The Amazon E-Book Price Fandango: In Which A Corporation Shares Its Opinion, Because Apparently Corporations Have Those Now?

To talk about e-book prices, I want to first talk about ice cream.

I like ice cream.

Fuck it — I love ice cream.

If you had ice cream on your person, I would seriously consider shanking you and robbing your bleeding body of the ice cream you thought you owned. Hell, if you were made of ice cream, I would eat you. I would eat you right up.

Sometimes, I make my own ice cream. This is relatively inexpensive.

Sometimes, I buy ice cream from the grocery store. I’ll buy Breyer’s, which is not particularly expensive, or I’ll buy fancy-shmancy-pantsy Jeni’s ice cream, which is particularly expensive.

Sometimes, I’ll buy ice cream from a place that makes its own. A local creamery nearby has good ice cream for cheap. Another local creamery sells weird artisanal ice creams (“Bilberry Thyme Witbier with Live Python Shavings and Maguey Sap”) for three times the price. I like both options.

On rare occasions, I will order ice cream online. Jeni’s, again, is good for this — if you thought it was expensive in the store, wait till you add shipping costs which require them to package it with a buttload of dry ice. (Caveat: don’t put dry ice in your butt.) It’s about four thousand dollars for a pint (I may be over-estimating). But, screw it, it’s basically what would come out of an angel’s head if you cracked open its skull. This ice cream is spun from the dreams of sleeping deities.

I like a diversity of options in my ice cream choosings.

And I understand — even expect — a variety of price ranges implicit in that.

The reason not all ice cream costs the same is because not all ice cream is the same. Local, organic, artisanal ingredients versus industrial-farmed Soylent goo. Glass containers versus plastic versus “I sell the ice cream in an old gym sock.”

Imagine, if you will, that your local grocery store wrote an impassioned-yet-clinical opinion piece on their own grocery store blog (is that a thing?) about how ice cream prices should be kept lower because people don’t want to buy expensive ice cream, and they note that people will buy more ice cream if it’s cheaper, and yay for that. They can buy whole clawfoot bathtubs of the stuff instead of these itty-bitty pints. Of course, choosing to lower ice cream prices into that range would benefit the store, but potentially hamstring some of the makers of the ice cream. That fancy artisanal brand won’t be able to use raw bison milk or rare moon-berries because the expected price of ice cream won’t support it.

Choosing to narrow the price diversity means narrowing the diversity of available options for consumers. If we become trained to understand that ice cream should cost between $3 and $10, anything outside that range is untenable and fails to sell and fails to exist.

Choices for all of us reduce.

Now, let’s talk about e-books.

I know, I know. E-books aren’t ice cream.

Still. Consider some things.

Amazon wrote a little letter (because corporations now have opinions and religions and stuff) and said some things about (yawn) the Hachette-Amazon cage match that is going on and keeps spilling over into our blogs (like this one; sorry!) and business-doings. In this letter they make some statements about e-book prices.

(You should go read what John Scalzi posted about that letter this morning.)

Amazon says:

A key objective is lower e-book prices. Many e-books are being released at $14.99 and even $19.99. That is unjustifiably high for an e-book. With an e-book, there’s no printing, no over-printing, no need to forecast, no returns, no lost sales due to out-of-stock, no warehousing costs, no transportation costs, and there is no secondary market — e-books cannot be resold as used books. E-books can be and should be less expensive.

“Unjustifiably high” is something I would rather readers decide. I don’t often spend more than $9.99 on e-books, so, on this point, I agree with the sentiment — but that’s also my call to make, y’dig? Just as with ice cream, I’m willing to spend crucial parts of my anatomy to get a taste of Jeni’s ice cream, other folks would not be so willing to drop that cash.

(Regarding the note about e-book reselling, let’s also remember that Amazon is the one who a year ago sent up a flurry about the secondary market for e-books.)

Amazon the Entity goes on to say:

Keep in mind that books don’t just compete against books. Books compete against mobile games, television, movies, Facebook, blogs, free news sites and more. If we want a healthy reading culture, we have to work hard to be sure books actually are competitive against these other media types, and a big part of that is working hard to make books less expensive.

It’s an interesting point, one with two axes that are not universally applicable to everyone: books compete with books and other entertainment in terms of both money and time. I have enough money to spend on a lot of entertainment choices because entertainment is relatively cheap. I do not, however, have time. Other people have tons of time but have to make real choices between how they spend their limited funds on something so non-essential as entertainment. A third group has plenty of time and plenty of money and can spend wantonly and consume wildly their entertainment choices, and a fourth group is limited in both.

By echoing the notion of competition (particularly books competing against books), Amazon is going against its own point here a bit: competition works when a variety of products is made available across an array of prices. The advantage of, say, an author-publisher’s work at $2.99 is very much in part because of that price point. It competes well in price against higher-cost offerings. Debut authors or otherwise unknown authors do better at lower price points, too. A Stephen King book doesn’t need to compete on price because, well, he’s Stephen King, son, and you know what you’re getting with his work, and if you’re a fan, you’re already willing to go above that $9.99 price point because STEPHEN MOTHERFUCKING KING.

What’s interesting, too, is that by echoing the non-book entertainment choices, Amazon is offering a poor analog — books are not other things, so how do you compare? Facebook is free, so should books be free? I can kill two hours on Facebook easy, just by tripping and falling into a rage-hole. Oh, but wait, a Blu-Ray or digital download of a new movie probably $19.99, bare minimum, and that’s only two hours long. A book will last you more than that so… should the book be $19.99? Or maybe a little less, in order to compete? $14.99, maybe. It’s an odd point to make and does little to enforce the argument that e-books should be cheaper just as it would be a bad argument in terms of demanding e-books be more expensive.

It’d be like saying ice cream should be cheaper because soup is cheaper. Or ice cream should be more expensive because Kobe beef is more expensive. IT’S ALL JUST FOOD FOR YOUR FOOD HOLE, AND BOOKS ARE JUST DISTRACTIONS TO FILL YOUR JOY SOCKETS.

None of this even factors size of the books.

Some books are 60,000 words.

Some are 120,000 words.

Some are twice even that (epic fantasy, I’m lookin’ at you).

And what about quality? The quality of the prose, the editing, the storytelling.

Are you really buying books based purely on the components? The base physical costs? (If that’s true, why don’t you just go buy a box of bricks or something.) Isn’t art weirder than that? Doesn’t art — whether it’s art versus art or art all on its own — resist easy pricing schemes?

It’s all a little weird, a whole lot slippery.

Amazon says:

So, at $9.99, the total pie is bigger – how does Amazon propose to share that revenue pie? We believe 35% should go to the author, 35% to the publisher and 30% to Amazon. Is 30% reasonable? Yes. In fact, the 30% share of total revenue is what Hachette forced us to take in 2010 when they illegally colluded with their competitors to raise e-book prices. We had no problem with the 30% — we did have a big problem with the price increases.

(Noting the “illegally colluded” part is a catty jab, Amazon. What are you, 13?)

I certainly support authors getting more money.

And if anything, I think this is a volley across publishing’s bow that Amazon is making a very serious, hard-driving play for the hearts and minds not just of readers, but of authors.  If publishers want to make a statement, maybe it’s time to offer authors a meatier cut. Sorry. It just is. If you want to play this game and win at it, you need to start finding ways to become partners with your authors — which is true for some publishers, and not true for many others. That means offering them things Amazon cannot offer them. More money. More data. More control.

See, that’s the funny thing here. On the surface, I agree with what Amazon is saying. I prefer cheaper e-books because they fill that niche. They’re disposable. Non-corporeal. Often licensed, not-owned. They don’t have to go through the cattle chute of physical printing, shipping, distribution, onerous returns. They also require expensive-ish e-readers to consume them. So: like I said, I’m on board with lower e-book prices.

I’m just not excited by Amazon being in possession of that lever.

I don’t want Amazon having that control.

I want publishers and author-publishers to have it, and I want readers — not Amazon — to decide whether they’re going to reject it or not. If we’re really so sweet on the idea of competition, fine. Do it. Don’t hobble the race-runners so they’re closer to one another. Let publishers run the race and see who the readers and the authors think are winning.

Here’s a handful of reasons, and all throughout it’s vital to remember I’m not a MONEYOLOGIST. I am likely to possess an entirely naive understanding of how commerce works, and you’re free to school me on that (politely). Remember: I write about robot Pegasuses and cranky psychics.

1.) Amazon already controls a whole lot, and frankly, I’m cool with them not controlling everything that touches book culture. Which leads me to point number two –

2.) Amazon has not demonstrated that this control has been universally favorable to authors. The ability to self-publish isn’t enough. Amazon controls an alarming number of access points and algorithms in terms of how they sell your books. Sales rankings, author rankings, also-reads — all these things exist outside not only an author’s control but also outside their understanding. They have put up a rather large curtain in the Emerald City, and we can’t see who or what hides behind it. Author-publishers who have been stung by changing algorithms or changes to their relationship with Amazon (and by proxy, to their readers) know this all too well.

3.) Amazon has already set a fundamental price range for self-published books — $2.99 to $9.99 is that range. If you fall outside of it, you fall away from their 70% cut (not a royalty, remember). They’re shepherding you into a price point which is ostensibly what they’re trying to do here with traditional-publishers — the problem is, establishing that with bigger publishers creates limited variability on price. Which means:

4.) Self-publishing will find one of its more notable advantages undercut. When $9.99 is the top cost for trad-pub e-books, you’ll see debuts and unknown authors drift to less than that, and those prices will encroach upon territory presently owned by author-publishers. The prices in self-publishing have been drifting upward. If this window tightens for larger publishers, self-publishers will need to move back downward into some kind of pricing oubliette. So will mid-list authors, debut authors, and unknown authors. (I’m actually a little surprised self-publishers are so invested in this battle. A battle that is, ostensibly, a battle over traditional publishing — a battle between publishers and a distributor. Self-publishers have done well in part because traditional-publishers have been risk averse, keeping contracts strict, prices high, money low.)

5.) Higher cost e-books from publishers help subsidize debut and unknown authors.

6.) Saying “pay the author more!” is very nice, but then also saying, “And charge less for books!” is a bit curious because it’s like saying authors should get a larger cut of a smaller pie. That can work out economically if sales are robust, but also is far from a guarantee. How about instead we just stick with “pay the author more!” and stop there? (Also, Amazon noting the “35% to authors” is cool and all, but do remember that some of their imprints still offer 25%, not 35%.)

7.) Diversification of price is meaningful just as its meaningful in all other aspects.

So, to recap:

Amazon maybe shouldn’t be in control of prices, not literally, not with emotional pleas.

Let publishers set the prices.

Let authors and readers decide if those prices work.

Let the market do its market-flavored thing.

Let’s remember that Amazon and publishers are neither saints nor evil-doers.

Let’s all eat ice cream.

[Note: I will unlikely be present in the comments. As always: be polite.]

82 comments

  • Also, a disclaimer that Amazon acts as my actual publisher for a handful of my books through their Skyscape imprint. I am a fan of them as a publisher and they’ve been top-notch so far in our relationship. This is, in fact, a good example of the kind of competition I’m talking about: in this case, Skyscape walks the walk, and I have recommended other authors publish with them for just this reason.

  • I can only speak as an avid reader and exclusive ebook reader for 6 years. I happen to agree w/ Amazon that $9.99 is a sweet spot for pricing. I have a couple of established series/writers that I’ll go higher on, but it’s a real grit-my-teeth-and-bear-it feeling. My preferred pricing is $7.99–same as a paperback.

    I’ll buy a new author (for me) at $5.99 and lower, but will grab almost anything at 99 cents. If it’s good, I’ll pay up to $9.99 for the next one. I don’t much mind a $2.99 price for a new author either.

    I say borrow the dope dealers’ model. Give em the first one for cheap/free to get em hooked, then up the price.

    All that said, I wish Amazon would just shut up about it and work on better book recommendations. And fix my Kindle app. And how about lowering the price of the Kindle Fire? And stop offering me diapers–I’m over 50 for gods sake–or at least offer me the right kind…..

  • It’s now much clearer that what’s happening here is that Hachette and the other major houses, since they were caught illegally colluding (and I’m sorry, it’s not immature of Amazon to mention that — it’s a fact, and one which the pro-publisher crowd continually and conveniently fails to address), are now trying individually to push back to Agency pricing. Hachette is just the first one up to bat.

    Let’s remember here that Agency pricing (publisher sets a price, and retailer only gets 30% of that price) is not business-as-usual. The standard model, since, well, EVER, was the wholesale model, where the retailer purchased the book at one price, and sold it for whatever they wished (usually in line with an MSRP — manufacturers SUGGESTED retail price). When Apple rolled out their iBook store, they and the Big 6 (at the time) colluded (again, illegally), to set prices and switch to an Agency model.

    So far all the constant talk of Amazon’s “disruption” — it is actually the publishers that are disrupting the traditional retail model here. But Something Something Amazon Monopoly, I guess.

    • You might be right that maybe consumers need to know that, though I think it’d be valuable to explain to consumers just what that means — because those two words alone do nothing to clarify the picture.

      That being said, it’s also worth remembering that Amazon doesn’t price self-publishing books in a wholesale manner. Self-publishers set their price.

      Also, I think it shortsells Amazon to suggest they’re not a disruptor. They are an epic disruptor. Often for good (and simultaneously often in their own interests, which is normal for companies who want money). The thriving existence of e-books is due in good part to Amazon. Like I said in an earlier post, they were one of the few companies who didn’t treat the Internet like a storm that was going to pass. And they’ve been rewarded for disruption and innovation in that they have a great deal of this market. Anything more than that is an over-reach, though, that threatens some vital checks and balances — and ignores too that everything they do is not puppy tails and blooming roses.

      (Also worth a mention that it wasn’t really traditional publishers who disrupted wholesale, but rather, they were following Apple’s lead, at least as I understand it.)

      — c.

      • To be clear: I’m certainly not suggesting that Amazon isn’t a disruptor. Or rather, I didn’t mean to- although looking now at the text on the screen, I can see how that might be the impression.

        I was intending to draw attention, given the constant framing of Amazon’s disruption as a negative, that in this case, it’s the publishers who are attempting disruption. (And yeah, they were following Apple’s lead.)

      • I am generally in agreement with both your original post, which made me think along an angle i hadn’t thought before, and what you say here. But I stand absolutely fast on two points:

        1) Publishers should be able to set the price of the book to Amazon.

        2) Amazon should be able to set the price of the book to customers..

        Add to that a third opinion: 3) Book pricing structures are an irretrievable snot-glob of stupidity. ALL book pricing structures. Amazon’s is slightly less gooey compared to publishers’, but it’s still a sticky, rubbery disgusting mess.

        I am against Amazon using incentives to get publishers, including self-publishers, to sell at fixed price points/ranges. It irritates me muchly. However, it’s not so irritating that I can’t live with it, especially since I would price in their ranges anyway since I am not STEPHEN MOTHERFUCKING KING or even CHUCK AUNT-OGLING WENDIG* and in general I agree with their logic.

        I am against publishers forcing Amazon, or anybody, or any supplier, anywhere, forcing any reseller to charge a minimum price. We HAVE anticompetition laws. If they need stiffening, so be it. But once you sell it to me it’s MINE and I can do whatever the fuck I want with it. If you don’t want me selling it cheaper than you think I should then a) raise your price so it’s not economical for me to do that or b) don’t fucking sell it to me, especially when you know exactly what I am going to do with it.

        I was in a restaurant the other day that up to then had had one of those Coke Machines from the Future that you can use to make any kind of drink you want, including a vanilla-cherry-cerebropspinal fluid Coke Lemonade Tea. (I fucking love those things. I want one for my basement SO BAD.) It was gone, and in its place was a sign that said, “We had to take the WonderFluid Dispenser out, because Coke won’t place them in restaurants that have third-party drink dispensers.” This particular restaurant also has a dispenser for a local bottler’s root beer/soda variants, and they are very tasty.

        The point being, it wasn’t the end of the world for either party to exercise its freedom of commercial choice. Yes, Coke was being stupid, but the punishment for that is that they will lose money. The restaurant was doing just fine and in fact the local bottler probably was experiencing an uptick in sales.

        *I just made that up: I didn’t know if there were lesser degrees, so I invented one. :)

    • Gareth, its my understanding that Amazon are also including a “most favoured nation” clause in their current round of negotiations which would prevent *any* other retailer from selling at a price below that which Amazon sets, so not really the wholesale model either.

      • Can you advise on where this information comes from? I’ve seen several assertions about new and dastardly things that Amazon has been doing, and I have yet to see any of them creditably sourced or even stand up to reasonable logical scrutiny.

        In any event, this particular dastardly thing would be highly illegal, and Amazon, having just benefited enormously from somebody else doing something dickish which happened to violate those selfsame laws, would be less than its usual Evil Mastermind self if it tried to do that.

    • In the DOJ case against the publishers and Apple, the courts said they had no problem with the agency model.

      Amazon in the referenced letter says that it has no problem with a 30% cut.

      So if the publisher have a right to use agency and if Amazon has no problem with a 30% cut, then why should any of us be concerned about how these huge corporations are trying to do business–which the courts have said is in a legal manner?

  • I learned that the plural of axis is axes! When I first read it, I literally imagined a point with two axes (the sharp kind), going around swinging at innocent villagers. Now, a thought experiment: an axes of axes. What would that look like.

    Chuck you made me learn something and I haven’t even finished my second coffee of the day.

    Thank you.

  • *muse* So we did a Digger omnibus awhile back. It’s massive. You could beat a burglar to death with the print version.

    It’s 800+ pages of comic. We have occasionally discussed doing it as an e-book. I would be rather shocked at the notion of charging less than $19.99 for it–the softcover’s $40 as is and the conversion with all those images would be grueling.

    No one is required to buy it, and in fact, I give the whole thing away free on the web. But I would not charge 9.99 for it.

    Likewise, art books. Many are large and beautiful and expensive. They cost a lot to make, layouts are time-consuming, and conversion is hard. I would be moderately appalled at the notion that a $75 book “ought” to cost 9.99.

    If someone else does not wish to pay that for them, they certainly don’t have to. These are luxuries. If they think I’m shooting myself in the foot at these pricings–well, it is my foot and my gun.

    I wonder if we’ll start seeing specialty “boutique” e-book retailers for things like art books, comics, cookbooks, landscaping and gardening books heavy on photographs. Some things do not cost 9.99, but are still worth buying. If Amazon’s not willing to cater to that niche, someone will.

    • “If Amazon’s not willing…”

      You really should read what Amazon actually posted. The following is a direct quote from the letter:

      “Is it Amazon’s position that all e-books should be $9.99 or less? No, we accept that there will be legitimate reasons for a small number of specialized titles to be above $9.99.”

      • You are certainly correct, I should have read the exact letter. Hmm.

        Does this mean they will allow a 70% royalty on those, do you think? Because their graciousness in allowing that I may have a legitimate reason to price things the way I do is rather empty if they are going to penalize me for that pricing.

          • Then I think my original point stands…we’ll start to see boutique pricing on art books and that sort of ilk. Because Amazon, whatever they may be claiming, is not apparently willing to cater to that niche.

          • They’ll cater to it, they’ll just ding you for it.

            Which is part of my point in the post — Amazon is trying to shepherd e-book prices into a certain range. Falling outside that range is punishable in some fashion.

            Just as I think if publishers want to be author-friendly they need to give authors more, I think if Amazon wants to actually be author-friendly they need to cut down on some of those restrictions they put upon self-published authors.

            — c.

          • Amazon has always had downright abusive terms for the small press that publishes my comics, to the point where they don’t bother any more. Which, fine, they never claimed to love publishers.

            But if they’re going to subject me-the-author to the same unkind terms with no nuance actually available, they can’t very well claim to love authors either. At least, not authors like me.

            I really wish they would just admit they’re a business out to make money and not try this stupid we-love-authors-really PR crap. I respect the bottom line, but I resent this.

          • “Amazon, whatever they may be claiming, is not apparently willing to cater to that niche.”

            Yes they are — at a 35% return, which is closer to industry standard than the preferential 70% they offer for stuff within the 2.99 – 9.99 window.

            To claim that they’re not “catering to that niche” because they’re “only” offering an industry-standard rate on speciality items is… frankly, a little bizarre.

          • Can you unpack that? Where is 35% the industry standard? They offer publishers 70% — which means they should conceivably offer self-publishers the same (if we are to assume that self-publishers are equal, and in this case I will).

          • Bizarre that I dislike my business niche getting caught in the pricing crossfire of Amazon trying to bring down prices on e-books from conventional industry publishers?

            Eh, maybe. Chalk me up as an ingrate. It’s cool.

        • Argh! The limit on nested replies is frustrating!

          “Can you unpack that? Where is 35% the industry standard?” Traditional wholesaling — manufacturer sells to distributor for 35-40% MSRP, distributor sells to retailer at around 50% MSRP, retailer sells to consumer at somewhere close to MSRP.

  • Like you, I’m skeptical of Amazon. I think this letter was a great PR play for midlist author support, as it lays an the unobjectionable part of their demands for Hachette: lower ebook prices. The push for Hachette to give authors more of their share is also, I’m sure, gladly appreciated by a lot of midlist authors. Of course, they only mention the positives. I’m sure they’re demanding far more from Hachette than lower ebook prices, one of the terms we’ve heard rumoured is the ability to POD a book if it’s out of stock. So there’s more to the dispute than ebook prices, let’s not forget that.

    I am becoming more sympathetic to Amazon’s attempt to control ebook prices though. If I’m right, Apple basically imposed pricing on the music industry with the $0.99/$1.29 standard for songs, and $9.99 for an album, with variations for length, plus they forced them to remove DRM. I think we all agree ebook prices should be lower, so why shouldn’t retailers (Apple, Amazon, all of them) force publishers into a new ebook price standard, allowing for small variations based on length, and maybe some other factors?

  • My Daughter had an internship at Jeni’s two years ago…she did the “Absinthe and Meringue” Video among others for them. I miss getting the Scoop on new flavors…

  • I don’t know a thing about book pricing, nor do I have invested much head space in the traditionally published vs. self-published debate, but the subject of what I am willing to pay is always in the back of my mind.

    I have no qualms putting $10 on the table for a book, especially if I know and like the author. In fact I tend to see a price under the $8 mark as cheap (but mostly that has something to do with the fact that the same book, translated to my native language would cost me 4-8 times as much). Occasionally I will close my eyes and pay the $20 price tag on a book I’ve been waiting for, but more likely I will hold out for six months or a year until the price has lowered, because I am an consumer, not just a joy-rider, I’ve got to balance what I want with what I can afford.

    But I find that pricing too low can also stop me from buying a book. I thought paying 4 bucks for Blightborn was a bargain, (I still believe I am robbing you blind Chuck, but those dollars not spent on your book will buy my book-sucking monster another fix eventually.) But when I stumble across a great-sounding book of an, to me unknown author, and I see a $1.99 tag, I waver a little, not because of the price but because of what my snotty consumer brain percieves of the price and quality balance, a little leftover thing from business and economics classes in the past. Supplier and demand territory. If a book is priced too low then my brain tells me it is because there is no demand, thus maybe the quality is in the drains. $2 or $20, doesn’t matter, if a book sucks, it’s a double punch in the gut because I have paid good money for it AND had a crappy time reading it.

  • I will refrain from meaningful commentary on the topic; I’m able to write full time because someone in my household receives a paycheck from a particular online retailer. But I will say, “distractions to fill your joy sockets,” is so much win. I do believe I will suggest that as the title of this year’s PTA bake sale.

  • Amazon argument about competing interests isn’t exactly incorrect. Mowing the lawn also gets in the way of my reading time. The worry for me is that I believe amazon is suggesting that ebooks are no longer books but rather, content. And content on the internet is cheapy cheapy. What troubles me is this tends to devalue the cultural significance of the written word. I think there’s inherent value in something be called a book. Books transcend content … they even transcend ice cream.

  • OK, so while I’m not really supporting Amazon here, I do understand the claim they’re making, which is basically that there are people out there _not reading_ because they think $15 is too expensive for that book their friend just recommended. When Amazon talks about getting people to buy, they’re not talking about people who always buy an author’s books in hardcover, in paperback, or at equivalent ebook prices. They’re talking about people who don’t read very much (but do read), get a recommendation from several friends for a new book, go to pick it up, recoil from the price and move on. These aren’t people who are going to come back for the discount pricing. They’re done. Their friends are reading something else now. It’s social reading. That’s the market Amazon (supposedly) wants to catch at with their $10 or less pricetag.

    Whether that’s a worthy market to go after is an entirely different discussion, of course.

    I think the argument that Amazon should not control everything is the most powerful one to stand on.

    • I don’t think that Amazon is just speaking for social reading. If anything, their argument applies more toward avid readers. Because when one reads 8-9 books a month, the price really adds up. So while $15 for an ebook is fine if one only reads one novel a year, it becomes expensive real fast.

      So as someone who read 100 books last year, and intend to read 100 this year, I feel like Amazon speaks for the avid reader too. Because without ebook costing less than $10, I’d be limited to what’s in my school library. While my school library’s very generous in buying requests, it doesn’t cover the many fantastic ebooks out there that I might’ve missed out on if $15 or even $10 was the norm for all ebooks.

      I think that if ebooks prices decrease and author royalties increase, publishers/distributors can get more sales, and authors can earn more, because readers can buy more ebooks without increasing their budgets. Win x4.

      • Oh, certainly. I was more thinking of the comparisons to other types of entertainment. I _suspect_ Amazon isn’t reaching blindly out of the Greed Pit and that because they sell so many different things they actually have some sense of the ebb and flow of book sales related to pricing and compared to other consumables they sell, especially among the ‘uncommitted’ demographic. (They almost certainly have that data even if they haven’t looked at it.)

        None of that really gets around the Amazon Controls All aspect of things though.

      • Anyone who doesn’t want to pay the highest price for a book can easily (and immediately, in most cases) find “new/used” copies for sale cheaper on Amazon’s site. Or get the book free through the Prime lending library, Or perhaps through the KU or other subscription service, or at their local used book store (online or physical.) So I don’t buy the premise that publishers who price books above 9.99 are preventing readers from accessing cheaper versions.

        And let’s keep in mind that Amazon is not pushing this agenda for readers’ sakes; Amazon needs to keep customers flowing through the cheap-book portal that Kindle established. Books were, are and will continue to be the welcome mat that funnels buyers to the big-ticket items. that’s why Amazon has undercut booksellers and lost $$$ on book sales for years — to keep prices low NOT as a friendly service to readers, but to use books as throwaway bait.

  • “Let publishers set the prices.”

    Didn’t publishers do the same thing when they fixed prices? Why should I trust publishers to set fair prices after they violated antitrust laws? I feel like Amazon should have a good say on this matter, since it wasn’t the party breaking the law recently.

    As a reader and an aspiring author, why should I trust Hachette to set fair prices? Because if it always have the customer’s best interest in mind, this entire fandango wouldn’t be happening.

    • Suppliers controlling the prices is resale price maintenance or vertical price maintenance. It’s shifted back and forth between legal and illegal and various derivations in between over the years, mostly because it almost always ends up with unjustifiably high prices and suppliers abusing that position. And while self pubs on Amazon do have great freedom to set their own prices, Amazon has the right to alter those prices anytime they like. They generally choose to be more hands off, not needing to be too active because most indies stay in their preferred price range thanks to the higher percentage structure, but it’s not the same thing as a vertical price deal where the supplier sets the price and the retailer has no discretion to change it. I’m not a fan of vertical price maintenance in any particular form, it’s a strain of price fixing. These deals are only in play because SCOTUS opened the door on them in 2007 and almost immediately, we had major collusion and price fixing going on, built around these agreements. SCOTUS should have left this particular Pandora’s box firmly closed and locked. It won’t be too long, I don’t think, before we see them pop up and burn us in some other industry too, if it’s not going on already. I’m all for diversification and Amazon not controlling every aspect of everything, but I don’t believe this is the way to get there. This ultimately just trades one situation with with a large potential for abuse with another even larger one.

  • So let me see if I can boil this down..

    The ‘big five’ want to compare prices and charge whatever people are willing to pay (which is different from watching your competition’s pricing and matching it how?). If this was about oh, say, water, I might be a little more concerned. After all, if my water company and the one in the next county decide to gouge me it’s not like I’m going to be able to sink a well under my house. I’m stuck paying whatever they demand. And I actually NEED water.

    But this is freaking entertainment guys. If you ask me for twenty bucks in return for amusing me, I’m perfectly capable of deciding whether or not what you’re offering is worth my time and the Jackson in my wallet. I make that decision all the time and, for the most part, I’m pretty happy with the outcome.

    I’ve been in the videogame business for a really long time and I’ve seen this argument come and go for decades. Back in the early 00’s Dixon’s, the leading retailer in the UK, tried to dictate pricing to game publishers. I remember these incredibly heated exchanges with the sales guys wailing, “But they’ll pull us off their shelves!” and the dev guys (like me) saying “Screw ‘em. Sell deeper in the other stores.”

    I realize that Amazon has tremendous leverage. They’re the first place a ton of people go when they want something to read/watch/play/hear/… I run a (tiny) little imprint of my own and I can tell you that our sales on Amazon vastly outpace all the other outlets combined. So I get it. But for Amazon to claim that their motivation is somehow altruistic is just silly.

    You and Scalzi have it exactly right. Amazon is in the business of benefiting Amazon. Same deal with Hachette. Expecting anything else is pretty much a guarantee of disappointment.

    • And didn’t Dixons go under? Or get taken over by Curry’s or something?
      Anyway, I think you’re right, its all about knowing that you are dealing with a company who always look at the bottom line and what’s best for them – that isn’t to say they are evil, they are just a company being a company.
      No one but authors are out to fight the cause of authors.

  • Amazon is, of course trying to optimize the commercial book world for itself – there is no altruism in it.

    What I don’t understand are the appeal of e-books. Acknowledging that engraving what I write onto stone tablets is harder than ever to arrange, I would still think it’s not too much to ask someone to chop down a tree, turn it into paper, and mark each sheet with type handset by a chaste monk. It seems trivial compared to the labor and internal agony of releasing one’s soul in words, our shared hobby of seppuku.

  • I’ve been trying to come up with an analogy for this whole mess… the closest I’ve got is that Amazon is essentially Catwoman – mostly self interested with occasional sidelines into selflessness when Batman is involved… who Batman is, I have no idea…

  • I like your comparison to different ice creams. I think it’s valid (but that could be because I spent years scooping ice cream for a living – outside of being paid for my stories/art that’s was favorite job!). Seriously Amazon has a point yet they lose the plot. Yes most e-books should cost less (it so makes me mad when I find a book I want to read and the e-book costs the same as a paper back version or more than the second hand paper back including postage and handling), but what is the point in blocking prices into a narrow gap? As you say, the publishers or authors should have the right to set a higher price if they wish. If no one wants to pay that price so be it – they’ll have to lower it or not sell any, but maybe they only want wealthy people to buy their books – I’m sure there are snobby areas in publishing where that occurs (hell, we don’t want poor ignorant ice cream scoopers to read our translated collegiate version of XYZ – I do come across this seeming scenario (and I just want to say to those publishers – for pity sake if you can only print five hundred copies of a freaking book on paper then offer it in e-book form. It’s not rocket science and isn’t education about educating and sharing knowledge or did I sleep through that college course? May have done!). As others have said, if I love the author I’m happy to buy new and pay a bit more knowing they get a bit more, but Amazon isn’t getting any of my e-book sales (I read on my phone and they don’t make it easy for techno idiots like me to buy so thumbs down).

    This week Amazon really made me mad when I discovered they’re selling Kindle e-book versions of book I’ve been waiting months to read (the latest in a gripping series – the last book left the reader on a freaking sinking Titanic cliff edge) but it’s not available on my usual e-book retailer nor is it offered in paperback on Amazon (which is what I do buy from Amazon) – no you can only buy it from Amazon in e-book form. I’m assuming they’ve made some deal with the author/publisher to lock the book to Amazon for a few months to win all the readers who can’t bear to wait another three months to find out what happens, but I’m determined to dig in my heels. I’ll bloody wait till Christmas and beyond if I have to and I can’t be the only one! Publishers need to get real. Pissing off readers isn’t great for those all important early sales figures. It’s actually made me so mad I might even not bother reading the book (yes I will cut off my nose to spite my face). At the end of the day locking down a book to one store for one price is insane for over all end sales and whatever else one wants to argue – that’s never going to be beneficial for authors.

  • No Amazon shouldn’t control the price but it is their site so they should. Publishers should set the price as high as they want and give authors a bigger cut. They should also walk away from Amazon with a book that they want to charge more than 9.99 for. If they want to charge 23.99 for the newest James R. Tuck novel then so be it, sell it everywhere but Amazon. Either the publisher will change it’s mind or Amazon will. It’s the “they can’t do this because we need them so much” crap that has to stop.

    Someone needs to play hardball and let it finally wash out.
    Cause let me tell you, If I put out an exclusive whatever and want to charge more than 9.99 I’m taking it elsewhere rather than eating that drop in my cut that Amazon penalizes me for. I’d walk. No problem.

    But this is a good post. You make sense.

  • Although I’m very happy with Amazon overall, I’d have to say that self-publishers like me shouldn’t be so quick to advocate for major publishers lowering prices (increasing royalties to their authors-yes) because, as you say, the primary advantage we have is pricing. My books at 2.99-5.99 look pretty attractive, I think, compared with a lot of the high-priced stuff. I know my spine stiffens when I see an e-book at 12.99 or some such outlandish price and I’m sure that many readers have the same reaction so when their shocked eyes happen to fall on a tasty looking morsel at 2.99 they might just have a tendency to give me a look see.

  • You know what would be awesome way to fix this?

    If digital copies were never sold, and only given away free with physical copies.

    Don’t want the physical copy? Then it’s donated gratis, to the library service in your postcode area.

    Then Amazon wouldn’t be able to moan about production costs of digital and the publishers would look like they’re being wonderfully charitable.

    Plus, I’d get a physical and digital copy of all the books that I buy, without having to buy them twice.

    • For many people one of the primary attractants of e-books is that they are environmentally friendly. And does your local library really NEED five thousand copies of Fifty Shades Freed?.

      Well, I don’t know what the people in your town are like. Maybe it does. But overall it still seems awfully wasteful.

      • Then let the libraries decide how many copies they need.

        Set up a system to allow libraries to request up to X copies. where X is the number of unclaimed paperbacks in their region, for just the cost of shipping.

        If people would rather not have a physical copy printed, for environmental reasons – then give them the option of doing that, too.

        Truth is, I’m not particularly invested in the absolute mechanics of how the additional physical copies are (or aren’t) distributed.

        Mostly, I’d just like a future where paper books and physical libraries still exist.

        That, and I’d like a future where I could order a book online, and start reading it on my e-reader whilst waiting for the physical copy to arrive.

  • This is a personal thing, but I rarely buy a book over $6. In fact, I use ereaderiq to find cheap daily deals on Amazon books. Many of those are indie, but there are also a number of great deals for authors like Stephen King, Dean Koontz, Anne Rice, etc. Yes, Uncle Stevies books are generally $9.99+, especially the new ones, but there are deals that come out where his books go down to around $1.99-$4.99. That’s when I snap them up. Like, today, you can get “The Green Mile” (complete version), for $1.99! I’ve also bought “The Shining” for the same price. And got “The Stand” for $2.99. I think the most expensive SK book I bought was “IT” and I paid only $8 for it.

    Maybe I’m just a cheapskate, but I’ve always been like that, even with my paperback and hardcover books. Most of the time, I think publishers are just taking the piss with e-book pricing (or pricing in general), hence the reason I’m on ereaderiq daily to find those great deals.

  • Why don’t I see any discussion of lowering the price over time. Sell the ebook for the hardcover price, when the hardcover comes out. Then lower it to the paper back price when the paperback comes out. Then a year later lower it to the amazon price.

    I remember the old days when I would wait in anticipation for the paper back to come out, since I really couldn’t justify to myself paying the price for my non A list authors.

    Personally my kindle is filled up with a bunch of unread Amazon sale books that only cost .99 – 1.99. My to read pile is about 88 books. This in itself is a disincentive to buy a new e-book that is above $7 dollars. Publishers need to realize that a lot of us who buy the Amazon sales have huge unread piles that we are slowly working through, so demand is going to go down over time too. Right now unless a book is under $3, I am only buying the books that I consider to be “stephen kings” or as I would term it my “terry pratchetts”.

    • They do that already. A new book comes out with a $10.99+ price tag, eventually drops to $9.99 or lower. Meant to not undercut their own hardcover price (aka, slit their own throats).

      • Yep, this.

        Although my personal line in the sand, not necessarily anybody else’s, get your own sand I’m WORKING HERE, is that the ebook must not cost more than the cheapest currently available print version. (It can cost the same and if I want the book bad enough I will hold my nose and buy it. But that is the line.) If it’s only out in hardcover, fine, it can be hardcover-ish priced. I won’t buy it, but then I haven’t bought a hardcover book new in years either.

        Baen Books, of all people, the publisher that took less time to screw up e-books less than any other publisher, broke this rule the other day. I was heartbroken. I buy hundreds of dollars worth of books from them every year. Or rather, I did. Now I buy zero. Because of this:

        Kindle: $9.99
        MMPB: $7.99, discounted $7.19

        I checked multiple etailers. All the same. That means it’s the publisher. And that means we’re done, Baen.

        That’s insulting, and I will not support anybody who does it. Period.

  • I usually love your perspective on things, but I came away from this post feeling a bit cold.

    You mentioned once or twice that readers, buyers, etc, should be deciding whether or not a price is good for them. Do we not think that Amazon probably has some customer data that could potentially be enlightening as to what their customers want to buy? Granted, Amazon should probably be more forthcoming with hard data, but I find it odd that everyone assumes that Amazon is speaking for itself and not on behalf of its customers. Amazon doesn’t exist without its customers; EVERYTHING they do is to on behalf of the people who shop there. I don’t think Amazon would be fighting so hard if they didn’t think that more profitability lay in having lower ebook prices.

    As far as self-published authors losing their price advantage . . . . I don’t see any reasons to protect that advantage for them. If publishers want to compete with lower-priced ebooks, I think they should be able to. Let the market take care of it, etc. Because honestly–it seems like in order to become decently successful at self-publishing, you already have to have something other than algorithms and low price points. There are so many people pouring their work into the market that one has to differentiate oneself in another way, even besides price.

    I would never pay even 9.99 for an ebook, even for an author that I’m a superfan of, unless it was literally the only way I would get to read the book (and even then? ehhhhh maybe). So while there are some people who will buy at higher price points because they CANNOT. WAIT., others of us are extremely put off by what I personally see as being a giant rip-off for an intangible product. I’ve seen the numbers on printing books (thanks to IPG) and I know how much less it costs to produce an ebook vs. a hard copy just on unit production numbers alone.

    I’m not Amazon’s biggest fan, but they generally do try to be a customer-centric company, so it might be worthwhile for publishers to sit down and at least ask Amazon why they’re projecting the price points that they are, instead of stomping their feet and demanding that they get to set the price points only, forever. Maybe the customers have ALREADY spoken, and we just don’t know it because nobody’s listening to Amazon.

    Amazon has been the ONLY side of this debate that is siding with the customer, and I have to give them props for that. Authors are siding with themselves, publishers are siding with themselves… but after years of customer service experience, I know that not considering the people whose money you need often leads down unprofitable roads.

    • “You mentioned once or twice that readers, buyers, etc, should be deciding whether or not a price is good for them. Do we not think that Amazon probably has some customer data that could potentially be enlightening as to what their customers want to buy? Granted, Amazon should probably be more forthcoming with hard data, but I find it odd that everyone assumes that Amazon is speaking for itself and not on behalf of its customers. Amazon doesn’t exist without its customers; EVERYTHING they do is to on behalf of the people who shop there. I don’t think Amazon would be fighting so hard if they didn’t think that more profitability lay in having lower ebook prices.”

      They probably do. But that doesn’t mean I want them being the arbiter of that. The market is the market. If the price is too high — people won’t pay it. And Amazon isn’t forthcoming with hard data at all. Some of their letter may also be a bit massaged in terms of the limited view of that data, as this Absolute Write forum poster notes:

      http://www.absolutewrite.com/forums/showpost.php?p=9002861&postcount=476

      Also, I don’t quite buy that they’re somehow the defender of the customer. Amazon’s interests line up with customer service, and they should be commended — but Amazon is in this for Amazon. And customers *are* being put out by all this. Amazon could make it easy for Hachette books to get into customer hands and actually told customers to go elsewhere for those books. That’s not friendly, it’s dismissive. And this’ll happen with each publisher down the line as they negotiate.

      Amazon is not a perfect customer service institution. I’ve had many issues big and small with the larger retailer (beyond the book side).

      — c.

      • “I find it odd that everyone assumes that Amazon is speaking for itself and not on behalf of its customers. Amazon doesn’t exist without its customers; EVERYTHING they do is to on behalf of the people who shop there.”

        Uh, no. Everything Amazon does is on behalf of its shareholders.

    • This is something I find really fascinating and slightly troubling about Amazon.

      You’re absolutely right about their focus on the customer. Everything they do is about the customer. Our natural instinct is to interpret that as somehow noble. But Amazon’s customer-centric POV has nothing to do with nobility. It’s entirely motivated by money. Their secret sauce is indeed the data they gather on the humans they interact with. They’re acutely, intently, professionally, relentlessly aware that happy humans = better data = more money.

      So what’s the end game for that relationship? At some point, Amazon knows my every need and want. They can even predict what I want before I want it. And the scary bit is that it’ll work. They’ll flash something in front of me and my little rat-brain will go, “oooh… shiny!” And I’ll click the food-pellet lever.

      Why do I suddenly feel like I’m in a Phillip K. Dick novel?

  • I’m not the first person to say this by any means, but at this point it’s becoming clear that Amazon has no sincere interest in trying to make a strong profit from pushing physical products or even digital products. Amazon could quite realistically make ZERO in profit for the next couple of years and most shareholders, of which I am one, would not complain. Amazon is positioning itself to offer something infinitely more valuable than books, diapers, and electronics: Consumer spending data.

    Amazon has the kind of data on their customers that makes marketing departments swoon. I fully suspect the reason they’re trying to sell everything on earth from their website is not at all because they want to make a profit off the STUFF, but because they want to sell the data they aggregate. Making a profit off the stuff is icing on the cake. The REAL money is in the data. (Or possibly in the algorithms they use to interpret and sort the data.) Amazon doesn’t care about the pricing of ebooks, or even books, and as a shareholder I’m fine with that. I want to make my bazillions later, when Amazon starts selling target marketing data on a large scale.

    • Amnie – you offer an interesting perspective. I’d overlooked the coming data harvest (silly me!). That would explain their irritating silence on sales. Why hand out the candy when you can sell it? I’m sure you’re right that in the long run Amazon will be raking it in off the back of people like me who can’t find what they want/need at a bricks and mortar shops within driving distance. I have no problem with people making bazillions off their investments (good luck to you), however as a consumer I do have a problem with any individual retailer who can and will happily screw the market (not just for books, but other consumer goods) for data harvesting without any concern for the long term affects of their business plan on the wider economy/culture. As a shareholder (and fellow consumer) it should concern you how Amazon attempts to control sales of certain products and prices of various goods (not least of all books) because if they irritate enough people (like me – and they have really irritated me this past week – again!) the precious data harvest might not end up what you hope it to be.

      • Cari, I am absolutely NOT on Amazon’s side in this battle. I see problems with both sides, but frankly if somebody’s going to screw me over as a writer, I’d MUCH rather it be a publisher. (The devil you know, ya know?) It’s also because I don’t really believe Amazon cares about this particular dog in the particular fight that I side with the publishers. For the publishers it means what it really means – sales figures and profit. For Amazon, it’s a means to a much different end.

        • Good point! At the end of the day I just want to be able to buy the books I want to buy where I want to buy them (preferably for a price that’s fair to the author and the reader). I think both Publishers and online retailers have a long way to go. I suppose even though I’m a writer I look at the situation as a consumer. I think Amazon testing its muscle is just the beginning of some continental shifts in the publishing industry. Who knows what sort of creature will rise from the ashes, but I’m hoping it’s one that offers a win/win.

  • I am with you that readers should decide what the ultimate market price is, but I think that will happen no matter who sets the price so I have a hard time caring. There is plenty of price diversity between 0.99 and 9.99 so I don’t buy that argument either. I still have a hard time swallowing that we’re supposed to think that 9.99 is such a reasonable price for an e-book. That is WAY TOO DAMN high for a digital product that I don’t even technically own. I don’t care who the author is. I used to be able to buy tons of paperbacks at 6.99 to 8.99 that I could use, abuse, or giveaway because I actually owned it. Now I’m supposed to be grateful to pay 9.99 for something that costs a fraction as much to produce. I get that prices go up over time, but there is no way a digital product should be the same or higher price than their physical counterpart.

    I think Amazon gets this. I don’t even think Amazon particularly cares if or what big publishing sets their price at. I think Amazon is really fighting this battle for one reason. They don’t like that big publishing’s pricing schemes are designed to retard the e-book market which Amazon essentially created and have invested a ton of money into. So they really want lower prices because it will convert more sales to digital, because duh, just like it’s cheaper for a publisher to produce an e-book it is also a whole lot cheaper to sell a digital book. No inventory. No shipping. Virtually no overhead costs at all. But Amazon sells paper books too. Yeah but don’t think they wouldn’t love to have to sell them anymore. If all book sales were digital, it would be a dream come true.

  • Whenever I complain to a publisher about the price of their e-books on Amazon when an e-book is more expensive than the same paper/hardback, the publisher always says “Amazon sets the price”. However, they are being disingenuous. What they mean is “Amazon sets the low price of the paper/hardback”, not “Amazon sets the high price of the e-book”, so I have little sympathy for the publishers here.

  • Was referred to your blog by two folk at Digital Reader’s post : nice! very free enterprise. It was mentioned you tend to a more balanced view. I tend to agree.

    “…if anything, I think this is a volley across publishing’s bow that Amazon is making a very serious, hard-driving play for the hearts and minds not just of readers, but of authors. If publishers want to make a statement, maybe it’s time to offer authors a meatier cut. Sorry. It just is. If you want to play this game and win at it, you need to start finding ways to become partners with your authors — ”

    So my current pet two cents worth applies to the above. If Amazon wants me in Kindle Unlimited, it needs to remove the exclusivity requirement placed on (mostly? only?) small self-published authors. Which aslo extends to not being able to place my digital work in libraries.

    Anyway, have signed up for more here, looking fwd to more ice cream (smiles).

  • Let authors and readers decide if those prices work.

    Let the market do its market-flavored thing.

    That’s the whole point. The market-flavored thing is telling amazon the publishers are pricing their work too high.

    As far as pricing goes, to use your ice cream analogy, paper books are the gourmet brands (requiring more and specialize ingredients…thus making the price point hire) and ebooks are the gas station brands (fast, convenient, and with standardize ingredients, making them cheap to produce).

    Paper books, from a producers point of view, should be priced higher because the overhead with printing is higher. Ebooks on the other hand should have a lower price point because the overhead doesn’t change regardless if you sell one copy or one million copies.

    Most paperback books are 6.99-7.99. So why should the consumer pay more for an ebook?

    Personally I think the real reason is to support the paper book market. It’s the one advantage big publishing has over self publishing and even smaller presses. They can get paper books into stores.
    If the ebooks are priced higher, consumers will buy paper over the digital copies.

    Mind you I’m talking in generalities. There will always be those readers who will only buy paper books. There are readers (like me) who almost exclusively buy digital and save the shelf space for treasured books.

    But for a general reader, pricing does make a difference. Most of us humble readers have a budget. And I do put books back that have a high sticker price because there are LOTS OF OTHER BOOKS. There are more books than I could possibly read in a life time, so if I can buy three books for the price of one “big named author” I usually go for more.

  • I only eat non dairy ice cream, and only soy free non dairy ice cream (soy allergy). I will pay a pretty penny for high quality ice cream– good flavor, good texture, not too sweet. Hell, just yesterday I bought a $5 scoop of ice cream. I regularly buy $6 pints. I’m not rich. Far from it. But I love ice cream, dammit.

    Same with books. If I want a book, especially if I know the author, I will pay what it costs. I don’t hesitate to buy an ebook book at $2.99 or $9.99.

  • “Let publishers set the prices.”

    My problem with this view is that, historically, this has resulted in higher prices. We have plenty of data on this. For example, when the agency model was forced on Amazon and five of the Big 6 publishers took control of retail pricing of e-books (and restricted Amazon’s ability to discount), e-book prices jumped overnight. When Amazon regained the ability to discount beyond a certain fixed amount, prices went down.

    In other words, if you are arguing that publishers to have the ability to set the retail price of e-books, you are essentially arguing for higher prices for e-books. While that could be viewed as advantageous to me (as a self-publisher) in a narrow sense because it protects my pricing advantage, I think it’s terrible for the market as a whole.

    Books might be special in terms of our attachment to them, but, as Amazon noted, e-books are highly price-elastic. I’m not sure how anyone can argue against that, especially they have published their own stuff and watched sales/revenue change at various price points. The extensive data that Smashwords releases every year also shows that e-books are highly price-elastic.

    I also agree with the contention that books are in competition against other forms of entertainment, but here’s a point I don’t see raised often: when books are more expensive, those on tighter budgets will do less purchasing of new books. They will frequent second-hand bookstores more. They will borrow books off friends more. And so on.

    Of course, authors (and publishers) make nothing from those transactions. IMO, cheaper books means more reading and more book transactions which authors (and publishers) profit from. I think cheaper books grow the market as a whole – and that’s why I don’t want to see Hachette and the other large publishers regain control of retail pricing and/or restrict Amazon’s ability to discount.

    • “In other words, if you are arguing that publishers to have the ability to set the retail price of e-books, you are essentially arguing for higher prices for e-books. While that could be viewed as advantageous to me (as a self-publisher) in a narrow sense because it protects my pricing advantage, I think it’s terrible for the market as a whole.”

      Not quite. I’m arguing to let the prices be the prices. What I mean is, if publishers wanna price high? Let them. If readers don’t like that and the publisher ends up harming itself? Let them. If they want to hand savvier publishers, and self-publishers, and debut authors, and unknown authors all a big price advantage? Let them.

      Their price comparison is also limited — they note $14.99, a price few e-books hit these days, but fail to note what happens to books prices at $10.39, or $11.99, or $12.99.

      (A good post on the subject at Absolute Write: http://www.absolutewrite.com/forums/showpost.php?p=9002861&postcount=476)

      — c.

      • I think it’s safe to assume that Macmillan, S&S, HarperCollins, Hachette, and Penguin Random House all want the same thing: to set the retail prices of e-books and/or restrict Amazon’s ability to discount – whether that takes the form of the agency model we had in the past, or some alternative model.

        Together, these publishers comprise a huge chunk of the market. The net effect if they prevail in negotiations will be higher prices for a large amount of books on the market – which, as I’ve argued above, will be detrimental for the market as a whole.

        The market may well sort that out over time by handing a bigger piece of the pie to players with cheaper books – and it looks like the Big 6 lost market share while Agency was in place – but what happens in the meantime while the invisible hand of the market is doing its thing? What happens to the sales of the authors who have contracts with these publishers? Stephen King will be fine, but an unknown author will suffer at higher prices.

        I don’t think the people at Hachette are stupid. I think they know all this. And I think their aim is to keep e-book prices high to slow the transition to digital – protecting their print advantage for as long as they can.

        • Sure, but with digital, the snakes will never go back in the can. Digital is here. It’s done. It’s a huge part of the reading ecosystem.

          Listen, bear with me as I ramble a little bit.

          We know that big publishing is slower than it should be. It is risk averse. It is resistant to change.

          And that’s a narrative told and understood by author-publishers. It is, in fact, one of the value propositions of self-publishing. Fuck risk. Go fast. Publish now. Right? And the argument there is often that the model supported by traditional publishers is aging, clumsy, busted up like an old recliner.

          Some even go so far as to say they should collapse. Or that bookstores are an artifact of the past — record stores, buggy-whips, etc.

          Well, okay, fine.

          So: let that play out.

          Let the publishers price themselves too high. Let indie publishing take more of its share. Let authors see that their books are too expensive and have to field questions from their audience — “Why is this book $14.99?” Let authors go to their publishers and say, “I think I’d sell more if priced less.” Let other publishers (self- and otherwise) who are more responsive to change and are themselves elastic as the prices actually choose to compete. Let the market be the market. Maybe it’ll cut into their market share. Maybe it won’t. Maybe $9.99 is the sweet spot for new authors, but $10.99 is the sweet spot for bestsellers. Maybe $4.99 is the best price for indies. I have no idea. But I’d rather see this happen organically than have Amazon put their thumb on the scale.

          My opinion is, let this balance itself out. Publishers are never going to be able to stop digital. They can’t hide e-books. They’ll figure it out or they’ll perish. We all will. And frankly, trying to dictate a tighter price range for traditional publishers will do more harm to the ecosystem than it will good. Like I said: why start to eat into the price advantage that indie authors possess? Why are indie authors so invested in a fight that is not at all about them and is entirely about traditional publishing? It’s not that they care about authors in general. Is it that they’re called to defend Amazon, like champions of the realm? Why are indie publishers trying to save big publishing?

          The natural course of things will either be that this shakes itself out and the market is the market and readers tell everyone what price they’ll pay. Or it means that the big publishers fail to adapt and sink into the tar pits. I don’t know which way it goes, but I’d rather let the game play on than have someone start changing the rules.

          — c.

          • (Apologies for length, but… it’s complicated.)

            It’s an interesting question as to why indie authors campaign on issues which don’t directly affect them (and, in some cases like this, where their immediate self-interest may lie in keeping quiet). I’ll try and answer it, with the caveat that I’m only speaking for myself and guessing at others’ motivations where explicitly flagged.

            I suspect at least part of it is because many self-publishers either have or desire a hybrid career. Therefore it would make sense to campaign against what they perceive to be regressive actions by large publishers. Maybe they want a strong marketplace with lots of places to sell work to, alongside a healthy self-pub marketplace. Maybe they have backlist books tied up in deals. Maybe they want publishers to get smarter because that increases options for them as a whole.

            Note, I’m guessing here, but *one* of the reasons I’m not pursuing a trad deal is because I feel that would be a fraught relationship – not least because my views on publishing seem to be diametrically opposed to those of large publishers on key issues (like royalty rates, pricing, DRM, non-compete clauses, reversion clauses etc.).

            Speaking for myself, I campaign on all sorts of author issues that don’t affect me personally because I feel it’s the right thing to do. I’m not affected by crappy agent-publisher operations or scammy vanity presses, but I feel that authors should look out for each other. I don’t think it’s too much of a stretch to imagine that other self-publishers feel the same way.

            There’s also another angle which should be noted (which does more closely align with my self-interest). The current anti-Amazon push in the media has veered dangerously close to calling for an Amazon boycott. (Indeed, some have explicitly called for that, others have danced around it.) I think that would be a terrible move which has the potential to greatly harm author incomes (that of all authors, including me).

            On top of that, you have people like Mike Shatzkin calling for some kind of governmental intervention in publishing. It’s hard to imagine what form that would take, but similar calls in Europe have led to a variety of price-fixing/discount-restricting laws which have led to an increase in book prices – something I am against for reasons noted above.

            As to the more general discussion, it’s interesting that you characterize Amazon (re)gaining control of retail pricing as putting their thumb on the scale, as if manufacturers/producers setting retail prices was the norm, and retailers setting their own prices was some kind of alien idea. I could equally characterize Hachette attempting to dictate retail prices to Amazon as Hachette putting their thumb on the scale (and I think I’d have a stronger case because Hachette wants to set the price Amazon pays them AND set the price readers pay Amazon).

          • David:

            Thanks for the discussion! This is interesting stuff, thanks for jumping in. Some thoughts below:

            “I suspect at least part of it is because many self-publishers either have or desire a hybrid career. Therefore it would make sense to campaign against what they perceive to be regressive actions by large publishers. Maybe they want a strong marketplace with lots of places to sell work to, alongside a healthy self-pub marketplace. Maybe they have backlist books tied up in deals. Maybe they want publishers to get smarter because that increases options for them as a whole.”

            That makes sense. Though this goes against (my opinion, not necessarily shared by all) backing Amazon — because a healthy marketplace is not dominated by a single retailer.

            “Note, I’m guessing here, but *one* of the reasons I’m not pursuing a trad deal is because I feel that would be a fraught relationship – not least because my views on publishing seem to be diametrically opposed to those of large publishers on key issues (like royalty rates, pricing, DRM, non-compete clauses, reversion clauses etc.).”

            Certainly understandable. Would you consider moving to a smaller, more dynamic publisher? (Those key issues are not universal, after all.) Do you have any issues with the way Amazon does things? Criticisms and the like? If so, how do you negotiate that fraught relationship? (My guess is any issues with Amazon are probably lesser than those with traditional, but I felt it worth asking.)

            “Speaking for myself, I campaign on all sorts of author issues that don’t affect me personally because I feel it’s the right thing to do. I’m not affected by crappy agent-publisher operations or scammy vanity presses, but I feel that authors should look out for each other. I don’t think it’s too much of a stretch to imagine that other self-publishers feel the same way.”

            That’s fair. Though there’s an argument there, too, that says looking out at all for large traditional publishers runs the risk of threatening indie-publishing. Plus, those authors inside traditional may be subject to some pretty nasty stuff sometimes, but it’s not like they don’t have a contract spelled out for them. What happens when you argue for an author ecosystem that many authors feel is antithetical to their success (true or false)?

            “There’s also another angle which should be noted (which does more closely align with my self-interest). The current anti-Amazon push in the media has veered dangerously close to calling for an Amazon boycott. (Indeed, some have explicitly called for that, others have danced around it.) I think that would be a terrible move which has the potential to greatly harm author incomes (that of all authors, including me).”

            That’s true, and a boycott would cut me out at the knees, too. (I honestly suspect a boycott wouldn’t do much.) But aren’t boycotts a vital way of turning up the volume on the “vote with your dollar” idea? Amazon effectively suggested a boycott of itself when it told people looking for Hachette books to go elsewhere. And isn’t this the value of a diverse ecosystem? Meaning, a boycott of Amazon leaves readers open to finding you at other venues.

            “On top of that, you have people like Mike Shatzkin calling for some kind of governmental intervention in publishing. It’s hard to imagine what form that would take, but similar calls in Europe have led to a variety of price-fixing/discount-restricting laws which have led to an increase in book prices – something I am against for reasons noted above.”

            That makes very real sense and is scary, indeed. Given the DoJ’s ruling against publisher collusion, though, I have a hard time imagining that happening.

            “As to the more general discussion, it’s interesting that you characterize Amazon (re)gaining control of retail pricing as putting their thumb on the scale, as if manufacturers/producers setting retail prices was the norm, and retailers setting their own prices was some kind of alien idea. I could equally characterize Hachette attempting to dictate retail prices to Amazon as Hachette putting their thumb on the scale (and I think I’d have a stronger case because Hachette wants to set the price Amazon pays them AND set the price readers pay Amazon).”

            You might also have a stronger case because of the collusion noted above. I might note that this goes a little bigger than that, with Amazon. Amazon unduly punishes author-publishers who stray from the $2.99 – $9.99 realm (given that self-pubs are also subject to some rough approximation of agency pricing, or at least, “not wholesale”).

            Here’s a question I don’t yet know the answer to — how does this work in other digital environments? How are prices set (between creators and retailer/distributor) with Apple? With Steam selling software? With Amazon selling software? I don’t know how this works in comparative situations, honestly.

            Thanks again for the discussion, David. Lots to think about here.

            — c.

          • Hey Chuck. I think I can tease out some nuance between “backing Amazon” and wanting a diverse marketplace in which authors can sell their work (and, indeed, a diverse retail landscape).

            In both cases, I agree that diversity is the ideal, but not at any cost. If, for example, the price of a diverse retail landscape is higher prices, or price-fixing, or governmental intervention, then the cure is worse than the disease.

            I think if we revert to an Agency system than Amazon’s competition have less incentive to improve their stores, not more. IMO, the big problem with Apple, B&N, and Kobo was that they didn’t get that the store is more important than the device. Their devices were great, the stores… less so. I think they’re starting to get that now, but they have a lot of ground to make up.

            “Would you consider moving to a smaller, more dynamic publisher?”

            Some smaller publishers are fantastic, but you’re giving up some stuff in other areas (bookstore distro v the majors & rights and freedoms and higher % v self-pubbing). There are plenty of smaller publishers I like for different reasons, but my attitude to all publishers right now is the same.

            Simply put, I think trad-pub tends to work out best for writers who can approach publishers from a position of strength. If you have a book they really, really want, then you (or your agent) have the power to negotiate out all sorts of contract gremlins. You also get a bigger advance, which puts more of their skin in the game and forces them to go all-out to market your book. That, in turn, leads to more subsidiary deals etc. Not so much (IMO) from the slush-pile.

            I’m not yet in that “position of strength” but I hope I’m building my audience and moving towards that. Maybe by the time I get there they’ll have figured out this Internet thing the kids seem to be crazy about. But the key question when (or if) I get there is whether I’d make more money and be happier on my own. And my feeling right now is that I probably would decide to keep doing my thing and that this is all moot. But I haven’t closed that door.

            The thinking for Amazon imprints is not that dissimilar, with the caveat that terms are better and they can send a book to the top of the charts with a KDD or an email push. If I was a faster writer, I’d probably be thinking more actively with regard to Amazon at least (and possibly outside that). I’m speeding up, so that may become a live question at some point. And I’m especially conscious that Lake Union is the hot imprint du jour and in my primary genre.

            I hear rumblings that the imprints might be becoming more trad-pub-like in various ways, but it’s hard to discern right now if that’s authors kvetching, a function of acquiring so many titles and difficulties with scaling, or just bumps in the road which will get smoothed out. It’s something I keep an eye on.

            “What happens when you argue for an author ecosystem that many authors feel is antithetical to their success (true or false)?”

            That bit went totally over my head, to be honest. Can you re-frame?

            “a boycott of Amazon leaves readers open to finding you at other venues.”

            Ideally, perhaps. But Amazon provides me with a much more level playing field than the other retailers. Many of the sales I get elsewhere tend to be sales I bring to B&N, Apple etc. It’s relatively harder for readers to discover me (and self-pubbers in general) at other retailers v Amazon for all sorts of reasons.

            “I have a hard time imagining that happening.”

            Imagine President Hilary with a $14m advance… Okay, I jest. But here in Europe publishers have much more influence. This has allowed them to get all sorts of things they desire, like price-fixing laws. It doesn’t take to much imagination to see how a clever PR campaign could convince politicians that there are votes in going after something or other, considering clever PR campaigns have historically convinced us to launch wars, or that you can’t propose without a diamond.

            In more relevant terms, I see authors are making important career decisions based on Amazon’s perceived actions. Some of the misgivings are sensible dispositions towards any large corporation. Others (IMO), less so.

            “Amazon unduly punishes author-publishers who stray from the $2.99 – $9.99 realm…”

            I’m not entirely sure how it works in comparative realms, other than knowing that Apple pays 70% from 99c to $9.99 (and not above, if I recall correctly, but someone may correct me on that).

            If I was to follow the “unduly punishes” characterization, I could say that “Apple is inspiring a race to the bottom by paying 70% on 99c books.”

            I don’t think either is particularly true. Apple is transposing a model which has worked for them in the AppStore. Amazon is incentivizing pricing in the $2.99 – $9.99 band because (presumably) their data suggests that works best for everyone – something that’s backed up by third-party self-publishing data from places like Smashwords.

            If Amazon didn’t have the $2.99 floor for 70%, you would have a load of self-pubbers pricing below that (just like in the AppStore). I think the floor makes people more judicious and strategic about using 99c, which is a good thing.

            IIRC, before 70% came along, $1.99 was the standard price point for self-publishers. Amazon pushed that upwards with the $2.99 – $9.99 window. I’m happy with its overall effect on the market – but I do wish they had an exception for short stories etc. (and, perhaps, certain kinds of non-fiction/reference books etc. on the other end).

          • “I’m not yet in that ‘position of strength’ but I hope I’m building my audience and moving towards that.” –

            Just be sure and hold on to those movie rights for Mercenary til you get the deal you want :-)

    • “…if they prevail in negotiations will be higher prices for a large amount of books on the market – which, as I’ve argued above, will be detrimental for the market as a whole.” –

      Unless one signs up for, or is signed for Scribd or Oyster or KU, or read via libraries.

      Not picking on you David, but your conversation with Chuck etc has finally (kinda) figured out what this is really about, the free market. And both sides are trying to say what the terms will be.

      Each side has absolute power to price as they wish, with their own products, and selling them themselves.

      Neither has the right to force the other how they would do business with each other.

      This has nothing to do with what’s best for readers or writers.

      I finally understand that.

      That’s why I didn’t agree with Mark Coker’s stance, and why I don’t agree with the folk backing Amazon.

      Neither has any absolute right under a democratic capitalist system.

      Ultimately, subscriptions, will benefit either way.

  • If what Amazon says is true (and we have no way of knowing), they have determined that everyone would make more money at $9.99 than at $14.99, for reasons your Econ 101 professor explained to you. They certainly have the data, so let’s say it’s true.

    Amazon and Hachette are big giant private companies. Their only goal is to make as much money as possible. That’s it. The argument has nothing to do with helping anyone, or helping publishing, or anything else. It’s only about adding dollars to the bottom line of big corporations.

    I’m cool with that, because it ain’t love that makes the world go round. But don’t shed any tears for Hachette.

    Amazon is a distributor of books, and Hachette has books to distribute.

    Amazon and Hachette are private companies. Amazon has no obligation to sell anything Hachette makes.

    Amazon has determined the price point at which they will make the most money. It’s their duty to sell at that point.

    If Hachette doesn’t like it, it can go elsewhere, to the extent that there is an elsewhere. If there isn’t, then they have the dough to make one.

    Self-published authors already are restricted as to price. Amazon makes the rules because it’s Amazon’s site. If a self-published author doesn’t like it, they don’t have to sell through Amazon.

    Your point, Chuck, about the relative pricing of self-published books and trad books is interesting. I hadn’t thought of it. But I’ve always felt that self-published books were under-priced. One thing I love about Amazon is that they stir all books together. B&N did not do this. Self-published authors sell themselves short. It seems to me that there is enough difference between $9.99 and $5.99, for example, to motivate a buyer to try a new author.

    The dispute between Hachette and Amazon is free enterprise at work. If they can’t get together, then they each go their own way. It’s the very nature of contract negotiations, and basic to the fabric of business in the US.

    • August 9, 2014 at 4:43 PM // Reply

      “The dispute between Hachette and Amazon is free enterprise at work.”

      Government regulation is almost as basic to the fabric of business in the U.S. as “free enterprise.” In a true free enterprise system, publishers would have been allowed to collude on agency pricing. Instead of allowing free enterprise to run its course, the D.O.J. intervened. I would assume their intervention at least helped set the table for the negotiations taking place.

  • Hagan Daz “Sea Salt Caramel” Gelato.. .. can’t be beat. Amazon e-books = your “i” or whatever you own won’t last forever, therefore, neither will your e-book. . . . 6-7 years at best. It’s hard for me to read an e-book (I like the ‘feel’ and smell of a real book); I haven’t paid more than $2.99 for an e-book, I’ve been so disappointed, except ONE e-book and a free e-book (2 total) would have been work the highest price you quoted. Thanks for the excellent research/article. The unfairness to the author is atrocious. That probably is the way I will end up publishing though. Blessings, Janet

Speak Your Mind, Word-Nerds