Monday, February 01, 2010

Ah, So Amazon Has "Capitulated"

Things are happening fast, apparently.

Amazon.com has announced that it's going to have to accept Macmillan's terms. HERE'S their announcement. I put the quotes around the "capitulated" because Amazon used it themselves. They've "capitulated" to selling ebooks at a higher profit margin, to likely making more money while also allowing the publisher to maybe remain able to publish titles in the future. Tough deal...

Listen, I'm no enemy to Amazon. That's not it at all. Please note the Amazon links in this blog. Rest assured that I check my Amazon sales ranking daily, and that I'm a frequent customer myself. I just find some of the rhetoric around this dispute... questionable.

For example, I find the wording that Amazon uses - that "Macmillan has a monopoly over their own titles" - a bit strange. Shouldn't they? That's what it means to be a publisher, to take all the risks of publishing and supporting titles. And that's a misuse of term "monopoly". If Macmillan was not only the producer of the titles but also the only venue to sell them that would be one thing. But that's not the case. And why shouldn't a publisher have ownership of the titles they've legally contracted to bring into the world? As an author, I signed a contract with my publisher (who is not Macmillan, by the way) to look after the future of my books; not Amazon. By pricing them publishers are not making people buy them at that price. They're not selling gasoline, here. They're only saying selling them for less doesn't work for them as a business.

I guess a lot of folks think Amazon.com should have that ownership, judging by the comment thread. Seems like a lot of people think publishers are just making a big money grab, since ebooks should just be like gravy to them. I may just have a different perspective on this, but I think folks have the wrong idea if they're thinking the publishers are some sort of fat cats in control of everything, and if they think that ebooks are completely separate from the economics of the entire industry. As a novelist with five books behind me my feeling is that the publishing world is struggling to stay afloat - not chowing down on big ebook profits.

Tina Jordan, in a short piece for Entertainment Weekly, words it this way:

"As someone who has been following this drama, and reading all the comments on this and many other books blogs, I'm alarmed that so many people seem to see Macmillan as the villain here. It's not that simple. The book business has never had high profit margins (I believe 3% is considered fairly healthy, which ought to give you some idea.) It costs an enormous amount of money to produce a book. The author is paid an advance; the book is edited and copyedited and often put through a legal check; a jacket is designed; the publisher pays for marketing (ads!) and publicity (sending the author on tour, or, if they're lucky, paying to bring the author to New York so that they can appear on a national TV show). The printing, binding, and shipping of a title are not the real expenses involved in publication. The issue that Macmillan had with Amazon is a very real one: Given the punishing terms that Amazon insists upon (most e-book profits are going to Amazon, not to the publisher/author), publishers are literally often losing money on their e-book ventures with the company. What Macmillan wants to do is what it calls "agency pricing", that is, offer the e-book for more money when it first comes out, and then decrease the price as time passes - much in the way that a book is first available in hardcover and then in paperback."

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8 Comments:

Blogger King Rat said...

That's not what defines agency pricing. Agency is all about taking a commission vs. owning your own inventory.

12:30 PM  
Blogger Casual Brewery said...

Aren't DVDs and Music priced similar? When they are 1st released, they are priced higher. Over time and & as popularity wanes, the price drops. Really see no difference between ebooks & this.

2:05 PM  
Blogger David Anthony Durham said...

King Rat,

Hi. I read your post. I hear you about working out that distinction. I have to admit it all makes my head hurt a bit, but that's not always a bad thing. Thanks for mentioning Stross post, too. I think I'll link to that.

Casual Brewery,

Yep. Only thing is that I think there's more at stake here than with those traditional models. The Charles Stross post that I'll link to in a second reminded me of some of that. The old model is already broken in some significant ways. This is about staking out the terms of the new arrangements.

4:06 PM  
Blogger King Rat said...

Sorry I was a bit curt in my first comment there. Was typing on my mobile phone.

6:18 PM  
Anonymous Ethan Iktho said...

Seen from far, far away (OK, it's old, old Europe, and especially from that very old f... country called France - f... being for "funny", of course -, all this stuff seems quite strange.

So Amazon thinks a book is no more than a peanutbutter can ? Sell the goods, make money, f... the client ? - f... being for "fawn upon", of course -

Here in France, ebooks are doomed to the same as Google Worlwide Library. If you a looking for an excerpt of a book - for your studies, a quote, whatever -, OK, you will look there. No need to pay for a whole book when all you need is a one of its sentence, alright ? But if you want the real pleasure of reading, especially fiction, you'll want the pleasure of paper under your fingers.

Reading is not like eating peanutbutter.

WARNING !!!

Eating peanutbutter while reading can make you fat and grease paper !

8:41 AM  
Blogger David Anthony Durham said...

Ah, peanut butter...

3:50 PM  
Anonymous Nate said...

I wonder how much of the papermarket is actually being transitioned to electronic books? Me, I'm an avid reader and yet I hate ebooks. I also am so worried that the bookstore/book reading will fade away that I spend more money than I should buying hardbacks when first released.

I worry about ebook pirating/sharing. I think music and literature cannot be compared so easily here. The music industry has much larger profit margins, and concerts rake in the money over and above CD sales. Also, I think it's fairly intuitive that there will always be incentives for people to produce music, even if not compensated, whereas if you took the profit margin out of writing fiction, I'd expect a sharp decline in the quality and quantity of fiction being produced.

Blah, ebooks suck.

3:21 PM  
Blogger David Anthony Durham said...

Well, Nate, I can't say that ebooks suck. I'm a regular book guy myself. After that, it's audio books I'm into. But still, if ebooks work for people as a way to access fiction I'm not against it.

You've got a great point about the profit motive, though, and how it's different than making music. I have friends that are musicians, and my wife sings in a band herself. She was a classically trained singer and music - whether accompanying herself on the piano or singing backup reggae - is so much about the joy in the moment. I can certainly see that musicians can/should be completely serious about their craft, even if they're not making money at it.

Now with writing... Well, storytelling would always have a place in my life, and I can see writing stories and publishing them without really needing to get paid. But writing 235k-word novels for free? I wouldn't do it. That's a strange thing for me to admit, because a novelist is what I feel I was born to be. It's the job named for myself in eight grade, and it's the only one that's ever felt like a complete fit.

But... writing a novel - especially a big one - is too much work, time, emotional stress, etc to be worth doing it for free. I don't just mean that in terms of profit. I mean it in terms of taking care of my family. It would be neglectful for me to spend as much time writing as I do if it wasn't also putting food on the table. I simply couldn't do it, and I'd probably slip toward other ways of writing narrative that can still function as a job. Screenplays anyone? Risky, but I might take a crack at it...

Luckily, I don't have to. Not yet. Nor do I really think that's coming. All this stuff that's playing out just has to. It'll settle down.

As for the "books should be free" folks... I'm sure some people would offer their books for free. I encourage those people to go seek those out. Maybe after reading a few, they'd be willing to pay again...

5:12 PM  

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