

All The Many Ways Amazon So Very Failed the Weekend - bensummers
http://whatever.scalzi.com/2010/02/01/all-the-many-ways-amazon-so-very-failed-the-weekend/

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DenisM
This quote sums it up pretty well for me:

 _Which of these responses, in short, appears to be the work of actual
adults?_

The problem with any business that succeeded quickly (in geological time) is
that adults in the company get rich and then they quit, leaving children to
take their place. Because adults built a resilient business the demographic
shift is not noticeable until something big and unplanned happens.

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Poiesis
I just don't get Amazon's stance here. It's evident by other actions that they
see the iPad as a serious competitior, which is smart. One of the announced
features of Apple's book store is that publishers get to set their own prices.
So Amazon...plays hardball with publishers who want to set their own prices.
Seriously, WTF? Way to push those publishers away, guys. It's funny--Amazon's
relationships with the publishers are its biggest advantage right now; Apple's
reportedly moving fast here but Amazon has a HUGE head start. Way to blow your
advantage. They're becoming like the Adobe of print or something.

~~~
rksprst
If Amazon forces publishers to a price ceiling of $9.99 for Kindle eBooks;
while the same books are selling for whatever price the publisher decides on
iBooks/iPad, where do you think consumers will buy their ebooks? They're not
blowing any advantage; it's a smart strategic move.

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waterlesscloud
It seems extremely unlikely to me that this action was taken without careful
consideration by a number of people at the very top of Amazon's organization.

This was not some off the cuff reaction, it had to be carefully planned. Any
analysis that assumes it was a silly mistake therefore seems likely to be
wildly off base.

~~~
olefoo
Nope. Sorry. Don't buy it. This is not Amazon playing some deep game to drive
the ebook market in directions that it wants. This was very plainly a screwup
of epic proportions. I don't know enough about Amazon's internal structure or
politics to finger a name but this does have the earmarks of an overreaching
junior executive who was high on the idea that "hey we're Amazon, the 800lb
gorilla, and we can call the shots and make publishers dance like monkeys." It
may have been a group rather than an individual, but if this was an agreed
upon action at the highest levels of Amazon... I'd say sell AMZN. Because that
sort of hubris in management leads to bad decisions.

And think about what message this sends to other Amazon customers and
suppliers. Would Amazon boot your startup off AWS if they decided you were
serious competition? Would you want to bet your company on that?

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Poiesis
"We will use the scar tissue from this painful mistake to help make better
decisions going forward, ones that match our mission." -Jeff Bezos

[http://www.amazon.com/tag/kindle/forum/ref=cm_cd_ef_tft_tp?_...](http://www.amazon.com/tag/kindle/forum/ref=cm_cd_ef_tft_tp?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdThread=Tx1FXQPSF67X1IU&displayType=tagsDetail)

Some guys never learn, I guess.

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mikeryan
So far the web outcry seems to be about 50/50 for/against Amazon on this one.
I personally can see both side's view.

My biggest issue is with their public airing of their dirty laundry. Seems a
calculated move that has backfired.

~~~
potatolicious
I think this hurts Amazon more than it hurts MacMillan.

99% of Amazon's customer base will never hear about this little kerfuffle, so
the good PR they got for "fighting for the little guys" will be fairly
limited.

Meanwhile they've lost a _lot_ of good will on the other side: publishers and
authors. The reaction from authors has been almost universally against Amazon,
and Amazon has been courting them for years to self-publish, especially on
Kindle.

The slight bits of positive "yay! Amazon fighting for low prices!" I think is
overwhelmingly erased by the author support lost.

~~~
adamc
Why? What influence do authors have on where their books get sold? Naively, my
guess would be "none". As a reader, I am certainly unconcerned with the
opinion of authors on where I should buy my books...

The publishers will be pissed, but Amazon remains a key market, so they will
get over it.

~~~
potatolicious
Amazon has been trying to sell authors on the concept of cutting out
publishers entirely, and just jumping on board with Kindle self-publishing.

Given the reaction by authors to this move, I don't think many would be
receptive to this idea any more - Amazon has shown that it's willing to bend
its suppliers over a barrel and strongarm people in pricing. Given that Kindle
self-publishing is still in its infancy, and still has yet to sign a major
author willing to ditch a publisher, this recent news hasn't really helped its
case any.

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nudist
Almost all of these things are not Amazon's fault. The fault should be placed
on the stupidly idiotic actions of the publisher.

~~~
lmkg
Amazon not communicating its situation effectively is the publisher's fault?

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dangrossman
AMZN is down over 5% today with headlines like "Amazon shares drop on news of
e-book price dispute"...

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jrockway
If I were a an author, I would be mad at the publisher, not at Amazon.

~~~
tylero
Can you explain why?

Specifically, I'm curious why wouldn't you want your representative (your
publisher) to have the power to achieve the best possible outcome for you, the
author. Disregarding the specifics of this case, why would you trust Amazon to
set your books' prices, seeing as how they're trying to subsidize a platform,
and they're in the volume business?

Thought experiment: As a developer, would you support a decision from Apple to
set a price ceiling of $0.99 for applications in the App Store?

I haven't really seen a convincing argument from Amazon's supporters why they
feel Amazon should be able to set prices to goods they don't produce. That is,
apart from the fact that these folks would like cheaper books--and that misses
the point of what's at stake here. Even if you agree with Amazon on their
_current_ pricing model, it seems like an arbitrary and likely momentary
alignment of opinion.

If MacMillan's ebook price system doesn't benefit them and their authors,
they'll almost certainly adjust it. They're a profit-seeking entity.

As a side note, this whole episode reminds me of Walmart squeezing down the
price of pickles by sheer monopsonistic purchasing power.

~~~
jrockway
Lower prices don't affect my bottom line, they affect the publisher's bottom
line. If it means more volume, I make more money. (You could argue that
allowing the publisher less profit means there will be fewer books of lower
quality, but that is already the case for programming books. There is already
no money to be made.)

~~~
tylero
Your initial claims here don't follow: Lower prices certainly do have an
affect on author's income. Authors receive a royalty based on a wholesale
price, which is (normally) directly related to the price you pay as a
consumer.

Publishers' and authors' interests are fundamentally aligned. Volume and
pricing affect everyone in this equation. It seems like they should be the
ones discovering and ultimately setting the right price/volume ratio, not
Amazon.

(I have no idea what you're driving at in your last two sentences.)

~~~
waterlesscloud
Author royalties are usually based on Suggested Retail Price, not the actual
retail price.

My impression is that Amazon is primarily fighting over the right to set
actual retail price, like bookstores all across the country have done for
ages. The publishers don't want that to happen because they believe Amazon
will set them low enough to affect hardback sales.

But actual retail price has no effect on the money most authors make. A
discounted book still pays the author a royalty based on full SRP.

At least that's how I understand this whole thing.

~~~
tylero
Yes, you're quite right that there is an important distinction to make there.

To clarify one point: Authors typically make their royalties on the wholesale
price--that is, the actual cash publishers receive from booksellers like B&N
and Amazon. For a printed book, that might be 50-60% of the list price
('sticker price').

The actual retail price, wholesale price, and list price are all related. A
higher list price does result in a higher wholesale price, which in turn
affects the royalty payment.

