Amazon says 'will have to capitulate and accept Macmillan's terms'

[guyanonymous]

They're trying to set an artificial price point as well. But they're not trying to enforce that on other retailers. They're undercutting them.

I've said that I'm not a full Amazon supporter several times. They are also not in collusion with anyone else - they're 'losing money' supposedly on many of those books. But that's their decision. But they also have the right to take a stand and say, "Your product is one we don't want in our store, as it's not financially viable," just like the art dealer can tell a painter, "Your painting isn't worth $1000000, even if we are taking a commission on it, as we'll get laughed at, ridiculed, and lose [s]shelf-space[/s] wall-space that could otherwise be used for something that will sell.

I keep hearing that publishers, book stores, authors, etc, are struggling....but they keep wanting to do things the same way as they always have.

[TallMomof2]

Originally Posted by tompe

But what is Amazon selling books at at a loss if not price-fixing?

If they were selling all ebooks for $9.99 I could call it price fixing even though in the US price fixing is either done from by the wholesaler by dictating prices to retailers (that's why the publishers want to go to an agency model, retailers become distributors) or when a group of retailers agree among themselves to charge a specific price and not to lower it without all agreeing to that. IANAL, but that's my understanding of price fixing.

Many US retailers use loss leaders to draw in customers with the expectation that the customer will purchase other items that give the retailer a profit and offset the loss of profit from the loss leaders.

[wallcraft]

Originally Posted by TallMomof2

Many US retailers use loss leaders to draw in customers with the expectation that the customer will purchase other items that give the retailer a profit and offset the loss of profit from the loss leaders.

In this case the loss leaders are to get more people to buy Kindles, as well as to buy more non-discounted ebooks (and potentially other stuff too, but the Kindle was sold primarily to Amazon's existing customers until they started advertizing on TV before Christmas). In any case, it isn't clear if Amazon is loosing money overall on ebooks (they offer many titles that are not heavily discounted, but we don't know how many of these are actually sold vs the bestsellers). They have a lot of experience with "loss leaders" and optimizing prices to get the best result overall. This is what is lost under the agency model, the publishers simply can't optimize prices this way. They can also raise prices whenever they want, and all the customer can do is buy at that price or not at all.

[kennyc]

Price-fixing is usually a term that is applied when the price is set artificially high as opposed to selling at a loss.

[bwaldron]

Originally Posted by Lemurion

I don't see why it's so hard to conceive of the possibility that Macmillan's behavior may change after they say they are going to do something different.

Because there is no reason for an informed ebook consumer to believe anything that they say. Past behavior is usually somewhat informative of future behavior.

When and if they act differently, most of us will be quite willing to re-evaluate their positions regarding Macmillan.

[crewpsu]

Originally Posted by llreader

Well, we still have the choices, just not good ones or "fair" ones. We can choose not to consume, or consume something else. I posted in one of these threads that classic, unencumbered texts are a good read, and there is enough to keep you busy for a while. A sharp drop in sales may be the corrective stimulus needed.

This would be true if they actually wanted ebooks to succeed. Remember they feel that sales of ebooks cannibalize from sales of paper books. If ebooks don't sell well what do they care? They didn't spend money to develop the readers for ebooks and they make no money on the sale of ebook readers. If ebooks fail and everyone goes back to buying paper copies and they still make money. There is currently no incentive for the publishers to lower prices. If the ebook doesn't sell they don't loose anything (it cannot cost that much for electronic copies of books, the author most likely submits them in this form nowadays). If the do sell at $15 or more, well thats just great. Many of you have said you would go to the library, which in turn would raise the demand for an item in that area and in turn the libraries would then purchase more of that author's books when they come out.

Amazon though has an interest in the ebook market succeeding. They spent a ton money developing the Kindle devices and make money off of each device they sell. If ebooks start to fail to sell due to prices Amazon will be the one to suffer as Kindle sales fall off and interest dies. It remains to be seen if Barnes and Noble or Sony will care as well. In the case of Sony based on their interest in their ereader prior to the Kindle I doubt they will care if the interest slows down to the few gadget type people out there that would spend a couple hundred of dollars for a device that allows them to read an ebook that costs as much as an actual physical copy.

The iPad is not marketed as an ereader nor will it be. Sure there is an app that allows this, from Apple as shown in the press show but it has been Apple's policy to not allow apps that compete with Apple's interests and if Apple has made a deal to sell ebooks via itunes or something similar, that would definitely be in their interests. Because of this I doubt there will be the Kindle app for this device or that any other reader software will become available on it.

[guyanonymous]

I think they do have an incentive to see them succeed - survival. The guys in charge just don't know it yet, and as with any big shift in an industry, some people will get lost between the cracks. pbooks won't go away, but in tech-rich societies, I see them becoming specialty items for collectors etc. And in tech-low societies, ebooks may also come to dominate as CHEAP readers become available. I feel for people in remote communities who have, if they're lucky, an old RV functioning as their library. Many have no libraries...book stores etc.

The publishers could/should be excited because they now have a mechanism to cut out the middleman - the retailer, the distributor, etc - and setup their own vending options. If they do this fast enough and effectively enough (pricing, format, etc), then they might retain some of their authors who otherwise will learn to do this for themselves.

There has been a rise, as I understand it, in individuals renting out space in an office environment. This environment may be shared by others doing the same type of work, or greatly different work. They share costs, however, on building maintenance and staffing (secretarial usually). This allows them to have a business space, with the perks of such a space, without having to support a complete infrastructure on their own.

What's to stop a consortium of authors from hiring skilled staff (editor, publicist, etc) in addition to contracting them on an individual basis? There are many, I am sure, skilled individuals who'd welcome such a setup.

Are there other ways of doing business. Yes...it's time to pursue some that haven't been shown to be broken in our current time.

[llreader]

Originally Posted by crewpsu

This would be true if they actually wanted ebooks to succeed. Remember they feel that sales of ebooks cannibalize from sales of paper books. If ebooks don't sell well what do they care? They didn't spend money to develop the readers for ebooks and they make no money on the sale of ebook readers. If ebooks fail and everyone goes back to buying paper copies and they still make money. There is currently no incentive for the publishers to lower prices. If the ebook doesn't sell they don't loose anything (it cannot cost that much for electronic copies of books, the author most likely submits them in this form nowadays). If the do sell at $15 or more, well thats just great. Many of you have said you would go to the library, which in turn would raise the demand for an item in that area and in turn the libraries would then purchase more of that author's books when they come out.

Well, you may be right. I am not entirely convinced though - I think there are probably a lot of different takes withing the publishing industry.

In any case, they may delay the adoption of ebooks, if that is the master plan, but it will still happen - the small publishers are getting more and more savvy, Amazon may now step up their efforts to make deals with small houses to keep a steady supply of content, and the e-only houses are getting better as well. I imagine Apple, once they get into the market, are going to want to simplify things - they know how to market, and they know that consumers like a fair price (there is some leeway for convincing people that a price is "good enough", but hopefully not that much) and reliable pricing.

From a pure entertainment perspective, it will be interesting if they manage to throw a monkey-wrench in the works, just to see what happens next.

[jaxx6166]

Well - I boycotted Amazon today and made my first eBook purchase in about two months.

Total cost was $53.95 - - all made from the Sony store. All Macmillan authors.

Then from my friends at a local bookstore, I bought two hardcovers.

Viva la revolucion!

[DawnFalcon]

Originally Posted by jaxx6166

Viva la revolucion!

Really?

So... Amazon are the new socialists?

[kennyc]

Originally Posted by jaxx6166

Well - I boycotted Amazon today and made my first eBook purchase in about two months.

Total cost was $53.95 - - all made from the Sony store. All Macmillan authors.

Then from my friends at a local bookstore, I bought two hardcovers.

Viva la revolucion!

Damn! You coulda got them for free on the darknet!

[Tim32127]

Originally Posted by jaxx6166

Well - I boycotted Amazon today and made my first eBook purchase in about two months.

Total cost was $53.95 - - all made from the Sony store. All Macmillan authors.

Then from my friends at a local bookstore, I bought two hardcovers.

Viva la revolucion!

I've had good luck with Kobo.
They had the new L E modesitt and Steven Brust books the day after the hard cover release.
Tim..

[Silenus]

Originally Posted by stustaff

Hmm find this really interesting, on the one hand

I want a strong book industry with authors being well rewarded and thus encouraged(and I feel tehy deserve to make as good a living as a tv writer or movie star)
Not sure what role the publisher will eventually fill especially in the ebook market as it seems Author-Editor-Agent-Retailer cover all thats needed.

However I am happy to pay $15 for a book I like when its new! However it must then drop in price, for example I would only buy my favourite books at $15 maybe 10 a year, the rest I would not pay over $10 and am happy that to do that I have to say wait 3 months after initial release window.

That's all very well if more of your $15 was going to the author, but as far as I can see this is simply extra money going to publishers or other middlemen. I must say I have the same problem with CDs etc when fatcat middlemen scream piously about how piracy is robbing the artist.

[DD1509]

Originally Posted by starrigger

Naw, they're not. They're saying, don't pay more than you want to for an ebook. Very different.

Interesting that they didn't mention, they had the option of continuing on the same basis, but with delayed publication. (With MacMillan, that hardly even matters, since they're so slow in getting the ebooks out anyway.)

I will be curious to see what other publishers do.

Nah, unfortunately not everyone thinks like you do and therefore others might get a different impression from this event. Don't be so quick to dismiss other points of views.

[DD1509]

Originally Posted by rmclachlan

Surely the Publisher and the Authors have a right to make a decent living. I have no sympathy at all for Amazon - about time someone stood up to them.

That is a silly comment. The publishers and authors continue to make a fine living, without Amazon and they most likely would increase their ability to make money with Amazon.

The publishers signed the deal with Amazon. You think the publishers would have signed the deal if it hurt them in any manner??? They loved every inch of the agreement.

Amazon is not the bad guy by any stretch of the imagination.

I find your logic terribly flawed.