Amazon vs. Hachette Update - It's About Price

[eschwartz]

Originally Posted by Barcey

Other then the childish response to the author's united childish publicity stunt I don't think it was that bad. I interpret it as a final warning rather then a PR stunt.

And it was mostly that that I was thinking of. It doesn't exactly help their case, it just makes the whole thing look like a battle scene from kindergarten.

So do you think Amazon will finally just pull the plug on Hachette?

[Josieb1]

I think the letter is very bad as a another author I follow said if she did what they asked ran the risk of taring her name as a trouble maker, and that could affect her if she ever wanted to try and get a trad publishing deal, as she assumes that the trad publisher people talk to each other. She's not going to risk anything to her reputation when she's not involved right now.

She also knows Amazon is her biggest retailer but she also places her books all over the place, I.e Kobo, B&N, Smashwords, AllRomance as she knows it would be bad news to give Amazon a monopoly.

If Amazon can't agree terms with Hatchette they should simply stop selling their books. Let Hachette explain the situation to their own authors. Either that or let Hachette set their own prices and let the readers decide. This war of words is a pr nightmare, for both sides.

[Josieb1]

This blog post post is from Dear Author. I found it fascinating as they indicate Amazon is fighting from a weak position

https://medium.com/@jakedfw/making-s...e-6ef55a961cbe

[darryl]

Originally Posted by Josieb1

This blog post post is from Dear Author. I found it fascinating as they indicate Amazon is fighting from a weak position

https://medium.com/@jakedfw/making-s...e-6ef55a961cbe

Very interesting link. I hadn't seen this take on things before and don't think it is correct, though I can't think of anything that absolutely blows it out of the water. However, based on what Amazon is saying, everyone generally makes more money at a $9.99 price point. Also, Apple and Google are already well and truly in the EBook business. Microsoft is playing catchup just about everywhere. It is difficult to believe that fear of Apple, Google and Microsoft is such that Amazon's whole market strategy is to keep margin's unattractively low. In fact, margins seem to be quite healthy. Amazon is a formidable competitor and would continue to be so even in an aggressive price war with Apple, Google or Microsoft, not that I expect that to happen.

[AnemicOak]

Amazon & Google already aggressively price match each others deals back & forth in my experience. A fair number of deals I've picked up at Amazon lately were originally Google deals that they've pm'd.

[tubemonkey]

Originally Posted by Josieb1

This blog post post is from Dear Author. I found it fascinating as they indicate Amazon is fighting from a weak position

https://medium.com/@jakedfw/making-s...e-6ef55a961cbe

From said blog:

Unfortunately for Apple, they had to break the law to combat Amazon’s discounting.

Utter nonsense! Apple is a high margin company and the word discount isn't in their vocabulary. Apple wanted a level playing field before they'd enter the game. To achieve it, they colluded with the publishers in order to force all retailers to accept prices that Apple could live with.

[Josieb1]

Originally Posted by tubemonkey

From said blog:

Utter nonsense! Apple is a high margin company and the word discount isn't in their vocabulary. Apple wanted a level playing field before they'd enter the game. To achieve it, they colluded with the publishers in order to force all retailers to accept prices that Apple could live with.

That's still breaking the law though, unless I'm mistaken

[rhadin]

Originally Posted by conan50

The bigger point I would make is that books have serious competition as entertainment compared to decades ago. They cannot expect to cost as much as they once did. They also have more competition within the book world, now anyone can publish a book, sell it for .99, so that even at $9.99 price point the traditionally published book ought to be ten times better than the indie selling for a buck. And usually they are not much better if at all. Yet traditional publishers want to raise their ebook prices higher. It is suicide. It is the 'buggy whip' problem if they are doing this to prop up hardcover sales.
I will give you a concrete example to the problem: Netflix. $10 a month gets you tons of shows to watch, almost exactly the cost of buying 1 best selling ebook at Amazon.

First, it seems to me that if Hachette wants to price itself out of the market, it has every right to do so. Corporate suicide is not illegal anywhere.

Second, books do not have more competition now than they did decades ago; they simply have different competition. In my youth, reading competed with actually going outdoors and playing games like baseball. Today, instead of going outdoors to play games, people sit in front of a computer or TV. Basically the same competition, just a different type.

Third, reading was always a minority past-time. It was always an expensive past -time, which is why there was the rise of libraries. But even with the rise of libraries and the making of books available for free, only a limited number of people actually patronized them. Price was not the motivator but interest.

Fourth, the availability of hundreds of cable channels and programs and even streaming services like Netflix do not change the equation. I pay way too much each month for cable access, yet I do not watch a single program (by which I mean I do not watch any programs at all). I prefer to read. But my wife prefers to watch TV and she watches it even though there are no limitations placed on her as to the number of books she can buy or the price. (I spend several hundred dollars a month on books and see no reason why she should be treated any differently.)

Bottom line is that books are not competing with other forms of entertainment. Those who like to read read; those who don't, and they make up the majority of the population by far, seek other forms of entertainment -- and never the twain shall meet.

The real question, I think, is can publishers price books too high for their market. At what point will a consumer not spend the money? I can't answer that as I am atypical. I spent $350 on a 2-volume book set on paintings by William Bourgereau without thinking twice. Just yesterday I ordered 3 books that cost me over $200. Clearly, publishers haven't priced too high to affect my buying but I suspect that very few readers are similarly situated.

My point is that I won't voluntarily spend 10 cents on other entertainment media, but don't think twice about buying a book I want. That's because I'm a reader and not a movie-goer or gamer.

[Barcey]

Originally Posted by eschwartz

So do you think Amazon will finally just pull the plug on Hachette?

No, I don't see a scenario where Amazon would unilaterally pull the plug on Hachette. If Hachette withdraws their books or terminates the contract I think Amazon would be willing to absorb the loss though.

[Barcey]

Originally Posted by rhadin

First, it seems to me that if Hachette wants to price itself out of the market, it has every right to do so. Corporate suicide is not illegal anywhere.

They can but they shouldn't be allowed to collude with their competitors to not compete on price.

Can all five price themselves out of the market? Yes but it takes longer and the fall is further. It's better for the long term stability of the industry if they adjust their business plan and compete.

Second, books do not have more competition now than they did decades ago; they simply have different competition. In my youth, reading competed with actually going outdoors and playing games like baseball. Today, instead of going outdoors to play games, people sit in front of a computer or TV. Basically the same competition, just a different type.

People who read fall into multiple categories, what you're describing is just one. There's also the category who read 1-4 books a year. Those are the ones that you lose to other media competition. I know many people in that category.

[tubemonkey]

Originally Posted by Josieb1

That's still breaking the law though, unless I'm mistaken

You missed my point. Apple didn't have to break the law to combat Amazon's discounting, they could've obeyed the law and discounted themselves.

[leebase]

Originally Posted by Josieb1

Either that or let Hachette set their own prices and let the readers decide. .

What a novel concept (pun intended)

[tubemonkey]

Originally Posted by leebase

What a novel concept (pun intended)

How about the novel concept of going back to wholesale pricing?

[leebase]

Originally Posted by tubemonkey

Utter nonsense! Apple is a high margin company and the word discount isn't in their vocabulary. Apple wanted a level playing field before they'd enter the game. To achieve it, they colluded with the publishers in order to force all retailers to accept prices that Apple could live with.

Apple certainly is in the "margin" business...as in "make a profit"....as are all book sellers save Amazon. It is not in the publishers best interest for Amazon to drive profits out of the book business.

Let the customers decide with their wallets. If Amazon is so sure that certain publishers price their books "too high" -- let the market teach them. All the indie publishers and "wiser" traditional publishers will price cheaply, and the stupid publishers will just go out of business because they, unlike Amazon, don't know the worth of a book.

[leebase]

Originally Posted by tubemonkey

How about the novel concept of going back to wholesale pricing?

Because there is a predator that is threatening to destroy the book retail business.