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

[WillAdams]

Just to insert a datapoint, on the sale of a $69.95 book in the Amazon Marketplace by an outside seller, Amazon's commission is $12.83, over 18 percent.

Tidy sum for just running some servers and charging a credit card.

[HarryT]

Originally Posted by WillAdams

Just to insert a datapoint, on the sale of a $69.95 book in the Amazon Marketplace by an outside seller, Amazon's commission is $12.83, over 18 percent.

Tidy sum for just running some servers and charging a credit card.

It's a free market. Anyone who believes that they can offer a better service at a lower price is entirely free to do so. Nobody's forcing anyone to use Amazon's service.

[Barcey]

Originally Posted by Prestidigitweeze

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.

An argument has been raised many times using the total annual revenue of Amazon and comparing it to the total annual revenue of Hachette and extrapolating that Amazon has an unfair advantage so therefore there can never be a fair negotiation. When you said the following...

Originally Posted by Prestidigitweeze

...
The specific issue raised seems to be whether Amazon is right to push for total control of pricing and publishing in every case. This speaks to the question of whether or not Amazon's advantage is unfair in specific cases.

It seems to me that this issue involves a question that FJTorres and I discussed on another thread at some point, which is whether it is always permissible for a powerful negotiator to pressure a party without leverage (which might not even be true in this case) to sign a contract that turns out to be unfair.
...

I thought you were making the same argument and was pointing out that by the same logic Hachette could never sign a fair contract with one of their authors. If that wasn't the argument you were making we can ignore it.


In regards to your second item....

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.

Context is everything and talking about specific demands without the wider context is pointless (imho).

Contract negotiations are seldom as simple as what is being portrayed. If the two companies are discussing two options and Company X favours Option A and Company Y favours Option B then Company Y might add demands to Option A that they know Company X will find distasteful. Their goal is really to drop Option A and move to Option B. It's pointless to argue about those specific demands in isolation and if they are good or bad for the industry. In this case they could just be a negotiating tactic.

The article is only talking about selective demands leaked by one side of the negotiation so it doesn't tell the whole story and doesn't set the context.

[mgmueller]

Originally Posted by WillAdams

...Amazon's commission is $12.83, over 18 percent.

Tidy sum for just running some servers and charging a credit card.

18%?
That's "nothing".
I've mentioned it before, but to repeat it here:
Most corporates have ASG (Administration, Sales, General) costs in the excess of 20%. 15% are considered benchmark, I know a few companies with >30%.
Meaning:
Their Gross Margin is 18%.
But that's not their EBIT.
With 18% Gross Margin, they can consider themselves happy, if even a few percent should be left.
It's well known, that Amazon still doesn't generate much of a profit.
(So does Facebook, Google on the other hand...)
For now, it's still about market leadership.
Question to me is, when their investors will insist on starting to make some serious profits.
"Profit" obviously is one of the reasons, why Amazon in the meantime is offering their own hardware and services, instead of being just a merchant.

Just for reference:
I've done a consultancy project a year ago.
An IT service provider with his average Gross Margin of 30% did struggle with being close to bankruptcy and seeking process optimizations...
Of course, this service provider is way smaller than Amazon, but the reference still somewhat applies...

[Prestidigitweeze]

Originally Posted by Barcey

An argument has been raised many times using the total annual revenue of Amazon and comparing it to the total annual revenue of Hachette and extrapolating that Amazon has an unfair advantage so therefore there can never be a fair negotiation. . . . I thought you were making the same argument and was pointing out that by the same logic Hachette could never sign a fair contract with one of their authors.

In order for you to refute my argument, you'd have to address one that I'd actually made. My desire to focus on issues of fairness/practicality (pertaining specifically to POD and pricing as mentioned in the article) is not the same as wanting to valorize Hachette as an underdog based on inapposite comparisons of revenue.

The point of focusing specifically on the demands in the article is to try to keep the conversation as low-key as possible given the fact people seem to get worked up. Getting upset about Amazon or Hachette's projected motives seems oddly vicarious unless some of us happen to own shares in these companies (and even then, why bother?).

Context is everything and talking about specific demands without the wider context is pointless (imho).

The problem is that you're not responding to the context of things I've said. You seem to be responding to charges that you associate with other people who might, as I have done, (i) link to an article like the one in The Guardian and (ii) suggest that the effect of the demands covered in the article is a topic worth discussing. And since I haven't made the arguments to which you're reacting, I have no reason to respond to the counterarguments you've made.

The last dogpit into which I wish to fall is the one that posits a good-vs.-evil tough-off between Hachette and Amazon.

I prefer to think of this conversation as dealing with abstracts involving parties known and unknown rather than with, say, a physical football at the center of a skirmish in which we ourselves are opposing teams. We don't want to be stand-ins for corporate teams because, for one thing, our own interests are not being represented.

This matters because our civility can hinge on the mutual understanding that an individual's words might only refer to what that person states outright within a series of given posts.

It's pointless to argue about those specific demands in isolation and if they are good or bad for the industry. . . . The article is only talking about selective demands leaked by one side of the negotiation so it doesn't tell the whole story and doesn't set the context.

Since you feel that way, I'm not sure why you want to talk about this with a boring individual like me, who finds questions about those demands worth discussing. Fiction writers deal with what-if scenarios all the time and the demands reported in the article seem to offer many.

Here's one such (tangential) scenario:

I personally have dealt with POD after a book of mine that was published conventionally sold out and was not reprinted, so the idea that a physical book which has gone out of print will then be replenished by Amazon indefinitely under the same contractual terms as the original deal (between writer and publisher, not publisher and distributor) could set up an echo chamber of autonomic neglect and/or stream of mysteriously disappearing revenue and could also prevent the book from being reissued by a different publisher in a different form. Amazon isn't going to pay me directly unless I self-publish, so my reimbursement could be exactly as shady as the machinations of whichever publisher offered whatever contract I was dim enough to sign in a fit of blithe idealism during a soporific decade.

[j.p.s]

Originally Posted by fjtorres

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

How is pharma not tech?

[fjtorres]

Originally Posted by j.p.s

How is pharma not tech?

Testing, certification, marketting are all different in pharma than in the broader tech world.

FCC testing runs maybe 90 days from submission to approval and rarely raises political issues. FDA drug approvals are a years-long bureaucratic mess that chews up big chunks of the product's patent protections. And that is before politicians and pressure groups step in.

Plus it is actually possible for small companies to survive and thrive in the tech world at large but pharma no longer has room for any but the largest multinationals. A small team working in a garage is not an option in pharma. Even a team of university researchers at a big world class school is going to have to partner with an established (big) player just to hurdle the government gauntlet.

It is pretty much a world apart.

[j.p.s]

Originally Posted by fjtorres

Testing, certification, marketting are all different in pharma than in the broader tech world.

You write "broader tech world", but seem to be using some extremely narrow definition of technology.

[JSWolf]

Originally Posted by Prestidigitweeze

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.

But part of the issue is that Amazon is trying to stop Hatchette from going back to agency pricing as has already been proved that Hatchette wants to do.

[Waylander]

I hope the deal concerning POD doesn't become reality, as I do not like the size of the POD books, they are too big. The biggest convenient pbook size is B-format, or 12x19cm, anything bigger is too large. Also, the binding is poor, and the paper feels awful, almost like loo paper. Also, I don't agree that Amazon should control everything, and that in order to have a healthy free market you need to have competition, which if Amazon gets its way won't be there, and we as consumers won't have any alternative or choice but Amazon, which would be extremely undesirable.

[ApK]

Originally Posted by Waylander

I hope the deal concerning POD doesn't become reality, as I do not like the size of the POD books, they are too big.

No one would force you to buy it.

Also, I don't agree that Amazon should control everything, and that in order to have a healthy free market you need to have competition, which if Amazon gets its way won't be there, and we as consumers won't have any alternative or choice but Amazon, which would be extremely undesirable.

Controlling all parts of process is not the same as being the ONLY one doing it.
None of stuff discussed here so far would reduce consumer choice. Except possibly the part about other resellers not be able to sell for less than Amazon. Which is ironic, because usually the complaint is from other sellers not wanting Amazon to be able to sell for less than THEM.

[mgmueller]

Originally Posted by Waylander

I hope the deal concerning POD doesn't become reality....

It is reality.
For quite some time already.
Meaning: POD is done already, albeit the business model might further adapt.
They don't inform you ("are you okay with digital print?").
And only an expert will see the difference.
There is a difference, but it's not an obvious one.
Years ago, print quality and paper had been significantly different. But this difference became smaller and smaller over the years.
There's still one huge difference: Price respectively costs.
But for a, let's say, $ 15 paper book, production costs are negligible.

[mgmueller]

Originally Posted by Waylander

...I do not like the size of the POD books, they are too big. The biggest convenient pbook size is B-format, or 12x19cm, anything bigger is too large...

I don't quite understand, what you mean by that.
First of all, the term "POD" is used very loosely here.
POD just means "print on demand" and doesn't refer to any specific printing technology.
Most assume digital print, but of course "on demand" can be done with other technologies as well.
But if you refer to "digital print": Why should there be any difference in size?
The measurements are absolutely identical, no matter what production technology. And the measurements even are defined in the specs of the book in Amazon's description.

[mgmueller]

Originally Posted by Waylander

...the binding is poor, and the paper feels awful, almost like loo paper...

Maybe 5 to 10 years ago.
But those issues have been solved a long time ago.
Don't get me wrong: I'm not a fan of digital print, not at all.
But issues like UV-endurance, binding, haptic feel, ... are problems of the past.
The problems that still exist won't bother the customer: Reliability, speed, costs, capacity, floor space, ...

[fjtorres]

Originally Posted by j.p.s

You write "broader tech world", but seem to be using some extremely narrow definition of technology.

Not in the context of the discussion of NDAs by tech companies.