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Amazon Surrenders To Macmillan On eBook Pricing
CuteSteveJobs writes with a followup to news we discussed on Saturday of a disagreement between Amazon and Macmillan Publishers over ebook pricing: "Amazon has thrown in the towel and announced it will now sell books at Macmillan's increased prices; up to $14.99 from $9.99. Said Amazon in a statement: '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.' Macmillan has sensed Apple's iBooks opens the way for higher prices. Perhaps the question should be: do we even need publishers like Macmillian? Publishers have long managed to keep their old business model chugging along nicely despite the Internet; Academics are still forced to give up copyright (PDF) of their work in exchange for publication. Textbook publishers have a history of unethical practices like frequent edition changes, unjustifiable price increases and bribing teachers. For that matter, why do the RIAA's members still control the music business? Why do these dinosaur publishing businesses still manage to thrive despite the Internet?"
At least for me... I invest a lot more in the books I read than in the music I listen to, and I care very much about reading *one* *particular* book. This means that there's not a lot of competition. I think part of the reason is that, for all the categories of books, the purchase price is the smallest part of the investment I make in the book. My major investment in the book is the time and energy I spend reading it. Ideas are not really fungible when they're new--and even when they're old, there's a lot to be said for getting the ideas from the source instead of from the imitators. In fiction, I'd much rather read Heinlein than an imitator of Heinlein. And if it costs a couple of bukcs more? Oh well.
I certainly recognize that some might be just as passionate about one particular song or one particular album. But it still seems to me, intuitively, that the music market is a little bit more competitive and dynamic than the book market is.
"He who would learn astronomy, and other recondite arts, let him go elsewhere. " -- John Calvin, commenting on Genesis 1
Do we still need publishers? The question should really be 'what function that publishers perform do we still need and how should those functions be provided?' Perhaps also 'Can a startup provide these functions and replace the entrenched companies?' We still need someone to plan the path from manuscript to finished book including content editing, grammar editing, artwork (inside figures and on the cover), legal issues (in every country where it's released), promotion/advertising, marketing (advising when a release will be available, how it will be different from last edition, etc). Should the publishers profit from owning relationships with the distributors, bookshops and retailers even when they're selling electronically? No, they shouldn't be able to gain from a monopoly in what should be a competitive market, but we still need some functions.
When a internet enabled solution for those issues starts to take off the publishers will start to lose their grasp on the book market and we all will be better off for it.
They're greedy. Even more than with CDs, the bulk of the costs with books are primarily in the printing/distribution model. The writer doesn't get that kind of money per book, I promise you that.
I think it's only a very short matter of time before independent authors skip the traditional publishing approach altogether. Once a viable digital book format takes off, the only thing they have left is an editing staff, and I'd happily split some of my book profits with a quality editor (they really do help) as opposed to a bunch of worthless executives.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
While I certainly think that $15 is overpriced for an ebook, I say let Macmillan potentially shoot themselves in the foot with their pricing. Amazon should be focused on making everything possible available in ebook form and letting the consumer decide what's a good deal. Amazon can always go back to Macmillan with sales stats to show them what they're losing (or not...perhaps $15 really does maximize profit for them). With sample chapters and the possibility of very low prices from smaller publishers, ebooks provide a great way for lesser-known stuff to be widely available. The same thing happened in music; it's far easier to get fairly obscure stuff via the internet than in CD form at a store.
What's a little strange about the ebook market is the fixed breakdown for the retailer (seems to be moving to 70 publisher 30 retailer), while in the hardcover world Walmart, Target, and Amazon are falling over each other to bring you the books with little or no markup over wholesale. Still, Amazon is offering the 70-30 split only if you priced your book under $10 (otherwise it seems to be 65-35).
"The universe seems neither benign nor hostile, merely indifferent." --Carl Sagan
They are just using supply and demand to set the optimum price. To the publishers (if they did their research properly) they may have found that $15 will give them the largest ROI. A book may only have a limited audience and that audience would be willing to pay $15, the audience may not grow even if the price were $0 because nobody else is interested in the topic. What this means is that publishers are just getting more bang for their buck.
What is wrong with the way they are doing it is that consumers feel like they are getting screwed. They see the costs of manufacturing plummeting yet prices are rising. From the business side they are seeing costs of manufacturing going down and an opportunity to increase profit margins. They aren't passing on cost savings to the consumers, they are instead lining their pockets; which they are in their right to do. It just isn't going to endear them to me and I won't be buying any books any time soon - paper, digital, or otherwise.
In the fields I'm familiar with at least, my impression is that large publishers like Macmillan filter for expected popularity rather than quality; they're in the book-selling business after all, not academics. As a result, an appalling proportion of Macmillan books on academic subjects contain factual errors, gross exaggerations, popular myths presented as fact, sloppy conflations, etc. It's one reason many academic departments give little career credit for publishing popular press books: if you got your history book placed with a respected academic press, people are willing to believe you made a contribution, but if you got it placed with Macmillan, who knows what nonsense history you wrote.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Yes, that's why iTunes is such an epic fail, costing Apple billions. Oh, wait...
Radio's strength is that DJs can repeatedly play crappy songs until you think you like them. Repetition, repetition, repetition. Ask any radio DJ. It's why payola is illegal in the U.S. -- record companies would pay radio stations to play the music which would in turn sell the albums. There was no gate keeper going on. There was no quality control, unless you consider "quality" to be the milquetoast slop that record companies want to sell.
If record companies built houses, they would build beige houses. Is beige a bad color for a house? No, it's neutral. It's not good and it's not bad. It's not challenging or interesting -- it's safe.
People are smart enough to look to a genre they like and start asking the crowds of people in that genre what is good.
Of course, how you're going to stop record companies from creating thousands of dummy accounts and flooding the ranking systems with bogus recommendations is a whole different problem.
riiiight, because they are going to charge $14.99 for an eBook that has a 4 year old discount paperback out..:eyeroll:
Based on current pricing, yes they are. I have a Sony eReader, and all the books I've actually wanted so far have either not been available at all or have been more expensive than dead tree versions, even after P&P. Sometimes a lot more expensive. Publisher's are already charging $14.99 and more for eBooks that have 4-year old discount paperbacks out. It seems that they figure that people who buy eReaders have more money than sense, and they can sting us again. Well, it looks like I'm caught bang to rights on the first point, but I'm not getting caught on the second. The eReader is languishing in a drawer until it becomes cost effective to buy eBooks.
Quidnam Latine loqui modo coepi?