Amazon vs. Hachette Update - It's About Price

[SteveEisenberg]

Originally Posted by JSWolf

We means Hatchette.

I did make an error is presuming that "we" meant eBook purchasers.

But reading your post #430, and regardless of your intention, I don't think "we means Hachette" is the most reasonable interpretation of what you wrote. The "our books launched Amazon" quotation beginning that post is from Authors United, not Hachette.

If Hachette, the smallest of the big five, said that they launched Amazon, that would indeed be incorrect, but I can't find any statement from Hachette that they have.

And looking down the list of 900 authors, I see a whole bunch of bestselling authors from the 1990's and the aughts. And not only is it reasonable to think their books launched Amazon, they signed a statement saying they do think it.

I do note that the single author who probably did the most to make Amazon, J. K. Rowling, didn't sign. Googling, she made an anti-Amazon tweet in June, but has been fairly quiet on this issue since then. One might note that Amazon is treating her latest book quite well*. I'm personally confident that Rowling can't be bought, but maybe there's an Amazon executive who thinks a bit of insurance can't hurt.

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* Note in case the link changes by the time some click: When I posted this, Amazon was selling the eBook Silkworm for $8.99, with immediate shipment at 40 percent off for the hardcover.

[pwalker8]

Originally Posted by SteveEisenberg

I did make an error is presuming that "we" meant eBook purchasers.

But reading your post #430, and regardless of your intention, I don't think "we means Hachette" is the most reasonable interpretation of what you wrote. The "our books launched Amazon" quotation beginning that post is from Authors United, not Hachette.

If Hachette, the smallest of the big five, said that they launched Amazon, that would indeed be incorrect, but I can't find any statement from Hachette that they have.

And looking down the list of 900 authors, I see a whole bunch of bestselling authors from the 1990's and the aughts. And not only is it reasonable to think their books launched Amazon, they signed a statement saying they do think it.

I do note that the single author who probably did the most to make Amazon, J. K. Rowling, didn't sign. Googling, she made an anti-Amazon tweet in June, but has been fairly quiet on this issue since then. One might note that Amazon is treating her latest book quite well*. I'm personally confident that Rowling can't be bought, but maybe there's an Amazon executive who thinks a bit of insurance can't hurt.

_____________________
* Note in case the link changes by the time some click: When I posted this, Amazon was selling the eBook Silkworm for $8.99, with immediate shipment at 40 percent off for the hardcover.

I would suspect that most authors are trying to stay out of this mess. It really is a no win situation for them. Certainly, there are a number of Hatchette authors who are being hurt by Amazon's actions, but I suspect that people like Rowlings are big enough that Amazon would be cutting off their own nose if they gave her books a hard time.

[SteveEisenberg]

Originally Posted by DuckieTigger

So why are they (Hachette) trying to draw attention to them by still wanting to enforce agency pricing?

This is speculation. Hachette and Amazon may have agreed on day one about whether or not to go back to agency, and now are on to something else. And according to the best informed source on this I can find, the dispute between Amazon and Hachette is indeed about something else. I recommend this next link in its entirety. Here's how it ends:

http://www.newyorker.com/news/daily-...e-orwell-think*

That’s what the dispute with Hachette is really about: Amazon’s need for higher profits. Which is why, according to publishing sources, the heart of the contract fight is Amazon’s drive to keep fifty per cent on each e-book it sells, rather than the current thirty per cent. In other words, this isn’t about a “healthy reading culture.” It’s about the company’s bottom line. That should not be hard to understand, but, in Orwell’s words, “to see what is in front of one’s nose needs a constant struggle.”

Interesting how Amazon offers independent Kindle device resellers a markup of six or nine percent, while insisting on a more than thirty percent discount for itself.

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* Here is an eInk Kindle-friendly version of the link:
tinyurl.com/q744grm

[AnemicOak]

Originally Posted by JSWolf

The readers don't want agency pricing. We already know this.

Do we? I honestly don't think the majority of book buyers out there know much about it let alone have an opinion on it. On this forum maybe, but folks here are more informed about things than people in general.

Originally Posted by JSWolf

Interesting how Amazon offers independent Kindle device resellers a markup of six or nine percent, while insisting on a more than thirty percent discount for itself.

Amazon is also selling Kindle's at cost, book publishers aren't doing the same with books. I don't see how one really relates to the other.

[rhadin]

Originally Posted by DuckieTigger

What I don't get - they basically admitted of having no chance in court and that is why they settled. So why are they (Hachette) trying to draw attention to them by still wanting to enforce agency pricing?

How long is the court order still good for everybody to discount?

The court order doesn't prohibit agency pricing. Each publisher can establish agency pricing on its own; they are just prohibited from doing it jointly. Even if they all end up going to agency pricing, as long as they do so without consulting with each other, they can do so.

The discounting order is good until the contracts with Amazon expire. I believe that the last contract will expire in October, but I may be wrong about that.

BTW, it is worth noting that as the contracts expire, each publisher can insist on agency pricing, which means that Amazon could end up facing the 5 BPH without contracts and all 5 demanding agency pricing. In that event, Amazon will be in a very weak position.

As long as none of the publishers discuss agency pricing with any other publisher, there will be little that Amazon -- or the Department of Justice -- can do, especially as both Judge Cote and the DOJ are already on record saying that agency pricing is OK.

The news media will keep each of the publishers informed as to what the other publishers are doing, so there will be no need for any collusion.

[rhadin]

Originally Posted by DuckieTigger

Yes, agency pricing is what was illegal about the collusion.

No, that is incorrect. The agency pricing was never illegal. Only the collusion to bring it about industrywide and simultaneously. Remember that Random House was not a party to the lawsuit and was free at any time to institute agency pricing because it did not discuss doing so with any other publisher. It chose not to once the lawsuit was settled because it would then have been at a competitive disadvantage (although the disadvantage was one of public relations, not of economics unless you think books are commodities).

[rhadin]

Originally Posted by JSWolf

The readers don't want agency pricing. We already know this.

Some readers and a vocal group on MR oppose agency pricing, but I suspect that most readers don't care one way or the other. What they care about is getting the book they want at the price they want to pay, not how that price is calculated or how the price is distributed among publisher, retailer, and author.

I also suspect that if agency pricing was set at $2.99 and the wholesale model meant the consumer price would be higher than $2.99, most MR opponents would no longer be opponents of agency pricing, but of wholesale pricing.

What we really know is that people have determined how much they are willing to pay for an ebook and do not care how that price point is reached, only that it is reached.

[rhadin]

Originally Posted by Phogg

That predator is not Amazon per se though.
It is free lance editing businesses and digital distribution, which is allowing authors to retain copyrights. Amazon is the 800 lb gorilla from a digital distribution angle, but taking amazon out would just let the other players grow.

Please explain to me how freelance editing businesses are in this equation and also how if Amazon were "taken out" freelance editing businesses would grow.

Also, I do not see what freelance editing has to do with allowing authors to retain copyrights. Please explain this to me.

[tubemonkey]

Originally Posted by rhadin

...agency pricing, but I suspect that most readers don't care one way or the other.

That is so true. Most readers just don't care; in fact, most of them don't even know that Amazon and Hachette are battling each other over pricing. When Agency was first implemented and prices rose, they grumbled a bit and paid them anyway.

The publishers' secret weapon is reader apathy.

[pwalker8]

Originally Posted by rhadin

Some readers and a vocal group on MR oppose agency pricing, but I suspect that most readers don't care one way or the other. What they care about is getting the book they want at the price they want to pay, not how that price is calculated or how the price is distributed among publisher, retailer, and author.

I also suspect that if agency pricing was set at $2.99 and the wholesale model meant the consumer price would be higher than $2.99, most MR opponents would no longer be opponents of agency pricing, but of wholesale pricing.

What we really know is that people have determined how much they are willing to pay for an ebook and do not care how that price point is reached, only that it is reached.

To a great extent that is why publishers want Agency pricing, they think that they have a better handle on what customers are willing to pay for books and when they are willing to pay those prices. Right now, publishers seem to have done a pretty good job at setting customer expectations that ebook prices should be in line with the price of what that book is priced in the B&M bookstores.

I find that the various MR factions tend to line up closely with traditional groups of books readers.

-You have a group of readers who never actually buy books, they only get books at the library, though they may read hundreds of books a year.
-You have other groups who mostly frequent the used book stores and will only buy books at a steep discount.
-You have groups of readers who have favorite authors and will buy the latest and greatest by those authors at hardback prices
-You have groups of readers who only read sporadically and tend to buy whatever is on the best seller list at the time.

The difference is that the traditional groups don't actively deride each other and insist that their way is the one and only true way to price books.

[tubemonkey]

Originally Posted by pwalker8

To a great extent that is why publishers want Agency pricing, they think that they have a better handle on what customers are willing to pay for books and when they are willing to pay those prices. Right now, publishers seem to have done a pretty good job at setting customer expectations that ebook prices should be in line with the price of what that book is priced in the B&M bookstores.

An ebook should be priced lower than the least expensive paperbook available. That price difference should reflect the difference in costs between producing the two products. Once priced, the publisher then sells it to a retailer. After that, it should be up to the retailer to set the final sell price.

[DiapDealer]

Originally Posted by pwalker8

The difference is that the traditional groups don't actively deride each other and insist that their way is the one and only true way to price books.

"The readers who don't go online and talk about book pricing on internet forums never argue and deride each other over book pricing."

That's deep, man.

EDIT: Crap! I broke my own new rule about not giving two hoots about Multinational X vs Multinational Y. And my complexion was starting to clear up nicely, too.

[pwalker8]

Originally Posted by SteveEisenberg

This is speculation. Hachette and Amazon may have agreed on day one about whether or not to go back to agency, and now are on to something else. And according to the best informed source on this I can find, the dispute between Amazon and Hachette is indeed about something else. I recommend this next link in its entirety. Here's how it ends:

http://www.newyorker.com/news/daily-...e-orwell-think*



Interesting how Amazon offers independent Kindle device resellers a markup of six or nine percent, while insisting on a more than thirty percent discount for itself.

_______________
* Here is an eInk Kindle-friendly version of the link:
tinyurl.com/q744grm

An interesting read. I agree with some of what Packer wrote and disagree with other pieces. The big piece that I disagree with is the
"
...They pay out vast sums for dubious projects, often ignore their “midlist,” publish far too many titles, and generally treat the book trade as if it were a business like TV, when, in fact, it’s closer to an artisanal craft...."

While certainly a segment of the book trade is an artisanal craft, full of "literature". the book trade has always had a large element of what I would call, for lack of a better label, the tradesman author. The author who churns out a lot and lots of words to make a buck. Many of the top writers during the late 1800's and early 1900's fall into that category - Jules Verne, Arthur Conan Doyle, Dumas, Jack London, Mark Twain and many more. These are the authors who make the money that pays for the "literature" books, most of which wouldn't don't really sell well, except to the NY elite and English teachers.

[pwalker8]

Originally Posted by DiapDealer

"The readers who don't go online and talk about book pricing on internet forums never argue and deride each other over book pricing."

That's deep, man.

EDIT: Crap! I broke my own new rule about not giving two hoots about Multinational X vs Multinational Y. And my complexion was starting to clear up nicely, too.

It may be deep, but it's also not what I said.

[pwalker8]

Originally Posted by tubemonkey

An ebook should be priced lower than the least expensive paperbook available. That price difference should reflect the difference in costs between producing the two products. Once priced, the publisher then sells it to a retailer. After that, it should be up to the retailer to set the final sell price.

Why? Do you oppose mark up in every other product? Way back when I was a teenager, working in fast food, I was shocked to see how little a large coke cost the retailer compared to what it was sold for. Have you checked out the difference in price for a can of Coke in a vending machine verses a QuickTrip verses a grocery store? The difference in the cost of a liter of Coke and a can of Coke isn't the difference in cost between producing the two products.