Amazon v. Macmillan.
If you’re involved in publishing in any way, you’re probably aware of this story:
Amazon has pulled all Macmillan books from its cybershelves. Macmillan, one of the big six publishers, includes publishing houses Henry Holt & Co., science fiction-focused Tor/Forge and the Tiffany of fiction, Farrar, Straus and Giroux.Apparently the dispute arose from tensions over e-book prices. Amazon likes $9.99 for e-books, but publishers do not. The New York Times reports:
A person in the industry with knowledge of the dispute, which has been brewing for a year, said Amazon was expressing its strong disagreement by temporarily removing Macmillan books. The person did not want to be quoted by name because of the sensitivity of the matter.
Macmillan, like other publishers, has asked Amazon to raise the price of e-books to around $15 from $9.99.
Cory Doctorow, John Scalzi, and David Isaak, all published by imprints of Macmillan, have further posts about what’s going on.
In response to Amazon.com’s strong-arm tactics some indie bookstores, beginning with Mclean and Eakin Booksellers, have decided to create Macmillan-specific pages on their websites so those inclined to support Macmillan with their wallets can do so.
And, since it’s always a good idea to support indie booksellers for any reason, here are some of the other indie bookstores I like:
And, of course, there’s always Indiebound.
I’ve read several comment threads for stories related to this and know several people think that even at ten bones ebooks are overpriced. I say you probably haven’t taken a look at publishers’ profit margins lately. Ebooks don’t go straight from writer to retailer with no cost to the publisher. Yes, the printing and warehousing costs are eliminated, but acquisitions, advances, editing, copyediting, proofing, design, PR, and royalties are not — in other words, most of the costs of producing a book remain. Let’s say Amazon’s current pricing means publishers get about $5.00 per ebook before all the above-mentioned costs are factored in. Considering that, according to at least one source, the above costs, less royalties, add up to $3.55 on average (possibly a little high, but not by too much), you’re talking $1.45 per book profit. Subtract a buck for the author — who’s now making less than half what s/he would be for a hardcover sale – and you’re down to $.45. Again, the margins are narrow. Besides which, I’d think six to ten hours of entertainment was worth the $15 Macmillan wants to sell new releases for. And if not, well, Amazon’s strong-arm tactics are still, in my view, unwarranted. They’re not merely punishing some random corporate entity; they’re trampling on all of Macmillan’s authors too, those folks who rely on their $.70 – $2.50 per book to put food on the table.
I suppose, as far as Amazon’s concerned, that’s merely collateral damage, but I count it as a pretty shitty move.
UPDATE: Let me add, it’s not certain this was Amazon’s doing, though it certainly appears that it was, and it almost has to have been (they’d still have books in stock to sell no matter what else happened). I suppose we’ll see as things progress. But, you know, if it wasn’t: oops.
UPDATE 2: Here’s a PW piece that quotes a letter from Macmillan CEO to authors/illustrators/etc. in full. The letter includes these two paragraphs explaining the deal they were trying to get with Amazon:
Under the agency model, we will sell the digital editions of our books to consumers through our retailers. Our retailers will act as our agents and will take a 30% commission (the standard split today for many digtal media businesses). The price will be set for each book individually. Our plan is to price the digital edition of most adult trade books in a price range from $14.99 to $5.99. At first release, concurrent with a hardcover, most titles will be priced between $14.99 and $12.99. E books will almost always appear day on date with the physical edition. Pricing will be dynamic over time.
The agency model would allow Amazon to make more money selling our books, not less. We would make less money in our dealings with Amazon under the new model. Our disagreement is not about short term profitability but rather about the long-term viability and stability of the digital book market.
This seems reasonable to me. It also means my numbers above re: profit margins are off, in part because most of those costs can probably still be billed to the hardcover edition (for now — long term, maybe not so much), and in part because, according to one source at least, Amazon is buying ebooks from publishers for the hardcover wholsale price rather than what I suggested above. Who was it that said if writers were good businessmen they’d have too much sense to be writers? Obviously that’s the case for me. Ah, well.
UPDATE 3: Amazon backs down. The thread following the announcement is pretty lively. Some of the anti-Macmillan crowd over there make some good points, as well. Despite some folks thinking this was Amazon fighting the good fight for its customers, Amazon’s actions were pretty thuggish, and their eventual response – an inane statement claiming that Macmillan had a “monopoly” on their own products; yeah, like McDonald’s has a monopoly on McNuggets — was pretty weak. I think, at the very least, Amazon came out a rather darker shade of gray.
UPDATE 4: Interesting analysis here.
UPDATE 5: And another from John Scalzi here.
![694-1[1]](http://gunsandverbs.files.wordpress.com/2010/01/694-11.jpg?w=180&h=300)
![PH2009120503085[1]](http://gunsandverbs.files.wordpress.com/2010/01/ph20091205030851.jpg?w=235&h=300)
![sito_gn_in_costr_i0025d4[1]](http://gunsandverbs.files.wordpress.com/2010/01/sito_gn_in_costr_i0025d41.jpg?w=500)
![H21[1]](http://gunsandverbs.files.wordpress.com/2010/01/h211.jpg?w=263&h=300)
![4253790069_ec5131bd6d_b[1]](http://gunsandverbs.files.wordpress.com/2010/01/4253790069_ec5131bd6d_b11.jpg?w=300&h=225)
![4254636908_da8aaf10a6_o[1]](http://gunsandverbs.files.wordpress.com/2010/01/4254636908_da8aaf10a6_o1.jpg?w=225&h=300)
![4254552194_6fd56470fa_b[1]](http://gunsandverbs.files.wordpress.com/2010/01/4254552194_6fd56470fa_b1.jpg?w=225&h=300)
![4254551308_b75368fcb9_b[1]](http://gunsandverbs.files.wordpress.com/2010/01/4254551308_b75368fcb9_b1.jpg?w=225&h=300)
![REFtwin03-HardboiledAmerica[1]](http://gunsandverbs.files.wordpress.com/2010/01/reftwin03-hardboiledamerica1.jpg?w=500)