And here we thought up until the actual release of iPad, that the next big fight was going to be Amazon vs. Apple. Surprise! If you've so much as glanced at publishing-related news over the weekend, you've caught on to the huge fight between Amazon and Macmillan, which has resulted in Macmillan titles not being available for sale from Amazon at the moment.
The letter from John Sargent, CEO of Macmillan, to Macmillan authors, can be found on the Publishers Weekly site. Amazon, as is fairly typical for them, has refused to comment publicly about the fracas. Andrew Wheeler's account is quite thorough and yet remains clear.
Lots of people on both sides of this issue seem to see it as one of pricing. But, unfortunately, that is far too simplistic. It's about the whole setup of the publishing industry, about what makes a book a book, and about what, exactly people buy when they buy an ebook. Or, even, whether they're buying anything at all. eBooks, after all, aren't governed by the first sale doctrine. They're licensed by the purchaser, rather than bought, which is one of the things many people object to about them.
Here's the basic problem: Amazon is a retailer. They want to treat books, in all their forms, as products. When a retailer buys a product from a wholesaler or directly from a producer, they have the right to price it however they want. That's why you see markings on products that say MSRP--Manufacturer's Suggested Retail Price. The "loss leader" has a long history in retail, and Amazon is looking at their $9.99 price for ebooks released at the same time as the hardcover as loss leaders. They are, after all, paying the wholesaler/publisher the full wholesale price for these items. That means they lose money with every sale, as is their right in our capitalist system.
For the first two years they were in business, Amazon lost money on every sale anyway. It was their business model. No one thought it would work, but it did, and they fully expect it will work again.
But Macmillan doesn't see books as retail products. It's not clear how they do see them, but that's not their fault--it's the fault of the publishing industry as a whole, which has never conformed to the rules of retail and doesn't see why it should now. Rather than consider changing to a traditional retail model, Macmillan wants to go to yet another new model, the "agency" model, wherein they would be able to dictate the prices for ebooks (licensed? sold? it's unclear). And those prices would be--according to Sargent--$14.99 for the ebook when the hardcover comes out.
But right now, the average cost for a hardcover book at the moment of release isn't much more than that. Because only a tiny, tiny percentage of people are actually paying full hardcover price. Most people are paying a discounted price. Starting with 30% off at their local Borders, or perhaps 40% if they have a coupon or something. So this is clearly a move designed to force readers to stick to the traditional media with which Macmillan is comfortable.
So here's a thought, if you don't like the fact that your books are being sold for $9.99 for the Kindle, don't produce Kindle versions. Not every book is available for the Kindle. Sometimes, that means I won't buy it, I'll just take it out of the library. Sometimes, I'll buy a paperback copy. (I don't do hardcover except for two authors: Margaret Maron and John Connolly.) If it's a textbook or research text, it's all irrelevant, since I only want those in print so I can mark them up.
I hear from publishers including Macmillan that the true reason they oppose the $9.99 price point is the fact that authors get a percentage of the retail price for which their book sells. But if that's really what publishers are concerned about, there's an easy change: change future contracts to say that authors get a percentage of the wholesale cost of the book. Then stick to your guns about what you charge retailers for your books, be they ebooks or paper.
Of course, that's only one of a whole slew of changes the industry as a whole would have to make in order to be both profitable and sensible. Don't even get me started on returns! Oy! And gazing into my crystal ball, I don't see publishers making those changes with any kind of alacrity.
At the moment, if both Macmillan and Amazon were run by grown ups I imagine all Kindle copies of Macmillan titles would be removed until they could come to some kind of agreement, but the hard copies would remain. Unfortunately, I don't see that happening soon, either.
[update]
Amazon has posted the following on their website:
Dear Customers:
Macmillan, one of the "big six" publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.
We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, 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. Amazon customers will at that point decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book. We don't believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced e-books as an alternative.
Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!
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1 comments:
Excellent post, Laura! I was just raving about this all to my husband- it's not his fault, but he was handy.
Another point: If MacM is so concerned about the authors earning out and getting royalties, perhaps they shouldn't overprint the first editions to the point they're all on discount tables for $4 within a season of publication. Is it better to sell a timely $10 e-version, or have people shop only discounters, or wait a few months until the $4 already-remaindered one? They need, as you noted, to decide what they think the e-books versions are, because no matter how hard the ball they're playing, those $30 hardcovers are largely collecting dust in retail.
Of course, if there were an Espresso printer in every bookshop that would fetch me up and bind me a simple, clean trade paper copy of anything that had ever been in Macmillan's publishing catalog, maybe when I came in, giddy, to pick up Fave Author's first previously out-of-print novel, I'd feel more like browsing. Heck, I wouldn't even mind if they charged a premium to ship it to me, or if the in-store receipt came with a shelf guide to tell me where to peruse the most recent additions to the canon.
As you note, there are so many ways that big publishing ought to change if it wants to be profitable selling anything but the latest Patterson or Harry Potter. I'm not convinced that, in the main, they've retained sufficient institutional expertise on how to market the mid list and below.
How I wish they'd choose some debut fiction authors and experiment-- after mutual contractual agreement, of course-- with new edition timing, pricing, printing, and marketing strategies. Most of those books don't earn out anyway, and they expect that, but they might learn some vital things about selling non-blockbusters in the current environment. And Guinea Pigs can be Black Swans, too.
If I were the author who liked the proposed ideas, I'd much rather be a guinea pig with hope for a different kind of result than the vast majority of unsold, unprofitable books. Whether it's the accounting, supply chain, or retail selling of books, the status quo is a big counterintuitive mess of red ink for most of the well-intentioned and passionately bibliocentric people involved. And I'll never be convinced that it has to remain so. In fact, I'm sure it can't.
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