Is Amazon refusing to sell Kindle versions of Macmillan books as a strong arm tactic? at Tobias Buckell Online

Journal Entry

Is Amazon refusing to sell Kindle versions of Macmillan books as a strong arm tactic?

A few hours ago John Scalzi pointed out on his twitter feed and blog that his books were unavailable for Kindle download, and that other books seemed affected. I logged onto Amazon to check this out, and found out my novels were also affected, and no longer for sale.

Like John I saw no need to jump to conclusions. We’ve had Amazon trip up on technical glitches before. It’s also just after 5pm on a Friday, and that’s usually when programs and database uploads are run. Amazon’s last bad PR moment festered because everyone left for the weekend, the problem wasn’t addressed, giving the old intarwebs plenty of time to create a feedback loop of assuming the worst and spreading the news.

I tabled this for a ‘check back Monday.’

But now the NY Times claims that this is Amazon.com playing hardball with a publisher to try and force it to sell books at a certain price point that it wants.

Keep in mind, I’m still somewhat dubious. This occurred Friday evening. The NY Times article says Amazon ‘refused to comment.’ But by the time people were noticing this was down, typical office hours were already over. So this could be a journalist calling after hours, getting no response, and adding in a juicy angle by hyping the ‘no response’ article when its not really surprising that no one responded: they’re gone for the weekend.

That being said. The timing is horrible, if it’s a glitch. Just after the iPad came out, and one of the companies identified as having books available for it. This is very curious.

If Amazon is doing this… well, you’ll see words here.

Filed under the topic Journal on January 30th 2010 at 12:35 am. You can subscribe to the RSS feed for this entry to keep track of comments. You can also use to trackback.

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26 Responses so far

1. Kimberly Unger on Jan 30th, 2010 at 1:17 am
THANK YOU, Tobias
For being a reasonable human being and not jumping on the “evil corporate conspiracy” bandwagon at the first opportunity While I wouldn’t put it past Amazon to play a little hardball, I have to agree with you in that it could just as easily be a glitch in the system.
Either way, since there’s no real benefit to being able to claim “First Post” on the still vaporware subject of Amazon vs Macmillan, I am happy to wait until CNN drags the Amazon CEO out of bed at 2am to get the real story
Cheers!
Kimberly Unger
@ing3nu
@Agiliste (my game dev team)
2. Jackie Kessler on Jan 30th, 2010 at 11:09 am
You’re right, of course. It could be just a glitch. But I’m too cynical to believe that.
3. Natasha Fondren on Jan 30th, 2010 at 11:39 am
Okay, why is everyone getting so pissed at Amazon about this, but no one is saying a word about the fact that iBooks and Random House have the same issue going on?
4. Tobias Buckell on Jan 30th, 2010 at 11:41 am
Natasha, what do you mean ‘the same’ issue? I haven’t seen Amazon pull any Random House books, have you?
5. Mike on Jan 30th, 2010 at 11:50 am
Everybody seems to be putting the blame on Amazon, when it might very well be the publisher insisting that Amazon raise its prices to be more inline with what Apple will be charging. Both sides need to weigh in, but if MacMillan is insisting Amazon raise its prices, then Amazon has every right not to carry them.
6. Tobias Buckell on Jan 30th, 2010 at 11:54 am
Amazon does have every right not to carry it. And the blame would be on Amazon.
Frex: if my favorite grocery store stops carrying General Mills, b/c it tried to force the prices lower, stunt ‘not carried’ their cereal, as a consumer I’d be annoyed.
Both companies are in their right to yank/withhold, etc.
But the anti-writer anti publisher pro price fixing crowd is basically saying ‘free market pricing’ is anathema, and that price fixing on the part of Amazon, at an artificially low price to subsidize Kindle sales, is okay.
And that I’m not okay with.
Publishers may not be right about the prices they’re choosing, but the invisible hand of the market should choose by awarding sales/profit to whoever’s model is best, not Amazon.com forcing a price in order to subsidize their device.
7. Scott Marlowe on Jan 30th, 2010 at 12:35 pm
This battle has been brewing for months. I say let the war begin.
Ultimately, it’s consumers who will decide re pricing. Publishers can price eBooks however they want, retailers like Amazon can refuse to carry them, but in the end if no one buys the books because prices are too high… well, prices will be forced downward. It’s that or publishers start going out of business (and, unfortunately, writers, too).
8. Scott Marlowe on Jan 30th, 2010 at 12:44 pm
I did a quick news search and it seems Amazon has indeed pulled Macmillan books as a result of a pricing dispute. All sources point back to the same 2-3 NY Times articles at this point.
http://www.nytimes.com/2010/01/30/technology/30amazon.html
9. King Rat on Jan 30th, 2010 at 12:51 pm
Regarding your comment at #6 that it’s amazon doing the price fixing, that argument only holds if Amazon is in fact a monopoly. A quick Google® search shows that at best they are 43% (based on big chain sales excluding Costco/Walmart) (http://www.fonerbooks.com/booksale.htm). Dominant, but not exactly in monopoly range yet. Basically, if this is a war between publisher and distributor, it seems to be less a moral issue to me. I’m annoyed at the moral outrage expressed so far around twitter. Sure, if I was an author I’d hate to see the top seller stop selling my books because they are fighting with someone affiliated with me. But it seems less a question of right and wrong than one of who gets what piece of the pie(s).
10. Tobias Buckell on Jan 30th, 2010 at 1:09 pm
King Rat: That’s for *physical* sales dude, not esales. Amazon’s the monopoly for eBook sales.
Publishers have determined that while they’re trying to recoup the costs of making a book (hardcover, paperback, ebook) all as one giant lump sum, that pricing it high at first, then dropping the cost to match paperback cost ($7.99) is an effective way of not losing too much money on every book (most books don’t earn out, or break even, it’s mostly the bestsellers that do).
Amazon’s been losing money on each book sale in order to drive up demand. Which is fine, it’s a business model (demonstrate that they can move enough copies at 9.99 and maybe the accountants at the publisher realize that they can cover the total book’s cost-to-make with a 9.99 or cheaper price point). But so far that hasn’t been demonstrated to publishers (the average book still sells a few hundred ecopies, scale is not there), they want a higher initial price until a book breaks more even.
Amazon says no. Apple says they’re willing to do this.
Now supposedly, if this, and I repeat, unsourced and single NY Times article that EVERYONE is using to base these charges on, and is to be suspected highly, Amazon says ‘if you don’t lower the price you charge us so we’re not subsidizing each eBook sale that’s a new hardcover, then we’ll yank all your books.’
Amazon has the RIGHT to do this, no doubt.
But that’s being very hardball and pissy. And it is a forcible price fixing attempt, if true.
Now, price fixing occurs all the time between these big guys, I understand. But also understand this, this is Amazon trying to play hardball before the iPad goes live.
Customers are thinking this is good for them, and it might be, short term.
Long term, publishers will just trim the number of writers they publish, the number of books, and try less experiments, leaning on bestsellers and a more limited range of ’sure things’ to try and sell.
Who does that ultimately punish?
Maybe me, I’m not sure.
I’m willing to let free market economics play out, which is that publishers compete against other publishers and start ups and technologies to find a sweet spot in pricing that lets them account back the price of the book and money invested. A new eBook will be expensive at first, yeah that sucks, but 7-12 months later be $7.99. I can wait. Demanding 9.99 price fixing means there will be pressure for less books, more ’same’ books, and no cheaper books (ie, publishers just put everything at 9.99 to recoup costs).
Ultimately, I think we need the economies of scale to get us to $4.99 DRM free eBooks sold via iPads, kindles.
But if publishers can’t determine the price they choose to sell books at, in a free market, then that will have an interesting impact.
One may be that more authors will handle erights direct.
But I know if I just spent 1 year writing a book, I’d probably start off with an initial if-you-want-the-hot-new book you have to pay more, and the price goes down after a while.
Because that’s how drugs, new computers, new fashion, and just about every other product in a capitalist world works.
11. The Green Mole on Jan 30th, 2010 at 1:27 pm
I can confirm that Amazon have done this before with a well known dictionary publisher with print books, pulling their titles and redirecting users to a competitor instead.
Authros and publishers alike need to stand up to this behaviour and it needs to be investigated.
Buy from competitors, even if you have to pay more.
12. Natasha Fondren on Jan 30th, 2010 at 1:37 pm
Do you mean iBooks? I don’t think there’s much difference between iBooks refusing to sell Random House books because of price-setting negotiations and Amazon pulling Macmillian books because of price-setting negotiations.
I don’t get why everyone’s upset at Amazon but not at iBooks.
13. Tobias Buckell on Jan 30th, 2010 at 1:40 pm
Natasha: do you have a link to a source for that?
14. Tobias Buckell on Jan 30th, 2010 at 1:44 pm
And if it’s true, Natasha, here would be my reaction:
Amazon is already selling books, with a set agreement that they got inked, and are now trying to change the terms by yanking books for sale (if that’s what’s going on, like I said, I’m not going to get worked up until I see a source confirming this).
If Apple is refusing to sell something from the get go, that’s different. Just like Amazon didn’t initially sell all publisher’s books on the Kindle, it took a while to make/reach agreements.
Changing an agreement in midterm, using your near monopoly on a market, that’s very strongarm, and it is annoying to me.
If that’s what’s happening.
But so far, there’s very little actual sourcing of any of all this. Lots of hot air and rumor.
It is just as likely a glitch.
We’ll see come Monday.
15. Tobias Buckell on Jan 30th, 2010 at 1:50 pm
And as for why writers are upset, it’s how we make a living, and we’re losing income each day we’re not listed. It hits them in the pocket.
As for me, I’m just as happy assuming technical glitch until I hear otherwise. No sense in getting hopped up before actual info comes in. Everyone is sourcing a single article that basically said ‘no one commented’ because, most likely, everyone had gone home for the weekend.
16. Natasha Fondren on Jan 30th, 2010 at 2:10 pm
But every day Random House books are not listed with iPad, Random House authors will be losing money, too. If Amazon pulled the Macmillan books off their shelves, then clearly that option was IN the prior agreement with Macmillan.
I make all my money from my fiction, too, so I understand, but it seems perfectly reasonable to me that a store choose not to sell something because of it’s pricing. It’s done in every single venue of a capitalistic society. It’s not “strong-arming,” it’s how retail businesses work.
Oh, the link: http://www.nytimes.com/2010/01/28/business/media/28media.html
17. Tobias Buckell on Jan 30th, 2010 at 2:16 pm
But Amazon agreed already to the ground rules, and is changing it midstream, you don’t see that as a problem? Random House authors aren’t losing any money b/c the iPad isn’t for sale yet, this is still part of the prelaunch dance.
MacMillan authors are losing money right now.
Amazon started up just like iPad started up, and you’ll notice authors weren’t pissed. When Amazon and the publishing houses battled it out in the early days of the Kindle, that was strong stuff, but it was negotiation. Once they settled it, we got the ‘all houses on board’ that we have now.
Now they’re using the threat of their market monopoly, which they have because the houses agreed to certain things, to pull this midstream stunt.
Now, if the publishers are demanding Amazon raise their prices (in other words, refuse to let amazon continue selling at a loss), then they’re stupid and this makes sense. If Amazon is ‘punishing’ MacMillan for joining the iPad, then this is bogus on Amazon. If Amazon is trying to force MacMillan to not have prices higher than 9.99, than this is strongarming.
Again, notice, I’m not saying its illegal, or that they shouldn’t, but it is strongarming, but they are within their rights to do it. Unions strongarm companies by striking, etc. But it’s a nuclear option, and if its the case, then I don’t have to like it.
I mean, if the narrative NY Times says is true, why should I be happy about this?
18. Natasha Fondren on Jan 30th, 2010 at 2:42 pm
I’m not asking you to be happy about anything. I think a lot of things suck for authors right now, period.
Personally, I’m on the side of anyone who’s keeping ebooks under $10, because I think that will benefit me as an author in the long run. If my publisher wanted to force all retailers to charge $15 for all my ebooks, I’d be furious. I feel for Macmillan authors, I really do.
And yes, Kindle did offer a better deal to pubs last week. (The 70% thing.) Personally, I’ll be making double the royalties from my Kindle books as I did last year. I’m thrilled at that.
19. Sean on Jan 30th, 2010 at 3:36 pm
As if you needed more reasons to never get an e-reader…
20. Steve Poling on Jan 30th, 2010 at 5:24 pm
I had a similar experience with a book published by Baen, Darkship Thieves by Sarah Hoyt. After a bit of grumbling at Amazon and Luddite publishers, I remembered, “this is Baen we’re talking about.” No Luddite publisher, Baen.
So, I went directly thereto and I purchased the book from them. Reformatting the book for Kindle was no problem. I blogged the details here.
I wonder if Barnes & Noble carries Macmillan… Why, yes, it does. I think Amazon is sending us all a message: go out an buy a Nook!
Let’s see if SONY has anything… Why, yes, it does, too. Amazon’s message should be amended: or buy a SONY reader, if you don’t like the Nook.
21. Bob on Jan 31st, 2010 at 12:43 am
“As if you needed more reasons to never get an e-reader…”
Quite right. Amazon is insisting on a low price for e-books, so don’t get an e-reader! Insist on paying higher prices!
(Not that I don’t sympathize with Tobias et al.)
22. Becky on Jan 31st, 2010 at 1:52 am
Sorry Tobias,
Looks like you’ve got part of it the wrong way round.
It’s MacMillan who wanted to change the current agreement not Amazon.
Yanking everything is definately pissy on Amazon’s part though. It’s also intimidation.
Source:
http://networkedblogs.com/p26257852
23. Tobias Buckell on Jan 31st, 2010 at 2:00 am
Yep, you’re right and I was in the wrong on that. This is Macmillan changing the agreement.
24. Gwen on Jan 31st, 2010 at 4:22 am
Why is everybody blaming Amazon?
The book publishers are trying to push higher prices. But I know I would never be willing to buy am ebook that I can’t share or resell at such a price! If I buy a music CD I can rip it and put it on my iPod. It is legal and my right to have my music also in a portable format. I can gift this CD to my friend or sell it if I don’t want it. But somehow bookpublishers believe they can keep on forcing prices on people that are in no relation to the product. Like in the beginning of digital music, music publishers refused to give in. What did people do? They got free illegal music and the industry did loose money. Now a few years later we can buy DRM free music for 99c a title. Are they publishing less music? No! So why am I to pay the same price if I do not have a physical item, I can’t give it to my friends and I can’t sell it when I have read it?
Digital book are the future and if the pricing is good people will buy more books. I know I am reading a lot more since I have the Kindle because I carry my library with me. I bought more books since Chritmas from Amazon and other stores than before.
TB: *Initially* higher. Not across the board and permanently higher, but initially higher, then cheaper as time goes by.
25. Bob on Jan 31st, 2010 at 4:35 pm
Tobias, apologies for asking basic questions, but this isn’t a subject I’ve delved into much:
1. What are your royalties on e-books compared to printed ones?
2. What are the profits of publishers on e-books compared to printed ones?
26. Joe on Jan 31st, 2010 at 9:54 pm
I admit I was upset first at Amazon. But after reading about WHY they pulled the books, I am siding with them and am mad a MacMillian books. One of the selling points about the Kindle was the $9.99 bestseller books. Now if Amazon can not sell the books for that price, due to MacMillian, than they are disappointing their customers. There is no way an electronic book should be close in price to a Physical book. A hardcover book at Sams Club can be $14-$16. With MacMillian’s new prices they want $12-$14 for an ebook. Consider, NO shipping, NO printing, NO overhead, NO reprints, and I believe MacMillian is overpricing their eBooks.
TB: My reply to you is this.

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