Something fishy about the anti-Amazon propaganda

[elf]

The publishing-related blogosphere has constant updates about the DOJ case against Apple & 5 publishers (called the Price-Fix Six in some areas). I encourage people to read lots of them, because this is a big, complicated case hinging on aspects of law most of us don't run across often, and the legal issues are not directly related to the future-of-book-industry discussions.

Quick roundup of links:
DearAuthor.com: Antitrust Primer for the Publishing Price Fixing Lawsuit--what it says.

DOJ Lawsuit Update: Where Windowing Becomes Important--update with excerpts of collusion details

The Passive Voice: Yes, the customer pays a little more--a lawyer's post about the denial to dismiss the case.

Murderati: DOJ files antitrust lawsuit against publishers--tells authors, "What I DON'T recommend is ignoring it as if it's some esoteric business thing that has nothing to do with you."

AARdvark: Letter to the Department of Justice by Simon Lipskar, board member of the Association of Authors' Representatives, who thinks the DOJ is going to run publishing.

David Gaughran: An Open Letter to the DOJ from Someone Who Actually Cares About Writers (and Readers)--rebuttal, more or less, to Lipskar's points.

Galleycat: How to Write the DOJ about the eBook Pricing Lawsuit--Requires sending a physical letter, not an email (and, IMHO, a damned good thing that is, or they'd be getting novella-length letters).

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Which brings me around to the *actual* topic of today's post: the "danger to the industry" of low (e)book pricing. Konrath has been his usual restrained, quiet self during the lawsuit drama, leaving his fans unsure exactly where he stands based his few indecisive tweets. (Wait, that doesn't look right. Whaddaya mean, this browser doesn't support the sarcasm tag? Why don't we have Kibo's HappyWeb yet?)

While I was entertained at publishers' supporters insisting that Amazon will destroy the book business (by selling millions of books at prices people like, including by thousands of authors who don't have publishing contracts), I am, again, delightfully enjoying Konrath's response.

In his post about Exploited Writers in an Unfair Industry, he tackles the "OMG MUST NOT LET AMAZON DECIDE ON PUBLIC PRICES!!!" meme that publishers yell about:

Let's say I sell widgets. I sell them wholesale, to retailers, for $5. ... Now say a retailer decides to sell my widgets for $3. In other words, they take a $2 loss each one sold.

Why would I be upset over that? I'd be thrilled! Many more people would buy my widgets because of the low price, and I'd be making a lot more money.

That's why publishers didn't complain when big box stores began discounting. Did you hear one peep out of the Big 6 when hardcovers were being discounted? Nope. Mom and pop bookstores were buying their books at Sam's Club and Costco because it was cheaper than they could get through their distributors. Publishers didn't care. They were making money.

But the Big 6 didn't want any retailers setting the price on ebooks. Because as bloated, lazy, ignorant, and ineffective as they are, publishers saw how quickly readers were flocking to Amazon and the Kindle, and they finally recognized the threat. Publishers had a lock on paper distribution. Ebooks didn't require that.

If ebooks became the dominant media, publishers would no longer have any power.

Emphasis added. That's an IMPORTANT point... publishers weren't making any noise about "omg, the public will get used to half-price books!!!" when those books were hardcovers. But it's apparently a Great Evil for the public to "expect" ebooks to cost $10 or less. Because then they might take action against the publishers, just like they did when big box stores were selling new hardcovers for $15 and new trade paperbacks for $6. We all remember how those actions nearly destroyed the publishing industry, right? We're still reeling from the aftereffects, waiting for the full selection of new books we used to have.

(To be fair, there *is* some cause for concern. Good nonfic takes considerably longer to write than fiction--it involves research & fact-checking that fiction can often write around--and it can't scale down to the $4-per-book midpoint that genre fiction is moving to. However, that's not what the lawsuit is about... none of the publishers has so much as hinted that they want different marketing terms for fiction & nonfiction.)

Comments

[ravan]

This is why I *hate* the agency model - It removes (not reduces, removes) the price competition between retailers.

Ordinarily, as long as the publisher producer got $x for the book/item, they didn't care if the retailer sold it as a loss leader at $(x-a) instead of $(x+b). They got their money, and didn't have to pulp as many returns.

But Apple didn't like that model, they couldn't compete with Amazon (and Borders, and B&N all of whom had been selling books for a while), so they invited the Big 6 publishers to set the price in an "agency" model, knowing that when they did they would push it onto Amazon and others, thus eliminating the price competition between them, and removing Amazon's competitive advantage of a large installed base.

Nevermind that Amazon was first to market with a relatively open format ebook reader - while Apple's is locked in to stuff bought through Apple. Seriously, I can download a book that I bought from Baen or O'Reilly, and load it onto my Kindle. What's more, I have a choice whether to buy the book from Amazon or Baen, Amazon or O'Reilly. Apple users have to buy from the damn apple/iTunes/iShit store.

Part of the success of the Kindle is that the Kindle format is a modified .mobi, and that it will read .mobi and (some) .pdf. With the Kindle 1 you could back up your books onto a SD card, too (I was mad when they took that away.)

As long as the publishers get paid their asking per book, they should have no say in how much the consumer has to pay for them. They don't have any say for dead tree editions, new or used, why should they have a say in electronic editions?

[elf]

Kindle format is not modified mobi; it IS mobi. (Except for the "topaz" format, which we're all waiting to die a hideous death.) Kindle's azw is mobi with a slight twist on the DRM from the mobi files provided by other sites; non-DRM'd mobis are the same.

Kindles can still back up files to a computer using a USB cord; it's just a bit more hassle.

I'm cynically entertained to see publishers jump around saying "this created more competition! Amazon used to have 90% of the market; now it has 65%!" ... riiight. And the others that now have market share? All have dedicated wireless ereaders. The contents of the stores are irrelevant.

The stores that *don't* have dedicated ereaders... Fictionwise, AllRomanceEbooks, Diesel Ebooks... are floundering, because agency pricing has killed the loyalty features they used to pull customers away from stores with a dedicated device.

I also note that Apple's never released any info about how well things sell at the ibookstore.

Apple didn't like that model, they couldn't compete with Amazon

On the nose. Apple wants to be a hardware company and allow contents to filter through its system while it takes a cut. It doesn't want to have to sell individual content-pieces, and certainly not manage them for usability or accuracy. ::ponders under what conditions one could sue a store for the contents of a book:: Hmm, the spambooks that are starting to take over at Amazon might eventually be lawsuitable... Apple avoids them by not allowing self-pubbed books to be uploaded directly.

Amazon was first to market with a relatively open format ebook reader

Nah, they were just first to break into the popular market. Sony was earlier, and while their BBEB format was proprietary, their readers also did PDF and RTF files. And 2nd gen Sony (the 505) read epub.

I think there were some European ereaders that read .fb2 before the Kindle. Same problem: niche market. Ereaders needed Amazon's publicity-engine to really catch on.

[trialia]

*cuddles her 505*

[glymr]

Heh, I was reading Plucker books downloaded from Gutenburg on my Palm TX before Kindle was a twinkle in Amazon's eye.

In fact, I still am. ^^;

[thejeopardymaze]

What's more, I have a choice whether to buy the book from Amazon or Baen, Amazon or O'Reilly. Apple users have to buy from the damn apple/iTunes/iShit store.

I have bought a few books from Smashwords and read them via iBooks so you can actually buy from outside that store. I haven't looked in to O'Reilly yet, but that's mostly because I don't think Smartphones are the right device to read most ebooks in general, and I'm working on saving money for a real one.

This doesn't mean I condone Apple's other policies, and they're missing out on a lot of potential sales with their restrictions and lack of electronic ink type of readers, but it's not impossible read a fair amount of file types downloaded outside of Apple's store.

[thejeopardymaze]

They don't have any say for dead tree editions, new or used, why should they have a say in electronic editions?

Hmm, I recall that Amazon's deep discounts might have something to do with publishers raising their prices, but I don't have the link for it.