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Amazon Confirms Hachette Spat Is To "Get a Better Deal"
tlhIngan (30335) writes "Last week we heard that Amazon was withdrawing Hachette books from its virtual shelves including allowing preorders of the new JK Rowling book. Amazon has responded to these allegations, and confirms that yes, they are purposefully preventing pre-orders and lowering stock in order to get a better deal from Hachette. Amazon recommends that in the meantime, customers either buy a used or new copy from their zShops or buy from a competitor. Amazon admits there is nothing wrong with Hachette's business dealings and that they are a generally good supplier." Here's Hachette's response to the Amazon statement.
FTFA:
Amazon indicates that it considers books to be like any other consumer good. They are not.
My rebuttal: Yes they are.
Enigma
Guess I'll be broadening my shopping horizons.
It's good to see a big company actually fight for better prices for customers. I wish my cable company was like that. And before anyone gets me started, remember that monopolies are only abusive if they use their power to screw over the consumers; there is no antitrust protection for businesses to profit.
Shouldn't this fuel an antitrust investigation? The mere fact they can pressure a publisher by not listing their books means free market failed.
I do use Amazon a lot more than others but I don't need to. I admit I don't even know who the other Mega publisher is.
Seems like I can safely ignore both of them till they get their bitch fight over with.
This isn't news for nerds. This is news for ... no-one - or at least not anyone who has any idea about how capitalism works. Of course when you deal in volume like Amazon, you're in a good negotiating position. To remain in a good negotiating position, you have to make clear that you won't take just any deal, and that you're ready to freeze out even a prominent publisher who refuses to give you a substantial wholesale discount. Yes, it's kind of a declaration of war and both sides will receive injuries, but it sends a message to other presses that if you don't give Amazon a good discount, you won't have your books sold by Amazon.
I'll just leave this here...
http://booksprung.com/dear-hac...
Thanks Amazon ;-)
...that consumers dump Amazon in favor of Powell's Books.
If you want news from today, you have to come back tomorrow.
Of course it's not news for nerds, everyone knows nerds are illiterate and so don't read anything. All those books they have on their shelves, kindles, and talk about were given to them by friends and family as decorations, and they heard a synopsis of it on a podcast, youtube, or downloaded the movie.
Now that the sarcasm-spasm is over, we don't have enough information about what the heck the real fight is over, we just have their P.R. statements.
So far it could be Amazon trying to squeeze out extra profit or special favors, or it could be Hachette trying to raise it's book prices or trying to get special favors.
All we really know is they are having a dispute, and both of them are trying to sway the public with sugar coated press releases.
Probably all of the cross-pollination with people from Microsoft.
Amazon behaving badly in a market where they have a monopoly? Time to get out the Apple Beatin' Stick again! Got to keep down those competitors with government sanctioned punishments for even trying.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
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The Amazon share price demonstrates that investors anticipate profit from the Amazon business model at some point, which they will point very loudly when it begins to appear that growth has reached a plateau. (It's only mildly conceivable that this whole thing is a Ponzi scheme held afloat by successive ranks of the greater fool.)
By some weird co-incidence I breezed through The Everything Store by Brad Stone yesterday afternoon (and following up, just an hour ago, MacKenzie Bezos's misguided one-star review).
I wanted to get a better sense of the author, so I also watched Discussion: Author Brad Stone on The Everything Store, hosted by Daniel Siciliano, professor at the Stanford Law school, who turns out to be sharp, engaged, articulate, and charismatic. Brad largely stays on script with his own book.
Brad did take certain liberties with his book (small ones) of the kind an author is pretty much forced to take if he wishes to have a readership. Mr Bezos would not be so principled as to fact check his profit into oblivion. MacKenzie needs to get a grip on her entitlement double standard.
Brad regards his critical chapter as the one entitled Expedient Convictions. His recap was the best bit in the entire Q/A: "Amazon [aka Jeff] rationalise their customer focus to excuse a lot of things. This paper-thin rationalization is actually naked self-interest."
No shit Sherlock. He then goes on talk about how Amazon engineered their operation to pay no sales tax at the state level by claiming not to operate in any of those states, which is only true in the narrowest legal sense. Amazon runs huge operations in those states structured as legally independent subsidiaries (which are nevertheless totally under Amazon's thumb).
In the book Jeff is quoted as saying they don't use any services provided by those states, so why should they pay a sales tax? Their subsidiaries are using plenty of government provided infrastructure in those states to make those products and services possible. The whole story is just an accounting shell game. Their products come from somewhere, somehow. I don't think you find out at the center of the nested Russian dolls that the Amazon fulfillment center is a Xen machine instance on EC2. In mathematics, Mr Bezos, this analysis is known as the pigeonhole principle, which in layman's terms says you can't ethically pay tax nofuckingwhere on $74b dollars in revenue. But you know that already, don't you? And MacKenzie knows that you know that, doesn't she? Right, I though as much. Pity Brad got the influence of Remains of the Day on your regret minimization framework misplaced in time by about a year in his origin story. How will we ever trust another word this man says?
Which of those two errors concerns a million dollars or more? Bzzzt. Looks like Jeff wins the milliravi award for speaking with forked cheek.
Anyway, this story today is nothing new, and hardly the worst. Anyone interested can check out how Amazon sat on Lovefilm in the UK/EU. It was brutal.
Stone makes Amazon's internal culture sound like The Passion of the Christ which I think was dramatised by Stone somewhat, but hardly given the full Oliver (the answer to my fey verbal riddle is Natural Born Killers if anyone cares).
As I recall it from an early chapter, among the fringe whingers MacKenzie complains are insignificant and overrepresented was one Shel Kaphan whom Bezos himself described as "the most important person ever in the history of Amazon.com" as part of his great and commendable summing up of a valued resource so totally no longer needed.
Quick, someone hand me a gold pen, I want to stick it down my throat.
That really is the right perspective. Hatchett is doing a hatchett job on the authors and customers, for very little value to either. Amazon is a much better publisher for e-books, as they're willing to give the author 70% v.s. 5 to 15% after "expenses".
Both parties admit they're in contract renegotiations. So the current public spat appears to be about whether a retailer should be obliged to continue to stock the goods under negotiation for resale without a contract, because... authors?
I notice re-reading my own post that I have an "out" missed and an "out" added. Must be how it passed through casting nines.
I presume that you won't mind getting a copy of Meyer's Twilight instead of Stoker's Dracula. I mean, they're both vampire novels, so they're completely fungible, right?
This argument would fit better if the publisher said commodity good.
http://www.investopedia.com/terms/c/consumer-goods.asp
Definition of 'Consumer Goods'
Products that are purchased for consumption by the average consumer. Alternatively called final goods, consumer goods are the end result of production and manufacturing and are what a consumer will see on the store shelf. Clothing, food, automobiles and jewelry are all examples of consumer goods. Basic materials such as copper are not considered consumer goods because they must be transformed into usable products.
There was a good article in The New Yorker a few months ago about the Amazon business practices.
Their very tough negotiation position typically forces the publisher to give big discounts, and even extra money to be listed high enough in the sales results.
Amazon books are usually cheaper than in many other stores so from a consumer level, this seems like a win for the capitalist philosophy.
However, it turns out that these huge discounts have a snowball effect towards the authors: they now typically get lower royalties per book, sometimes much lower. I had this confirmed by a few authors I know.
The danger for the general culture is that authors would write far less as they (except the most popular ones) will have to do more other work to have a normal standard of living. Most of the midlist authors, and those are in my opinion often the most interesting ones, already had to combine writing with other professional activities. In essence there is nothing wrong with that, but when at one point they have little time left to write, books will come much slower.
In some European countries there are fixed price laws regarding books, these are exactly there to ensure that writers can focus enough on their craft, it is seen as a matter of national culture that should be stimulated, not necessarily mercantilised.
I do agree that a purely capitalist attitude in this matter can be detrimental to culture over the longer term.
Discuss.
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According to: http://www.themillions.com/2013/12/how-many-novelists-are-at-work-in-america.html
The vast majority of book authors already have day jobs. Maybe like 5% of book authors make a significant amount of money from writing a book. To put it in perspective, the average novel sells less than 3,000 copies and 76% of books are self-published. In 2002, back before self-publishing was a big thing we had like 25,000 fiction novels with an ISBN number published. In 2012, we had like 70,000.
So, I imagine, that we will actually have a lot more authors rather than less due to it becoming easier and easier to self-publish and sell stuff online. Whether or not the quality of books will go down is an open question. But, it probably will not. The good thing about e-books is that more people are reading that wouldn't have done so before. So, there is actually more demand for books. It seems like the big losers in this whole thing are the publishers. They no longer can go around burning other people's printing presses, so they are in a bad situation. When people buy a lottery ticket, they generally only look at how big the jackpot is rather than what the expected value of their lottery ticket is. Most book authors today already know deep down that spending years writing a novel that will get you a few thousand dollars is not a good value proposition. But, there is always that chance that your book will take off. And that is pretty much like winning the lottery.
E-books are not books. They are not retail sales of merchandise. An e-book purchase is only a license. Amazon is using monopolistic behavior in e-book licensing to control pricing from publishers to extract monopolistic profits, to secure market share, and to reduce competition where Amazon is able to dictate access to customers who they control through their locked ecosystem. Amazon's ultimate goal is to bypass the publishers altogether, and control the licensing of books from authorship to consumer.
The whole reason we have copyright is that information wasn't self publishable and near infinitively reproducible, and because England had them. Instead of doing the experiment and determining if copyright and patents laws were actually beneficial for society as a whole, we just assumed they were. Now there is no evidence that artificial scarcity is beneficial for society, there is only evidence in support of the null hypothesis: 0) Mathematics, Fashion, Automotive industries have no copyrights or design patents and yet are very profitable, the latter two selling heavily on design, the former selling what is actually scarce: The labor to create new ideas and information, not the infinitely reproducible output thereof.
You wouldn't sell ice to Eskimos. Why would you enforce laws that punish Eskimos for not buying your ice? Why would you run the entire world's economy of ideas and information on an untested and unproven hypothesis? Authors can withhold their work, negotiate a price and make arrangement for payment, then do work once, and get paid once, and then the information can be reproduced by everyone forever, such is the way mathematics operates, that's how art commissions work, that's how the construction industry works, it's how medical practices work. These are sane ways to do business. Selling 1's and 0's to computer owners is like selling ice to Eskimos.
Yes, the physical book exists, but in capitalism wouldn't consumer demand decide where (or if) hard copies are created, and how much they are valued at? There are other merchants to peddle your infinitely reproducible information via. Deadwood printings themselves can now be thought of as a way for authors and publishers to make information artificially scarce. Amazon offers a way to leverage the world wide information system, but their artificial scarcity is really no different than that of the author or publisher -- The latter has worked for free to make an expensive igloo design, and is now trying to recoup those costs by preventing others from building similar igloos with 3D igloo printers. If the author were instead also the publisher then they could still make agreements to get paid up front: They could leverage the peer to peer technology of the Internet to sell directly to consumers. Bonus: You don't waste time creating what customers don't want (unless you're a true artist).
The dawning of the Information Age changes the game. Elementary Economics says that which tends towards infinity in supply tends towards zero in price regardless of demand and cost to produce. Ours is the first generation born with the global information network, of course markets will need to adapt.
I applaud Amazon. Their greed only pushes market forces towards monetization strategies that leverage what is actually scarce. Realize the truth: Without Copyright you would have to create more works to make more money... you know, like when you work for your boss, or even on FLOSS.
I agree with most of your points, but take issue with this statement. "Amazon books are usually cheaper than in many other stores so from a consumer level, this seems like a win for the capitalist philosophy.".
The cheapest price for a consumer is not "Capitalist Philosophy". Capitalist Philosophy, according to Adam Smith requires evaluating the economy as a whole. Consumers and regulators need to remove bad players from the system and diminishing those too large, or Capitalism will fail just like Mercantilism he warns. (We would probably agree that Amazon at least has too much power).
Adam Smith was very clear that monopolies were detrimental to any economy, including Capitalism. He also stated that large companies would require extensive regulation or could easily turn into predatory monopolies. Lastly, he stated that if the Government fails to act on these monopolies it was up to consumers to boycott and remove their power by removing their revenue. He credits the failure of mercantilism, and it's predecessors, primarily to unchecked monopolization.
I highly recommend that people curious about Economics read Adam Smith's complete works, followed by Milton Friedman (just don't purchase them from Amazon :P ).
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
The overall quality of the books is likely to go down -- part of what publishers do is editing (although not always -- increasingly, lesser writers have to hire their own).
I've read a number of (admittedly inexpensive) self-published books ... and it's like the authors didn't know how to turn on spell check. Tangentially, I've noticed a funny thing in online reviews of books: people increasingly include the price of the book in the review. Reviews are no longer based on quality but value (i.e., the $0.99 book wasn't as good as the $9.99 book, but, damn, what a price!).
FWIW, people will always write books or make music; many people need to express themselves creatively. What's really going to be cut out of the equation are the people in the middle (editors, researchers, engineers, producers) who help to make those works better as we race to the bottom.
"Mathematics, Fashion, Automotive industries have no copyrights or design patents and yet are very profitable"
You might have been lured in by a very bad TEDx talk (http://www.ted.com/talks/johanna_blakley_lessons_from_fashion_s_free_culture) but this is pretty much entirely false.
Mathematics is not profitable, by pretty much any metric imaginable. Lots of things that use mathematics are very profitable (pretty much the entire IT sector and any heavily engineered business), but mathematics itself isn't. In order to translate mathematics into goods and services, a significant amount of work is required, and whilst the mathematics itself can't be protected under IP laws, the product of the work put into making the service or good can. Programs can be copyrighted, goods or services that leverage mathematical properties can be patented if they meet the required criteria, and so forth.
The automotive industry is a hot-bed of IP protection. Ford alone has been assigned over 6 000 patents in the US, looking only at the records from 1979 onwards (http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&u=%2Fnetahtml%2FPTO%2Fsearch-adv.htm&r=0&f=S&l=50&d=PTXT&RS=AN%2FFord&Refine=Refine+Search&Refine=Refine+Search&Query=AN%2FFord+and+Global+and+Technologies). Toyota, VW and all the other major automobile manufacturers have similarly huge patent stashes that they guard preciously. In the past decades they have been more aggressive with design patents in order to stop aftermarket parts makers from successfully entering the replacement parts market. Design patents are ubiquitous, and pretty much every single car since the 70s has a few... Porsche (http://patft.uspto.gov/netacgi/nph-Parser?Sect2=PTO1&Sect2=HITOFF&p=1&u=/netahtml/PTO/search-bool.html&r=1&f=G&l=50&d=PALL&RefSrch=yes&Query=PN/D673484), Toyota(http://patft.uspto.gov/netacgi/nph-Parser?Sect2=PTO1&Sect2=HITOFF&p=1&u=/netahtml/PTO/search-bool.html&r=1&f=G&l=50&d=PALL&RefSrch=yes&Query=PN/D688160), Ford (http://patft.uspto.gov/netacgi/nph-Parser?Sect2=PTO1&Sect2=HITOFF&p=1&u=/netahtml/PTO/search-bool.html&r=1&f=G&l=50&d=PALL&RefSrch=yes&Query=PN/D488405) just to name one in each major market.
As for fashion, well it's hardly a brilliant example of a "beneficiary" industry when it is the sector that pursues the most aggressive out-sourcing and mechanisation strategies. Buying things made in the USA isn't always easy, but for clothes it's almost impossible. A few companies that are pushing the high end of the market manage it, but that's hardly a ringing endorsement of a sector that is in great health.
But beyond the obvious financial difficulties that many fashion companies have had over the past decade or two, a more potent criticism is the actual lack of innovation that fashion has brought over the past century or even two. In 1930 IT didn't even exist as a sector, and pretty much every aspect of our lives have been transformed. Cooking has seen the meteoric rise of the microwave oven and the freezer, whilst fridges became basic home appliances. Communications went from the radio to TV and online broadcasting, whilst telephones have become mobile personal assistants. Cars have seen vast transformations in performance, variety and ease of use. Air travel has gone from a luxury reserved to a prestigious and wealthy elite to a popular mode of transport. Electricity has definitively finished its transformation from a convenient novelty to a base necessity of achieving any decent standard of living. Plastics have gone from being synonymous with bakelite to a whole group of materials with ever more varied properties...
The changes in pretty much every facet of life have been huge thanks to sustained innovation over the past century. What has fashion (or even apparel in a larger sense) brought to the table? Very little I fear. New materials have been brought to the ma
Amazon are putting pressure on suppliers to get lower prices for us customers? That's exactly what I expect a good retailer to do. New books are way too expensive. We should get rid of the publishing companies, then authors would get their fair share and buyers would get cheaper books.
It is clear that amazon is refusing Pre-order because the increase in their credit values can result in a decrease in market value, But since the number of users increased because of more payback pre-order guarantees the leadership became more popular than ever. They even say that CEO is the man who can sell anything. I guess all this talk was not for naught but it too much pre-orders also has its drawbacks which we are looking at right now.
The changes in pretty much every facet of life have been huge thanks to sustained innovation over the past century.
All of which has been without the need for design patents or copyrights (on electronics).
Automotive benefits from hard-edged technology patents, not from design patents and not from software patents. Fashion hasn't advanced much partly because it's an exceedingly mature industry - design patents and copyright weren't needed to aid development of automated looms back when fashion was undergoing its rapid innovation phase.
There is tremendous innovation, but that innovation does not derive from copyrights or from design patents. Those are holding us back.
In mathematics, Mr Bezos, this analysis is known as the pigeonhole principle, which in layman's terms says you can't ethically pay tax nofuckingwhere on $74b dollars in revenue.
Better check your research, Amazon does pay taxes: http://www.wikinvest.com/stock...
And FYI, companies pay taxes on profits, not revenue, so that $74b figure is not very useful unless you want to underscore how thin Amazon's margins are?
because you have values other than just capitalism.
Some of us don't assign much value to Capitalism. YMMV.
They feared that it could be used to suppress protest or support unpopular rule.
design patents and copyright weren't needed to aid development of automated looms back when fashion was undergoing its rapid innovation phase.
What are you talking about? Toyoda Automatic Loom Works heavily relied on patent protection for their advanced automatic loom technology, the sale of which funded the development of Toyota Motor Company.
However, it turns out that these huge discounts have a snowball effect towards the authors: they now typically get lower royalties per book, sometimes much lower. I had this confirmed by a few authors I know.
Then the publishers or Amazon are making a whole lot more per book than they used to, at least in the case of best sellers.
It's not uncommon to be able to buy new fiction hardbacks for around $15, while the eBook is around $10. It's pretty easy to see how actually printing and proofing a physical book (no automated spell check, no way to verify that text from the original source wasn't changed other than reading, and you need to do spot checks on a few books from the print run) and then shipping it somewhere could easily cost $2-3 dollars. Since a physical book can be re-sold at least once (easily, many more if gently read), that cuts into original sales. So, with eBooks, two copies are sold (because you can't re-sell them, and assume only one re-sale of the physical book) at a gross of $20 at retail. With the physical book, one copy gets sold for $15, and there are easily $3 more costs for the publisher, thus only $12 really counts for that sale (as far as profit for various entities is concerned). Although the eBook also has production costs, all of them are shared with the physical book.
So, if an author really gets less money from $20 at retail than $12 at retail, then the middlemen get at least $8 more, which is 40% of the possible profit. That's a frightening amount.
This. The Kindle is drowning in a sea of horsecrap, and Amazon makes it VERY hard to sort the wheat from the chaff. And you're right, the online reviews are utterly useless for the most part. I've encountered ebooks with 4.5-5 star ratings that would fail as sixth grade writing projects. Really embarrassing stuff.