Unqualified Offerings

As of this morning, Amazon and Macmillan are locked in a dispute over ebook pricing. For its part, Amazon pulled many Macmillan books from their website – after a fashion, which we’ll get to. You can read comment threads at Making Light, blog posts by Cory Doctorow and John Scalzi, and the Twitterstorm (using the revived #amazonfail hashtag). The above sources have various degrees of favor for Macmillan and against Amazon. The Twitter feed particularly treats the dispute as a moral issue, including rehearsals of past Amazon asshattery, of which there’s been no shortage. Note that I have freelanced for Tor.com, which, plus my friendship with the Nielsen-Haydens, makes me mildly Macmillan-connected. Also, I’m an Amazon affiliate and Kindle owner. Long, long ago, I managed stores for Waldenbooks.

Of the links above, I think Doctorow makes the most sense. Some reactions of my own follow:

1. There’s a lot we ordinary readers don’t know about the sequence of events here. The NYT’s Bits blog says Macmillan “asked” to increase the price of some of their Kindle books to as much as $15. Other sites say Macmillan “demanded.” Apple’s courting of Macmillan for their planned iPad bookstore plays in somehow. (Apple is luring publishers partly with the promise of higher price points.) For the cheap seats out here in reader and business-observer land, sorta-yanking Macmillan’s books seems pretty extreme for an “ask,” less so for a threat.

2. People are rightly passionate about books, which can obscure the fact that this is fundamentally standard corporate hardball, likely to be revised one way or another fairly quickly. That’s not guaranteed – corporate honchos are people mammals eukaryotes too. Their emotions can get the better of them and get into a downward spiral of pride and vindictiveness. But the truth is that from time to time producers and distributors get into arguments that lead to the producer temporarily withholding or the distributor temporarily deleting a set of products.

3. Amazon hasn’t stopped direct sales of all Macmillan titles. (You can get Pirate Freedom as of Saturday morning.) In particular, they haven’t taken down third-party sources of Macmillan titles, which they could surely do. This is a slap in the face, not a murder attempt.

4. It’s also a negative-sum game. In the short term, Macmillan and Amazon are both losing sales because of the move. Both have an incentive to settle.

5. I have never been able to buy Gene Wolfe books on Kindle, despite wanting to. I’d love to have the Book of the New Sun in ebook form. In truth, I can’t have it for Kindle, or the Nook, nor, so far as I know, any current ebook reader. I reasonably infer that this is Macmillan’s decision, not Amazon’s, because I find very few if any Tor books available on Kindle. We know that Macmillan wants to be able to charge prices greater than $9.99 for at least some books. Teresa Nielsen Hayden offers the justification in comments at boingboing:

while a fixed $10 price point would undoubtedly be good for Amazon’s ebook business, it would take a shark-sized bite out of the market for hot new bestsellers, which is trade book publishing’s single most profitable area.

That revenue source is what keeps a lot of publishing companies afloat. It provides the liquidity that enables them to buy and publish smaller and less commercially secure titles: odd books, books by unknown writers, books with limited but enthusiastic audiences, et cetera.

My honest estimate is that the result would be fewer and less diverse titles overall, published less well than they are now.

What’s the point of having the option of a higher price point? IMO, it means you can charge more for hot new bestsellers, and pick up some of that bestseller revenue. Afterward, you can lower the price again.

Prices of new bestsellers we’ll get to. What interests me here is, Gene Wolfe’s backlist does not count as “hot new bestsellers.” Nor does the two-year-old Pirate Freedom, whose Nook version costs $13.60. They’re selling The Wizard on Nook for two bucks more than the paperback. They don’t sell The Knight, the preceding book in the diptych, at all.

On the one hand, I’m tempted to conclude that Macmillan’s business people are “withholding” their backlist from the Kindle store – and an eager public in the form of me! – to pressure Amazon into giving way on pricing generally. On the other hand, the Nook catalog inclines me to believe that Macmillan’s business side has no clue what to do with the ebook market period.

In the former case, then Macmillan partisans complaining about Amazon’s current conduct are in a bit of a “so’s your old man” situation. In the latter, Amazon may believe it’s time for some tough love.

6. Confusingly, Amazon does allow higher price points on some new books. If you want the Kindle edition of the next Dresden Files book, Changes, it will cost you $13.47, a massive dollar-fifty discount over Amazon’s price for the hardcover. This was true of Turn Coat, the previous book in the series – its initial Kindle price was in the thirteen-dollar range. It’s now down to $9.99. Where the series has gone to mass-market paperback, the Kindle edition is $6.39.

7. If I’m Macmillan and other publishers have the option of charging a higher frontlist price but I don’t, I’m ticked.

8. Doctorow’s argument about the incremental cost of ebooks is not flawless – once ebooks start to cannibalize frontlist sales you need to burden them with some of the editorial, design and marketing costs in your business plan. But, there’s obviously no printing and shipping costs on an ebook. [Update: Nor are there returns.] As a wise university-press sales rep and former operations chief once told me, “What people don’t understand about publishing is that it’s a manufacturing business.” That was true then! It’s in the process of becoming untrue. And it’s an awful lot of expense that can’t be reasonably loaded onto your ebook model.

9. As a reader, $9.99 is in fact my ceiling. I find the Dresden Files “nice, nice, not thrilling but nice,” so I did not buy Turn Coat when it came out. Contrariwise, when Mike Carey’s Dead Men’s Boots came out and was $9.99 off the bat, I jumped on it. It matters that I like the Felix Castor series better than Dresden Files, but I wouldn’t have bought the ebook at $13+.

10. I am concerned about DRM issues when it comes to ebooks, and I don’t like Amazon’s current DRM policies. It’s not trumps for me because, while I love “books,” I no longer want to be surrounded by them as things. I’ve spent several months now giving physical books away in an attempt to regain some space in the house.

11. Nobody who wants to make a moral issue of Amazon’s DRM policies could possibly countenance publishers playing footsie with the increasingly proprietary Apple. At the same time, Jonathan Badger makes the crucial point in Doctorow’s comment thread:

. . . the sort of books *I* want to read (generally nonfiction and literary fiction) are DRMed in all ebook formats (Microsoft Reader, Adobe Reader, Sony Reader, Palm Reader, and Kindle) that are sold currently. I’m not interested in arguments that say “DRM is pointless” or “DRM is evil” unless there is a company that actually sells ebooks that I want without DRM. And yes, I *do* want ebooks for a variety of reasons.

12. At bottom we’re dealing with a transition from one medium, physical books, to another. It’s just not going to be pretty.