Book Publishing Industry Just Now Realizing That Change Is Turbulent?

from the really? dept

Thu, Feb 4th 2010 6:47pm — Mike Masnick

As the latest episode of "the ebook wars" continues, there's still lots of chatter about last weekend's Macmillan/Amazon fight. Apparently a lot of authors are angry at Amazon for this. While I can understand how the fight might hurt some authors -- and they're justifiably worried about Amazon's dominance in the ebook market today, I think they need to take a larger view of things. The reason why Amazon tried (though, failed) to stand up to Macmillan was to avoid Macmillan making some really stupid decisions about ebook pricing and distribution windows. That Macmillan won may have helped some authors in the short run (avoiding them being cut off by Amazon), but could hurt in the long run by fighting against the economic tide.

Perhaps the best summary of this situation was written by Steven Pearlstein at the Washington Post, who recognizes that this is a technological transformation, and while it may be messy in the interim, the end results should be quite positive:

While markets have their flaws, over the long run they are good at executing these technological transformations.... Reports of the death of book publishing, like those of music publishing and newspaper publishing, are greatly exaggerated. Business models will change, companies will come and go, and people will lose their jobs. But at the end of the process, there will be fewer people who will be paid higher incomes to produce a wider array of products at lower prices. There's a word for that -- progress -- and it's exciting to see it unfold right in front of us.

If only those going through that transformation could recognize it in those terms...

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: books, change, ebooks, progress, publishing

22 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Rose M. Welch (profile), 4 Feb 2010 @ 6:05pm

My problem with this is that Amazon didn't try to force the prices 'to avoid Macmillan making some really stupid decisions about ebook pricing and distribution windows'. They did it to try and sell more Kindles. (And Kindles are a whole different bag of worms...)

Amazon trying to force a low price on Macmillan is just as dumb as Macmillan trying to force a high price on Amazon. In this case, neither of them is attempting to listen to what the market wants, so it doesn't really matter what they do otherwise.
[ link to this | view in thread ]
Jon Renaut (profile), 4 Feb 2010 @ 7:30pm

Not about Kindles, it's about control
I don't believe that Amazon is selling ebooks as a loss-leader for Kindles. Electronics are usually really low-margin - you don't make much profit on each device. Electronic files, on the other hand, are usually high-margin.

This whole thing is only barely about price. It's about who gets to set the rules. Amazon botched the handling of this pretty badly, pissing off a lot of authors in the process, but neither side really cares about what the price is, or what the consumers want.

Macmillan isn't used to a retailer trying to make the rules, and Amazon isn't interested in being treated as a retailer. This is likely to get a lot worse before it gets better, but it's a really interesting time in publishing.
[ link to this | view in thread ]
zegota (profile), 4 Feb 2010 @ 7:31pm

How did Amazon lose?
What I don't understand is how Amazon was able to successfully shake up the digital music world, Apple's hometurf, by offering lower prices and non-DRM'd files, but seems to be unable to do so in the eBook market, which is where you'd think they'd be the strongest.

I think Amazon should find loopholes to get around this, personally. Let the idiot publishers offer their books for $15, but offer an easily accessible "$5 off any eBook priced $14.99 or higher" coupon.
[ link to this | view in thread ]
ChurchHatesTucker (profile), 4 Feb 2010 @ 7:36pm

Re: How did Amazon lose?
"What I don't understand is how Amazon was able to successfully shake up the digital music world, Apple's hometurf, by offering lower prices and non-DRM'd files, but seems to be unable to do so in the eBook market, which is where you'd think they'd be the strongest."

And which is their hometurf.

To ask the question is to answer it. Amazon wants to protect its market leadership.
[ link to this | view in thread ]
Anonymous Coward, 4 Feb 2010 @ 7:42pm

Please tell all this to Brandon Sanderson. He is a terrific author, but has come out strongly against Amazon over this. Maybe you won't change his mind, but it would sure be nice if he saw another point of view.
[ link to this | view in thread ]
fishbane, 4 Feb 2010 @ 9:06pm

Re: Not about Kindles, it's about control
I don't believe that Amazon is selling ebooks as a loss-leader for Kindles.

If it isn't true, then there's some serious misinformaiton afoot, and Amazon hasn't denied it.

There's a really great article comparing this story to music over here.

I think TNH probably is right, and I also think Mike is right about the economics. And I don't see how authors work out self-promotion as well as musicians a la Amanda Palmer - some surely will, but rather a lot of them are simply constitutionally much different sorts of artists.
[ link to this | view in thread ]
markchd, 4 Feb 2010 @ 9:29pm

"those going through that transformation"
"Those going through that transformation" are people who stand to lose their livelihoods. It's perfectly understandable for a person halfway to retirement to fight to defend a broken model when that model is the best bet they have. It's unfortunate that people's well-being stands in the way of progress, but that's how it is.

Capitalism works...eventually.
[ link to this | view in thread ]
Anonymous Coward, 4 Feb 2010 @ 10:52pm

It's a sausage factory
There are a few subtle, yet very important differences between the book publishing industry and other media such as Television, Motion Picture, and Music.

Apple is in a great place, remains very well positioned, very well... And continues to provide an additional, revenue-generating platform, but after dropping in and talking to a few people in Boulder CO, I still think that Scott may not be best.

However, I'm pretty sure everything will work out.

Somehow...
[ link to this | view in thread ]
Jon Renaut (profile), 5 Feb 2010 @ 4:30am

Re: Re: Not about Kindles, it's about control
Amazon has been pretty quiet about a lot of Kindle-related details. And yes, they could be using their position as the only vendor of a new Kindle to set the prices high enough to make a nice profit. But they have to know it can't last.

Being THE place to go for ebooks is a good long-term position. Taking advantage of having the best (and I use that term loosely) ebook reader is great in the short-term.
[ link to this | view in thread ]
Anonymous Coward, 5 Feb 2010 @ 4:47am

The Macmillan version if I did not misunderstand is that until now, Amazon as the only player in town was selling 9.9$ fix price but was paying to the publisher a variable price higher at the beginning lower later on, in this deal Amazon didn't lost money it lost money at the beginning of a book been published but was making for it in latter sells but for the publisher it promoted selling of ebook at the beginning when he has a just printed book costing money in the store and promoted sales of book latter on when it didn't have books to sell. Apple is offering to publishers the same deal that to App developers 30(Apple)/70(Publisher) with any price the publisher wish (That would make best seller book more expensive that 9.9$ but would make it much cheaper later on the ebook then is money without any expense so the best for the publisher is if you buy the ebook instead of having to do another run of books to print, store and move around book is not as cheap as printing,store and move around CD). In response Amazon offered and alternative deal to the first one 30(Amazon)/70(Publisher) with price ceiling of 9.9$ and it wanted exclusivity in ebook publishing and been considered a licensed publisher (with the corresponding copyright transferring) instead of just a seller. So Macmillan say the Apple deal is much better that any of yours Amazon so no ebooks for you. And Amazon said no ebooks no books.
[ link to this | view in thread ]
Anonymous Coward, 5 Feb 2010 @ 4:50am

Oddly enough this tempest in a teapot was triggered by McMillian Trying to update their business model to make less money initially, but be able to make a sustainable income selling ebooks. They were offering Amazon a bigger slice of the pie to stop selling below wholesale. Also most of the reporting only mentions the $14.99 price point, not the sliding scale that decays to $5.99 by the time the book is available in paperback.

While McMillian may not be acting in favor of the customers, Amazon is acting like a spoiled child. The last I have heard is that many authors still can't sell books directly from amazon, even though it has been a week since they have said they will put the buy button back up.
[ link to this | view in thread ]
Jon Renaut (profile), 5 Feb 2010 @ 5:34am

Re: Re: Re: Not about Kindles, it's about control
DBW, the iPad and Amazon

Really nice write-up of the whole thing from someone who knows what she's talking about. Reminds us that ebooks could be a loss-leader for all of Amazon's inventory rather than just Kindles.
[ link to this | view in thread ]
Anonymous Coward, 5 Feb 2010 @ 6:16am

take a look to:
http://www.antipope.org/charlie/blog-static/2010/01/amazon-macmillan-an-outsiders.html
[ link to this | view in thread ]
Hephaestus (profile), 5 Feb 2010 @ 7:08am

Re: "those going through that transformation"
Mind if I quote you on that ? ... it was well written.
[ link to this | view in thread ]
Alan Gerow (profile), 5 Feb 2010 @ 8:09am

"If only those going through that transformation could recognize it in those terms..."

I think many of them do. They just don't want to be one of the ones losing their jobs. They're probably just holding out until it's time for them to retire or they have their own great idea for what the new "thing" is. Until then, the longer they can stave off the tide, the better off they feel they'll be personally.
[ link to this | view in thread ]
chris (profile), 5 Feb 2010 @ 8:19am

Re: "those going through that transformation"
It's perfectly understandable for a person halfway to retirement to fight to defend a broken model when that model is the best bet they have. It's unfortunate that people's well-being stands in the way of progress, but that's how it is.

you make it sound like they have some sort of choice or recourse. they don't. the market has changed and that's that.
[ link to this | view in thread ]
Mike (profile), 5 Feb 2010 @ 8:46am

Re:
John Scalzi has been railing against amazon as well. I love his stuff, and he's usually really funny, but I gotta side with Amazon here.
[ link to this | view in thread ]
Mike (profile), 5 Feb 2010 @ 8:49am

Re:
Yeah, but we all remember the "sliding scale" they said we'd get at itunes.... where's all those 69 cent catalog songs we were promised? Oh right, they don't exist.
[ link to this | view in thread ]
RD, 5 Feb 2010 @ 10:21am

Re: Re:
"Yeah, but we all remember the "sliding scale" they said we'd get at itunes.... where's all those 69 cent catalog songs we were promised? Oh right, they don't exist."

Thats because the music industry LIES. They LIED about CD's when they first came out (and "had to be" priced at 1.5x an album price until the CD caught on) and they LIED about the iTunes pricing. THEY LIE. That is what they do. Anything to make a buck.
[ link to this | view in thread ]
Ronald J Riley (profile), 5 Feb 2010 @ 1:55pm

The solution
Amazon needs to offer to act as a publishers for ebooks, complete with doing the PR and offering print on demand. This would force the industry to change.

They will need to offer authors a higher commission but can do so and turn a tidy profit by cutting out the other middlemen.

Now all I need is a way to get a piece of the action.

The beauty of this is that they can then charge Apple a higher price just like Apple has been doing to their customers since the Apple III (Lisa), a really crappy product with a propriety floppy drive. I dumped Apple at that point. I have allowed fellow inventors to talk me into trying the Airport, the AirBook, and an iPhone and I found all of them unacceptable because Apple cripples their products by design.

Ronald J. Riley,

I am speaking only on my own behalf.
Affiliations:
President - www.PIAUSA.org - RJR at PIAUSA.org
Executive Director - www.InventorEd.org - RJR at InvEd.org
Senior Fellow - www.PatentPolicy.org
President - Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (810) 597-0194 / (202) 318-1595 - 9 am to 8 pm EST.

Ronald J. Riley,

I am speaking only on my own behalf.
Affiliations:
President - www.PIAUSA.org - RJR at PIAUSA.org
Executive Director - www.InventorEd.org - RJR at InvEd.org
Senior Fellow - www.PatentPolicy.org
President - Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (810) 597-0194 / (202) 318-1595 - 9 am to 8 pm EST.
[ link to this | view in thread ]
Danny - Kindle Case Guy, 28 Oct 2010 @ 6:14pm

Amazon is somewhat to blame
Some commentators on here say that amazon should do something about "evil" book publishers. Do you really think that Amazon is unable to act in this situation. Amazon has full control - this is their hometurf. They sitatuion is the way it is because amazon wants it exactly like that..

Danny - Kindle Case Blog
[ link to this | view in thread ]
Brian Bordenkircher, 16 May 2011 @ 8:21pm

Amazon is a major game changer for publishers
Amazon became such a major part of the publishing industry fast and made changes due to its large share of the industry. Another factor is the internet as well as many people begin to turn to webstites for news. Now with e-books becoming very popular, I'm certain that will be a huge change. Whether or not Amazon will continue to be the leader of the e-book market, this is certain to change what libraries will be like in the next 10 to 20 years. Another big change brought about due to e-books is the ease and low cost of self publishing. It will be very interesting to see how this industry will turn out and what changes will take place over the next 20 years!
[ link to this | view in thread ]