Amazon vs Hachette

[fjtorres]

Originally Posted by pwalker8

Perhaps I'm missing something, but I don't see anything that says that big pub makes outs at $10. The article talks about what price point people buy the most books at, not what price point the big publishers make money at.

Big pub making money or not is not a function of book price.
(Price elasticity makes it a wash at the price range they roam.)
(Authors getting readers and building a career is a different story.)

BPH profitability is a function of the *number* of "lottery winner" high volume sellers. The Randy Penguin is shoveling out 14,000 titles this year but their overall profits will depend on the dozen or so big sellers that will stick to the wall. If they hit the jackpot with just one title, they'll give out bonuses. If none hit, the low level staff will have to update resumes regardless of whether the ebooks are priced at $10, $13, or $15 because their machine runs off bestsellers and backlist, not midlist new releases.

[DiapDealer]

I'm really getting tired of seeing the word "bullying" or the phrase "corporate bullying" being used in articles/opinions on Amazon vs Hachette (with regard to Amazon).

Whether or not you believe Hachette and four other publishers broke the law several years ago (and whether or not you thought they were "justified" in doing so), they got together and used their market power and leverage to force retailers into accepting agency pricing. They "bullied" their way into getting what they wanted. It's how things get done in the world of multi-national corporate negotiations.

We shouldn't get to pick and choose who gets called "bully" for using their power to make others bend to their will.

[shalym]

Originally Posted by pwalker8

Perhaps I'm missing something, but I don't see anything that says that big pub makes outs at $10. The article talks about what price point people buy the most books at, not what price point the big publishers make money at.

Well, if "big pub" hadn't started messing with the pricing and forced Amazon to change from the wholesale model to the agency model, what price the consumer pays would have absolutely nothing to do with how much money the publishers make. It's been documented many many times that the publishers made more money per book sold under the wholesale model than they did under agency.

They made this mess...now they need to deal with the fallout and stop whining.

Shari

[TCSimpson]

Watching all this unfold reminds me of about 10 to 15 years ago when B&N was gobbling up everything bookwise and they were the big bad monster who would put bookstores out of business, and they had control of telling the Big 5 (Big 6 at the time) exactly what they wanted because they were the ones who would see to it which book was featured in the window, storefront etc. Technology. What a thing.

[fjtorres]

Originally Posted by TCSimpson

Watching all this unfold reminds me of about 10 to 15 years ago when B&N was gobbling up everything bookwise and they were the big bad monster who would put bookstores out of business, and they had control of telling the Big 5 (Big 6 at the time) exactly what they wanted because they were the ones who would see to it which book was featured in the window, storefront etc. Technology. What a thing.

B&N routinely sent the publishers back to the drawing board to redo covers if they didn't like them.
And they meekly complied.

Short memories...

[DiapDealer]

Cory Doctorow
http://www.theguardian.com/technolog...chette-hostage

[fjtorres]

Originally Posted by DiapDealer

Cory Doctorow
http://www.theguardian.com/technolog...chette-hostage

Saw it earlier this week.
Saw it dismembered a half dozen ways, too.

Total lack of understanding of mainstream consumers.
But then, ideologues are top-down thinkers. Looking at how people behave and why isn't as important as promoting their ideas.
(Shrug)

[DiapDealer]

Originally Posted by fjtorres

Saw it earlier this week.
Saw it dismembered a half dozen ways, too.

Total lack of understanding of mainstream consumers.
But then, ideologues are top-down thinkers. Looking at how people behave and why isn't as important as promoting their ideas.
(Shrug)

It does seem to be a bit of an awkward mishmash of ideas. Can't say all of them are wrong, per se, but they definitely don't integrate.

Hachette didn't allow Amazon to put their DRM on their titles, they insisted upon it. And besides, the DRM is not really what keeps people "locked in" to Amazon. The DRM is in fact, negligible to the tiny portion of consumers that gives a damn about it. They've always had the option to stop selling their books through Amazon. The small group of consumers who would be bitten in the ass by not being able to open their old books on new devices would be the least of their worries if they did so.

So while I think he's right that Hachette could possibly benefit by offering a highly publicized 50% sale "for anyone who wants to switch to buying ebooks from Apple, Google, Kobo or Nook," I think he's silly to think that it's Amazon's DRM that would thwart it.

I don't think his suggestion that they immediately remove DRM from their titles is a bad idea (in fact I support it)--and one that may give them some options in the future. I just don't think it would have the slightest effect on the current state of affairs.

He IS right to believe that Hachette had a big hand in putting themselves in their current situation, just not about HOW they got there (or what they need to do to get out of it).

It's like he just couldn't resist making this into a "No DRM!!" article, regardless of how irrelevant it is to the situation.

[fjtorres]

There you go.
Some things get so much clearer when you think as a consumer instead of as a pundit. And if you actually look at the real world outside the ivory tower.

Like the fact that somewhere around a quarter (a third?) of Kindle ebooks are DRM free, but almost 100% of BPH titles are DRM-encumbered, everywhere. Which tells you right there Amazon doesn't particularly care about DRM.

[Barcey]

He does over simplify the history but I think he's correct in the points he's making. The last point he made that Amazon has been playing the long games and the publishers have been playing the short game is absolutely correct.

The walled garden model does depend on keeping your consumers captive and DRM aids in that but so far Amazon has done a good job of keeping customers happy enough that they have not run into the DRM wall.

I agree with Cory that if the publishers have finally realized how useless encryption based DRM is that now would be a good time to drop it. It would improve their negotiating position with Amazon. Yes it would probably only be a small portion of Amazon's customers that take advantage of it but Amazon doesn't want to lose market share.

[JSWolf]

Cory could be wrong when he says that removing DRM is illegal. There are grey areas and one that most might not have thought about.

The one we have known about for a long time is FAIR USE. Fair use says we can strip the DRM for personal use. That was in place before the Digital Millennium Copyright Act. There is nothing in that act that says that Fair use is out the window. So until we have it legally decided in a court of law, this will remain a grey area.

Now the other grey area (and this is a really good one), When Tor first went DRM with the eBook Redshirts by Jeffrey A. Carver, a number of eBook shops were not ready for this and it was still sold with DRM. The author put up on his blog to get the tools to remove the DRM if you bought it with DRM and the publisher allowed this. So with the author and publisher's consent, the tools were advocated to be used and used LEGALLY! So now we have the tools being distributed legally to legally strip the DRM. This is a very interesting grey area as the tools were legalized.

[JSWolf]

This quote is the best part of Cory's article and I think if the publisher's did follow his advice here, Amazon would not have a leg to stand on.

However, there's still time. The Macmillan imprint Tor Books – the largest science fiction publisher in the world, and the publisher of my US novels – gave up DRM on its entire catalogue two years ago. Each year since, the company has reported strong increases in ebook sales and no rises in piracy levels. If Macmillan – or its rivals – want to avoid the Hachette trap, now is the time. Push out the entire catalogue without DRM, now, and arm yourself with an "Amazon Refugee" app that can convert all your Kindle books to run on anyone else's platform, ready to release the very instant Amazon tries
this trick again.

Instead of an "Amazon Refugee" app, they could just push Calibre to do the conversion(s).

[sirmaru]

Amazon has removed DRM from songs they sell. They insert a long number in the metadata to identify who purchased the song instead.

Now they are distributing over one million songs free to their Prime customers.

Could this be the future of eBooks? If it is, would publishers be driven out of business and authors impoverished?

[HarryT]

Originally Posted by sirmaru

Amazon has removed DRM from songs they sell. They insert a long number in the metadata to identify who purchased the song instead.

Then they haven't "removed the DRM". Watermarking is a form of DRM.

[DiapDealer]

And the free Prime Music is NOT DRM-free. It can't be played with anything but Amazon's players. You can't download it, load it up on any mp3 player of your choosing and run with them. Purchased music? Yes. Prime Music? No.