Posts Tagged ‘MacMillan’
Update on MacMillan and Amazon
I am sure most are aware, but since I did do a ranty blog post about why I am Team Amazon the other day, I thought I would go ahead and update on the situation. After pulling all versions of books published MacMillan on Friday, Amazon.com issued a statement Sunday, January 31st:
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!
Thank you for being a customer.
Basically, they have no choice but to try to work something out with MacMillan. Amazon would prefer to keep the current model of buying ebooks which matches their model for all other books. They buy a book at approx. 50% of the cost and then set their selling price. As an example, a new released hard cover may have a list price of $29, chances are amazon would buy that ebook for $15 and then turn around and sell it for $9.99. They do this to encourage people to buy Kindles and because it gives them a large share of the ebook market. MacMillan is forcing a switch to an agency model where Amazon simply becomes a distributor who gets what amounts to a commission. MacMillan sets the selling price and Amazon keeps 30% of it. The irony is that Amazon makes more money in the agency model since they are not taking a loss on bestsellers, the publishers will lose money in the short term. For some reason, publishers are convinced that this model will be better for them in the long run….I guess we will have to wait and see.
As of this blog post, MacMillan books were not yet reinstated to Amazon.com store. There were some sightings of books earlier today, including MacMillan ebooks priced as high at $16.49, but they seem to have been taken down again.
So what can you do now? Unfortunately not much except vote with your money. If you agree that 14.99 or higher is too much for an ebook, don’t buy it! Wait for it to come down in price or find it at the library or borrow a friends “dead tree” version.
For now, this new pricing just applies to MacMillan yet there seems to be some talk that are leading people to think other publishers could be following suit:
Fight Night: Amazon vs. MacMillan vs. Apple ?
No Saturday Sound Off today…. too much news to post about! Before I get to the explosion of ebook drama all over twitter today, I had saved up a few reaction posts to the Apple IPad I wanted to share. First – the IPad? Really? *sigh* I am an apple fangirl, but even I can’t swallow that name and say it with a smile.
Links of Interest:
Kindle vs iPad is an easy decision because these are very different devices built for two distinct sets of customers.
So is the iPad a Kindle killer? No. And it probably won’t make a dent in Kindle sales. The people who are going to buy an iPad are most likely not the people who would buy a Kindle.
It’s far more likely, in fact, that the millions of iPad buyers over the coming months will include very large numbers of people who will use their iPads to buy books from the Kindle Store. The bottom line is that by the end of this year there will be over 5 million Kindles and, I suspect, just as many iPads, and those numbers together will mean over 10 million people for whom the Kindle Store provides the best selection and best pricing for their ebook purchases.
“If you like your kids, get them an iPad so they can play games,” said Russ Wilcox, the head of E Ink Corp., which created the digital paper technology used by the Kindle and many other e-ink-based readers. “If you love them, get them an e-reader so they can actually read.”
Now that we have the initial Apple IPad reactions out of the way, let’s get to the ebook drama that exploded on the web last night and continued over to this morning. A condensed timeline of events:
So what does this all mean? For the time being if you own a Kindle, you can not purchase books published by any author under the MacMillan name. Additionally, you can not buy new copies of these books from amazon.com unless you are willing to go through secondary sellers.
Many seem to be jumping to attack Amazon.com for being a bully or throwing a tantrum, yet I want to point out, it seemed obvious from Steve Jobs’ comments that book publishers were getting ready to do exactly the same thing. Withhold books in an effort to get what they wanted, higher e-book pricing. Amazon simply beat them to the punch, instead seemingly taking the consumer’s side on this one and saying NO. That is not to say that Amazon is doing this for the good of you and me, lets be realistic…. they are all about profits as much as publishers are. They are just more in the know with how to make profits from Kindle users….. we buy more books when they are priced lower and easily accessible. Pulling the sales of print books in addition to kindle books may seem like an unrelated move, but we must remember that Amazon sales volume is their negotiating tactic in this.
Being a Kindle lover, I find myself siding more with Amazon on this. This issue ties in with my previous post about publishers making users wait for Kindle releases. Once again I find myself thinking, major book publishers simply do not understand their various customer bases. I will not pay 14.99 for a new release, even if the print is hardcover, to read on my Kindle. Not when they still come loaded with overreaching user agreements and the horrible atrocity known as DRM. If you give me an ebook that I can own, transfer to any device I want, resell, and be able to lend in some way…. then I will happily pay “dead tree book” pricing for that ebook. Until then, 14.99 or more for an ebook is overinflated and unjustifiable.
Have I spent that much on e-books in the past? Absolutely… for authors I love and don’t want to wait for. But those are rare instances and if all e-books were that price you would loose a great many sales from me. Especially when I can head over to Fictionwise.com and MBaM and get great authors like Moira Rogers, Keith Melton, and Josh Lanyon for far less than that… and without DRM. Lower priced e-books give readers the chance to try out new authors without worrying about spending too much, without risk! Publisher’s need to figure this out and run with it. I can not even begin to understand why they don’t have someone in their marketing department who does not see e-books as the death of the publishing! Author Carolyn Jewel nailed it on the head with this:
Publishers need to hire someone who actually understands technology. Someone who grew up with it or enthusiastically threw themselves into it when the world changed. And it did, people, it did. And then they need to actually LISTEN to that person. Any C-Level employee who didn’t personally take a look at Twitter when the buzz started is automatically disqualified from this position.
The sad part about this entire situation is that the readers and authors are the ones stuck in the middle and ultimately taking the most harm. Just as we readers aren’t able to buy books at a reasonable price from Amazon during this time, authors are going to lose a what I imagine is a large chunk of royalties from Amazon sales. Let’s all cross our fingers that Amazon and MacMillan find some way of working this out quickly.
Update
While I was writing this post, there was an update to this article about the situation.
Motoko Rich, my colleague, spoke with a person who had a direct conversation with a person at Macmillan familiar with the conversations with Amazon. Macmillan offered Amazon the opportunity to buy Kindle editions on the same “agency” model as it will sell e-books to Apple for the iPad. Under this model, the publisher sets the consumer book price and takes 70 percent of each sale, leaving 30 percent to the retailer. Macmillan said Amazon could continue to buy e-books under its current wholesale model, paying the publisher 50 percent of the hardcover list price while pricing the e-book at any level Amazon chooses, but that Macmillan would delay those e-book editions by seven months after hardcover release. Amazon’s removal of Macmillan titles on Friday appears to be a direct reaction to that.
There now appears to be confirmation of this here.
Wow. *shakes head* I’m Team Amazon.
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