Charlie Stross: Publishers "Cutting their own throats"

[murraypaul]

Originally Posted by rhadin

I think there are lots of problems with the new program from an author's perspective but aside from those, here's my question: How can Amazon provide "better distribution" when so many people -- worldwide -- do not have devices that are compatible with Amazon's DRM and Amazon is not making its DRM freely available to competitors? Anyone who already owns an Amazon device is already being distributed to by Amazon.

Because dedicated eInk devices are not the only reading devices, or I would imagine by now even the most common reading devices.
There are Amazon reading clients available for almost any device except other eInk readers.

[Sil_liS]

Originally Posted by leebase

Amazon paid the normal wholesale rate. HOWEVER, Amazon was training the market that $9.99 was the appropriate price for just release best sellers....when publishers had $25/30 as the price (with discounting down to $20ish).

Just like they did when they lowered the price of the readers.

Originally Posted by leebase

And after Amazon runs all of the publishers other clients out of business....those that don't have internet billions from other types of sales to wage war with....

No, because that would be a monopoly.

Originally Posted by leebase

THEN Amazon could tell the publishers that $9.99 was the new retail price and that the publisher would get $5.

And you are basing this on what exactly?

[Elfwreck]

Originally Posted by leebase

Amazon paid the normal wholesale rate. HOWEVER, Amazon was training the market that $9.99 was the appropriate price for just release best sellers....when publishers had $25/30 as the price (with discounting down to $20ish).

And after Amazon runs all of the publishers other clients out of business....

Well, except for Baen, who seems to have missed the memo that publishers can't survive on less than $13 ebooks for new releases. Some of us had already been trained to the idea that ebooks should be $6, not $10.

I spent $10 on ebooks today... for four books. None of them are NYT bestsellers, but I'm familiar with 3 of the authors & know I'll love reading those, and the fourth is a Hugo-Nebula nominee, so odds are good that I'll at least find it interesting. I'd say "I'm set for books for a while," but really, I expect to be done with those before Friday, and maybe before Wednesday night.

When I run out of enjoyable books without DRM for under $6, I'll reconsider my purchasing habits. In the meantime, authors who figure out how to offer their works in my price range have a chance of getting money from me; authors who go through the DRM publishers don't.

[Nancy Fulda]

Originally Posted by rhadin

How can Amazon provide "better distribution" when so many people -- worldwide -- do not have devices that are compatible with Amazon's DRM and Amazon is not making its DRM freely available to competitors?

Perhaps 'better distribution' is a poor choice of terms. But Amazon is defiitely creating high sales volume for its indie authors. I have met very few authors who sell better on Barnes & Noble, Apple, Kobo or Smashwords than they do on Amazon. On the other hand, I know several authors -- including one who hit the NYT Bestsellers list with a 0.99 cent indie novel -- who have seen wildly spectacular sales on Amazon.

Whether you like or dislike Amazon's business practices, one must admit that they are very, very good at matching up books with customers who are predisposed to like them. The Amazon algorithms place indie books in front of dozens -- sometimes hundreds or thousands -- of potential customers every day. So even though Amazon's distribution is technically limited (because it is restricted to a single e-reader) it is functionally far larger than any other online retailer (because a vastly higher percentage of readers see and purchase the books).

As far as indie books go, Amazon outsells every other outlet I know of. That is why authors are willing to make their work exclusive to Amazon.

[jersysman]

Originally Posted by Nancy Fulda

...That is why authors are willing to make their work exclusive to Amazon.

That is also why I won't be buying books from authors who will go the exclusivity route. The way I see it, those authors have slighted me and are deciding not to market their books to me (I have a T1 and a Nook Color). Since they are doing that, I don't see why I would be should reward them with my hard-earned money?

Only having one outlet for anything has never been good for the consumer.

[TechnoCat]

Originally Posted by jersysman

That is also why I won't be buying books from authors who will go the exclusivity route. The way I see it, those authors have slighted me and are deciding not to market their books to me

Could be true, if you make them choose between allowing you to discover it, or having it heavily marketed to fifty times more people on Amazon. Not sure they'll notice the punishment you're dishing them though.

Originally Posted by jersysman

Only having one outlet for anything has never been good for the consumer.

What, precisely, do you consider an iPad? Wasn't the Sopranos solely on HBO? I live in a state where liquor currently only comes from state-run unionized liquor stores. Are you or were you 15 years ago allowed to choose your cable TV, telephone, electricity and water providers?

In reality, you don't reward the authors. You reward yourself, exchanging money for entertainment or relaxation. And it does sound like you would not enjoy yourself nearly as much if you felt you had supported an evil monopoly, so I certainly agree with your conclusion that buying the entertainment from a source that reduces the pleasure-payoff would be counter-productive. My only point is that while you certainly may justifiably have these views and feelings, they are not entirely internally consistent. You can still justifiably have them; my wife raises all sorts of inconsistencies in me and I wouldn't trade her in for another supplier either!

[sabredog]

Originally Posted by jersysman

That is also why I won't be buying books from authors who will go the exclusivity route. The way I see it, those authors have slighted me and are deciding not to market their books to me (I have a T1 and a Nook Color). Since they are doing that, I don't see why I would be should reward them with my hard-earned money?

Only having one outlet for anything has never been good for the consumer.

That is a question asked by many respondents to a thread started by an author announcing a new ebook, solely released through Amazon.

Is an ePUB available?

I simply buy from amazon, remove infestation and convert.

However not everyone can do that sort of thing, so it does narrow down the range of readers that a new author or indie author can reach.

[Andrew H.]

Originally Posted by leebase

Oh, the old "Loss Leaders" gambit. When you take the entire New York Times best seller list, and put in on fire sale, every day, all the time....that's not merely a "loss leader like milk".

You are taking aim at the heart of the publisher's profits. Selling for $10 what the publishers have priced at $25/30 and which normal retailers would sell for $20ish.

Nonsense. It doesn't hurt the publisher's profits at all. In fact, they make more if Amazon sells more. It helps them, financially, anyway.

This pricing disparity was SO GREAT...that you could justify paying $400 for the original kindle just on the cost savings alone.

Sure, buy 80 bestellers - $800 - and you've broken even. That's not a super deal.

So...Amazon was using it's ability to sustain losses to attack the very profitability of the publisher's who's books it was selling. As Amazon was also the 800lb gorilla in the paper book selling business, the publishers were hand cuffed.

Again, they didn't attack the publisher's profitability at all. The publishers make the same regardless of whether Amazon sold the book for $10, $15, or $20.

What Amazon was doing with the $10 pricing was *creating* a mainstream e-book market. Something that didn't exist before. And something that would - and has - helped the publishers.

Amazon had 14% of the market at the time. They were important, but not more so than other big sellers. And to the extent that the publishers were handcuffed, it was because Amazon was making so much money for them.

Along comes Apple and the possibility of a credible alternative to Amazon for the publishers. THEN FINALLY, the publishers were able to bring Amazon to the bargaining table. Amazon had a choice....stop the crazy low pricing....accept time windowing for ebooks....or become an agent seller instead of a retailer of ebooks.

This is pretty much true.

All of those choices basically removed the publisher's highly profitable hard back business from having to compete with THEIR OWN product. Just like publishers never release the paper back version until the hard back has had it's run. Nothing new here.

Amazon chose to go the agency seller route as it was the best of the three options. Amazon certainly couldn't allow Apple to have the best sellers months before it did (the time window solution).

Yes, that was the only option. Everyone thought at the time that Apple was going to dominate the e-book market

Well...as Amazon had already bought themselves a near monopoly....not much was going to change that.

Amazon created a mainstream consumer market where there was none before. So, yeah, they dominated it.

At least, though, there is not a CLEAR and OVERWHELMING price advantage to buy an ebook over a hard back book. And thus, we saw the price of the Kindle device drop like a stone. No longer could it sustain even the $250 price point it had reached by the time of the agency agreement.

Lee

The kindle dropped like a stone because of competition from other e-readers. Other e-readers were cheap because the technology matured and the popularity of e-ink readers led to massive economies of scale.

Most of your post has been about publishers and Amazon. But you left out the consumers, who were the people really screwed by agency pricing.

[Elfwreck]

Originally Posted by Andrew H.

Yes, that was the only option. Everyone thought at the time that Apple was going to dominate the e-book market

I didn't. A bookstore you can't even *browse* without a $500 piece of hardware? No chance it's ever going to dominate the market. (Notice how Apple's never released any info about what kind of sales the ibookstore has.)

iTunes took over because anyone could access it through their home computer, not just through their iPhones. And because it works well as a music library--none of the ebook store/device software does that, because they're all caught by the format problems.

[jersysman]

Originally Posted by TechnoCat

Could be true, if you make them choose between allowing you to discover it, or having it heavily marketed to fifty times more people on Amazon. Not sure they'll notice the punishment you're dishing them though.
What, precisely, do you consider an iPad? Wasn't the Sopranos solely on HBO? I live in a state where liquor currently only comes from state-run unionized liquor stores. Are you or were you 15 years ago allowed to choose your cable TV, telephone, electricity and water providers?

In reality, you don't reward the authors. You reward yourself, exchanging money for entertainment or relaxation. And it does sound like you would not enjoy yourself nearly as much if you felt you had supported an evil monopoly, so I certainly agree with your conclusion that buying the entertainment from a source that reduces the pleasure-payoff would be counter-productive. My only point is that while you certainly may justifiably have these views and feelings, they are not entirely internally consistent. You can still justifiably have them; my wife raises all sorts of inconsistencies in me and I wouldn't trade her in for another supplier either!

Please don't try to say what feelings that I have are consistent. It is my opinion and I will state what it is. I happen to feel strongly about it and will vote the only way that I can. By not giving my hard-earned money to those that abide by this. Others may have different opinions and that is their right.

[teh603]

Originally Posted by TechnoCat

What, precisely, do you consider an iPad? Wasn't the Sopranos solely on HBO? I live in a state where liquor currently only comes from state-run unionized liquor stores. Are you or were you 15 years ago allowed to choose your cable TV, telephone, electricity and water providers?

Public utilities are a very bad example, because de-regulation has always caused price increases.

[JD Gumby]

Originally Posted by teh603

Public utilities are a very bad example, because de-regulation has always caused price increases.

...for less service.

[Ken Maltby]

...and the moderators have no problem with the last two posts??

You appear to be confusing Government Subsidy with Government Regulation. What
example of de-regulation has caused a price increase. Removing the support provided
by our tax dollars will cause something to return to its market price.

Remember "Ma Bell", the telephone utility?

Luck;
Ken

[rhadin]

Originally Posted by Ken Maltby

Remember "Ma Bell", the telephone utility?

Yes, I do, and I am sorry that Ma Bell was broken up. Until FiOS became available, Verizon had for years terrible service and quality in my area. (I have to give Verizon credit -- I've had FiOS service for several years now and it is nearly never out of service.)

Some monopolies are good, some bad. Cable TV is an example of a de facto monopoly that is bad (and FiOS competition has done nothing to lower prices; in fact, pricing continues to climb and a la carte viewing still isn't a reality).

The deregulating of my local gas and electric utility did nothing to lower pricing. The most expensive part of the service, the delivery, is not subject to competition, so the few cents lower cost for the gas and electric is lost in the many cents rise in delivery charges.

[gweeks]

Originally Posted by Ken Maltby

...and the moderators have no problem with the last two posts??

You appear to be confusing Government Subsidy with Government Regulation. What
example of de-regulation has caused a price increase. Removing the support provided
by our tax dollars will cause something to return to its market price.

Remember "Ma Bell", the telephone utility?

Remember Enron and the California electrical deregulation?

Greg Weeks