

Amazon indicates they'll accept Macmillan's terms - healsdata
http://www.amazon.com/tag/kindle/forum/ref=cm_cd_et_md_pl?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdMsgNo=1&cdPage=1&cdSort=oldest&cdThread=Tx2MEGQWTNGIMHV&displayType=tagsDetail&cdMsgID=Mx5Z9849POTZ4P#Mx5Z9849POTZ4P

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ryanwaggoner
There's something very weird about this. I'm surprised that they would post
this in the Kindle forums, and the tone is just odd:

 _We want you to know that ultimately, however, we will have to capitulate and
accept Macmillan's terms because Macmillan has a monopoly over their own
titles, and we will want to offer them to you even at prices we believe are
needlessly high for e-books._

If that's true, then why wait? Just "capitulate" now and get it over with. If
you're going to tell the other side that you're going to cave anyway, you've
pretty much given up all bargaining power.

I see the move to this agency model as such a monumentally bad deal for Amazon
that it seems like one of four things must be going on here:

    
    
       a) They've analyzed the situation and know they can't win (unlikely)
       b) There's a legal reason that they can't do what they're doing (unlikely)
       c) They're running a more elaborate play than we all realize
       d) This was posted in error or without authorization

~~~
thras
e) 5-10 big name publishers threatened Amazon over Macmillan, and they had to
choose between backing down or facing a publisher revolt.

~~~
waterlesscloud
f) Amazon believes the consumer will eventually force the prices down and this
was their method of bringing public attention to the issue. Thus every author
posting on their blog today ultimately helps Amazon.

~~~
wheels
If Amazon's goal was to make noise they'd hardly have picked the Kindle forum
as the place to do so.

~~~
ErrantX
why not; that's probably their most vocal consumer market for ebooks after all

------
ghshephard
Huge win for the publishers. If Amazon accepts, then the publishers (And I
disagree with Amazon, once they conceed with Macmillan, the rest will want the
same deal) will be able to leverage this agreement to get the same from Barnes
and Nobles and other eBook sellers - I'm sure Apple will, likewise, agree - if
they haven't already.

This will restrict (prevent?) Amazon, B&N, Apple from discounting eBook prices
to get people into their eStore. It hurts the reader, in that they can't get
cheap eBooks until a year after they are released. I wonder if the publishers
will try to extend this to the "Physical" book market, or whether that's a
different ballgame altogether. (If Walmart is the Amazon in the physical book
market, who is the Apple? I'm sure B&N likes being able to flexibly price
books to get traffic in the store. As does Target. For that matter, so does
Amazon. Is there an odd man out there with enough volume to make a
difference?)

From a competitive landscape perspective - Steve Jobs knew that providing an
agency model as a negotiating tool to Macmillan was valuable - I'm wondering
what he got back in return?

All in all, a very exciting weekend of developments in the eBook economy. All
started with the iBook store negotiating between Apple and Macmillan, I'm
sure.

~~~
mechanical_fish
_It hurts the reader, in that they can't get cheap eBooks until a year after
they are released_

One of the lessons I have learned from this debacle is that I should be
careful what I wish for. It turns out, according to my favorite authors, that
time-sensitive pricing is a huge part of what makes the economics of their
business work. After all, an author's hardcore fans are willing to pay more,
and time-sensitive pricing -- with books costing more on the day of release,
then gradually getting cheaper -- is the established mechanism for extracting
that premium. The "hardcover" vs "softcover" vs "remaindered" thing is the
industry's way of signalling the different price points.

I've suddenly started looking at hardcover buyers with more respect. These
people aren't suckers, or at least they aren't _mere_ suckers. They are the
patrons, the hardcore fans, that are keeping my favorite writers in business.

It would be the height of irony if I eventually got what I used to think was
my wish -- flat-rate ebooks at, say, $5 per copy, no premium pricing -- only
to see my favorite authors either go out of business or figure out some other
way -- exclusive early releases by subscription, the street performer
protocol, selling T-shirts, product placement -- to recover the equivalent of
the cost of a hardcover book!

We're all going to save money in the e-book era, but I'm not really sure it's
going to be _that_ much money: Writers and editors and marketers still need to
be paid. We'll save on printing and shipping, but that may be about it. There
just aren't tons of excess profits sitting around in book publishing: The
audiences are too small. I might not even save money on bricks and mortar: I
_like_ visiting bookstores or the equivalent, even if just to sit and drink
tea while surrounded by media.

~~~
patio11
_I've suddenly started looking at hardcover buyers with more respect. These
people aren't suckers, or at least they aren't mere suckers. They are the
patrons, the hardcore fans, that are keeping my favorite writers in business._

For years I felt proud of that -- as I mentioned yesterday, I used to buy
hardcovers pretty indiscriminately. I'll happily pay extra for quicker access.
That's why I shelled out $350 for the machine which teleports books directly
into my hand. When I hear publishers talking about windowing books on my
Kindle to protect their no-longer-relevant-to-me hardcovers and physical
distribution systems, I get a little upset. I mentioned so on my blog.

This morning, I woke up to an inbox full of mail from people who profess to be
professional communicators telling me that I "stabbed them in the back" and
was a "useless parasite" and "tightwad" for expressing my desire to continue
paying them thousands of dollars in return for fastest possible access. I
think of myself as a patron. They clearly think of me as a sucker. Did the
Medicis ever have to put up with this? Of course not: in addition to hiring
artists they also had assassins on the payroll. I'm strangely tempted.

It seems like six authors have a radically different understanding of the
patronage relationship than I do. In a not totally unrelated turn of events,
today my To Read list got shorter by two books.

~~~
jstevens85
> When I hear publishers talking about windowing books on my Kindle to protect
> their no-longer-relevant-to-me hardcovers and physical distribution systems,
> I get a little upset.

It's important to note that Macmillan was only considering windowing books on
the Kindle because Amazon was forcing them to sell their books at a price
below what they believed was profitable. Had Amazon been more flexible in
allowing publishers to set prices for the content _they own_ , then this never
would've happened.

~~~
patio11
Here's what I'm hearing from Macmillan: whine whine whine, blah blah blah,
_windowing_. Whine whine whine, blah blah blah, _price increase_. Whine whine
whine, blah blah blah, _most books will be released simultaneously_.

(When I hear that I start speculating on what books a hit-driven industry will
make into the exceptions from simultaneous release. Oh, right: the ones they
think I'm most likely to want to read.)

I understand on an intellectual level that Macmillan has business model
problems, but their problems are not my problems. Attempting to make them my
problems does not endear them to me.

------
wheels
Wow. I'm surprised Amazon didn't leave the hurt on longer, find some way to
ensure used stock of the most important Macmillan titles to block revenue to
Macmillan, go all out tactical maneuvers on this one. Their not-even two week
old impressively ambitious strategy is already cracking and I suspect once one
publisher has stiff-armed them, their ability to reel-in the others will be
nullified.

I don't really have a team I'm rooting for here, but this is as close as I get
to watching sports and the quarterback for one team just got taken off the
field in a stretcher 2 minutes into the game. Man, and I thought the final bit
of this was going to be Bezos vs. Jobs slugging it out over the future of
publishing, now it's looking like it'll underwhelm.

~~~
gamble
Going nuclear on Macmillan was a mistake. It made Amazon look like the bully,
and I wouldn't be surprised if it scared the other major publishers into
standing behind Macmillan.

~~~
wheels
That's believable. But Amazon basically declared war on book publishers two
weeks ago anyway. It's disappointing that when the publishers (predictably)
pushed back that Amazon didn't have something more nuanced than this worked
out.

I figured going nuclear was part of a scorched earth strategy, "You can die
now or later..." sort of thing. From the (admittedly, little) that I
understand of the publishing industry, it's fragile enough that there was at
least uncertainty in what the result of such would be.

------
petercooper
Amazon would have done a lot better out of this if they hadn't pulled the dick
move of removing all of Macmillan's irrelevant-to-the-argument _print_ titles.

Now we've seen Amazon's true colors. They're not bothered about destroying
their entire relationship with you if you want to negotiate on one element of
it.

------
jsz0
I'm curious why people think e-books should be so cheap? $15 for a recent
release really isn't a bad deal in my opinion. Books are a value compared to
most other forms of entertainment. A new release movie costs you $15-$25 and
it's only 2 or 3 hours of entertainment. A new release video game costs
$50-$60 and is probably pretty close to the number of hours of entertainment a
book offers. A CD is $10-$15 for up to 70 minutes of entertainment. That's
simplifying it a bit since we should consider the re-consumption value of each
medium but I think it's worth considering that a book has quite a bit of
consumer value. I think it's also worth considering that the number of people
who actually read books has been on the decline for some time. I'm not sure a
lower e-book pricing model makes up the difference. Are people more likely to
read if a book is $5 instead of $10? Doubtful since libraries have books for
free and most people _still_ don't read that much.

~~~
Lazlo_Nibble
_For me_ (and I don't claim this calculus works for anyone else) an ebook is
overpriced if I can get a discounted or used copy of a print version for the
same amount or less. The print copy has intrinsic value; I can resell it, lend
it out, donate it to a "books for prisoners" program or leave it to my
grandkids; it requires no additional hardware, and I'll be able to read it
anywhere, anytime for the rest of my life. If I drop it down a sewer grate or
forget it in a cab, I'm out no more than the replacement cost of the book
(which is probably out in paperback now). If I throw it in a box in the attic
and leave it there, barring the Rise of the Silverfish I'll be able to pull
the box back down again in ten years and pick right back up reading it again.

But the electronic copy has _no_ intrinsic value; I can't resell it, lend it
out, or donate it; it requires additional hardware to use, and I can only read
it on the platform(s) the vendor allows me to read it on for as long as the
vendor allows me to read it. If I'm reading on my PC, I can't change platforms
or upgrade my OS unless the proprietary reader software is available for the
platform/OS I'm moving to. If the vendor decides to adopt another format or
leave the business entirely, my books suddenly have a drop-dead date: once my
hardware breaks, I lose the titles I've bought forever.

A lot of these issues go away with non-DRMed titles, but in all but a few
cases (bulky tech reference titles for example) a DRM-free eBook is still
unlikely to be worth as much to me as the print version.

And you really don't want to get into the "dollars per hour" argument here.
The iPhone game I just finished up cost me a dollar and I got a good 20+ hours
of play time out of it. But I can get through an average-sized book in four or
five hours, so if I went by price per enjoyment-hour, it'd make that book
worth about twenty-five cents. (I'm cheap, but not _that_ cheap...)

~~~
mmt
I can't upvote you enough :)

The calculus works for me, as well, with a twist. I place very little
_intrinsic_ value on the paper book, myself, other than as a delivery
mechanism. As you point out, however, since I can resell it, the market places
non-zero value on some instances of paper books[1].

Since the value, for me, is entirely in the convenience of delivery, hardback
books, by their bulkier, heavier nature, have less value than mass market
paperbacks. I even wrinkle my nose at "trade" paperbacks[2]. The size of the
current crop of e-readers fail to be no larger than a mass market paperback,
even the silly extra-tall ones.

An electronic copy, to me, does have _some_ intrinsic value in that it's
searchable, but that's primarily interesting for the bulky tech reference
titles you allude to.

Everything else is delivery. I'm only willing to pay the full $8 price when
I'm desperate, having nothing with me to read, but a local bookstore having
something I know I'd buy eventually anyway. It's something I try to avoid by
thinking ahead. Otherwise, for a brand new book, the Costco $6ish is my limit,
and that's typically only for the more popular releases. Otherwise, it's $2-$5
at the used bookstore or online.

In contrast, perhaps since I'm not an avid game-player, or, perhaps because I
read for pleasure 2-3 slower than I could, I find the price per enjoyment-hour
to be one that makes some sense. This leads to a desire for a subscription
model, since, after all, I can only read one book at a time. It would allow me
to try out a writer without forking over my time _and_ the cost of a whole
book. Moreover, I'd be happy to pay several times as much for a 1k+ page
Pynchon tome as for a pulpy novella or something in between[3].

If such a system were to pay royalties based on usage, I would expect it to
encourage writing that's a balance between being so light as to be skimmable
and so involved as to be inaccessible. I believe this to be a desirable
consequence, though I recognize the danger in, if I may abuse the term,
engineering regression toward the mean.

[1] This is on the order of $1 per item, in trade, at my local used bookstore.
It's often $0.

[2] though some can mostly fit in a pant pocket, especially the Canadian
Costco cargo pants I favor

[3] all of which I enjoy, but I can't fathom paying full price for 150 pages
consumable in one sitting.

------
nfnaaron
"Macmillan ... are committed to switching to an agency model and charging
$12.99 to $14.99

"We have expressed our strong disagreement and the seriousness of our
disagreement by temporarily ceasing the sale of all Macmillan titles. We want
you to know that ultimately, however, we will have to capitulate and accept
Macmillan's terms because Macmillan has a monopoly over their own titles, and
we will want to offer them to you even at prices we believe are needlessly
high for e-books. Amazon customers will at that point decide for themselves
whether they believe it's reasonable to pay $14.99 for a bestselling e-book.
We don't believe that all of the major publishers will take the same route as
Macmillan. And we know for sure that many independent presses and self-
published authors will see this as an opportunity to provide attractively
priced e-books as an alternative.

"Kindle is a business for Amazon, and it is also a mission. We never expected
it to be easy!"

Wow. What a masterfully passive aggressive mash. They made us do it. But
they'll see. They will. Will.

Also, even if Amazon's posts on that forum are normally signed by "the team,"
this was a decision by somebody or a small group of somebodies, and it should
have been signed by a name. Especially something as masterful as this.

------
b3b0p
I agree with Amazon's opinion on the prices, but disagree with their action.

If the publishers wish to have their items for a certain price, let them.
However, I think it's clear they are in for a rude awakening when they see the
sales figures.

My fear is that the publishers will find a way to blame not their prices, but
another variable (Amazon, the devices, something else). Ultimately hindering
the availability of books and adoption rate of what could have been an
excellent format.

Your product is only worth what others are willing to pay and I do not believe
I am in the minority when I think that $14.99 (or even $9.99) for many is too
much for a non-tangible drm (or not) ebook.

------
tsally
An author published by Macmillan did a write up about this on the Science
Fiction and Fantasy Writers of America's blog:
[http://www.sfwa.org/2010/01/why-my-books-are-no-longer-
avail...](http://www.sfwa.org/2010/01/why-my-books-are-no-longer-available-on-
amazon-com/)

You can probably skip the commentary on free markets, but he has some
interesting insight in the actual cost and mechanics of publishing. He
explains that at the moment eBooks are the equivalent of selling limited
editions of paper books because they just don't have the volume yet.

------
jonknee
Ironic that Apple is the one forcing Amazon's hand for not allowing publishers
to use the agency model. Steve Jobs went to war with the record labels when
they wanted the same thing as Macmillan. Even better is that Amazon went
agency for their music sales which put a kink in Apple's plans and caused them
to introduce flex pricing and DRM free content. This is all the result of two
egos duking it out. Fun to watch.

------
dpapathanasiou
It's more than just an indication: "we [Amazon] will have to capitulate and
accept Macmillan’s terms" (
[http://www.nytimes.com/2010/02/01/technology/companies/01ama...](http://www.nytimes.com/2010/02/01/technology/companies/01amazonweb.html)
)

------
Kilimanjaro
I never understood why an e-song can be sold for 99cts and an e-book can not.

Anybody care to explain the economics of both?

~~~
likpok
e-songs sell much higher volume. Therefore, e-books must cost more to cover
the fixed costs (someone else posted a breakdown of book-costs in an earlier
thread).

Edit: [http://www.tobiasbuckell.com/2010/01/31/why-my-books-are-
no-...](http://www.tobiasbuckell.com/2010/01/31/why-my-books-are-no-longer-
for-sale-via-amazon/)

~~~
GavinB
Additionally, the effort required to produce a song is much less. I could
write, record, mix, and master a song in a week. A book would take several
months just to get a first draft.

An album of songs is much closer in terms of production costs, and requires a
similarly large effort.

------
DannoHung
Why are authors going to stick with publishers in 10 years or 20 years or
however long it takes for there to be more eBook purchasers than physical book
purchasers?

I mean, it only took cell phones what, 15 years before they were so common
that people in third world nations had them, right?

------
gills
And...queue Amazon publishing house in 3...2...1...?

~~~
ajdecon
Which would be interesting to see them try, but I don't think they'd find many
takers among popular authors right now. Most of the anti-Amazon press this
weekend was generated by _authors_ angry over the stealth delisting of their
physical books. It's a community response, too: many of the angry authors did
not even publish through MacMillan.

------
synarch
Apple is encouraging cartels.

~~~
sachinag
Sure, but most cartels fall over time as the players find themselves having
divergent priorities. And even now, I'm going to tie myself to Amazon's MP3
store. I just got a Pre Plus and I'm never, ever going to buy a song from
iTunes again.

~~~
ugh
Why do you tie yourself to anything? There is no more DRM. No need for any
tieing.

Buy wherever it’s cheapest or where what you want is available. File formats
are no problem, webOS plays both MP3 and AAC files.

~~~
sachinag
I thought the cheaper iTunes downloads are still FairPlay protected AACs and
only the $1.29 downloads are DRM free.

~~~
JeremyBanks
They dropped the price of DRM-free tracks to be the same as DRMed tracks way
back, and during the first quarter of last year they removed DRM from all of
the songs in their library.

Some music videos are still DRMed, but all songs are DRM-free 256 KBps AACs
for 99 cents.

