February 5th, 2010

inverarity

Amazon vs. MacMillan

Since I've been talking a lot about ebooks lately, I thought I'd mention the current battle going on between Amazon and MacMillan.

It's long and complicated; below are some links to explain it in detail. In a nutshell, Amazon has been trying to force all publishers to price all ebooks at $10. Cheap ebooks = more ebooks and more Kindles sold. MacMillan, a major publisher (who owns Tor, among others) balked and said they want to be able to set variable prices on their ebooks. Amazon responded by delisting all MacMillan books. They've since said that they will "capitulate" to MacMillan, but as of now, the books are still unavailable on Amazon's site.

I'm posting this because the general consumer response has been a somewhat misguided "Yay, Amazon! They're keeping prices down on ebooks!"

Well, yes, but the problem is that they're doing it so that they can sell more Kindles and hold onto their market share (and of course, right now they are preparing for a major turf war with Apple). In the process, they are taking a loss on ebooks, and want to force publishers to take a loss on them as well. Contrary to what's been claimed, MacMillan isn't trying to price all of its ebooks at $15. They're trying to hold onto the same pricing model as regular books: you can buy a book when it first comes out as an expensive hardcover, or you can wait until it's released as a mass-market paperback and buy it for less. Likewise, they want to price ebooks higher when the hardback is released, and lower the price when it becomes available as a paperback.

Also, the battle has been characterized as being like Apple/iTunes vs. the music industry. Which it is, in a way, but there are a lot of subtle differences that make Amazon the bad guys here.

Here's why I side with MacMillan, even though I'd just as soon pay less for ebooks myself: Who gets screwed most by Amazon's tactics? Authors.

Science fiction author John Scalzi has covered this in detail, as he's one of the authors affected. A lot of authors are taking a serious hit in their income right now, with every day that passes that their books aren't available on Amazon. And if Amazon "wins," then authors will take a serious hit in their income long term, as forcing lower prices on books by a company that treats books as loss-leaders to sell Kindles means reduced royalties for the writers.

Also worth noting: a lot of consumers have the attitude, "Ebooks should be much cheaper than paper books, since they're much cheaper to produce!" I admit I kind of felt the same way, but read up on the topic. Printing and shipping costs for books actually represent a relatively small portion of the total production cost, after paying editors, proofreaders, illustrators, marketing, agents, etc., and somewhere in there, a little bit for the author.

I now feel the same way about ebooks that I do about paper books: there are very few books which I will buy in hardcover, rather than waiting for the paperback. (The last hardcover fiction book I bought was Deathly Hallows.) The same thing applies to ebooks: I'm not going to buy one at a premium price unless I just can't wait a year or so for the price to drop, but I think publishers are perfectly within their rights to charge a premium price for those who want it right now.

So the upshot of all this is, I am going to actively avoid buying from Amazon in the future, and when I start shopping for a new ereader, I won't be looking at Kindles.

The Amazon-Macmillan book saga heralds publishing's progress (The Washington Post).

TechCrunch's articles on Amazon vs. MacMillan

John Scalzi's posts on the topic