NYT: Electronic Device Stirs Unease at Book Fair

[wallcraft]

Originally Posted by Over

I'm not following up. How can Amazon being loosing money, if they sell the ebooks at the same price as the paperbacks? Shouldn't they be having a wider margin profit? Or are hardcovers the big money makers?

Publishers get 35% to 50% of the list price. The list price of ebook versions of new hardcovers are typically the same as the hardcover. So when Amazon sells these for $9.99 they nominally loose money if the list price is above $20 (50%) or $28.50 (35%).

Where they really loose money, though, is when publishers charge hardback prices for ebooks even though there is a paperback version. In that case Amazon meets the paperback price, at great cost to them while subsidizing the gouging publisher.

[Steven Lyle Jordan]

It's certainly a shame that the publishers have this mindset... their wording says it all: They don't see this as an opportunity, they see "threat" and "cannibalization" in the e-book market.

In that light, one can only hope that Amazon will manage to drag publishers (surely kicking and screaming) into the 21st century.

[tirsales]

Originally Posted by Steve Jordan

In that light, one can only hope that Amazon will manage to drag publishers (surely kicking and screaming) into the 21st century.

No. Because what Amazon wants is exclusivity on the ebook market.
Why sell under price? For the same reason every big company does - to get a monopol and later be able to let customers pay through the nose, offer no service, dont upgrade their devices, etc

Mark my words: If Amazon continue being really successfull on the ebook market and more publishers give their content exclusive to Amazon - this is the worst thing that can happen.

Dont get me wrong: E-Books are fantastic. And that is why I am afraid of Amazon. Really afraid. I don't want to use the Kindle (or whatever device Amazon releases afterwards) - I want to be able to choose. Choose the shop, the device, the software.

Why publishers dont release ebooks? Because they are afraid and dont understand the technologies involved. And they really dont want to change to a new market. After all - the old market hasnt change for several hundred years, and they seem to be a little bit set in their ways.
The music industrie had to change format a number of times, the publishers? Never so far ...

[Walk Broad]

Very well could be part of Amazon's goal.

But I think the only way to really tell about publishers is if Simon & Schuster also makes those 5,000 books available to Fictionwise and everyone else.

Maybe they did and Amazon got the headline because more people have heard of them. Maybe S&S announced it for the Kindle since Jeff Bezos was there. Maybe Fictionwise (et al) is on the phone with S&S right now negotiating a similar deal.

We just don't know yet.

If not, or if so, then we will be better able to see what is happening.

[pilotbob]

Originally Posted by lee1234

The reason why I hadn't bought Amazon Kindle is because it is so damn expensive.

It cost less than the CyBook.

BOb

[pilotbob]

Originally Posted by tirsales

Why sell under price? For the same reason every big company does - to get a monopol and later be able to let customers pay through the nose, offer no service, dont upgrade their devices, etc

This is just FUD. When iTunes started they sold songs for $.99 each. Now that they are they number one seller of music (or are they still 2 behind Wally) they still sell each track for $.99.

As many of use have felt, if publishers really studyed ebooks and electronic distribution they would realize that they could make more profit with lower prices on ebooks than on pbooks.

BOb

[tirsales]

Nr 1 != monopol

[Walk Broad]

Originally Posted by pilotbob

This is just FUD. When iTunes started they sold songs for $.99 each. Now that they are they number one seller of music (or are they still 2 behind Wally) they still sell each track for $.99.

As many of use have felt, if publishers really studyed ebooks and electronic distribution they would realize that they could make more profit with lower prices on ebooks than on pbooks.

BOb

I agree BOb but this kind of thinking is rampant against any big coporation. Everyone has the same knee-jerk reaction (including me at times)

What corporation doesn't want to corner the market on whatever? It's what they do. (See the excellent documentary "The Corporation").

I wholeheartedly and completely agree with you on your second point. If only publishers would see the benefits of "e" and stop treating it as a threat.

But, publishers are simply following the same path the music industry followed. They learned that electronic distribution wasn't the end of their industry, merely an evolution.

The Publishing industry will learn the same thing but probably not after much "wailing and gnashing of teeth".

[tirsales]

I agree that it is mostly FUD. I have no hard data on Amazons intentions. Nevertheless - monopols are among the worst things that can happen. I don't know many monopolists that played fair - or even cared about their customers.
And Amazon is not among the companys winning prices for nice behaviour. Look at their behaviour against e.g. publishers. Or even at their approach to e-books - making a new format though they own Mobipocket. It tells you something, it really does.
Thus I would absolutely not like Amazon gaining any monopol (or even a too dominant position) on the e-book market.
Better formulated?

Originally Posted by Walk Broad

I agree BOb but this kind of thinking is rampant against any big coporation. Everyone has the same knee-jerk reaction (including me at times)

Well ... perhaps, only perhaps, there is some reason behind this automatic reaction .. Perhaps one learned from experience?
I really cannot remember any monopol that had a beneficial outcome (excluding the company itself). Monopols on anything leed to higher prices, less service and a slower development. If you dont believe me, have a look at existing or historical monopols.
And no, I am not a communist.

Originally Posted by Walk Broad

But, publishers are simply following the same path the music industry followed. They learned that electronic distribution wasn't the end of their industry, merely an evolution.

The Publishing industry will learn the same thing but probably not after much "wailing and gnashing of teeth".

I hope - but I seriously doubt - that they will learn a bit faster. But I fear they give to much about the media industries ranting and are even more unwilling to learn ...

[Walk Broad]

Originally Posted by tirsales

I agree that it is mostly FUD. I have no hard data on Amazons intentions. Nevertheless - monopols are among the worst things that can happen. I don't know many monopolists that played fair - or even cared about their customers....

No monopoly has ever been good for the consumer.

And, as you said, Amazon already owned Mobipocket which could have been the defacto book format for the Kindle with no need of further intervention or manipulation from Amazon.

Instead, they created a new proprietary format.

So, yes, something is up.

But at the same time, we have to understand this is the cost of doing business for the things we want/need/like. As we continue down the electronic age, I'm sure this issue will come up again.

The best we can do is to continue to rally for change or not purchase from said companies and protect ourselves as best we can.

ePub / HTML are great universal formats, but all corporations exist to increase the wealth of the shareholders. If they can get more people onto a proprietary system the better to lock in their profits by locking in customers.

It's simple business economics. They really don't give a rat's patotey about longetivity. In their corporate mind, their corporation is going to be around forever anyway. None of them "plan" to go out of business.

Looking at it from their perspective (short-term, profit motivated) why should they use a more open standard? Because it is the kinder, gentler thing?

Unfortunately, that doesn't work with the majority of most shareholders.

[tirsales]

Originally Posted by Walk Broad

No monopoly has ever been good for the consumer.

So we agree

But at the same time, we have to understand this is the cost of doing business for the things we want/need/like. As we continue down the electronic age, I'm sure this issue will come up again.

That is where we differ - you can do business in two ways. Either you can simply aim for middle or short term profit or for long term profit - and I am very sorry to see that most companies aim for the first.

The best we can do is to continue to rally for change or not purchase from said companies and protect ourselves as best we can.

That is what I wanted to achieve. You can only force business into something helpful for yourself by not buying there.
So - abandoning shops/publishers/etc using DRM or trying to enforce a monopol would actually be a way to get nicer formats, better service, etc

ePub / HTML are great universal formats, but all corporations exist to increase the wealth of the shareholders. If they can get more people onto a proprietary system the better to lock in their profits by locking in customers.

That is again not true in my opinion - have a look at the current development of open document standards vs the previous closed standards. It is the same for the music or for office formats - they are switching to open standards because closed standards are really no way to go. Not even if you try to hold customers...
I dont know why CEOs and share holders still believe in "closed formats" - there is actually no sense in them.

It's simple business economics. They really don't give a rat's patotey about longetivity. In their corporate mind, their corporation is going to be around forever anyway. None of them "plan" to go out of business.

Yeah. And none of them think for the next 5 years - at least thats my current view of the problem ...
And pissing off your customers really is not a good business strategy. As "company founder seminars" keep repeating ... One completely satisfied customer means three customers won. One annoyed customer means seven customers lost.

Looking at it from their perspective (short-term, profit motivated) why should they use a more open standard? Because it is the kinder, gentler thing?

Yeah. Short-term motivation is one of the key problems of todays economy. Oh well, that's not the topic here

It seems we agree in quite a number of positions. And as long as we both agree that monopols or market-domination are bad things, I can live with it

[Walk Broad]

Originally Posted by tirsales

It seems we agree in quite a number of positions. And as long as we both agree that monopols or market-domination are bad things, I can live with it

Yes, we agree on a number of points. I wish it were so easy for corporations to put aside short-term greed for long-term profits but they haven't.

What people forget about corporations is they are run by people. And people can change the climate of the corporation (from within as shareholders and from without as customers) to truly be "kinder and gentler."

[JSWolf]

I think that if Adobe does it right, ePub could become the #1 eBook format. And what will be good is that hopefully ePub will be able to be viewed on a number of different devices. If that happens, I see publishers maybe willing to take the risk and release ePub format eBooks.

[Steven Lyle Jordan]

@tirsales: Don't forget, the focus of the article is on Amazon, a company that has always operated on the long-term view. Amazon created its present business model by taking its time and tweaking it to death, until almost a decade later, it was operating, and profiting, like a swiss watch. I'm sure they are approaching the Kindle in the same way. And I agree that this is potentially not good, since Amazon is concentrating their efforts on a proprietary format and delivery system.

If publishers can maintain their sovereignty long enough to establish a standardized format (like ePub) that any outlet can sell and any e-book reader can convert, it won't matter what Amazon does. But I don't know that the pubs have the stones to do that, as opposed to rolling over and accepting Amazon's in-place, we-do-all-the-work e-book contracts--which, I'm sure, entice the pubs with the carrot of DRM protection (however illusory) and the lock the pubs into exclusive deals and Kindle formats only.

[Steven Lyle Jordan]

Originally Posted by JSWolf

I think that if Adobe does it right, ePub could become the #1 eBook format. And what will be good is that hopefully ePub will be able to be viewed on a number of different devices. If that happens, I see publishers maybe willing to take the risk and release ePub format eBooks.

They still have to be convinced that they can profit off a format that is interchangeable on any device... they still believe that interchangeability will encourage rampant copying and subsequent loss of profit, which makes that a hard sell.

Since ePub now exists, it satisfies the need for a universal format. The publishers now need to work on two other fronts: One, getting all e-book reader HW/SW to come equipped with conversion SW for ePub (even if they use another format); and Two, working out an easy-as-dirt marketing and distribution system, so people can and will buy their e-books like they are going out of style.