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Did Amazon Just Blink on eBook Pricing? "Ultimately … we will have to capitulate," says company

By Stephen Windwalker

As customers and members of Kindle Nation, we can’t pick Amazon’s battles. Amazon’s Kindle Team has posted this message on the Kindle community forums within the past hour, strongly suggesting that the company does not expect to have a strategy for fighting back if publishers insist on pricing ebooks at $12.99 to $14.99. We’ll see, and I hope you will share your opinion with Amazon directly on the forums and also in comment form below:

Dear Customers:

Macmillan, one of the “big six” publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.

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!

Thank you for being a customer.


Amazon’s "Delete You!" Tactics Creates Other Opportunities, but Will It End in Global Thermonuclear War? Or Just a Lawsuit Against Jobs, Apple, and the Publishers?

By Stephen Windwalker

This is ugly, for now.

The no-holds-barred Kindle pricing struggle between Amazon and one of the world’s largest publishers, MacMillan (and its dozens of imprints) continues. The huge headline remains the same:

Amazon Deletes Buy Button 
From Thousands of MacMillan Titles 

But now some of the backstory is beginning to unfold, and we’ll continue to hear more of the details in the coming days. MacMillan CEO John Sargent has taken the uncommon step of releasing a somewhat self-serving open letter that makes it clear that Amazon stopped shipping all MacMillan print and ebook editions only after MacMillan unilaterally imposed a total transformation of pricing and terms for editions to be sold in the Kindle Store. It’s interesting reading, and it quickly becomes clear that this is no petty spat: it is the continuing high-stakes unfolding of the major book business story of the past few months, one that may well end up in serious litigation and could spell doom for some key players.

It’s clear that, along the way, even if only temporarily, there will be surprising winners and losers:

  • For starters, both Amazon and MacMillan are sure to be short-term revenue losers.
  • Short-term winners will include Barnes & Noble, the major book club operations, thousands of independent booksellers whose stores are well-stocked with MacMillan titles, any Amazon Marketplace third-party sellers who similarly have good MacMillan inventory, and distributors like Ingram and Baker & Taylor.
  • Authors with MacMillan contracts are sure to be short-term losers, but those authors who have the freedom to begin dealing directly with Amazon and the Kindle publishing platform hold a powerful trump card that could soon lead them to the land of direct 70 percent royalties.
  • Apple, whose share price has fallen a stunning 12 percent since its iPad announcement Wednesday, will be a winner in terms of short-term buzz, but without any iPads to ship or iBooks to sell yet, it remains to be seen if that buzz will turn into dollars.
  • Lawyers will do pretty well with this by the time the story plays out. Of course, with enough lawyers involved, it may never play out.
  • And last but not least, we as citizens of Kindle Nation, and book buyers in general, may suffer some from fewer reading choices in the short run, but it is likely that in the long run the result of the war and the underlying transformations taking place in the book business — and perhaps (see below) our own action — will be that more and more books will be made available to read on the Kindle and other devices, and that their prices, even if they are bumped up in the short term, will settle back to the $9.99 range for new-release bestsellers.

There is a long history of serious struggle between trade book publishers and retailers. Such struggles are not generally marked by open, transparent communication from the publishers or, for that matter, from the retailers. When the rubber really hits the road on this chapter of such struggles, one hopes that due attention will be paid to the utter ridiculousness of the notion that, with the actual discounted pricing of most sold units of new release hardcovers ranging between $12 and $18, it is somehow fair or justifiable to charge $12.99 to $14.99 for ebook editions that have no significant production, warehousing, return, or fulfillment costs.

Indeed, such prices could only come about in a seriously manipulated marketplace.

For now it is very clear that Amazon’s move late Thursday to delete the buy button from MacMillan’s titles amounts to a preemptive deployment of “the nuclear option” in this struggle, and it’s not surprising that it has caused a great din of whining on the part of MacMillan and its authors, most of whom seem to be marching in lockstep with MacMillan CEO Sargent whether it is in their long-term interests or not. And I will admit here that Amazon’s “Delete You” move is a bit troubling, for the moment.

But that is partly because it is not yet clear to me what Amazon’s next move will be. As a reader and a minor functionary in Kindle Nation, I want the next moves to lead to a situation where all titles are available in the Kindle Store, and where something close to the $9.99 price point is preserved.

Let’s be clear that none of this would be happening were it not for Apple’s launch of the iPad, and more importantly, were it not for Apple’s recent “negotiations” with publishers in which Apple promised them it would give them a place to sell their ebooks for $12.99 to $14.99. The underlying, anti-consumer shadiness of that deal with the devil seems especially evident in the imprompu interview where Jobs smugly assured journalist Walt Mossberg that “the prices will be the same” between the Kindle Store and the iBooks store:

The more I watch that interview, the more I believe that it is being watched with surpassing frequency on the computer screens in and around Jeff Bezos’ office at Amazon, and especially on the displays of Amazon’s top anti-trust lawyers. If this week’s “Delete You” tactic was the nuclear option, perhaps we should be preparing for the next phase, Global Thermonuclear War, in which Amazon sues Steve Jobs, Apple, and one or more publishers for colluding to fix — and raise — prices for ebooks. 

If I were managing that campaign, I’d consider another step first: I’d ask Kindle owners to join Amazon in any such anti-collusion lawsuit, because it is us whose right to read is being infringed upon by this collusive conspiracy, and who would suffer if Apple and the publishers were to succeed in manipulating the marketplace so as to raise the prices of ebook new releases by 30 to 50 percent.

But come to think of it, why should we wait for Amazon to initiate such an action? If you’d like to join other Kindle Nation citizens as a plaintiff in such an action, or if you are an attorney who is interested in offering your services, I hope you will add a comment below or send an email to kindlenation@gmail.com.

R.I.P. Jerome David Salinger

By Tom Dulaney

Kindle Nation Daily Contributing Editor

(Publisher’s Note: Please join me in welcoming Tom Dulaney to the contributors’ board here at Kindle Nation Daily. It’s a pleasure to have him aboard, and I hope you will enjoy his contributions as much as I do. –Stephen Windwalker)
Originally posted January 30, 2010 at Kindle Nation Daily – © Kindle Nation Daily 2010

J.D. Salinger  died on Wednesday, Jan. 27, leaving behind a reclusive reputation, a milestone novel of the mid-20th Century, a thin volume of nine short stories, two compilations that scream and shimmer with potential, and no presence whatsoever in epublishing.  His Author’s Page on Amazon displays the full canon of those of his works that were published in book form.

Sadly, none are available in the Kindle Store.  One hopes that Amazon is working as hard to get Little, Brown, Back Bay Books, and the Salinger Estate to rectify this gaping hole — and so much other great in-copyright writing from the past century — as it is to pressure MacMillan and other publishers to adhere to its intended price points for the Kindle catalogue.

For now, the closest we can come to digital-age reading of Salinger’s fiction is — if we happen to be subscribers in the traditional sense to The New Yorker — to read his stories as, with the truncated screen shot at the beginning of this post, they first appeared in the magazine in the two decades following World War II.

The Catcher in the Rye,  published in 1951, has long been a staple of college and, later, high school literature courses.  The scandalous teen angst of main character Holden Caulfield electrified generations of teen readers adrift in a world of grown ups who did not understand them.

Holden, burdened with the massive freight of early teen testosterone in a 1950s world of tease-and-denial, struggled to understand the rules of adulthood that suddenly confronted him.  The book, banned by the Catholic Legion of Decency and countless other guardians of American morality, enjoyed huge success and sales.  Millions of young men read Holden’s struggle while hidden beneath the covers,  flashlights illuminating the text, in the 1950s and early 1960s.

When those young men took over teaching duties as graduate assistants in college, Holden reared his confused adolescent head in lit classes and ascended to literary respectability.

Sad to say, as of Jan. 30, 2010, he hasn’t crossed the electronic border into the world of ebooks. Kindle Nation citizens should be aware that the Kindle titles with “Catcher in the Rye” in their titles that have been rocketing up the Kindle Store sales ranking ladder in the past few days are books about Salinger’s novel rather than the thing itself. The only downloadable works on Amazon relating to Catcher in the Rye are derivative works:  study guides, Cliffs Notes, and commentaries. For the moment, fresh copies of The Catcher in the Rye fetch prices of $5 to $7 as dead-tree books.  Cliffs Notes  on the novel run $5.99 on paper.

Plaintively, the little notice “Tell the Publisher!  I’d like to read this book on Kindle” sits forlornly on not only the original works but the study guides as well.

Death propels artists to fame and, for their estates, prosperity, as witnessed by the massive earnings last year of Elvis, John Lennon, George Harrison, and others beyond this veil of tears. If Catcher in the Rye fails to appear as an ebook in the next few days, it will be a mystery of cosmic proportions.

May Mr. Salinger rest in peace and the wisdom of his iconic novel arise again electronically.

Hardball: Amazon Ceases Shipping of All Books by MacMillan Publishers and Imprints over Kindle Pricing Dispute

By Stephen Windwalker

Are you ready for the latest chapter in the business thriller saga of the year? The one that has some print-book publishers in a death match with Amazon in their efforts to hold onto the last remnants of their publishing prerogatives from an earlier century?

We’ll call this chapter “HardBall.”

Brad Stone and Motoko Rich report in the New York Times today that Amazon’s has pulled all books by major publisher MacMillan from its shelves. That’s all print books, all ebooks, all books, period, although some quick spotchecking by this reporter suggests that Amazon’s move may not yet have been extended to all titles.

Amazon has been involved in difficult discussions with MacMillan over Kindle Store pricing for months, and has responded with a “temporary” move to stop shipping the publisher’s books. It is widely believed that Amazon is responsible for over 20 percent of all book sales in the United States, with Kindle-formatted books representing more than one-third of all Amazon sales.

One of MacMillan’s most venerable imprints, Farrar, Straus & Giroux, is headed by my old college friend and literary zine colleague Jonathan Galassi, shown here, who weighed in with an intriguing but incomplete op-ed piece in the Times late last year.

“Macmillan, like other publishers, has asked Amazon to raise the price of e-books to around $15 from $9.99,” said Rich and Stone in their report, although the phrasing that suggests that publishers in general have taken that position is, according to our information, grossly unwarranted.

The only way you can buy books published by MacMillan and its imprints at the Amazon website is to get them from third-party sellers through Amazon Marketplace. (This, by the way, will be a huge boon to third-party sellers, like the thousands who have built their businesses by applying the principles and strategies described in Selling Used Books Online: The Complete Guide to Bookselling at Amazon’s Marketplace and Other Online Sites.)

The background for this story, of course, involves Steve Jobs and Apple playing the uncharacteristic role of David to Amazon’s Goliath and attempting to build an iBooks catalogue for the iPad — from scratch — by trying to convince publishers that millions of prospective iPad buyers will want to pay $12.99 to $14.99 for the types of iBooks “bestseller” offerings that have previously been available for $9.99 in the Kindle Store. Ordinarily one might say, “Good luck with trying to get that dog to hunt, Mr. Jobs,” but Jobs is as tenacious a player as Jeff Bezos, if perhaps not quite as focused and consistent. And Jobs gave a remarkable impromptu interview to Walt Mossberg at the iPad launch event in which he claimed that “the prices will be the same” between the iBooks and Kindle stores and touted his belief that “publishers are actually withholding books from Amazon.”

Indeed, Rich and Stone report that “publishers have withheld select e-book editions for several months after the release of hardcover versions of books.  It is not clear yet if publishers can withhold books from Amazon while giving them to other parties like Apple. Antitrust lawyers said it could raise legal issues.”

In that final sentence, I think, is one very likely denouement for this saga: a courtroom drama that might well be worthy of John Grisham’s talents, but of course if he writes the book, we won’t get to read it on the Kindle.

And then there’s the fact that such courtroom solutions tend to take years, during which the entire landscape would change anyway.

MacMillan is owned by the global publishing holding company Verlagsgruppe Georg von Holtzbrinck, based it Stuttgart (that would be Germany, not Arkansas), whose imprints include:

  • Macmillan
  • Farrar, Straus & Giroux
  • Faber  
  • Farrar, Straus 
  • Hill & Wang  
  • Sarah Crichton Books  
  • Henry Holt  
  • Holt  
  • Metropolitan  
  • Times Books  
  • Macmillan Children’s  
  • Farrar, Straus Children’s  
  • Frances Foster Books  
  • Melanie Kroupa Books  
  • First Second 
  • Holt Children’s 
  • Christy Ottaviano Books  
  • Kingfisher
  • Macmillan Children’s
  • Priddy Books 
  • Roaring Brook Press 
  • Neal Porter Books 
  • Square Fish  
  • Starscape  
  • Macmillan Science  
  • Palgrave  
  • Picador USA 
  • St. Martin’s Press  
  • Griffin  
  • Minotaur 
  • St. Martin’s  
  • Thomas Dunne Books  
  • Truman Talley 
  • Tor/Forge  
  • Forge  
  • Orb  
  • Tor  
  • Macmillan Publishers (UK) 
  • Pan Macmillan 
  • Boxtree  
  • Campbell Books Kingfisher 
  • UK Macmillan  
  • Macmillan New Writing 
  • Macmillan UK Children’s  
  • Pan Macmillan  
  • Picador  
  • Rodale UK 
  • Sidgwick & Jackson  
  • Think Books  
  • Tor UK 
  • Young Picador 
  • Pan MacMillan Australia  
  • von Holtzbrinck 
  • Droemer Knaur 
  • Droemer Profile  
  • Kiepenheuer & Witsch 
  • Rowohlt  
  • Kindler  
  • Rowohlt 
  • Rowohlt Taschenbuch  
  • Wunderlich  
  • S. Fischer  
  • Fischer  
  • Fischer Taschenbuch  
  • Krueger  
  • Scherz 

It is not known, as we post this, if the German imprint Kindler will be barred permanently from the Kindle Store.

In Confusing Move, Amazon Hikes Prices on Several Books Listed as Free for Pre-Order Earlier Today

This morning we posted an alert about three Kindle Books which were listed as free for pre-orders.

Amazon has now, as of early afternoon, changed its Kindle Store listings for these three books so that they are no longer free. Whether the listing was a Kindle Store glitch or, as it might seem to some customers, a bait-and-switch tactic, Amazon should refund any charges levied against customers who naturally believed they were pre-ordering these books at no charge, and issue an apology for the confusing website behavior. It is especially important for the Kindle team to be proactive in this case, given the fact the these were pre-orders and Kindle Store customers probably will not see evidence of the charges on their credit or debit accounts until Monday (the books’ Kindle release date) at the earliest.

The telephone number for Kindle Support is 1-866-321-8851 (1-206-266-0927 outside the US).

Update: By way of explanation, a contact at Amazon emailed Kindle Nation Daily this afternoon: “In this case, the publisher decided this morning to end the free promos, timing and control of which is at their discretion.”  

As shown in the screenshot below, although the books in question are no longer listed as free, they continue to show up as of 2:30 pm EST 1.29.2010 in response to a Kindle search for zero-priced titles.

Kindle Nation Daily Free Book Alert for Tuesday, January 19, 2010

  • Originally posted January 19, 2010  – Copyright Kindle Nation Daily 2010
  • Please note: If you’re reading this on your Kindle and you’d like to go to your computer to click on these links, just enter bit.ly/KindleDaily into your browser
  • “Free” refers, for now, to the price for download to US-based Kindles. Amazon adds various charges for Kindles based beyond US borders

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