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

[Argel]

Originally Posted by theducks

Tony Weisskopf, over at "'The Bar" has stated negotiations are slow because Amazon insists on DRM.

I hate DRM as much as the next person but are we really saying that publishers are pushing for higher prices with no DRM?

That's the shortest suicide note in history.

[kennyc]

Originally Posted by Argel

I hate DRM as much as the next person but are we really saying that publishers are pushing for higher prices with no DRM?

That's the shortest suicide note in history.

[guyanonymous]

Perhaps they're insisting on DRM (if they are) to lock things in to the Kindle platform as much as possible?

[Lemurion]

One thing I know: If Toni Weisskopf says that DRM is the sticking point over why Baen books are not in the Kindle store we know it's not Baen that's insisting on DRM.

As for the publishers, I don't think DRM and price are that closely coupled for most of them. It's not so much an issue of "we'll give up DRM if you let us raise prices," as much as a desire to fight rampant discounting which has created a 40% drop in the perceived value of their most important products over the last decade or so.

Nobody buys hardcovers for list any more, and that drop in perceived value is something publishers have to deal with, especially since their costs have not dropped significantly.

[HarryT]

Originally Posted by Lemurion

One thing I know: If Toni Weisskopf says that DRM is the sticking point over why Baen books are not in the Kindle store we know it's not Baen that's insisting on DRM.

I'm pretty sure that Amazon don't "insist" that a book has DRM. There are quite a few DRM-free books in the Kindle store.

[jmaloney]

Originally Posted by HarryT

I'm not sure that I understand your point. Amazon don't "insist" that a book has DRM. There are quite a few DRM-free books in the Kindle store.

You might want to check out David Rothman's rants about Amazon and DRM over at Teleread. He had to fight for at least a month and a half before Amazon allowed the DRM-free edition of his book in the Kindle store.

[Lemurion]

Originally Posted by HarryT

I'm pretty sure that Amazon don't "insist" that a book has DRM. There are quite a few DRM-free books in the Kindle store.

While there are DRM-free books in the Kindle store, there have also been a large number of reports of people having a great deal of difficulty getting books published through major publishers released on the Kindle store without DRM.

[theducks]

Originally Posted by zerospinboson

I'm not really sure I agree, here. As I understand it, in the paper world, retailers get about 50% of the price. If hardcovers cost 25$, that leaves roughly 13$.

Where did you get your numbers? As a former independent bookseller, 50% cover discount was rare. Only Distributors and large chains qualified for the above schedule rates.

For many publishers, there is no single discount rate.
There are multiple "Schedules", some based upon your business classification (Bookstore, Museum store, College book store...)
Some Schedules base the price tier upon Dollar amount, others by piece count of the same book class. Ordering "Non-Returnable" may give a larger discount if you can sell all of the title

Most book stores pay the shipping (worked out to be 5-10% of order dollars for me).
So, unless you can order hundreds of copies, or getting the "Show Special" at a Booksellers Convention, the chances of an independent getting above 40% are slim.

40% - 10% - 30% gross margin
Out of that, comes the Rent-Utilities, Wages, Credit Card fees, Taxes (other than VAT/Sales).
Do enough volume and you might qualify for a Publishers Co-Op advertising program.
My numbers were for direct publisher purchases. Buying from distribution centers like Ingram result in different rates (and reduced selection)

[Elfwreck]

Originally Posted by HarryT

I'm pretty sure that Amazon don't "insist" that a book has DRM. There are quite a few DRM-free books in the Kindle store.

Several publisher reps have mentioned (over the last year or so) that Amazon's contract demands the right to put DRM on the ebooks. They may not do it for self-published books, but they insist on it for those going through publishers. Or perhaps only those going through large enough publishers.

[rhadin]

Originally Posted by Elfwreck

Several publisher reps have mentioned (over the last year or so) that Amazon's contract demands the right to put DRM on the ebooks. They may not do it for self-published books, but they insist on it for those going through publishers. Or perhaps only those going through large enough publishers.

That is absolutely true. I was involved in contract negotiations for the Kindle store and Amazon insisted on DRM (not that my client cared because my client also wanted DRM, but it was part of Amazon's contract terms, not the client's).

[Lemurion]

Originally Posted by HarryT

I'm pretty sure that Amazon don't "insist" that a book has DRM. There are quite a few DRM-free books in the Kindle store.

It may not be that Amazon insists on DRM so much as Amazon insists on being the one who decides whether a book has DRM or not. They want the right to make the decision.

[rwizard]

Although I have not done any independent research yet, but I am thinking based on the number of reports I am seeing here that Apples negotiation with the publishers may have ended up with a deal where they require the publisher to sell without DRM (and not just where apple is concerned). I commented on this previously (either in this thread or another, similar thread) and I think it makes sense. Now I know that Apple is considered the king of controlling a market through DRM; however, hear me out.

When Apple went after digital music files, there was not really much in the way of another legal distribution channel for it. There fore, getting in on the ground floor, proprietary DRM made the music industry feel secure and made it so only their devices played the files. This, plus making a better portable music player than anyone else at the time, allowed them to get a very large presence in that market before the market was very large.

The ebook reader market is different. There are already fairly entrenched players in this market and 2 of them have been selling DRM'ed ebooks that are not readable on other readers for years(I am counting B&N here even though they are relatively new to the market, since they bought up older companies and are supporting a file format not supported by almost any other reading device). It would be like Virgin records and one or two other music sellers had their own music players and sold proprietary files to be played on those devices but the devices were not functional enough or inexpensive enough to create a large market for them. Since this is the case for the ebook reader market, it makes sense for Apple to fight for no DRM to help even the playing field. In addition, they likely have numbers to indicate that sales of music are better since DRM was removed from that media and they offer the publishers the ability to set their own price for ebooks in addition to that (No matter how much an industry does not like their work to be pirated, if there is strong evidence to indicate there are in fact, not just a theory more sales without DRM that is what matters. Because at the end of the day it is sales that matter.) And Apple is in a unique position to be able to show this since no other sellers of ebooks have sold both DRMed and non-DRMed music. So DRM becomes a non issue. Effectively leveling the playing field. Add to this possible strategy the fact that Apple is using ebub (even touting it as the "open standard" in the keynote for the iPad) and not using the Adobe SDK (or B&N's encryption that will be included in adobe in the future). They could be going for proprietary DRM, increasing confusion in the market (I believe this would benefit Amazon the most) or they could be making a move to remove DRM across the board so that any device that can read a format will be able to since there will not be any DRM and customers will not have to do anything illegal to shift an ebook from a format that their reader cannot read to one that it can.

Sorry for the long post, but that is my two cents on the subject at this point

[DawnFalcon]

Originally Posted by rwizard

Although I have not done any independent research yet, but I am thinking based on the number of reports I am seeing here that Apples negotiation with the publishers may have ended up with a deal where they require the publisher to sell without DRM

Very funny, but completely unrealistic (EMI *forced* them to drop DRM on music, there was no "went after" for Apple). We already know they're using their own incompatible DRM, which speaks volumes.

[stustaff]

Originally Posted by DawnFalcon

Very funny, but completely unrealistic (EMI *forced* them to drop DRM on music, there was no "went after" for Apple). We already know they're using their own incompatible DRM, which speaks volumes.

We don't know if it will be 'incompatible' drm yet do we?

for all we know Apple could make it available much like the adobe DRM is where you authorise different devices such as a sony reader or a PC so you can view the apple ebboks on them

[kennyc]

Originally Posted by stustaff

We don't know if it will be 'incompatible' drm yet do we?

for all we know Apple could make it available much like the adobe DRM is where you authorise different devices such as a sony reader or a PC so you can view the apple ebboks on them

The past predicts the future.

I can hardly believe DF and I are agreeing on something!
Both here and with the MacMillan hubbub!