Guardian: "New Amazon Terms Amount to 'Assisted Suicide' for Book Industry"

[fjtorres]

Originally Posted by astrangerhere

As to the NDAs, I would be interested to know if they actually have an NDA just to cover the contract negotiations. I know what sort of things happen here in terms of evidentiary law, but I am simply curious to know how Amazon treats these sorts of meetings. I wonder if signing an NDA is part of your ticket to even to get to the table. Do parties even have a choice?

Traditionally, in the tech industry NDAs with teeth are a prerequisute to pretty much any serious discussion between companies. No NDA, no meeting. The potential for insider trading is too high. Just a rumor can move markets...

(Imagine if somebody saw a high level B&N delegation walking into Apple HQ today. That kind of sighting alone can make the witness some serious cash.)

An NDA figures prominently in the rise of Microsoft as an OS company, back when IBM was secretly developing the original PC. Bill Gates, the son of a bank exec, was handed the NDA and saw he would be sued out of vital organs if he even hinted at anything while IBM was not liable for anything he showed then. He smiled and signed and got a deal to provide BASIC for the PC, a deal that led to further business when Digital Research refused to sign until flying the NDA past their lawyers. IBM was in a hurry and MS knew where to get an OS and the rest is history.

[crossi]

Originally Posted by astrangerhere

The print on demand option is the most troublesome issue for me because I, as a consumer, would believe I had been sent the wrong thing were I to get a cheaply bound paperback when I ordered a deckle-edged hardcover. I think that presents a real issue of material change in what is provided. Publishers would be right to challenge as it could materially harm a publisher's business if that copy of the book would be held out as the publisher's own. (Might be nice for brick and mortars though who DO have the nice copy in stock).

Of course Amazon couldn't just substitute the POD version for the paperback or hardback at the same price. They would need to just offer the option probably with a different price for the customer to decide if he wanted in preference to waiting for either of the other editions. I have no doubt that each product, HB, MM PB, kindle and POD would each have a separate product ID number and that Amazon wouldn't substitute one for the other. Amazon is not in the habit of pissing off customers that way.

[ApK]

Originally Posted by crossi

Of course Amazon couldn't just substitute the POD version for the paperback or hardback at the same price. They would need to just offer the option probably with a different price for the customer to decide if he wanted in preference to waiting for either of the other editions. I have no doubt that each product, HB, MM PB, kindle and POD would each have a separate product ID number and that Amazon wouldn't substitute one for the other. Amazon is not in the habit of pissing off customers that way.

Certainly true, but I can see some publishers or authors simply not wanting there to be such a version of certain items, just like some brands choose not to make a cheaper version of their products to cater to the low end of the market.

ApK

[Sydney's Mom]

I find it interesting that the rumor just refers to print on demand and lowest price. I heard other rumors that the sticking point was the continued ability to discount.

Reading between the lines, I think the real objection, from the BHPs, is the print on demand, and the cost being attributed back to the publisher. If the publisher didn't have the book, Amazon could print it up, charge the publisher, and completely cut out the publisher (absorb all the publisher's profit with the charge to POD). I can understand the objection to that. Offer a compromise--if the book is out of stock, it will be discounted by the publisher x amount per day. Of course, Amazon won't accept this if it really just wants to start dealing in out of print books. So Amazon could set a date--if not available within 10 days, . . .

I really don't care about the availability of pbooks, but I do want Amazon to get the continued ability to discount ebooks. I believe Amazon's efforts around discounting ebooks is why my library suddenly has Silkworm. During Agency, my library didn't have any newly issued books. As a matter of fact, I just checked the first Galbraith book, and see I only have it in audiobook. But now, it is for the first time available in ebook format.

There is a show on Amazon this Sunday. It will be interesting to see if this issue is mentioned. The one thing I think everyone is ignoring, is Amazon's part in making ebooks mainstream. There were other ereaders before the kindle, but it was Amazon's efforts, and storefront, that really made ereading take off. I spend a lot more on ebooks that I ever did not pbooks. For pbooks, I would look at my bedside pile of unread books, and decide not to go to the bookstore. With ebooks, I can just add it to Calibre, and I have 30 years (I hope) in which to read it. There is no pile, and I ignore the number in the lower left hand corner.

I think this is just a smokescreen. The real fight is whether agency is going to die a true death.

[conan50]

I actually like that part about if publishers let the book go out of print Amazon publishes it. Many times over the years I've seen books go out of print, then used copies selling for upwards of $100. I'm with Amazon on that point.

[astrangerhere]

Originally Posted by fjtorres

Traditionally, in the tech industry NDAs with teeth are a prerequisute to pretty much any serious discussion between companies. No NDA, no meeting. The potential for insider trading is too high. Just a rumor can move markets...

(Imagine if somebody saw a high level B&N delegation walking into Apple HQ today. That kind of sighting alone can make the witness some serious cash.)

An NDA figures prominently in the rise of Microsoft as an OS company, back when IBM was secretly developing the original PC. Bill Gates, the son of a bank exec, was handed the NDA and saw he would be sued out of vital organs if he even hinted at anything while IBM was not liable for anything he showed then. He smiled and signed and got a deal to provide BASIC for the PC, a deal that led to further business when Digital Research refused to sign until flying the NDA past their lawyers. IBM was in a hurry and MS knew where to get an OS and the rest is history.

My industry before I started teaching, my area of practice was corporate pharma, and I know how NDAs work there, hence my curiosity. I just didn't want to assume. But I appreciate the context.

[fjtorres]

Originally Posted by astrangerhere

My industry before I started teaching, my area of practice was corporate pharma, and I know how NDAs work there, hence my curiosity. I just didn't want to assume. But I appreciate the context.

Your world is a lot closer to the tech world, then.
And probably even further away from the la-la-land of publishing.

[Barcey]

Originally Posted by Rizla

Is a cartel better than a monopoly?

Monopoly isn't a bad board game but I haven't played Cartel.

The big five currently have a cartel on small monopolies (via the life plus 70 copyright) so it's actually the worst of both. If Amazon actually gets a monopsony it's not good either but they're unlikely to one day raise prices of all best sellers by 50%. If they piss off a customer that spends a few hundred bucks a year on books they could lose that same customer that probably spends a couple thousand a year on other products. They will squeeze their suppliers though so authors should be wary.

Either way they're all bad for a healthy industry but I believe the free market will eventually straighten it out. The problem is that the market correction will be more painful the longer they try to fight it. Unfortunately the people that won't get hurt by it are the ones that caused it. They'll be long gone with golden parachutes.

[SteveEisenberg]

Originally Posted by fjtorres

Traditionally, in the tech industry NDAs with teeth are a prerequisute to pretty much any serious discussion between companies.

Back when InfoWorld was a, or the, prominent tech industry print publication, the Robert X. Cringeley column routinely published non-disclosure agreement-violating news and gossip. I don't recall anyone ever being bitten by said teeth.

As for signed non-disclosure agreement between Amazon - Hachette, I have two questions:

-- Does anyone have a copy of said agreement?

-- Was disclosure of the agreement a violation of the agreement?

Thank God nation states don't have such toothy agreements. Otherwise there would be no diplomacy.

Comment: Even governments that can threaten long prison term can't keep their employees from blabbing to the press. How can anyone expect a corporation, that has neither a prison system not the ability to subpoena reporter's notebooks, to effectively muzzle employees' freedom of speech?

[mgmueller]

Originally Posted by Prestidigitweeze

According to Bookseller editor Philip Jones and others quoted in this recent Guardian article:

"New Amazon Terms Amount to 'Assisted Suicide' for Book Industry"

"...via its print-on-demand facilities...".
Those print capacities (digital print) are unbelievably tiny.
They never, from a production perspective, can and will add up to any significant portion of the book market.
I've been in touch with the head of this department in Europe (coming from Xerox, the "inventor" of just-in-time/print-on-demand, this discussion a year ago seemed to make sense).
They aim for about € 20 million publishing revenue per year. In Germany, (one of) the biggest market in Europe. That's "nothing" and never will increase to much more.
Xerox and others had been dreaming of taking over the print business for decades, but never made it to more than 5% of the total volume in their digital print niche.
And the head of the department clearly expressed: It's not about revenue, it's not about profit, it's not about volume.
It's solely about 100% availability...

[fjtorres]

Originally Posted by SteveEisenberg

Comment: Even governments that can threaten long prison term can't keep their employees from blabbing to the press. How can anyone expect a corporation, that has neither a prison system not the ability to subpoena reporter's notebooks, to effectively muzzle employees' freedom of speech?

As a regular Cringely reader, I don't recall any of the Cringely writers publishing any proprietary information about ongoing negotiations. IDG has standards and they depended on ads from those very companies. Dvorak had better sources and actually named names but the closest he ever got was talking in general terms about Scott MacNeally's silly WABI crusade. (He met with Gates to get Office ported to Solaris and Gates agreed if SUN guaranteed a minimum number of sales. Which, embarrassingly, was larger than the total number of SUN workstations sold in a year or more.)

As for government leaks, the vast majority of those are intentional and sanctioned. It's part of the DC negotiation toolkit. Of the few that aren't, attempts have been made to put leakers in jail. Some successful. When they fail it is because the information is usually available to hundreds or thousands of drones. Serious leaks have almost always been tracked down and sent to jail (the most recent being Bradley Manning).

In the tech world, people *have* been sued for NDA violations.

Here's a recent one:
http://www.bizjournals.com/prnewswir.../06/07/NY20460

NDAs are a lot like copyrights and trademarks pooh-poohed by many but an inescapable part of the tech world.

[TechniSol]

Makes sense from the "If you don't have it in stock, I'll just look elsewhere" angle. I really think it's about two things, insuring availability(so that one does not leave Amazon to look elsewhere for anything -never give a sucker an even break!) and that it keeps the publishers from playing favorites or holding out to renegotiate for whatever set of circumstances they might try to exploit. If the decision is up to the publisher in terms of how big a batch is run off, and when, it gives them a measure of control that Amazon would, I'm sure, prefer to have.

Let's face it, the idea is along the lines of providing vertical integration control to ensure that you're not at the mercy of suppliers. Amazon couldn't care less about anything beyond making sure it can move merchandise and that a level of quality is maintained -note the order in which these concepts were presented. Can't ship it, can't get paid for it... People with choices will almost always pay a little bit more to get something sooner -especially when a wait time is indeterminate.

[eschwartz]

Originally Posted by ApK

Are you sure? Not just for select?

I don't recall seeing that in my KDP info. That would mean I couldn't offer a Smashwords coupon or other promotion. I'll have to double check.

I heard they just reserve the right to automatically price-match.

[Prestidigitweeze]

Originally Posted by Barcey

You can compare the largest Hachette author's income to the income of Hachette and ask the same question.

Yes, you could compare authors' incomes to Hachette's profits (or the income of its highest-paid author to that of its highest-paid employee -- I'm not sure which thing you mean).

I'm not certain what point you're trying to make, since that's a different relationship and I don't think anyone's attempting to vilify Amazon. The idea is not that Hachette is good and Amazon bad. And since Apple isn't mentioned at all in the article, I'm hoping that a discussion about specific terms won't have to come down to yet another brand loyalty tussle.

Originally Posted by Barcey

Companies make unreasonable demands in contract negotiations. It's being portrayed as only Amazon making unreasonable demands and I don't believe that.

The article is about whether specific demands made by Amazon could have an adverse effect on the publishing industry. When articles about publishers' demands appear -- and past history indicates they will -- we'll be talking about the specifics of those demands.

Originally Posted by astrangerhere

There are enough contractual issues floating around in this question that I might use it to write my next final exam. . . . (Might be nice for brick and mortars though who DO have the nice copy in stock.)

Thanks for the intriguing questions and perspective.

Originally Posted by fjtorres

As a regular Cringely reader, I don't recall any of the Cringely writers publishing any proprietary information about ongoing negotiations. IDG has standards and they depended on ads from those very companies.

I haven't been able to find an advertisers list for The Guardian or The Observer, but I wouldn't be surprised if it included Amazon. Besides, haven't GuardianFilms and other companies under the GMG Guardian Media Group umbrella relied partly on Amazon for distribution?

Also: The idea that IDG "has standards" and, by implication, that Guardian News & Media does not seems a Hank uncharitable.

[fjtorres]

Originally Posted by Prestidigitweeze

Also: The idea that IDG "has standards" and, by implication, that Guardian News & Media does not seems a Hank uncharitable.

I wasn't trying to imply anything about the Guardian.
(When I choose to attack their credibility I'll do it openly. There are grounds for it, but I don't need to go there on this one... )

I was merely pointing out the IDG has standards specifically about NDAs and avoiding lawsuits. Especially from the advertisers because IDG's business model for INFOWORLD was almost 100% ad-supported. Once they pulled it back from newstands and focused tightly on corporate IT they had a fine line to tread between appealing to the readers to keep their subscription lists overflowing and scaring off the tech companies they covered. That's why, over time, they de-emphasized product reviews. And that is why the Cringely column became more of a gosip column over time.