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:
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!
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.
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 firstname.lastname@example.org.
References to prices on this website refer to prices on the main Amazon.com website for US customers. Prices will vary for readers located outside the US, and prices for US customers may change at any time. Always check the price on Amazon before making a purchase.