Amazon Surrenders To Macmillan On eBook Pricing 437
CuteSteveJobs writes with a followup to news we discussed on Saturday of a disagreement between Amazon and Macmillan Publishers over ebook pricing: "Amazon has thrown in the towel and announced it will now sell books at Macmillan's increased prices; up to $14.99 from $9.99. Said Amazon in a statement: 'We will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books.' Macmillan has sensed Apple's iBooks opens the way for higher prices. Perhaps the question should be: do we even need publishers like Macmillian? Publishers have long managed to keep their old business model chugging along nicely despite the Internet; Academics are still forced to give up copyright (PDF) of their work in exchange for publication. Textbook publishers have a history of unethical practices like frequent edition changes, unjustifiable price increases and bribing teachers. For that matter, why do the RIAA's members still control the music business? Why do these dinosaur publishing businesses still manage to thrive despite the Internet?"
Monopoly? (Score:4, Insightful)
Ugh. (Score:5, Insightful)
$14.99 for a freaking E-BOOK?!?!?!? No. No no no, and no.
Why would I pay twice the cost of a paperback version just so I could have a digital version? I realize there are costs associated with OCR services, but most writers use computers now anyways. What gives with the exorbitant prices?
What's the marginal cost of production on an ebook (Score:2, Insightful)
One word (Score:3, Insightful)
Why do the RIAA's members still control the music business? Why do these dinosaur publishing businesses still manage to thrive despite the Internet?
Lawyers..
Why? (Score:5, Insightful)
"Why do these dinosaur publishing businesses still manage to thrive despite the Internet?"
Because development, editing, and marketing--and even distribution--have value and take skill to do well.
Less than the publishers believe or would like, perhaps, but more than the /. crowd gives them credit.
Amazon bows, I won't. Boycott greedy publishers. (Score:4, Insightful)
The solution is easy: don't buy ebooks from extremely greedy publisher like this one. Even if you can afford it. Just say no. I don't.
--
El Guerrero del Interfaz
Re:Monopoly? (Score:5, Insightful)
Yeah that sounds a little bit stupid. Of course they have "monopoly" over their own titles. Duh.
For that matter, why do the RIAA's members still control the music business? Why do these dinosaur publishing businesses still manage to thrive despite the Internet?"
Because they
1) Provide money and pay the big costs while artists are producing their album
2) Provide marketing
3) Find the promising artists and writers
4) Have the distribution channels
You can say anything you want about the internet as a marketing channel and cheap personal computers being capable of producing albums, but they really aren't. You need a good studio. I'm not going to listen to something that sound like demo tracks. They're horrible if you've ever listened to any other than your favorite band's. They also filter out the crap.
This might be a little bit different with books, but you still need those distribution channels and marketing. Books don't just magically show up in book stores, libraries or have articles in magazines, nor do people just accidentally hear about it. And eBooks aren't going to replace paperback books yet.
Macmillan has a monopoly over their own titles? (Score:3, Insightful)
Seriously. It's their product. Waah, Coke won't let me make Coca Cola.
Re:One word (Score:3, Insightful)
What about 'Lobbyists' or 'Bribes'?
Re:Amazon bows, I won't. Boycott greedy publishers (Score:5, Insightful)
Why? If they have a book I want and I think the $14.99 price is worth it, why wouldn't I buy it?
Re:Ugh. (Score:5, Insightful)
They want the option for the new $36 hardcover big author titles to at least make half the money on an eBook format.
If they want to control their pricing then they should be able to... If that prices them out of the market then that is their business.
Why Publishers Exist (Score:5, Insightful)
For certain types of content, such as text books and works of history, philosophy, and journalism the effect this has can go either way in how people, including myself, are willing to weigh benefits vs detractions. Certainly, it would be better if this content was more democratically available -- however, facts still need to be checked for correctness, copy edited etc. For works of literature, the potentially stifling affect on discourse is much more limited and even though I've almost always been on the losing side of the submission, I'm willing to accept the judgement of poetry and fiction editors as far as to what's actually worth something and what isn't, as they deal in literature every day and see submissions from all kinds of sources -- and when you finally do get a piece accepted then the fact that you had to try so hard to get through the filter makes the joy of it all the greater. That's not really a feeling one can get on the internet where the cost of reproduction approaches zero and so there is no real reason not accept a piece, or when one can stick whatever crap they would like on their own site and eventually someone will see it.
However, for music -- where the bands mostly exist to play live and have fun, where the record itself is really just a form of marketing of their live performance, and where the technical ability to produce recordings of quality and distribute them directly to fans who will then come to their shows is now within the reach of just about everyone, then direct distribution without much filter makes more sense. However, poets and authors tend not make their money from live recitation but from the printed book itself, and the services of the publishers and distributers there are therefor more necessary and valuable. As someone who writes a lot, submits a lot, gets accepted rarely, and who has been in a few bands, played shows and cut a couple of demos I can see the difference, it is what it is, and I'm totally cool with it.
Re:What's the marginal cost of production on an eb (Score:3, Insightful)
It seems to me that was what Amazon was saying. (Score:3, Insightful)
as in, we want to still offer their products even though we know they are overpriced. We give you the choice, choose correctly.
Honestly, the iPad was designed to bring Apple and their publishing buddies more money. After Steve got us off the 99cent model anything was possible. There was too much money on the table. Books presented a new avenue for increasing revenue as their is no such thing as "per chapter". They can charge you more and make you feel as if your getting something special in the experience.
Kudo's to Amazon for calling it like it is. I understand why they gave in, it really does come down to the public making the choice. Unfortunately far too many will make the wrong choice
Re:Amazon bows, I won't. Boycott greedy publishers (Score:5, Insightful)
If I am going to waste money paying far too much for a book than I really need to, then I'm going to at least get a version that I can pass on to someone else.
Re:Monopoly? (Score:2, Insightful)
1) Provide money and pay the big costs while artists are producing their album
I have heard many quality recordings from basement studios built on a shoestring budget. This cost has dropped significantly.
2) Provide marketing
This can be done cheaply on the internet. It is done all of the time.
3) Find the promising artists and writers
They know who they are.
4) Have the distribution channels
Yea, like the internet doesn't work.
Amazon attempts to use their monopoly power (Score:5, Insightful)
In fact, Amazon was the one who was trying to use their market dominance as a tool to set prices, which is what we call monopolistic behavior. Note that what they did was not merely decide not to sell those books that they thought were overpriced-- they attempted to force the publisher by pulling all Macmillan titles from their store, including the physical (paper) ones-- saying "either you accept our prices for e-books, or else we will not sell any of your books." (And, of course, also all the imprints of Macmillan, such as Tor.)
That only works, though, if Amazon were enough of a monopoly that people wouldn't just go elsewhere... and it turns out that Amazon isn't. Yet.
In the long run, it benefits consumers that Amazon backed down-- it's never good for one vendor to have the power to set prices, even if (initially) they claim that they are only using that power to lower prices to the consumer.
As Charlie Stoss commented [antipope.org], Amazon was fighting this one because if the publisher wins, it hurts their profitability because it pushes prices down.
Perception of unreliability in self-publishing (Score:5, Insightful)
The question should really be 'what function that publishers perform do we still need and how should those functions be provided?'
One function of a publisher, as opposed to a vanity press, is to have a reputation for checking the facts in what it publishes. There's a perception that works self-published through a vanity press can't be counted on as reliable sources of information.
Re:Monopoly? (Score:5, Insightful)
Agreed about decent production values on an album and the need for a studio. *BUT* let's face it
the compression that happens in post-production these days makes modern music just as unlistenable
as if it were recorded in a truck stop bathroom. As a volunteer front of the house (read: live music)
and studio (broadcast) board monkey, I can't claim to have experience cranking out studio albums.
But the theory's widely known, and despite the black art elements of getting all the performers and instruments
properly mic'd and isolated in a studio setting, maybe it's time for StudioWiki? Great things have come out
of the collective wisdom and efforts of those passionate enough to contribute their time and knowledge.
You won't see a major label backing things cranked out in someone's garage studio, but it's about the music
and not about the money, I think your average band is just fine with Myspace, iTunes and the other internet-based
distribution channels. And frankly I'd rather listen a McGyvered album with no COMPRESSION FUCKING UP ALL THE MUSIC
taped in a stupid garage than a perfectly recorded / mastered / mixed AND THEN COMPRESSED TO FUCKING SHIT ANYWAY
taped at Abbey Road. Wouldn't you?
Re:Ugh. (Score:5, Insightful)
First of all, we don't spam our links in the post here on slashdot. Anyone can click your Homepage button.
Secondly, where did you get the idea that eBooks are supposed to be cheaper so the publishing industry goes to the "right" direction? Frankly if I buy a book, I want it as hardcover/paperback. Sure, music I want to download digitally, but books just aren't the same thing.
Thirdly, this thing most likely isn't about eBooks being $14.99 while paperbacks are $5. The $14.99 eBooks are for books that cost $30 or more as a hardcover.
Re:Monopoly? (Score:5, Insightful)
3) Find the promising artists and writers
They know who they are.
The problem is sorting them out from the 10,000 other useless artists and writers who "know for certain" that they are the next big thing and are waiting to be discovered.
Re:What's the marginal cost of production on an eb (Score:4, Insightful)
Re:What's the marginal cost of production on an eb (Score:2, Insightful)
Re:Monopoly? (Score:4, Insightful)
Agreed - and it's the same in publishing.
The question of reputation is central in academic publishing. The same book will be at an advantage if it is published by Macmillan rather than brought out by an unknown press, or published online. The large and respected presses carry an automatic sense that their books are likely to be well-written and worth reading. Once an author has a good reputation, maybe they can start publishing under Creative Commons licences or the like. Lawrence Lessig [lessig.org] and Jonathan Zittrain [futureoftheinternet.org] have both done this - but only after spending a long time building up their reputations and writing a lot of other books under - presumably - the usual contracts. And their books come out with "big-name" publishers like Penguin and Yale alongside being freely available to download.
You just can't ignore the cachet of the publisher when it comes to books. It's one of the factors that academics use to evaluate whether a new book is worth their time or not, and that in itself often reflects the fact that the good publishers provide invaluable services in reviewing and editing.
I'm not defending Macmillan's move, btw - just pointing out that it's not quite as easy as it might seem to write the publishers out of the process.
Re:Monopoly? (Score:5, Insightful)
Yeah, cause that can't be done by a widely accessable moderation system. Just imagine the anarchy that would happen if anyone could create anything and the only way people would know if it was any good is to look at how other people just like them ranked the work. Terrible.
Re:What's the marginal cost of production on an eb (Score:3, Insightful)
That's right, because nobody markets books, or pays authors, or runs press tours, or edits books...
... and none of that has any bearing on the marginal cost of production of an ebook. The fixed costs are just that, fixed. The marginal cost associated with selling an ebook is *zero* (Amazon covers the cost of sending you the ones and zeroes)
Re:Amazon attempts to use their monopoly power (Score:3, Insightful)
Re:unfortunately, recently permitted in the U.S. (Score:3, Insightful)
What do I get? (Score:3, Insightful)
Honestly I would be willing to pay the same as a paperback as long as it was DRM free. Even though an EBook costs way less than a Paperback (because in theory a paperback should include binding/printing charges as should a hard cover), there is a convenience to not filling up a library.
But I'll be damned if I'm going to pay 14.99 every time I switch e-readers for the same book.
Some publishers are holding e-books back long after release. First they release the hard cover, then a few months later they release the e-book with the paperback. For me that's stupid and it would be better to charge more for the e-book. But still I would expect some savings over a full hardcover, after all there are no binding/printing/additional costs. I would expect those savings to be passed onto me. Also if you are going to charge me $20 for a book where the paperback is $10 and the hardcover is $30 then it damn well better be DRM free.
The reality is many of the DRM formats have been cracked and people often buy e-readers expecting to use the DRM cracks to export the title to however they want. But this is stupid because it just keeps funding the companies so they can constantly create new DRM and new nuisances for the customer. It's time to stop rewarding DRM makers. I don't want to have to be a "criminal" (see DMCA) in order to shift books to whatever format I want. I want that as part of the deal. Why people are such idiots and open to being ripped off I have no idea.
And on the e-book prices, if the price is too high then people won't buy. I'm surprised apple is letting publishers set prices. I guess they aren't going to fight the fight to eliminate DRM from books for us like they did on music.
Re:Ugh. (Score:2, Insightful)
If it's too expensive, don't buy it. Just like any other product. I could buy $150 balsamic vinegar, but I don't think it's worth it even though it is tasty.
As far as the textbook industry is concerned, I know a thing or two about it's inner workings and, let me tell you, there is a big difference between a free textbook and a $80-$130. There are a lot of people working behind the scenes to make sure that it's useful to you, well written, up-to-date and error-free.
Re:Ugh. (Score:3, Insightful)
I would pay extra for ebooks if I have to. I want all my books on one device. I want to be able to search. I want all the other advantages of ebooks.
The pricing of media has nothing to do with distribution costs, and everything to do with "how much will people pay?"
Re:Amazon bows, I won't. Boycott greedy publishers (Score:3, Insightful)
You're doing something wrong if you're buying an eBook/game/whatever for it's bits. I'm buying it for the value it gives me - be that information, entertainment or something else.
Re:Monopoly? (Score:5, Insightful)
Agreed about decent production values on an album and the need for a studio. *BUT* let's face it the compression that happens in post-production these days makes modern music just as unlistenable as if it were recorded in a truck stop bathroom.
I disagree in the strongest possible terms. When I was young we listened to media that had far, far less fidelity than the music that I have access to today. There are lyrics that I can make out that I never could when I was young (and my hearing was better then).
This is the age-old debate that springs up whenever something new comes along. There's always the crowd that will claim they can "tell the difference" and then proceed to confuse that with the new product being inferior. As I pointed out to a friend who was arguing that vinyl was superior to digital music: of course you can tell the difference. The digital music doesn't skip or hiss. Everything else is colored by the fact that you know which one you're "supposed to like." It's like having a blind taste test between coke and orange juice.
Yawn (Score:3, Insightful)
If Macmillan want to charge $14.99 for ebooks, fine. If I decide $14.99 is too expensive, I'll just tell them to fsck themselves. Free Market.
Re:confused.. (Score:3, Insightful)
They're allowing Macmillan (and apparently only Macmillan, for now) to set their prices on their own books. This allows Macmillan to do things like release new books for $15 and slowly drop the price over time until the best price point is found. You know, just like every other consumer good. Amazon also agreed to reduce their outrageous 70% markup to 30%, the standard for a retail distributor.
This is a *good* thing. It allows more market flexibility and keeps Macmillan from going bankrupt or screwing their authors.
Re:Monopoly? (Score:5, Insightful)
From someone outside the industry, Macmillan's job needs to be educating the public on why a book, that no longer needs to be printed, and distribution costs have been cut 10-50 fold, why are these books still as expensive?
I'm still confused on why I can get a CD at my local music store for $10, when online it's the same price. I know there's a bunch of front end costs in there, but you've cut out almost all of the physical costs, why isn't the book cheaper? Especially when you're locked into a proprietary DRM laiden format, and cannot pass the book off to anyone else? Electronic books are Less valuable, and should be priced as such.
Re:Why Publishers Exist (Score:4, Insightful)
Publishers still exist largely because of their editorial and "filtering" services. Editorially, they help to ensure that the best possible version of a text makes it to market -- that it is as technically (grammar, spelling, etc) correct and engaging as possible. As for filtering, they are meant to ensure that only works that have a reasonable degree of merit actually make it to market -- this is why people tend to believe printed word over that which they find on the internet, and why for those who create content, being accepted by a publisher for print production is highly valued. Anyone can put whatever crap they like on the internet, but the publishing industry exists to make sure that random crap doesn't flood the actual shelves.
WRONG. The publishers are in it for the money. They are no different from anyone else in this regard. The editors and literary professionals may see their mission as you describe it but if a publisher thinks they can make a buck off a Sarah Palin biography, it'll be ghoswritten and printed faster than you can say "remainder."
I do like your ideal world, though. Publishers are in the printing and book distribution business only because that's a necessary step towards getting paid. But if they can handle most of the distribution electronically, all of those costs go down and the books should be cheaper.
If California wine had to be shipped cross-country by wagon or mule, it would be thousands of dollars a bottle. That sort of shipping is costly and inefficient Shipping by train and truck reduces the cost a great deal. Any winery that tries to charge mule-shipped prices for something that came by train is just trying to scam us.
It's all about setting ridiculous price points. Netflix can blow Blockbuster away with depth of selection and avoiding the cost of physical stores. Renting from blockbuster is I think still $4 a movie. (haven't been in years.) They have dollar dvd kiosks in the grocery store now. Buck a day for a first-run movie. Meanwhile, Microsoft is still charging $4 for the same movies on Xbox. That has to be even cheaper than the kiosk stores and there's far less physical infrastructure compared with Netflix and their shipping facilities. Microsoft prices at what they think they can get away with, not cost plus 30. I think it's too much and thus have never rented from them.
Re:Monopoly? (Score:3, Insightful)
Amazon is hard to say no to, because they move a lot of books. But they are cutting profit margins dangerously low for us.
Let me make sure I'm understanding you correctly. If the original price of $9.99 was "cutting profit margins dangerously low", then that means you were barely breaking even. An increase to $14.99 would mean that your company is now reaping a profit margin of more than 33%. Is that what you intended to say? In what way should we feel badly for your company?
Re:Monopoly? (Score:4, Insightful)
The price in any market is not set on what the consumer thinks is fair, it's based on what they'll pay. If it makes you mad, don't buy it. When the manufacturer sees that they could be making more money by charging a lower price, they'll lower the price.
Re:Monopoly? (Score:3, Insightful)
Uh, yeah. So. How did you hear about that music that you want to buy? Pick it up from signals hitting your teeth? You heard about it from your friends, probably. Which is really all we're talking about. A ranking system is just a way to get information from people whom you may or may not know, but it's not that different than word-of-mouth.
Record companies do not own radio stations. Not in America, anyway. For a while they got around the law by paying third party companies ("independent music promoters") to create playlists for radio stations, and the radio stations then don't have to have a program manager. After a few multi-million dollar lawsuits in New York, the record labels stopped doing that and the radio stations stopped buying playlists from independent music promoters.
But what you have now is seriously homogenized music choices that lean towards hits of the past (safe bets to keep listeners) instead of challenging listeners with new music. So radio does very, very little to introduce new music. Less than it used to under the payola system, which was ridiculously weighted towards the established record labels instead of independent record labels or the actual musicians.
Re:Monopoly? (Score:3, Insightful)
Convenience is not what your job is. Your job is to find authors, hone works, publish them, distribute them. Not trying to charge me more at the bookstore next to my house because it took less of my time to get there than the bookstore across town. That's a self-serving and absurd argument that you're making. Amazon found a way to make it convenient for me to read your books - YOU did not. But you want extra money for that convenience?
And I don't believe you one bit about ebooks costing so much to publish. You're not paying a whole line of people from lumberjack to printer to truck driver all of the sudden. There may be a larger upfront cost, due to whatever hardware/software growth, but suddenly your books are available indefinitely and don't need second printings. You can profit off of small sales books forever without risk of excess overhead and storage. And you NEVER sell out and miss on sales. Frankly, you are lying.
And it's ridiculous to classify text books in with all literature. Yes, what you work on requires fact checking, layout, et cetera for small numbers of sales. That's why textbooks cost $100 instead of $10, like the paperback novel. The latest airport novel needs none of that extra effort that is specific to your particular division.
Re:What's the marginal cost of production on an eb (Score:3, Insightful)
Perhaps I am unusual (I suspect not), but I often chase authors, not genres, and therefore the book market is not one controlled by substitution, and we see that in it's price inelasticity. I do not see how this would be different if we had even a significantly larger number of publishers with smaller pieces of the pie.
Piracy provides the elasticity. I'll give you the old college student/anime example. As a low-income college student, it was worth my time to track down episodes on emule. You had many people doing encodes, variable quality, and it was pretty laborious to find everything and burn CD's. And hard drive capacities were not as insane as today. If a series costs $200, it's worth my time. But when you can get a full season for $20 or $30, depending on the show, who has the time to muck with downloading? Especially as disposable income rises as disposable time decreases, people want to maximize their enjoyment. If there's ten hours a week for goofing off, people want to be watching the show, not trying to watch it.
Re:Monopoly? (Score:3, Insightful)
No, it works on everybody. Scientific fact. Even misanthropes are a market. A niche market, but a market. You may not respond well to mass marketing, but you do respond to some sort of marketing.
We learn language and life skills through repetition. Advertising and marketing just build on those hooks in the human psyche.
You may use the brand of deodorant that your mother bought for you when you were a kid, but some day that brand won't be made anymore. Then you're going to have to make a choice. When you go to make that choice, you'll be open to advertising. You'll be assessing brands on how you feel about them based on their past advertisements. Oh, you might go to Consumer Reports or do weeks of comparisons from trial-size samples, but even in doing those things you've still been exposed to and influenced by advertising.
I'm not saying that we're all unthinking blobs who gesticulate to the biggest billboard. I am saying that advertising (or marketing) influences everyone. I don't care if you're buying a banana, a song or health insurance -- advertising influences people. (Do you like bananas? They only exist in American markets because of heavy advertising.)
Re:Monopoly? (Score:3, Insightful)
Sorry, but the poster is right. Humans and animals alike are hard-wired to enjoy things that are familliar to them. There may be the paripheral fascination with exploring new territory, but by-and-large, humans are very slow to accept new things, and are much more likely to choose the familliar over the unfamilliar. In the right setting, with the right mindset, people can be willing to branch out a little, but for the most part, it's contrary to our nature. Playing a song over and over again, in the background (as radio usually is), is a good way to build familliarity, and thus, a comfortable center for individuals. So, when people go down to the record store to buy some music to listen to on a regular basis, they buy the things they've heard, that being the stuff that DJs have shoved down their throats.
Even those of us who claim to enjoy exploration only do so because the act of exploration itself has become familliar and comfortable with us, but we all have our self-imposed limits.