency program is for Amazon to no longer serve as a retailer (by setting prices) but to serve as a sales agent. Macmillan would then set the prices, and those prices would presumably be the same everywhere (since the other retailers will presumably have to follow the same agreement, or face the same “windowing” that Macmillan said they would do with their e-books at Amazon if Amazon didn't agree).

    Amazon has revolutionized the e-book market through their willingness to take a loss…not the publisher's loss, and not the author's loss. Authors may be paid based on the list price (let's say, 25 pounds) or the amounts received (which would be 12.50 in Amazon's model). To my knowledge, it would be an unusual contract for an author to be paid on the sale price, rather than the list or wholesale price (which are the common two options). The agency model results in less money for authors, even ignoring the question of volume. It also creates a non-dynamic market, in which you won't see sale price variations (which stimulate sales).

    I want to be clear about something, though. You are saying that you don't want people to get the books from Amazon? I recently sent a post out to my readers alerting them to the ability to get the second book for free from Amazon. I'd be happy to amend that. I will add a link to this post, regardless. I do respect author's wishes, and if you aren't comfortable with people getting the books that way, I'll let them know.

  2. 1: of course Amazon wants total monopoly of the writing trades, normal manly behavior, always want more, 'tis why there be Empires. It only comes tumbling down when the profit dries up.2There are three major buying categories.a] He who must be first and pay the most and brag…. b] He who must pay the least and brag see….c] Then the rest are those that do not care or do not know the correct price, and pay up.If you get 1% of London paying a Quid each that means you can buy your Lamborghini [well the seat covers? anyway].

  3. 4th category: Captive audience, the student that must buy the professors tome at a mind boggling price if he wants to get his AAAA's

  4. Oh great… I had no idea Amazon shouldn't be selling your book – I put it on my wishlist there. Only thing is I like a normal book and not reading from the screen so where can I get a regular copy from?Thanks 🙂

  5. you can buy another book about the old days in the Ambulance Service Bells Two Tones And Sirens Profits go to the Ambulance Benevolent Fund

  6. I downloaded it onto Kindle for PC but I can't seem to get it to synch to kindle on my iphone… annoying!When I go on the manybooks site on the iphone it only offers about 5-6 download formats and none are kindle.

  7. As far as I'm aware the sync only works with books bought from the Kindle store.For iPhone and computer I can recommend Stanza, which is a bit better at what you are trying to do for 'non-kindle store' books.

  8. Thank you! That works perfectly and even got a few other free books! I do kind of object to paying $13 from Amazon for their books for kindle, which incidently I discovered via one of your tweets

  9. Hello Tom,I'm a new fan of yours from the U.S. I own a Kindle and got the book from Amazon. I'm also an RN who really appreciates your viewpoints and witty stories. I hope to read more of you but, for better or worse, it will have to be from buying at Amazon.

    I'm also a subscriber to Bufo's blog. Thanks, Bufo, for all your writings as well.

    From my perspective Amazon is doing authors a favor in the long run, although I can understand why for some it doesn't seem that way. I never would have heard of you otherwise. But I can understand others have a different viewpoint.

    Anyway, thanks for the very entertaining book and I hope to read more from you in the future.

    Sally

  10. You can convert pretty much any ebook format to any other format using Calibre, which is free:http://calibre-ebook.com/

    I just converted an ePub to a Kindle file, and it kept the formatting perfectly. Unfortunately I already paid the $10 to Amazon for your first book. Managed to download the second one for free, though…

Leave a Reply

Your email address will not be published. Required fields are marked *