Why my books are no longer for sale via Amazon at Tobias Buckell Online

Journal Entry

Why my books are no longer for sale via Amazon

This is long.

Like, really long.

And talks about the intimate details of publishing in long and meandering manner.

I tried to make it shorter, I really did, but as Mark Twain once said, I didn’t have the time. So I wrote this instead.

So as of right now, you can’t buy my books via Amazon, as they have stopped selling all Macmillan books (both mailing print books to you, and selling Kindle books).

So, Amazon wants to sell books for $9.99 or less, my publisher wants to sell books for a more dynamic range of $5.99 to $14.99.

Right. So Amazon and Macmillan are in the middle of negotiations about how to sell eBooks. Amazon had, for a while, paid publishers an agreed upon price, and then discounted them to $9.99. Amazon’s reasoning: this would move eBooks, in particular Kindle eBooks (and maybe some Kindles, though I think Amazon’s creating a Kindle was to move more eBooks).

Publishers would like to be able to set eBooks at a higher price, say $15, then degrade the price over time to a much lower price. How much? CEO of Macmillan says “Our plan is to price the digital edition of most adult trade books in a price range from $14.99 to $5.99.”

This isn’t unusual. When a jacket first comes out at Macy’s it’s usually a certain price. Over the season it drops, and eventually it becomes bargain.

When a new device comes out, the initial R&D that was invested in it is recouped by an initial higher price point.

Cars sold on launch day are NOT cheaper than cars sold a year later.

In a free market economy, dynamic pricing is not exactly a new and stunning concept. Prices are flexible, they’re something a company sets as it eyes how many units are sold in volume versus how much profit it makes off each item.

Amazon is fighting this. Using its large (pretty dominant) share of both eBooks sold and print books sold online, it has in the past dictated the terms. Amazon says it wants customers to not have to pay more than $9.99 per eBook. Obviously Macmillan has bucked this, as Macmillan eBooks come out for a price higher than $9.99.

Due to the launch of the new Apple iPad, Macmillan seems to be working to strengthen its position on variable pricing. Amazon, after an apparently tense negotiation, has decided to use the nuclear option: yanking all Macmillan books, except for the ones for sale via third parties (used books sales, other companies using Amazon marketplace).

Does Amazon have the right to do this?

I don’t do legalese, but I would assume businesses get to sell what the want to sell. Yes Amazon is a near monopoly online, but this is legal. They have every right to refuse to sell.

Isn’t Amazon just looking out for us, the reader, getting the customer the best deal?

Amazon has made noise that this is all about the customer, but I doubt that.

Here’s why:

1) Amazon still uses Digital Rights Management. This is not a customer-helpful feature. In fact, Apple iTunes has gotten rid of it, as have many other music sellers, and found that sales increase. If Amazon was doing this ‘for the little man’ then where are all their attempts to get rid of proprietary Kindle software and DRM? We know it increases sales to drop DRM, so why aren’t they doing it? Customers would love it. But Amazon would lose control.

It’s their right to use or not use DRM, I’m fairly neutral about it myself, but to cast them as some sort of consumer advocate is off the mark.

2) If Amazon is a marketplace, they would just let a publisher putting out expensive books to shoot themselves in the foot. But what we’re seeing is a very aggressive move, designed to shock and awe the publishers. This really has nothing to with what customers want and everything to do with Amazon using its very large position to leverage itself into remaining number one. They deep discount books, often at a loss, because then once they have a customer, there’s so much more to sell you. Speaking as an Amazon Prime member, I understand. If Amazon loses customers elsewhere, because of books, they lose the ability to leverage the wide of their item selling.

What Amazon wants to do is price fix books to a ceiling.

If Amazon were a smaller retailer, this probably wouldn’t be a big deal. But Amazon pretty much, right now, has a monopoly on online bookselling. They’re huge. As a result, this becomes nearly a form of de facto price fixing.

Yes, we’d all like cheap books. I’d like cheap gas too. And milk has gone up. I’m working in a recession. I know this stuff hits the wallet. But the genius of a market economy is that we let companies try to charge what the market can bear, and let sales and results sort it out.

During the 70s the government tried to put artificial prices on gas, resulting in shortages as hoarding occurred. Most economists that I’ve read demonstrate that while artificially blocking a higher price sounds like a good idea (populism), it’s actually bad economic news.

That’s why your gas, milk, and other items aren’t pegged to a maximum price ceiling.

When a manufactured thing initially comes out, the initial investments to make that thing are still there. As a result, with designed jackets, new cars, new medicine, the price is initially higher. Over time, as those investments are recouped, the unit cost comes down.

It’s not surprising that publishers would like to do this with eBooks.

When price fixing occurs, there are consequences.

In the case of books, Teresa Nielsen Hayden predicts this is what will happen if price fixing is allowed to occur:

My honest estimate is that the result would be fewer and less diverse titles overall, published less well than they are now.

$9.99 is really expensive, you suck. eBooks should never cost this much

As a buyer of eBooks, I agree. Hell, as a buyer of regular books I agree.

Here’s how I, as a reader, go about buying a book.

Is it someone I know will rock my world and I’ll love reading? I’ll buy hardcover. Heck, I’ll spend good money to right away read a favorite author. I’d pay $50 to read Vernor Vinge’s next A Fire Upon the Deep related book he’s working on. Maybe more, to be honest. I can’t. fucking. wait. for that book to come out. Hardcover, paperback, eBook, whatever, I’m a crack addict who’ll pay for this author’s book.

The next level is someone I want to read. I try to read them in paperback or eBook priced at roughly paperback equivalent prices. But sometimes the convenience of reading right away on my iPhone triggers a buy between $9-12. $14.95 is a mental trigger for me, at that price I’ll wait for the book to come down in price (which it always does), or find a cheap print copy.

Of course, I’ve been in some financial hard times in my life. Right after I was laid off the $4 difference between $9 and $14.95 was a bit much. For those times I use the US’s amazing library system, and get the book on loan. I understand if people are hard enough up they can’t afford the $4 difference. It’s mac and cheese time, ramen noodle time.

But if you’re spending more than $4 a day on Starbucks coffee and fast food, I have less sympathy!

And not every writer can be an amazing “OMG I’ll pay anything writer.” As one ‘9.99 fanatic’ got in reply to a very nasty email sent to me, “I apologize for not being a good enough writer than you feel the $12.95 spent on my words is not worth a half a day’s entertainment, compared to the couple of hours you get via a DVD for more money. I will endeavor to try and write better in the future. Thank you for your email.”

But Baen sells books really cheap, never more than $9.99, so shut up.

Well, yes and no. Baen is awesome and shows a way to really get eBooks working well for their readers. I think it should be paid damn close attention to.

But Baen sells books for a wide range of price flexible options.

For example, if you want the book as soon as possible. They sell eArcs for $15, catering to the ‘can’t wait to get it first’ crowd. As time goes by, they bundle books into packages (webscriptions) and sell individual non-DRM books for a very good price. If you buy their bundles, you can get books for mere dollars. They also do 99 cent sales. And they have a Baen Free Library. So the price of a Baen book is anywhere from $0 to $15, just glancing at their sales pages.

Again, price flexibility.

Nightshade sells books via this program at a very affordable straight $6.

That rocks.

Okay, but what price should an eBook be?

If you were paying attention to my mini lecture on free market economy, you know that it’s “as much as the market can bear.”

The truth is, the answers range dramatically depending on a lot of variables *which is why publishers want the ability to flex price!*

But isn’t an eBook ‘cheaper?’

Well. Here lets look at…

How books are made:

Let’s take a look at how this particular sausage is made. I understand readers don’t appreciate this much, I didn’t before I was published, but now I understand that a book is a group undertaking.

A book comprises of the following production investments. Just like a pill requires research to bring to market, or a jacket requires artists, designers and invention, professionally published books that look slick and readable use the services of a number of different people.

What are those costs?

An editor: the man who works with the author on the big picture of the book. How are these chapters hanging together? Does this character make sense? What book should we work on next?

A typesetter: makes the inside of the book look professional and easy to read, well put together

Designer: interior art, layout, more look and feel of the inside. The look and feel of the outside of the book and how it incorporates the cover art

Art: someone has to paint, create, or put together the graphics that sell the book

Copy editor: this person goes through and makes sure the book is readable, looks for internal consistency (your character has blue eyes here, but brown here. Suns don’t actually go nova like that).

Proofreader: this final pass looks for any final typos that have slipped through everyone else.

Those are just some of the people involved in making a professional book.

I’m not including marketing/advertising, or the author’s advance in this little mental experiment.

In this article by K.T. Bradford, Jeremy Lassen, who runs a lean, focused, smaller press, says those initial investments for a book run from $7,000 to $20,000.

If you were making an eBook only, to make a professional, slick, proofread and well edited project, let’s take that lower number. Let’s say you farm this all out and pay an up and coming artist $3000 for a painting, a proofreader $1,000 to go over and copy edit, and then later proof the manuscript, a designer $1,000 to design the book’s look and feel all throughout, and a freelance editor to help throughout all this. I have no idea what an editor costs who’s freelance, but let’s lowball this and say that person makes $2,000 a book, like the copy editor (this would mean, for an NYC based editor, that they’d edit 24 books a year to make a freelance living. A lot of hustle). That’s a $7,000 initial investment.

So you can see, even without printing the book, there are upfront ‘development’ costs in good books.

So what price point do you need to cover your costs?

Well, how many eBooks do you think you can sell? See, the question becomes one of volume. In order to cover this back on only eBook sales you have some choices.

At 99 cents it takes 7070 sales to break even.

At $9.99, it takes 701 sales to break even.

At $15 it takes 467 sales.

That’s if you’re selling direct. Amazon takes a cut, so we actually probably need to multiply these by 30% to make them real world.

That looks impressive. Only 467 sales to cover back the initial outlay. The problem is, volume. Can you guarantee 700 sales vs 300, 7070 at 99 cents?

I’ve gotten to talk to other writers, and for all that people are buying books happily on Kindles and iPhones, very few writers other than big sellers (the top tier), are seeing more than triple digit sales a year for eBooks.

The volume is so low that with Amazon taking its cut, and so forth, most people are seeing a couple hundred dollars here and there.

Could pricing be the issue you’re not getting volume?

Well, I have my eBook sales figures of Crystal Rain, a book that has sold in the five figures in print, meaning people who have purchased in print, print online and in bookstores. That’s a nice run, it’s my bestselling book of the 3 Xenowealth books (Crystal Rain, Ragamuffin, Sly Mongoose), but leaves me still a midlist writer. Ragamuffin hasn’t broken five figures yet, it sold in the high thousands of copies (that dip between them is one reason the Xenowealth books are on hiatus now).

In 2008, for a brief while, Crystal Rain was available for free via download. Number of Kindle users who downloaded it: low thousands. Number who’ve purchased it for sale after that: low hundreds.

So five figures in volume compared to three figures. That’s an order of magnitude difference.

This magnitude difference holds steady. I sell hundreds of copies of eBooks, and thousands of paper copies.

So pricing it for free reveals that there’s a very small pool of eBook readers still. In fact, eBook sales as a percent of total sales are just over 1%, up from .47% in 2008.

Again, in economics, there is the law of supply and demand, and demand is still pretty low when compared to print books.

Even assuming eBook adoption follows an exponential takeoff, and map the growth rate of 2002 having .03% of the market to today’s set up, you have eBooks being 10% of the market in 2016. At that point, I’m betting volume will start picking up enough that it gets easier to justify smaller prices per unit. But right now, eBooks sell like limited editions.

But the current volume is still low, although some people (our new superstars) are able to get sales into the thousands and break the curve (every graph has outliers).

But publishing doesn’t publish just eBooks!

Correct! Publishing spends an initial outlay for designing and editing the books (that 7-20K we talked about) plus it has offices, plus advertising, marketing, and it offers the author an advance, and it pays to print the print copies.

Then, there’s usually a person who has to be hired to do the eBook conversion process. What people have found is that even with automated export tools, they still have to create an eBook version. Amazon has software to create their Kindle version, B&N uses ePub, other people use other versions. Someone has to check that even if the automated ‘make a version of this’ works well, that there aren’t any hiccups.

So it has a larger initial investment. And eBooks aren’t the only focus, but one arm of a large initial investment.

So on the first quarter this book is for sale, what the publisher is most likely trying to do is at least not have eBooks cost more than what it took for that extra effort to create it.

And with a few hundred copies, chances are, it’s barely doing that.

So publishers, looking at supply and demand, think that there’s low enough demand that they can up the prices a bit and overall, in that first while, make a little more. There are enough people who are excited about an author no matter what the cost, that they’ll make more. This way they’re covering the cost of the guy who makes sure the books get converted into nice eBook versions. And over time, they’ll drop the price.

Just like people who sell pills. Or jackets.

And here we go back to price fixing versus flexible pricing that falls over time. When you have smaller sales, sometimes reducing price to boost volume can leave you with the margin you want. But sometimes not. Sometimes you need to raise the price.

This is why price fixing is not the answer to the eBook dilemma. Letting volume grow from the single digit percentages it is, while giving publishers the flexibility to experiment and play is not the end of the world some claim it to be.

So Amazon has the right to pull the list. It’s part of the negotiating game. They did this to Hachette UK earlier this year in the same manner to force Hachette to play the game according to Amazon’s rules, as it set them up when Amazon first started selling Kindle books. Hachette folded, Amazon views this as a way to get publishers to do what they want.

The reason Macmillan is asking for a change in the way things are done, is because Apple has released an new program, and it offers publishers a program more in line with what they think will work: including some flexibility in early release prices. This now means Kindle is not the big kid anymore, as many are assuming Apple will pull a repeat iTunes store.

Whether or not that happens, I don’t know. But Amazon seems to find the nuclear option okay, and after years of working to send them a lot of business, this is a reverse blow. Because of my online presence, over half of all my print and eBooks are sold via them. Just as they have the right to do this, I have the right to be pretty friggin’ pissed that they think this is the way to negotiate, or build good will in any way.

So tell us how you feel about all this?

Look, I use Amazon Prime because I live in the boonies. I read books via Amazon Kindle. I’m even moderate about DRM packaging (I’d prefer not to have it on my books, but as long as it doesn’t get in my way too much I’ll tolerate it).

But this looks to be very dickish, and using your size as a prime negotiating tool to play hardball. Again, Amazon has built themselves up to the size, so they have the right to use their size. It’s just business, you know? But so is my then saying, I will now be dropping all Amazon.com links from my website.

I will no longer be doing any business with them. This includes renting from video on demand, buying books both print and Kindle, as well as buying various goods. I will not use them for payments either.

Because I’ve entrusted my traffic and customers with them over the years, I do expect a slight bit of reciprocity. I don’t like to do business with people who, apparently as far as I can tell, think sucker punching you when they disagree, even if they have the right to do it, is the way to go about this.

I know the publishers are far from perfect (believe me, the handling of eBooks over the last X number of years has been frustrating, as a person who loves eBooks), but so far they haven’t behaved like giant kids throwing a temper tantrum during negotiations of anything.

What about when Apple forced everyone to buy songs for 99 cents?

I think it’s useful to compare the two, and realize that music and books are different. For one, volume seems to be different. People play music all the time, it’s electronic adoption *exploded* the moment napster arrived. Millions of downloads.

With books, even heavily pirated ones are not seeing the insane activity you saw with music. Again, that volume question. It’s a vastly different industry we’re comparing.

So even in the early days, the fight Apple was having was different than this one due to magnitudes. Even then, ultimately, in exchange for giving up on DRM, music publishers got the ability to be flexible with Apple store pricing. They actually gave up frigging DRM for it, it was that important.

Large companies, like record companies and book publishers, just wanted to screw the little guys.

Well, they want to make a profit. That’s called capitalism. And you make as much profit as the market can bear. Now what music companies did that got them labeled evil, and was stupid (besides having vastly larger volumes than books), was to become crazy about suing their consumers (crazy) and going after them. That developed bad publicity.

While some authors have done the same, have you seen publishers treating consumers the same way as the RIAA?

Publishing has very small margins, the corporations are large, but I’ve visited their offices. While Goldman Sachs is handing out billions in bonuses, overworked book editors are in small offices and worrying about layoffs.

What do you want me to do about all this?

Nothing. If you’re a reader, it’s not your problem. Buy the books you want where you can.

Listen, in the big scheme of things, this hits me in the pocketbook slightly, most likely, and Macmillan in a big way. It’s not a reader’s problem, in as much as, if you believe price fixing most of the market will lead to what Teresa Nielsen Hayden says is a reduced number of non-bestseller kinds of books/new authors and midlist authors. That may concern you. It may not. I don’t know you.

Some of you will just see that books will be price fixed at $9.99, and be happy. Much like many people would be happy to hear that gas was to be price fixed at $2. I understand that.

But if you do like the authors Macmillan puts out, now is a good time to buy one of their books from a non-Amazon source if anything you saw here made you think differently about price fixing. But I wouldn’t even encourage you to buy books that are too highly priced. Heck no. You are the consumer, you need to send the right pricing signals. This is how the free market works.

Go forth and just be your merry selves.

Then why did you write this

I’m not trying to exhort anyone to do anything, but to explain the situation I’m in, and to educate. I’m seeing a lot of people state things with certainty (points I try to knock down above) who have no involvement in the trade.
A lot of readers are going to take this out on authors, and I wanted to basically show my homework to explain things that people may not be aware of. People toss out prices of what eBooks ‘should be’ who’ve never even stopped to understand how the math of something like this works. They demand things they’d never demand of a jacket salesman, just because they think economics and supply and demand and volume don’t apply to eBooks. They do.
Seriously. I’ve thought about these things a lot. Mostly because I have a novel series that has not been renewed, and I keep running the numbers to see if I could write it as an eBook, and when I run these numbers, I come up looking at making a few thousand dollars for half a year’s worth of work based on how eBook sell now. Yes, there are a few J.A. Konrath’s selling well on Amazon, but as I’ve linked, other authors aren’t automagically selling thousands of eBooks there. Most who follow these footsteps sell hundreds. Not everyone becomes JK Rowling.

What do *you* think is a good price for an eBook, then?

It depends on the author. Like I said, some authors I’d pay a lot to read. Some I won’t. I’m flexible.

But my gut instinct is that because eBooks have a slightly lower overhead than print books, I bet having them cheaper than a paperback is most comfortable. I wouldn’t be surprised if $4.99, once volume picks up over the tail end of this decade, becomes a sweet spot (under the $5 psychological breakpoint, just like $9.99 is under the magic $10 mental spot) where you could move a decent number of copies with audiences.

But right now, think of an eBook as being somewhat akin to a limited edition in terms of potential demand, with bestsellers/top sellers excluded.

One reason this focus on $9.99 is somewhat misleading is that it will allow places like Amazon to keep that as a mental target and expectation. When you look at volume, potential sales, and what eBooks sell, $9.99 is just as meaningless as $4.99. It all depends on how many copies are purchased.

Thanks for reading this crazy long ass thing…

Yeah, you think it’s taken a long time to read, here I thought I was just dashing out a quick ‘here are my thoughts on this’ sort of thing, and I’ve written a crazy ass long… thing.

Sorry about that.

Also, for a look at distribution and another inside the business look, you should also read Charles Stross’s take on all this here.

Amazon and DRM, a comment lower in this post about DRM and Apple comes from Jeffrey Carver:

A correction to several comments about Amazon and DRM. While it is true that individual authors can choose DRM/no-DRM, the situation is different for publishers. According to E-reads, the publisher of many of my ebooks, they are required by Amazon to use DRM. They’ve asked, they don’t want DRM, but if they want to sell through Amazon, they have to use it. Look at E-reads titles at Fictionwise, and you’ll find them multiformat and DRM-free. The same titles in the Kindle store carry DRM.

Update. What is this stuff about agency, and the deals that are being brokered and the differences?

Well, LJ user Fashionista explains it extremely well here (snippet):

So let’s take a look at a practical model, St. Martin’s (a division of Macmillan) author,Janet Evanovich’s Finger Lickin’ Fifteen, which has a list price of $27.95 (so let’s call it $28.00 for ease of math).
Macmillan sells it to Amazon for $14.00, Amazon turns around and sells it for $9.99, so essentially at a four dollar loss.
Under the agency model, the publisher sets the price for the e-book at fifteen dollars and takes 70 percent, so they make $11.50 per book, which is less than they were making before and Amazon makes $4.50 per title, which is more.
So what’s the problem and why is Amazon throwing a hissy? Because they don’t care if they make a profit on e-books. As was explained to me by a NY Times Bestselling author, she said that Bezos knew he was taking (roughly) a five dollar loss on each e-book sold and had plans to do so for at least five years, in an attempt to establish a monopoly in the digital book market, trying to outprice his competitors. And he would have, too, if it hadn’t been for those meddling kidsSteve Jobs and Apple.

Scott Westerfeld also has a super summary here.

PS: For more about why I think it’s a bad idea to artificially cap the price, which actually raises backlist book prices to subsidize new releases read “Why does Amazon want expensive backlist books?”

PPS: For why authors need publishers, read Cat Valente:

Funny thing is, if this future came to pass and the market were nothing but self-published autonomous authors either writing without editorial or paying out of pocket for it, if we were flooded with good product mixed with bad like gold in a stream, it would be about five seconds before someone came along and said: hey, what if I started a company where we took on all the risk, hired an editorial staff and a marketing staff to make the product better and get it noticed, and paid the author some money up front and a percentage of the profits in exchange for taking on the risk and the initial cost? So writers could, you know, just write?
And writers would line up at their door.

And lastly, PPPS: Amazon has come to an agreement with Macmillan.

All the other publishers that were negotiating agency agreements are also coming to agreements. And my books have been put up for sale again by Amazon.com.

Filed under the topic Journal on January 31st 2010 at 3:06 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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154 Responses so far

1. Robert N. Lee on Jan 31st, 2010 at 3:36 am
I’m really sorry. The second thing I thought when I heard about this was “Oh, Jesus, which people I know are getting hosed by this?”
I don’t like Amazon’s practices and regard them similarly, as a company, as I do Apple, and I think you know this: not very highly. However, I did feel compelled to address this:
“Amazon still uses Digital Rights Management. This is not a customer-helpful feature. In fact, Apple iTunes has gotten rid of it, as have many other music sellers, and found that sales increase.”
Apple got rid of the specific use of FairPlay that tied iTunes and iPods together into a vertical monopoly only after they were busted just as hard over it by the EU as they never were, here. You might note the month and year DRM officially “ended” for iTunes (it’s still used for video content, and indeed, Apple uses variants of FairPlay to lock down just about everything they make and sell, from streamed video on Apple TV to apps on iPhones): January 2009.
Something else happened that month, something big that signaled that the DoJ might be back sniffing up anticompetitive monopolies’ butts again, after an eight-year hiatus. But I can’t put my finger on what that was…
At any rate, Apple’s very much a DRM-friendly company, and their statements otherwise are…not representative of reality, let’s say that.
That being said, this move from Amazon sucks ass, and further cements my disdain for the house Bezos built.* Hope things get better, although…I gotta say, hoping Apple will save from Amazon-style dictatorial tantrums is a little like hoping the Germans’ll save you from the Russians in Krakow, 1941.
IMO, naturally.
–Robert
*Disclosure, I guess: I interviewed several times in 1996 to…design Amazon.com. Before they went public. I broke off the interview process because they demanded I hand them a preliminary site design in the final stages of the hiring process, prior to hire, and I don’t do spec work for anybody. (Nor do companies in Amazon’s class demand it, generally – only amateurs, criminals, and egomaniacs want people to work for them for free. This is certainly the only time that’s happened to me in that context.)
Anyway, that’s where not liking the company much started, I have to admit. They got all pissy about it, too, and fuck that. You do not want to work *there,* not for any amount of stock options.
2. J Meijer on Jan 31st, 2010 at 4:27 am
It might be a long long post, but it is a very nice explanation of the current issue. Thank you very much for that, it is the best one I have seen so far.
With their powerplay (the last one in an impressive series apparently) Amazon seems to have alienated a lot of authors. I just hope that the only long term result will be a diversification in the online (e)book markets and continued publication of the books I love to read.
3. JCAP on Jan 31st, 2010 at 4:55 am
As a college student, I am acutely aware of how expensive books can be, especially when ordered in bulk. Buying from the college bookstore will cost the average student an extra hundred dollars. That said, I have found that deferring to Barnes and Noble has actually been cheaper for my books, and often has free shipping, much like amazon prime.
I think my biggest issue with amazon is the pure lack of selection of books that are not in English. As someone in German/Austrian lit classes, I found that while amazon claims to have a wide selection, Barnes and Noble was much more willing to accept that sometimes books read better in a different language. There is a huge difference when comparing One Hundred Years of Solitude in Spanish and English. This same principle is true for books originally in German– they just aren’t as well known in the US.
4. Anne B. on Jan 31st, 2010 at 5:27 am
Thank you…good explanation! I read voraciously on my Kindle…so my book habit has actually increased since I started using the device. (amazing how much one can read at stop lights and in pokey lines!) Amazon’s course of action does not sit well with me as I predominantly read Science Fiction/Fantasy. Have to admit….I have a mental roadblock here….if I am going to spend more than 10$ on a book….I want a physical copy. I will have to ponder this further….
5. Eric Knibb on Jan 31st, 2010 at 6:17 am
I buy a lot of books from Audible.com. I understand Audible is now owned by amazon. How will this effect the books listed there?
TB: No idea!
6. CharlesP on Jan 31st, 2010 at 6:31 am
Nice piece Tobias. One of the more reasoned ones thus far (perhaps having something to do with it not being posted 5 minutes after the news was “released”). For as much as I respect him, Cory has an anti-DRM/license drum he’ll beat till it kills a horse and then he’ll use it to beat the horse… and though there are MANY points I agree with him on, his quasi-religious fervor for the subject makes it hard to take anything he says on the subject without a heavy dose of salt.
I know I’m a bit of an Amazon apologist (I worked there 10 years ago and even though they shut down our building and we all got layed-off, I still generally like them), but I have found it depressing/amusing/interesting that all of the commentary I’ve seen thus far, has been made without Amazon making a peep. I know a lot of people think this silence speaks volumes, internet time, blah blah. For me, I think I’ll at least give them a weekend to say something considering most of the information we have on the subject (aside from the Macmillan titles not being listed) comes from an open letter from the Macmillan CEO… which I don’t count as an exactly unbiased source.
All that said, IF this is just a negotiating tactic from Amazon, I totally understand it. I don’t particularly LIKE it, but if I were facing the media distribution juggernaut of Apple marching into my market space in 60 days, I’d be tempted to use the nuclear option sooner than later to make sure the contracts were as good as possible while I still had SOME leverage. Apple had the benefit of that leverage with music for quite a while before there was serious competition in that market. Amazon was probably another year or two away from having significant enough market for eBooks to not have to worry too much about Apple moving into its space.
I’m trying to look at what the three companies involved (because Apple IS involved in this, even if they’re not mentioned in the stories anywhere) are looking to accomplish. The short versions are:
Amazon: Wants to sell books. Selling Kindles is nice, but it’s only a means to an end for selling ebooks and having a significant portion of that market. They want leverage to charge what they want to charge, and generally what they want to charge is going to be something they think will encourage the use of their service/device over others in the market place.
Macmillan: Wants to sell books. They’re trying to adapt to a new world and new market and maintain their business and control. They are probably looking at the very real concerns to their business brought up in a digital distribution world where content creators can go directly to an audience (I don’t think this is their primary concern, but I do think they’re keeping it in mind lest Amazon or somebody similar create a means for bypassing the publishers that actually works and chewing into their business). They don’t want to be tied to any distributor like Amazon or Apple, and are hoping to use the leverage of their content to keep their level of control in the market.
Apple: Wants to sell iPads. I’ve read agents on twitter say that Amazon wants to keep the prices on the books low to make money selling Kindles. That is, in my mind, rather obviously wrong. But Apple has, almost from inception, been about selling the hardware. Apple makes a comparative pittance on iTunes songs, but they make a ton on each of us buying a new iPod every couple years… and they make a pretty penny on iPhone apps and such. Apple right now needs content for its new device (same as Amazon did/does), and as they’re not the big kid on the playground in the book space, they’ve GOT to be willing to negotiate on terms that are favorable to the publishers. They need publisher buy-in for the iBook store just like Amazon needed publisher buy-in for the Kindle a couple years back. As far as books go, for Apple (and I’m an Apple fanboy too I guess), they’re primarily another bullet point on the list of features for the iPad (though I’d be surprised if Steve isn’t smart enough to be negotiating Apple sweetheart deals from publishers to allow the publishers pricing control to use as leverage against Amazon).
All three players have their strengths in this “battle”, and all have their weaknesses. Apple has the benefit of being 2 months removed from really being involved. Amazon & Macmillan have the benefit of ebooks being a relatively small percentage of their income. The main people who are talking about it are the ones who are potential collateral damage, the artists. I suspect this will be a few days blip on the historical radar of the book publishing industry soon… In the short term it seems Amazon has played its hand poorly, but I think we won’t know the big picture for a little while.
7. Lisa on Jan 31st, 2010 at 7:39 am
I think a point you don’t really address here is the expense of entry into the eBook market for your average reader. The Kindle is $259 right now. That’s as much as about 26 of their price-fixed books. It’s an enormous investment, and very few people are willing to make it. That’s why the market for eBooks is so limited right now. Amazon seems to rely on the cheapness of eBooks as a main attraction to tempt people into the Kindle. They wield a lot of control in the book market, and maybe they’ll get away with it, but I would personally rather pay a little more per book and less for the device, especially considering how short a life electronics seem to have.
TB: My feeling is that people buy iPhones for pda/phone stuff, and gain a free eBook reader in that.
8. Amy-Elizabeth on Jan 31st, 2010 at 7:52 am
I’m really sorry to hear about Tor’s troubles with Amazon.com I actually came to this post through Brandon Sanderson, whose books I actually randomly found while playing on my iPhone. I hope that Tor will figure out a way to continue to sell eBooks, but I will definitely discontinue buying my eBooks from Amazon. Thanks for letting everyone know the situation.
9. Mary Anne Mohanraj on Jan 31st, 2010 at 7:58 am
Good job.
I won’t be boycotting Amazon, mostly ’cause I am an Amazon Prime junkie, and with two small kids, the convenience factor is too hard for me to give up. But I appreciate the time you took to write this up, and I agree with you on the value of the free market re: book pricing, electronic or otherwise.
It’s funny — I may be releasing a few of my small press titles on Kindle, and was thinking about pricing — and had ended up with $4.99 myself as what felt appropriate for an eBook edition. Great minds.
10. Raphael on Jan 31st, 2010 at 8:12 am
Crazy move by amazon. I have some great Tor books here myself.
However, I think you miss some points. Yes, for some authors I’d pay what is necessary. But why pay 20€ or more for a hardcover (usual price in Germany, ~28$) when at the same time, the paperback costs 8€? (~11$) The words are the same. I have bought hardcovers when no paperbacks were available, but usually I tend to buy pb. I do not feel that I support the author by buying expensive, but the publisher. If a book is released HC only at first, well, I wait another year. Most of my favorite authors have release cycles of several years, anyway, and I can easily bridge the gap with a dozen other great books.
(I will wait for the PB especially if I own only PBs of a series’ start for the sake of consistency)
4$ difference per book might not be much, but if I buy 10 books it is 40$ I could have invested in other books.
I am torn by the question “What should an eBook cost?”. As a book addict, I like, no, I want to have a print copy in my hands and on my shelf. For me, Paberback + eBook as a bundle for 1.5 times the PB price would probably be a deal I’d take. And that may be a good deal for the publisher: As long as they produce print copies, only the additional effort to produce an electronic version should be what it should cost.
I think you get market dynamics wrong. Low demand implies lower prices, not higher. If sales cannot cover your expenses, you drop the product. Consequently, publishers that offer eBooks that can’t support the investment are kind of stupid. If you want to publish low volumes no matter what, be prepared to take a loss or to decrease volume further by higher prices. Or you use income from print versions to cover eBook expenses in order to fire the market. If you do want to do the latter, lower prices would be a good idea in general, even if you take heavy losses in the beginning.
Talking about eBooks, one has to remember one important thing: You need a decent reading device. Those are still quite expensive (at least here in Germany). So I go ahead and by a 300€ (400$) device only to see that the eBook is as expensive as the print version. Does not work for me, sorry.
11. Karen Lord on Jan 31st, 2010 at 8:27 am
Thanks for this post. It’ll join several others that I’ve bookmarked from your blog which have helped me to learn about the publishing industry. I’m grateful for the detail and clarity – and the length!
12. Jackie Kessler on Jan 31st, 2010 at 8:38 am
Excellent article. Thanks for breaking it down.
13. Christa on Jan 31st, 2010 at 8:50 am
Excellent post.
I’ve been a loyal Amazon customer almost since they started and an Amazon Prime member since it was first offered. Of course, I also own a kindle. I’ve bought most of my books through Amazon over the years, and I read a LOT.
However, yesterday I cancelled my subscription and sent them an email explaining why.
I knew Amazon has been flexing it’s muscles with respect to e-book pricing for awhile now. I’ve followed the issues when WalMart and Target entered the game last summer/fall. I had held out hope that the publishers would put their foot down and not cave on this point.
I’m glad to see MacMillan taking a stand and I’m happy that Apple has entered the picture. While the Nook looks much nicer than the kindle, I think Apple will be closer to level footing with Amazon when it comes to being a ‘real’ threat.
Yanking all of the books because MacMillan wants pricing flexibility is a jerk move. It’s akin to the big kid taking his toys and going home when others don’t want to play by his rules.
I refuse to support any company that uses bullying tactics to force its way. I refuse to shop at WalMart for similar reasons, even if it costs me more to go elsewhere. If I can’t find it elsewhere, I don’t buy it.
I had two pre-orders through Amazon that I cancelled and placed through Powells.com instead. As a consumer, taking my business elsewhere is the only means I have of expressing my opinions of Amazon’s movements.
14. Michele on Jan 31st, 2010 at 8:52 am
Thanks for the explanation. I hate Amazon’s tactics, but have long wondered why eBooks aren’t much cheaper than paperbacks. Personally, I tend to buy physical books and for genre books go to local independent stores.
15. Laurel Amberdine on Jan 31st, 2010 at 8:53 am
Have you seen this breakdown of one author’s Kindle sales vs. pricing?
http://jakonrath.blogspot.com/2009/10/kindle-numbers-traditional-publishing.html
Not commenting on the behavior of various corporations involved, just thought it was interesting.
TB: Yes, JA is a total leader for giving us the raw numbers! I’m very thankful for him. It shows that the way this works, selling directly to Amazon works best for the author LOL :_)
16. Sumana Harihareswara on Jan 31st, 2010 at 8:55 am
Thanks for the thoughtful explanation. This is wonderfully useful.
17. Steven Saus on Jan 31st, 2010 at 8:56 am
Excellent writeup. While I’m a Prime junkie as well, this has me seriously reconsidering it, and definitely moving as many purchases away from AMZ as possible.
Because you’re right about market forces and the free market – but what the big companies (and economists) often forget is that angry people are also a market force.
I value having choice – enough that I’m willing to pay a little more for it.
18. Laurie Mann on Jan 31st, 2010 at 9:01 am
We’ve been big Amazon fans. We’re Prime members. Since Borders collapsed as a good place to buy books and we moved out to the relative-boonies, we’ve spent thousands of dollars at Amazon.
However, Amazon has been behaving more and more like a monopoly. I thought the Kindle implementation was incredibly misguided, so I had no plans to buy one, much as I want an eBook reader. At one point, they were doing some scuzzy things on how they reported the sales of gay and lesbian-related books. And now, they’re pulling books over a pissing match. This is the last straw.
I will not buy from Amazon until they restore the MacMillan titles.
I expect we’ll be more books than usual at cons, through other online sources and at Barnes and Noble.
19. Ray Briggs on Jan 31st, 2010 at 9:07 am
I am a Kindle DX owner. I have 33 books on my system now. The prices I paid ranged from $9.99 to $0.00 (yes there are many free ebooks available). Amazon does have a variable pricing structure, I would love to pay less than $9.99 for a TOR ebook, which I have already purchased both a hardback and paperback version of, however I am supportive of the $9.99 standard at this time.
FYI: My first two books, Crystal Rain, and Ragamuffin, were less than a paperback price on Kindle. Sly Mongoose was 12.95

Amazon’s most expensive ebook is a mere $6,431.20 and if it ever gets down to $9.99 I might consider buying it just for kicks. For now I have 3 of the TOR ebooks from the Wheel of Times series and suddenly I am NOT happy. Fix It. NOW.
20. John Chu on Jan 31st, 2010 at 9:08 am
Thank you for the clear explanation of what’s happening. One slight quibble with the numbers. Amazon’s cut is likely more than 30%. (Macmillian wants it to be 30% which makes me think it’s currently more.) I’ve heard 50% bandied about. The link Laurel Amberdine@5 references implies Amazon’s cut (for him anyway) is 65%.
TB: Yeah, I think it was originally 70%, some have 50%, and due to Apple, they finally dropped to 30%.
21. DaveFortier on Jan 31st, 2010 at 9:17 am
Thanks for the information. It will aid in a discussion elsewhere.
22. Mary Anne Mohanraj on Jan 31st, 2010 at 9:29 am
I should note that I’d be more interested in an Amazon boycott if it seems like there’s an organized action plan. A few random writers boycotting aren’t likely to have much effect. Ten thousand household buyers, on the other hand…
I’d like to see a clear plan of action, place to sign a very visible petition, P.R. efforts, etc. If someone starts organizing along those lines, I’d be willing to join the boycott.
23. Scott Marlowe on Jan 31st, 2010 at 9:47 am
Nice post. Thanks for taking the time to write it and good luck. I hope when the dust settles authors like yourself are still standing.
I’m not in favor of an Amazon boycott, for the same reason I won’t boycott Walmart because they’ve strong-armed Procter and Gamble into lowering their wholesale prices on cereal (or whatever). This is business, and businesses need to play hardball sometimes. It just so happens that Amazon’s objectives are aligned with consumers; I wouldn’t for a moment think Amazon is championing the cause of low eBook prices b/c they’re kindhearted.
24. Adam Heine on Jan 31st, 2010 at 9:50 am
A fair and thorough look at the whole thing. Thank you. I don’t know what the best thing for the market is either, but I know stuff like this makes me trust Amazon less.
I’ll still buy books there if it’s convenient (I’m boonier than you), but this is the second or third thing that’s convinced me to stay away from the Kindle, at the very least.
25. Brenna Lyons on Jan 31st, 2010 at 9:52 am
Actually, cars on launch day are not usually sold for more a year later. They are sold for less. That’s one of the tricks to getting a good price on a car…buying the last year’s model when the new model comes out for sale. But…that’s an industry that renews models every year. Books don’t do that, unless it’s a non-fiction that is renewed yearly and time-dependent. Beyond that nit, this is not a bad little post.
TB: that was a typo! So sorry, it’s fixed now!

Do publishers have the right to set their prices? YES! Fully agree with you.
Should Amazon back off and let Macmillan set whatever price they want to? Absolutely.
Do I think it’s going to work for Macmillan to hold to the old model when getting into e-books? NO! Macmillan would do better to learn from indie, since they have learned these lessons over more than 15 years in the business and are still thriving.
You noted that the right price is “what the market will bear.” That’s already been largely established. The market will bear at or just below mass market price for the same book. Sales numbers from indie distribution have set this, rather than trying to force trade or hard bound prices onto e-books.
Should Amazon drop DRM? Sure…so should all the other formats NY conglomerates use. Another lesson best learned from not only the music market but also from indie press. Thankfully, Harlequin was smart enough to try the indie model with Carina Press and may they flourish and teach NY from inside their own markets.
But keep in mind, Macmillan has the perfect out right now. Tell them to go to Smashwords, Fictionwise, and ARe/OmniLit and sell the Kindle format through those outlets at whatever price they want to set. ARe even has wireless to get the books onto Kindle. And tell readers where they can get the books in Kindle format, since it’s not from Amazon. If Macmillan and all the other conglomerates did this, Amazon would have to knuckle under.
Brenna
26. Joe Morrison on Jan 31st, 2010 at 9:54 am
I highly doubt that Amazon will see or notice me boycotting them as I buy very little from them anyways. However I think the publishers in general are missing an excellent opportunity in the e-book market.
I enjoyed crystal rain when I was allowed to download the free e-book, however as a marketing strategy it failed. I buy quite a few e-books from baen, including several of the $15 e-arcs every years. This is because I like the price structure and because they do not put DRM on the books.
I have too much stuff in my life, so I tend to avoid buying paper books and when I buy an e-book I expect to own it, not rent it so DRM is a non-starter for me. On the other hand I understand why publishers are afraid of e-book piracy and would support ebooks that were watermarked instead of DRM marked. This way pirate copies could be traced back to a source without interfering with me reading them on different devices and operating systems.
TB: Joe, you and I have basically the same approach to eBooks, though I’m a bit more willing to put up with DRM, not because it doesn’t outrage/annoy me, but because I’m a lazy customer…
27. Veronica on Jan 31st, 2010 at 10:09 am
Wow, this just stinks. I am extremely sorry that you are caught up in this nightmare of negotiations gone bad. I’m just hoping that both parties will come back to the table and iron this out. I wonder about the future of publishing, bookstores are stocking less and less (seemingly filled with the classics and NY Times best sellers), online buying is surging. If the physical retailer market continues to shrink, and online sellers like Walmart and Amazon continue their pricing wars, what will happen to traditional publishers?
28. Ella Drake on Jan 31st, 2010 at 10:39 am
Just a quick note about the Kindle & DRM. Amazon recently made DRM optional in their Digital Text Platform. So, self-published authors and small presses already have the option to remove DRM. Not sure how this plays out for the large publishers, but I think change is coming on that front.
TB: Agreed!
29. JA Konrath on Jan 31st, 2010 at 10:46 am
Tobias, I feel your pain.
But Amazon isn’t the villain here.
Amazon only uses DRM on the books if the PUBLISHER demands it. They follow the publisher’s wishes on DRM. Always.
Amazon, as a retailer, can price an ebook however it wants to price it. Publishers want ebooks priced high, because they can’t cover their overhead with low-priced ebooks. So they artificially INFLATE the price of ebooks. There is no reason an ebook, which costs next to nothing to copy and distribute, should cost the same as a hardcover. Even more importantly, consumers don’t want to pay $15 for an ebook.
Amazon is losing A LOT of money on practically every ebook they sell, because publishers refuse to sell them ebooks at a price customers want to pay. You think Amazon is happy to lose six bucks every time it sells a copy of THE LOST SYMBOL? How do publishers really feel they can sustain this business relationship?
Ebooks don’t sell according to the business model of supply and demand, because they don’t physically exist, and can be reproduced freely. Publishers want to artificially create supply and demand through higher pricing. Ebooks, unlike print, don’t have a shelf life.
This leads to more piracy, not more sales.
And the only way to fight piracy is with cost and convenience, as Apple show shown.
I believe your upfront development costs are skewed. Not that some publishers don’t pay that much or more. But that each of those can be done for less. For example, ebooks don’t need typesetters and layout artists. I had my cover art done for a few hundred bucks. Friends did the proofreading.
And doing something “in-house” overhead is tacked on in the form of rent and utility for the office, employee benefits, not to mention the tremendous waste in the publishing industry, where a 50% sell-through is tolerable.
Publishers seem to be following the same route as the RIAA and MPAA in regard to piracy. This doesn’t work. And they’re going to hurt themselves, and their authors.
TB: I didn’t say Amazon was evil, but they are being *dickish.* They have the right, as I said numerous times in my post.
As for upfront costs, J.A, I love what you’re doing with Kindle, but your Kindle books do look like they were done by an amateur, and they’ve done well due to the investment you’ve put in publicity, outreach, blogs, and carryover from your well done print publishers packages.
I’d encourage you to find a good unpublished/first time author and slap cheaply put together book on amazon and see how it sells. Do it with a pen name and tell no one, then reveal the results. You may be surprised how large a platform under you have goosing your existing sales.
That said, you’re very right. I will be, in a couple years, continuing my book series, and I’m hoping online eBook sales to be a leveraged part of that, much like you’re doing.
30. Alessia Brio on Jan 31st, 2010 at 10:53 am
Thanks for taking the time to share all this information. It’s fascinating to see the difference in perspective between authors who are toplist, midlist, and (like me) no list.
Here at the bottom of the food chain, we price ebooks by size (word count). Print price is driven by the page count which is driven by the print-on-demand service used.
What fries my bacon with Amazon ebook pricing, however, is the inability to GIVE my work away. I like to offer readers a free appetizer or two, but DTP won’t let me set my prices below 99 cents.
Oh, and since moving from small press to self-publishing, I have dealt directly with Amazon’s Kindle upload interface (DTP). Recently, a radio button appeared with which the publisher must choose whether or not to enable DRM. So, that ball is now in the publisher’s court.
Thanks (again) for your post.
peace & passion,
~ Alessia
TB: interesting!
31. Joey on Jan 31st, 2010 at 10:54 am
Thank you for this post. I live in a major metropolitan area so access isn’t a huge issue for non-limited stuff. I can afford to pay full price for books, etc. so I vote with my $$ and support local bookstores as well as more independent mailorder/online folks (like Mark Ziesing). My use of Amazon is very limited compared to most of my friends. So I’d have no problem boycotting Amazon.
Also, I still love my printed books and have yet to get on the e-book bandwagon. Maybe with the iPad but probably not. It scares me that the e-book fight could cause the demise of publishing houses. I guess I hadn’t been paying close enough attention.
32. CharlesP on Jan 31st, 2010 at 10:55 am
Well, my original post is still hung in moderation land… but I reposted almost all of it over at my blog (assuming this post doesn’t get hung up in moderation/spam lists somewhere too).
TB: First posts to this blog are always moderated, after that, people are welcome members. It helps cut spam/driveby nasties.
33. Vera Nazarian on Jan 31st, 2010 at 10:59 am
Excellent post, Toby, and I applaud the spirit of what you are saying.
A couple of small points:
1) This may be just my opinion, unsubstantiated, but I don’t think Amazon is out to sell e-books as much as it is out to sell the Kindle devices themselves. Without the draw of cheap (under $9.99) e-books, they are probably thinking there would be less incentive for customers to acquire their proprietary reader.
2) Not sure if DRM has always been an enforced requirement with the Kindle format. Very recently I made my own first foray into e-book territory, and set up a Kindle e-book edition of my Mansfield Park and Mummies. This was as recent as this month — I uploaded the e-book file on January 18, they took two days to process, and the book went live on the 20th. During the setup process I was given the choice of DRM or No DRM. I naturally chose the “No DRM” option for my e-book. Does this mean that they will still encrypt it somehow? I am very curious now if most people who set up the Kindle editions have had this choice or if this is a recent development? Anyway, the DRM issue I think might be interesting to poll others about. I am assuming I was not the only one given the choice to use or not use it for my title. The question is, has this been a choice for publishers and authors from the getgo, or is this a new thing?
In any case, I would also like to openly share a couple of stats about my own e-book. It showed up for sale on the 20th, and sold 6 copies and earned me $21, to date.
I set the magic $9.99 price since the trade paperback first edition costs $16.95 and is a huge thick book at 568 pages. I think that’s a fair balanced price point difference, since I had to do a significant amount of work reformatting the e-book from the trade paperback edition to the Kindle.
Now, I do want to mention that I am not planing to boycott Amazon (regretfully) — not because I approve of their handling of Macmillan ( I do not), but because as a small press author, Amazon is pretty much my main source of sales.
Unlike Tor authors such as yourself, and other folks with major streams of brick and mortar distribution elsewhere, Amazon is what I place my main hopes on.
Without Amazon, the online vendors are a tiny stream, even counting B&N Online. So, here I am stuck in the A-boat, and suitably terrified that as everyone begins to boycott Amazon for good reasons, those of us little press guys will suffer from this backlash when people cease browsing our work there, and reducing our already modest sales in the process.
What a sad sorry business this is, for all of us. Damned if you do, damned if you don’t.
My prediction is, Amazon will soon change its mind and reinstate Macmillan titles. Give them a WEEK, I say, if not less, as they cave to internet pressure.
TB: Vera: for the record, due to my online presence, most of my books sell online, and since Amazon is that prime point, I’m losing most of my sales as of Friday at 5pm.
34. Matt C on Jan 31st, 2010 at 11:02 am
> [Vernor Vinge] I can’t. fucking. wait. for that book to come out.
Me either, but since I WILL be waiting I guess I’ll take a look at this Bucknell guy that I never heard of before.
TB: Well thank you sir!
35. Matt C on Jan 31st, 2010 at 11:03 am
er, Buckell . . .
36. Mike on Jan 31st, 2010 at 11:08 am
Having worked in the publishing industry, the cost of producing an e-book (especially if a print version of the book is being producing) is minimal. The copyeditors we used were all freelancers and trained to us an XML template. Copyeditors, depending on the publisher, are either paid by the hour (averaging $20.00/hr) or by the manuscript page (last time I checked, the rate was $2.50 – $3.00 a page). The XML-coded manuscript is forwarded to the typesetter, who processed the coded manuscript and generates a digital file. From this file, since it was XML coded, print, web, and e-formatted books can be generated. The cost of generating an e-book from the existing file is minimal, icing on the cake so to speak. A price of $9.99 is appropriate to outweigh the cost of producing the e-book, in fact, it is inflated. To charge higher would be criminal, so as a reader and a writer, I can support what Amazon is doing.
How long has the Kindle been around? And MacMillan is only now taking a stand on the issue of price? MacMillan has partnered with Apple and its iPad, so it seems more like corporate greed on the part of MacMillan because their “proposed” price plan coincides with the commercial availability of the iPad. If pricing was such an issue and they felt they weren’t being fairly compensated by Amazon’s selling of their e-books for $10.00 or under, this issue should have been addressed years ago, not when another e-bookstore is on the horizon, especially one you are going to be partnered with. There are other e-bookstores out there that charge the same as Amazon, some less, some more, and this had never become a major issue. Not until one of the publishers enters into a corporate marriage with one of the bookstores.
People are so quick to point the finger at Amazon, but I can see both sides of the coin, and I will be the first one to say the fault is on the part of the publisher. If this had been a concern for as long as they say, it should have been addressed long before this.
37. Grumblebot on Jan 31st, 2010 at 11:09 am
Well said. Thanks for putting in to a perspective that is readily understood.
I’ve had a Kindle about a year and I’ve paid $15 for books I wanted to read right now and $5 for books I wanted to read now that they were available at that price. I still by hard-cover books when it’s a favorite author and Kindle never changed that. In fact, I’d often buy both.
I hope it all get sorted soon. I hate it when my library gets too small.
38. Rhonda Garcia on Jan 31st, 2010 at 11:11 am
So sorry to see you caught up in this. As someone who wants to write for a living, it was reassuring to see that your research bore out my initial thoughts, which I expressed on the OWW’s list. I’m not a business person per se, but I’ve been in business for most of my adult life. I work for a company that only sells brand items, and we make more profit than other companies that sell generic items. We are smaller and we’re number 2 because of a sound business decision based on economics.
It has amazed me how many writers have gone against their own best interests because they forget that they ARE the business here. That this isn’t a cheap versus expensive issue, or a publisher verses seller issue. We are the product. We should understand supply and demand. If someone wants to price an item according to the market, and someone else wants to set a price, chances are, they’re not setting it at a level that benefits you.
I will never buy a Kindle as long as Amazon thinks they can mess with my purchase anytime they please. I will remain an Amazon customer because I live in the Caribbean and have no choice if I want to get certain things. But I will not be purchasing if I can help it until this is resolved. And I pray that Macmillan will not fold. This monopoly needs to end here–any cyberpunk writer worth their salt should be able to see that. I can see that and I’m mainly a scifi / fantasy crossover.
I mean, I can literally sense Phillip K Dick turning over in his grave right now.
39. Thiago on Jan 31st, 2010 at 11:19 am
Great Post. I’d just like to expand a little on this:
“But right now, eBooks sell like limited editions.”
Well, but that’s the whole point, isn’t it? Ebooks are nothing like limited editions. In fact it seems to me that the issue most potential consumers have with the pricing is that they perceive an ebook as somehow less than an actual book (and DRM doesn’t help a bit with that). So no wonder they don’t feel like paying more than they would for a paperback.
On the other hand, as you put it yourself, there’s just no way ebooks can be much cheaper than actual books (at least not while they’re fresh), since the production costs per unit for both aren’t that much different.
Anyway, since prices can’t be brought down, I think the next best thing is to break the feeling that costumers are buying less than a book, by offering content which will only be available on the electronic version, e.g., merging with audio version, a “making of” the book, video interviews with the author… stuff that wouldn’t raise the costs so dramatically but which would make the ebook a different product, not necessarily more than the paper version but no longer perceived as less than it.
40. G on Jan 31st, 2010 at 11:21 am
I tink it’s naive to believe the McMillan posture: I actually have no issues with dynamic pricing (I would simply wait until the PB was issued, then buy if the e price was lower), but that is not what I see in much of McMillan’s real pricing- I don’t see them offering older books at reasonable prices. I also wandered over to Orb and Tor to see what I could buy directly and I don’t see anything, so Im not impressed. I value a physical book as an object to sell, loan or donate (or in certain case, keep and adore). E books are much less valuable without physicality if it’s a book I really like, and publishers aren’t interested in addressing my concerns. So I’ll stick with Amazon (and if a better non-Kindle comes out I’ll break the DRM and take my books with me- fair use) while they give me what I consider a reasonable price on a non-physical object.
Btw, the non-DRM option is indeed very, very new on Amazon.
As I mentioned over on Whatever, from 5 books a week I have gone to 5 physical in the last three month, and those because cheaper in physical form than e-form. McMillan had best set up a forum where I can buy their books if they don’t want to use Amazon and I’ll check it out just as I go to Baen to buy. Because I don’t want a physical book anymore unless it’s graphics hevy, a Pratchett (don’t want to break my HC run) or a childrens book (my kids are too young for that type of electronics and there are usually illustrations in their books).
41. Moshe Feder on Jan 31st, 2010 at 11:25 am
Nice job, Toby. Now instead of having to repeatedly explain all this at length, I can just refer people here!
42. Kate on Jan 31st, 2010 at 11:38 am
Amazon now allows publishers to choose to add/leave off DRM on each ebook publication they sell. It was required before, but now it’s in the hands of the publisher, not the seller.
TB: In their direct publishing arm yes. Cory Doctorow’s been talking to them about taking a non-DRM stand and getting bupkiss. They’re still using DRM in audio quite happily. There’s a disconnect, and it’s not all publisher, though I agree, publishers are crazy obsessed with DRM and need. to. stop.
43. Shel Holtz on Jan 31st, 2010 at 11:41 am
Great post, and clearly an Amazon fail that denies choice to its customers.
But I did have to point out that it wasn’t Mark Twain, but rather Blaise Pascal in a letter to his son who wrote, “I didn’t have time to write a short letter, so I wrote a long one instead.”
TB: Thank you, I’d been told it was Twain, I should have sourced it first.
44. Geoffrey Kidd on Jan 31st, 2010 at 11:49 am
I’ll believe the “drop the price over time” when I see it. To give a current real-world example, it’s been six years since the paperback of Jacqueline Carey’s “Kushiel’s Avatar”(Macmillan) was released. The paperback is currently listed at Barnes and Noble for $7.99. The eBook is currently listed at $20 ($17 if you’re a member of their “buywise” club) over at Fictionwise.
TB: Really, then you must not be spending a lot of time online buying books. Crystal Rain, my first novel, was available on the Kindle, for less than the paperback. Sly Mongoose, the book the 9.99′rs obsessed about, was pegged to the hardcover. So this *exactly* what Macmillan is moving to do. You’re not telling the truth, pure and simple.
I once asked the president of Fictionwise about this little “discrepancy” and he replied “The publisher sets the price.”
If you have any way to contact whoever actually runs Macmillan, remind him of the old Roman proverb: “Facta, non verba.” (Deeds, not words.)
At the moment, given that Amazon appears to be using nuclear weapons in a wrestling match, I’m inclined to say “A plague on BOTH your houses.”
45. Peter on Jan 31st, 2010 at 4:40 pm
If I may suggest? Before you call people liars you may want to take a moment to check your facts.
Fictionwise page for Kushiel’s Avatar: http://www.fictionwise.com/ebooks/b9804/?si=0
Barnes and Noble page for the paperback of the same book: http://search.barnesandnoble.com/Kushiels-Avatar/Jacqueline-Carey/e/9780765347534/?itm=1&USRI=kushiel%27s+avatar
Now tell me again how Macmillan’s ebook prices are going to fall over time?
TB: Because right now they’ve fallen on my titles and many other titles. You said they don’t. I told you they did on mine, so your blanket assertion that Macmillan doesn’t do this at all is simply not true.
46. Peter on Jan 31st, 2010 at 5:17 pm
Your assertion that I pointed out the pricing is simply not true. Your assertion that Geoffrey Kidd, who did, made a blanket assertion rather than an example is simply not true. You’re not telling the truth, plain and simple.
TB: Geoffrey Kid made a blanket assertion, you’re backing him. Macmillan does drop prices over time.
If you’d like to say “some Macmillan books don’t seem to have dropped” then I’ll agree with you. Otherwise, stop trying to troll.
47. Jaws on Jan 31st, 2010 at 5:28 pm
I’d like to put forth a couple of cautions about this entire mess –
(1) It’s not all about fiction. Fiction is only a relatively small proportion of the market; nonfiction is the dog, fiction is only the tail (and a pretty stumpy one at that). In particular, this concerns the price breakdowns for the sunk costs in a book; nonfiction covers are seldom even half of what was stated, but other costs (such as indexing, permissions for quotations and illustrations, the illustrations themselves, more-highly trained and therefore expensive copyeditors, etc.) usually overwhelm that. Further, it’s MUCH more complicated to take a nonfiction work — whether or not it is already in some flavor of SGML — and turn it into a readable e-book. One word should send readers running scared: tables.
In particular, Macmillan has a large number of nonfiction imprints — one of the best-known being Scientific American Books.
(2) Those concerned about later restrictions on what is in the marketplace (like TNH) are right to be concerned… and I’m afraid that this particular fiasco applies directly to the GBS fiasco. If I thought the leadership at Amazon was intelligent and Macchiavellian enough, I might even consider this a preemptive strike at the GBS settlement structure that will be discussed in its appearance by the Open Book Alliance, of which Amazon happens to be a member. I don’t think they’re that Macchiavellian, and the fact that this is version 3 (or higher) of AmazonFail in the last twelve months says all that needs to be said about their intelligence.
TB: the comment about nonfiction is very germane, it points to my own filters/blinkers, as the last time Amazon did this it was to a smaller publisher of nonfiction books, I believe. You may have the right of it.
48. Jeffrey A. Carver on Jan 31st, 2010 at 5:38 pm
Excellent summary, Toby.
A correction to several comments about Amazon and DRM. While it is true that individual authors can choose DRM/no-DRM, the situation is different for publishers. According to E-reads, the publisher of many of my ebooks, they are required by Amazon to use DRM. They’ve asked, they don’t want DRM, but if they want to sell through Amazon, they have to use it. Look at E-reads titles at Fictionwise, and you’ll find them multiformat and DRM-free. The same titles in the Kindle store carry DRM.
The reason I know this is that I asked to have my ebooks DRM-free, if possible. Not possible with Amazon or Sony, and I suspect also B&N.
TB: Jeffrey, you’re quite right about the DRM, people aren’t hearing this.
49. Jeffrey A. Carver on Jan 31st, 2010 at 5:43 pm
Oh–re Geoffrey Kidd’s comments about ebook prices *not* coming down with the paperback release, there’s no question he’s right that it happens all too often. But my guess is, it’s not through design but through inattention.
Many unfortunate things happen in publishing through inattention.
50. hugh57 on Jan 31st, 2010 at 5:49 pm
Several months ago, you posted something about Borders and their reordering policies. I made a comment on that thread, something to the effect of “Dudes [meaning Borders and B&N], if you don’t sell what I want to buy, I can’t give you my money!” Now that Amazon has pulled not just the ebook editions of Tor (and other) books, but the paper editions as well, I say the same thing to them.
As a reader, who doesn’t own a Kindle, nor buys ebooks in any format (I’m a die-hard print fan), I am now even less inclined to make the jump to digital books, and if/when I do, it will likely be with somebody other than Amazon. Too many issues have to sort themselves out before I make the jump, and I suspect that sorting out will take quite some time. And Amazon has shown that they can’t be trusted to even keep even their print supply chain open, much less their digital chain. I’m a major Science Fiction fan, and Amazon would do well to note that Macmillan, through Tor, is responsible for a large chunk of the SF published these days.
For now, I’ll find some way to buy books in print, because despite what Amazon would like you to believe, they are not the only place to buy books — print or digital, online or brick-and-mortar. And once I buy my books, they’ll be mine, to do with as I please. Amazon won’t be able to sneak into my house (the way they apparently can sneak into your Kindle) to take them back. The local police will back me up on that. And printed books don’t have any of that silly DRM.
And to parallel something I said on Scazli’s blog, I’ll buy your books if I have to drive to Bluffton to do so.
51. Jeffrey A. Carver on Jan 31st, 2010 at 6:38 pm
Amazon has announced that they are caving.
http://www.amazon.com/tag/kindle/forum/ref=cm_cd_tfp_ef_tft_tp?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdThread=Tx2MEGQWTNGIMHV&displayType=tagsDetail
“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. “
52. AMusingFool on Jan 31st, 2010 at 7:05 pm
I have to apologize for not reading the other comments, so hopefully nobody else has mentioned this, but you’re missing one major point.
You talked about the law of supply and demand several times, implying that you must charge a price for an eBook or you’re breaking the law of supply and demand, but that’s exactly why you CAN’T expect to be able to charge a price.
When the supply is infinite (and with an eBook, it is), you cannot expect to be able to charge more than a nominal fee.
Yes, there are fixed costs that must be recouped somehow, but expecting to make them back on an infinite good is a bit of a fantasy. It might happen, but there’s no reason why it should happen.
Think of the eBook more as a marketing tool. Take advantage of the fact that they cost you nothing beyond those fixed costs. Think of that extra proofing of the digital copy as a fixed marketing cost. As that, it’s damned cheap.
You pointed out that almost no copies of that one eBook went out (several hundred), but what I’d like to know is: a) how many of those free copies were then given to others (I know, no way to determine this)? But, it can possibly be teased out by looking at sales. b) Did sales (of the print edition) increase during that time?
(b) is how you really tell whether giving it away worked.
Cory Doctorow is one author I know who has been giving away ebooks of his books for ages, and he insists that it improves his print sales (and, to return to my earlier point, keep in mind that print copies are NOT infinite).
And also remember, for 99% of authors (heck, maybe 99.9%), the biggest threat to making money is not that someone might copy their books, it’s that nobody will have heard of them to want to copy their books.
TB: Try reading through some of my own free eBook experiments on my blog to see answers. I’ve run the numbers and saw a very slight uptick. Other Tor authors saw no difference in sales. Not everyone has Boing Boing to both finance fiction as a loss leader or to gain awareness. Cory (who I have the luck to call a friend and who I like, and who I am even giving content to for his short story collection experiment and love his ideas) has what in classical marketing is known as a ‘platform,’ one of the biggest online. Releasing a free eBook is good, it builds awareness, it does not equal instant profit. There is more than one way to make this. It’s why people with really huge blogs, even without giving books away, sell a ton of them, and celebrities sell lots of books even though they shouldn’t. They have an existing platform.
As I mentioned in the damned article above, when we *gave away* copies of Crystal Rain a very small number of people tried it.
That’s because a) time is a finite resource, even convincing people to try freebies is hard.
All that being said, I continue to experiment with loss leader freebies. Any traditional marketer will point out awareness is needed to build brand.
But ‘infinite’ demand? No. Not in practice.
53. John Ginsberg-Stevens on Jan 31st, 2010 at 7:52 pm
There’s a lot of good information here, particularly for an aspiring writer still getting a handle on the business side of writing. Thanks for taking the time to lay all of this out.
I am closer to Cory Doctorow’s perspective on DRM, and I think from that point alone it is obvious that this is about control. Selling these e-books with DRM is about maintaining control over them (in a way in which, as Jay Lake has pointed out, makes e-books more of a service than a product). I have heard commenters in other places argue that this is just Bezos being Bezos, but that seems to be too facile a conclusion. Amazon as a company wants to stay on top of every product or service market they can, and this is a move designed to flex their commercial muscles to keep not just market share, but to keep a near-monopoly on a growing, still evolving market.
I’ve been reading about the Hachette Incident in relation to this and I think that precedent spurred them to take this action immediately, to show how serious they were and perhaps to leverage their position in subsequent negotiations. Now that it (apparently) has not worked, they are going to prime customer loyalty to support their position and try to make Macmillan into the black hat. They aren’t going to stop looking for leverage, and I doubt that they will halt their attempts to force the market to do their bidding.
54. JTG on Jan 31st, 2010 at 8:05 pm
Tobias,
You have written what is clearly sincere piece. I do think you miss a couple of key points. Unless you have information to the contrary you can site, DRM on the Kindle is inflicted on by the publishers more than Amazon as was the case with iTunes. Kindle book form is an encrypted wrapper(proprietary) of an open book format. You also fail to acknowledge that Macmillan has a vested interest in preserving the status quo in an error of increasing disinter-mediation. It is my opinion that in the decades to come the way you run your professional life will far more resemble how Ani Difranco runs her musical life than your life today. Publishers like record companies before them are the walking dead.
Joe
TB: JTG: you’ve written a sincere comment. But you missed the last paragraph of my article which includes Jeffrey Carver’s statement. I suggest you try rereading it:
” According to E-reads, the publisher of many of my ebooks, they are required by Amazon to use DRM. They’ve asked, they don’t want DRM, but if they want to sell through Amazon, they have to use it. Look at E-reads titles at Fictionwise, and you’ll find them multiformat and DRM-free. The same titles in the Kindle store carry DRM.”
55. Alexandra Jackson on Jan 31st, 2010 at 8:25 pm
Thank you for this post and your insights into the situation. I’m an avid reader and a lover of books as physical objects and despite my initial skepticism I’m a proud Kindle owner and user. I’ve spent considerably more money on books in the past two years since owning a Kindle than I had in previous years. Why? Because it’s easy, it’s instant gratification, and I don’t add to my groaning bookshelves. I continue to buy cookbooks in hardcover. And if a favorite author publishes a book I’ll buy it in hardcover. Other than that I was taking books out of the library or buying paperbacks or used books. Publishers and authors don’t make money when I take a book out of the library or buy a used book.
I used to work in book publishing and I know the costs associated with making a book, many of which you pointed out. But what about the shipping costs, the production costs (paper, printing, etc.), and the warehouse costs? These are costs that do not apply for e-books. I don’t want to screw publishers or authors (my life would be gloomy without you!), but I object to paying $14.99 for a book that costs $17.63 or something in hardcover. I agree that it’s worth seeing what the market will bear, but from my perspective ultimately sales will suffer. Price a new book at $14.99 and reduce it to $9.99 after a few weeks. The people who want it immediately might be willing to pay more, and those who have a $9.99 ceiling will still buy it. I’ve paid more than $9.99 for e-books in the past and I’ve made a vow not to anymore. I feel like I’m getting ripped off if I pay more. It’s frustrating that some publishers price new books north of $14.00 and price their paperbacks at $9.99 (who wants to pay $9.99 for a backlist book they can buy in paperback for $10.12?)
If I’m searching for a new book on Amazon I’ll buy it if it’s $9.99 more often than not. I won’t if it’s more…instead I add my name to the waiting list at the local library. That’s lost sales for authors and publishers. I’m still putting money in Amazon’s coffers since I’ll buy another e-book instead – one for $9.99 or less, and one that most likely isn’t published by the same publisher as the $14.99 book and almost definitely isn’t written by the same author. If all publishers started pricing new e-books at $14.99 I would stop buying new e-books.
Apologies for the long-winded comment!
56. jk on Jan 31st, 2010 at 9:01 pm
As far as the cost of making an eBook goes, bad news: no one — NO ONE — is proofreading those books. I have read some truly horrible Kindle editions of bestselling books. Missing paragraphs, mangled words, etc. When I complain about the typos, they offer to refund the purchase price — and then they pull the book from the store.
TB: I know, b/c there is so little money in that department they’re just auto-generating e-copies and tossing them out. Which is frustrating.
OTOH, you may read more than me, I have to say, the last 15 books I read on my Kindle on iPhone were well formatted and proofed.
57. MarkC on Jan 31st, 2010 at 9:11 pm
My big problem with eBooks is that you don’t buy them, you rent them and have the appropriate rights. You can’t loan them to other people or sell them and occasionally they just disappear when the publisher so chooses. So $10 for a rental is not acceptable, $2-$3 is more reasonable.
Don’t shoot the messenger, but you need to change your thought process. You are no longer buying anything, you are purchasing the ability to read the book. Nothing else.
Mark
TB: I’d agree with you if you were buying books that deleted themselves after you read them. I rent movies from amazon.com for 2-4 dollars that disappear after 48 hours of watching them. But I ‘buy’ them and they remain in my Amazon ‘locker’ ‘forever’ and pay a higher price.
So you’re actually the one that needs to change your thought process and not talk down to me.
I support non-DRM. You might want to ask, as in the last paragraph of this article you’re commenting on, why Amazon mandates that large publishers who sell through Kindle have to have DRM while they pretend to advocate for consumers.
58. Teresa Nielsen Hayden on Jan 31st, 2010 at 9:50 pm
Let’s say you farm this all out and pay an up and coming artist $3000 for a painting, a proofreader $1,000 to go over and copy edit, and then later proof the manuscript,
Proofreading, copy editing: very different processes. Also, if someone did the copy edit, they can’t proofread the book. There are errors they won’t see. Each pass needs a fresh pair of eyes.
There’s a third freelancer: the slugger, a.k.a. the second-pass corrections checker. You don’t know they exist because there usually isn’t time to let the author check the corrections in the second pass. They can’t be the same person who did the copy editing or the proofreading.
a designer $1,000 to design the book’s look and feel all throughout, and a freelance editor to help throughout all this.
There’s also a production editor. And if the freelance editor isn’t talented at packaging books — that’s everything from cooking up the cover to writing sales copy to soliciting quotations — you may have to hire another freelancer whose business cards will have the word “marketing” somewhere on them. They won’t be cheap.
I have no idea what an editor costs who’s freelance,
It varies. Note: it’s Lou Aronica’s current gig. Make of that what you will.
but let’s lowball this and say that person makes $2,000 a book, like the copy editor
You might get a good copyedit at that price, depending on the length of your manuscript.
(this would mean, for an NYC based editor, that they’d edit 24 books a year to make a freelance living. A lot of hustle).
A vast amount of hustle. Also, since they’re being paid by the book or the page, they’d have to bail on or give inadequate attention to projects that have complex problems, and they wouldn’t be able to spend time developing the author or the category.That’s a $7,000 initial investment.Lower end of the range, but a plausible figure. Even at publishing industry wages, what we do isn’t cheap.
59. Farrell McGovern on Jan 31st, 2010 at 10:21 pm
Your commentary about how cars are sold is only *one* of many ways to sell a product…Another popular way to sell, especially when you are introducing a totally new product or product category is to sell the new product very cheaply, to create a demand for it, then slowly, or dramatically raise the price to what they think the market will bear. It’s just as valid and as widely used as the model you discussed.
But to speak to the Amazon vs Macmillan…realistically, if either side wins outright, we all loose, since this is just a pissing match between two megacorps over who will control the market. Almost universally, customers have been siding with Amazon this. And the first law of retail says that the customer is always right. If the customer feels that the price is too high, they will buy similar product elsewhere, cheaper. That’s why places, as evil as they may be, like Walmart exist.
Similarly, if Amazon wins, it gets to promote and fixate it’s DRM encumbered reader and ebook format (although everyone knows it’s just a variant of Mobipocket (Moby Pocket?) format), and they retain the same level of control and discounts that a retailer has, even though they also operate as a distributor.
Authors and Readers should push both parties towards creating a compromise, and don’t allow either of them to gain control of the channel, because that, really, is what this fight is about.
60. Elliott Peeler on Jan 31st, 2010 at 10:37 pm
Okay, I read the post and all of the comments but I guess I’ve missed it. Are you saying that the publisher receives a percentage of the sale price of the book over and above what they received from the retailer during the wholesale transaction? My understanding of this issue is that the publisher sets a retail price and the seller pays a percentage of that price for the book. So MM tells Amazon that the retail price is twenty eight bucks and thus Amazon can buy it for fourteen. Amazon pays the publisher the fourteen dollars and then goes and sells the book at loss to themselves for 9.99 in order to spur the sales of e-books/Kindles. Is this how it’s been working? I’m sincerely asking if I’m missing something here because I don’t see how Amazon’s sale price has anything to do with what anyone on the publishing side gets paid. You made your money as soon as Amazon bought the book didn’t you? Why do you care what they sell it for? Please tell me what I’m missing because I want to understand this issue in order to make decisions about how I spend my money in the future. I have a feeling I’m going to end up perturbed at someone and I want to be certain it’s the correct someone.
TB: Does the Scott Westerfeld link help you:
http://scottwesterfeld.com/blog/?p=2138
?
61. Bryant Cutler on Jan 31st, 2010 at 10:57 pm
I don’t understand why so many readers are taking Macmillan’s side in this. When I see a publisher say “We’d like to do variable pricing from $4.99 to $15.99″ what they’re saying is “We’d like to price our best, most popular books at a significantly higher price.” Anyone who thinks books they’ll want to read will end up at the shallow end of the price pool is dreaming – if it wasn’t going to cost readers more, the publisher wouldn’t be doing it.
TB: Well, I must be dreaming, because before Amazon yanked me off their website, my Macmillan eBooks that came out in 06 and 07 were available for cheaper than paperback prices.
Yep, that’s me, dreaming.
62. Barb Ferrer on Jan 31st, 2010 at 11:03 pm
Tobias, thanks for including me in the Mega-rundown, although allow me to make my own correction of the math:
Under the agency model, the publisher sets the price for the e-book at fifteen dollars and takes 70 percent, so they make $10.50 per book, which is less than they were making before and Amazon makes $4.50 per title, which is more.
Yeah, not $11.50.
Math, not my strong suit.
Which is why I’m a writer. *g*
63. Jim on Jan 31st, 2010 at 11:29 pm
I agree that there is an overhead to production… But the fact is that when a book is set for printing there is NO reason that work should have to be reduplicated 100% for an ebook. Hardcovers require all that work… but the ebooks can be made from that same labor for very little additional cost.
TB: care to clarify? How much is ‘little additional cost.’

I suspect that when an ebook is released at the same time as a hardcover, the ebook is virtually pure profit…. No printing costs, no shipping costs, no storage fees, no dealing with overstock, etc.
TB: right, those things add how much of a percentage to the cost of a book? Care to break the figures down for me?

I just don’t buy it. In fact I will have to boycott Macmillan till they come around and remember how important the customer is. The customer is aways right.
If they want $15+ for an ebook, fine. I want an ebook that works exactly like it should. No page number. No OCR artifacts. Links that work. Etc. AND I want a hardcover included for that hardcover price too.
TB: Here we have entitlement on display.
You can demand gas cost $1 too while you’re at.
Any other prices you want fixed, comrade?
64. mattmc on Jan 31st, 2010 at 11:49 pm
This is just a painful step in the eventual disintermediation of the publishers. They won’t have much reason to exist if eBooks become popular.
I completely agree on the subject of variable pricing being more logical. It isn’t fun, because it makes me think about how much something costs instead of whether I want to read it. (Would I rather get two good books at $5 or one great one at $10?) So, as a consumer, I hate it. As a producer of content, I want to charge the price the market will bear. And seriously, the OED should cost a little more than the poetry pamphlet some guy banged out while drunk one weekend…
On the other hand, your section “So what price point do you need to cover your costs?” is wrong, because you list all of the key production costs, and then point to weak eBook sales- leaving out the paper book sales figures. Obviously the editorial costs will factor in quite heavily.
I also think you are grossly overestimating the costs of those services in the global marketplace. Prices for stuff that can be outsourced are dropping precipitously. I have gotten designs, with graphics, done for $200.
65. Rick Maynard on Feb 1st, 2010 at 12:01 am
This is well written, but misses a few points.
Neither side in this comes out smelling like a rose, as both had made some major dick moves. Neither is acting in your best interest or mine. This is nothing more than a battle over primacy for one e-reader or another, coupled with an attempt by MM to save an industry that is doomed to irrelevance within the next two decades.
Amazon pulled a dick move in removing even print editions of MM books.
But Macmillan are the ones that are truly interfering with the free market principles you talked about.
First, you talk about publishing companies laying people off. Had Amazon been trying to hammer them into a lower wholesale cost, that would have been valid.
But they haven’t. Amazon has been paying Macmillan the full wholesale price that Macmillan asked for. They’ve been selling the books at less than cost in order to maintain Kindle’s dominance.
Macmillan has demanded that Amazon quit selling e-books below cost. Not because it affects their end of the purchase— They get what they ask— But because they would rather throw in with Apple and want to use their own size to force the market into the iPad.
They are both within their legal rights, but both are being dicks.
66. Christine on Feb 1st, 2010 at 12:36 am
Very well written and researched. Thank you. I think Kindle is too expensive and their downloads too expensive. Having a hard copy has many advantages like sharing it with someone else or keeping it on your bookshelf. Amazon has already shown that if they pull a story/purchase, they will delete it from your Kindle without notifying you. You can’t back up your Kindle purchases nor share with another. When you buy it, if’s like software. It’s only for that device for as long as you own it or for as long as Amazon allows it to be on THEIR Kindle.
So, all the people that purchased your publisher’s stories, did Amazon wipe out people’s Kindles of those stories? Am I being too cynical?
I’m an author whose books sold on Amazon take lower percentage due to their high percentage take.
67. Al Jigen Billings on Feb 1st, 2010 at 2:02 am
All I know is that I’m not paying $14.99 for any ebook fiction. Not yours, not anyone’s (and I own all of your books). I’ll pay a premium for a hardcover that will last many years or a trade paperback that I can loan to people but the utility and value of an e-book is less than that of a mass market paperback. I own a Kindle DX and have more than a hundred purchased books on it. If I see a novel that I want to read and it is priced higher than $10, I’m unlikely to buy it, especially if the physical form is only a few dollars more. In all likelihood, I’ll just wait for the mass market and then buy it then (if I still remember it and feel like it a year later).
This may make me a bad fan but I read a LOT of books and I use the Kindle to keep from putting box after box of books in my garage or otherwise having to deal with them. That said, my wife generally reads a lot of my fiction, which she can’t do with a Kindle, so there is a trade off. E-books are not real books and shouldn’t be priced like they are. If that means a publisher chooses not to make e-books, that is their choice as well.
TB: Where did I say eBooks should be priced like real books? You’re fighting something I didn’t say. Nor did I say you were a bad fan for choosing to buy what you did. I’ve never belittled or said anything negative about people who don’t want to pay more than $9.99 a book. *I* don’t pay more than $9.99 a book unless it’s a book I really, really want. But I will pay *anything* for a book by a new author I dearly love. $14.95 for Vernor Vinge’s next book, the day it comes out? I’m there.
68. Ugly American on Feb 1st, 2010 at 2:07 am
What paper publishers did was lock up shelf space and then if you didn’t let them take 80 or 90% of your book sales and hire all their people for art, editing, advertising and so on, they wouldn’t let you on the shelf in any major store. Now the paper publishing cabal is crying because Amazon is squeezing them the exact same way.
So kick publishers to the curb like Trent Reznor. His figures showed that even selling at a much lower price with voluntary payment he netted more in his first month than he had in a year with the record company’s ‘help’.
TB: And how did Trent Reznor become so famous? Oh, right, he initially go there via that ‘help.’ Much more impressive if you were to back your own talking points and rhetoric with an artist who worked their way up with digital downloads, independently, all the way from the beginning.
I know I can name some (they’re on my hard drive and I support them). Can you?
Yeah, you’re not self published or unpublished, by any chance?
Fight the power! LOL
69. CEG on Feb 1st, 2010 at 2:34 am
All of this, and much more, is why I became a Wingman. (ie http://artemiseternal.com & http://www.youtube.com/watch?v=SBXOwWC48PM&fmt=22 ) “If you’re an artist, we’ve got your back.” Thx for publishing this info.
70. alaska on Feb 1st, 2010 at 4:45 am
Thank you for this – I have been very curious throughout this process about the actual money involved – what the publishers/authors/booksellers make and don’t make.
I buy from amazon because they are quick and have what I want. Usually they have textbooks discounted, which, when you are spending over $500 a semester on books alone is a huge benefit.
I also like that the amazon marketplace sellers don’t have to pay a fee to list the book, that you can choose your own price, and amazon only takes money if it sells and at a price it tells you upfront. (Unlike, say, e-Bay, which charges you just to list, and then takes a cut of the sale – if it sells.)
I tried a Kindle when I stayed at the Algonquin Hotel in NYC. I couldn’t get used to not turning pages. However, as someone who reads anywhere from 3-9 books in a one week vacation, I definitely see the allure of having a machine that I can read on that allows me to not fill my entire suitcase with books – especially since airlines are charging for bags now. (Which look at that – people are paying it, because they have no other choice. It sucks, but people are still flying.) However, nothing will ever be the same to me as holding real books in my hands, smelling them, turning pages, closing the book and seeing the cover – or my joy at having rooms covered with full bookshelves.
In these crappy economic ties, I use my library a lot. (I am also bad at returning books on time, and consider my late fees part of my donation to the library.)
The only thing I want to disagree with is your analogy of medication – as someone who works in the mental health “industry”, I can tell you that the pharmaceuticals are not really concerned with “what the market can bear” – nor do they necessarily lower the price of the medication once costs have been recouped. (I could be wrong about that – I don’t know how much they spend on developing a single medication.) But I have so many elderly clients who can’t afford their medication that try to cut their dosage in half, or take it every other day, or other crazy things to try and afford them. I wouldn’t have such an issue if Medicaid DID cover all medicines, but it doesn’t. Not to mention the people that can’t afford health insurance, much less prescription drug coverage – or the programs that consider anyone on any possible psychiatric medication to be “high-risk” and therefore raise the premiums and deductibles.
Where your analogy DOES work is here: the big companies own the patent on their medication for at least 10 years. The price won’t lower (almost always) as long as the patent exists – and then usually it only lowers because you can get it in generic form (like a paperback vs. hardcover) – and the expensive name-brand is still sold at that high cost, and they still make money off the generic. But you can’t choose to wait for the paperback version of your medication the way you can with a book.
With that said, thank you for explaining the ins and outs of this to me in a way that I understand. Can you explain to me (or point me somewhere) how the author makes money in this scheme? How an advance is figured out and then royalties? I know each house is different, but a general idea would help me a lot.
71. Raphael on Feb 1st, 2010 at 6:25 am
There is another thing I do not understand in (not only) your math: How come you can say “X% of a book price is for covering initial expenses”? That _has_ to be untrue because books are often sold infinitely long (read: for a long time). I guess the calculation really done is sth like that:
We _expect_ to sell N copies of that book. We had M$ expenses so far (Author, Reviewing/Editing process, Art, merchandise included). Production, shipping and/or storage of one copy costs K$ on average. So we price one copy at (K + M/N + P) initially if we want to make profit P.
Of course, this is not done. If it was, popular books (larger N!) would be cheaper than unpopular ones because M/N would be smaller, obviously. But I am not that pricky (but sound arrogant, though ), I will grant the publisher the extra margin P they get by making the popular book (unnecessarily!) expensive because that way they can afford to publish and promote new authors with unsure N. In the end, they want and have to make profit.
My point is: After those N books are sold (and I guess N is chosen “safely”), initial expense is paid for. What they now need to charge is K + P’ only! This, obviously, is not done, too, at least not completely. What you call price regressesion because of product aging (assuming here) might be due to exactly that symbolic calculation. But nonetheless, I expect publishers to make more profit by copy the longer a book is on the market because they will _not_ drop P below a certain level (given they do not need to get rid of the stuff) but at the same time add M/N to P.
This argument, btw, can explain publishers’ ideas for eBook pricing: Despite smaller K and and maybe negelecting M/N (because they cover that with print copies), it is P and P mainly that drives the price. Profit.
Concluding, I want to claim that profit P is the most important factor of publishers’ pricing policy. Only so can the actual pricing observed be explained. And consequently, they expose themselves to the harsh market and have no (or very, very few) arguments why a book should cost X in their opinion. If I am right, all their whining can be ignored.
Proof me wrong if I am, but this is the only way it does make sense to me.
(Maybe, we have yet another problem of perception: Readers might think in terms of big books like The Wheel of Time, Harry Potter or Twighlight which sell in millions and could really be sold at K today without anyone the poorer. Authors, on the other hand, might think of small books that have a first printing of only several thousands that will only maybe be printed a second time, books that _have_ to make profit in that first run they can eat and sleep for. For the respective factions, argumentation should be different.
What I ask the small author then is: Are you paid with the dollars earned by the big ones? No? So where do those dollars go? If there is no cross-financing, publishers are even more greedy than I concluded for myself above.)
72. Raphael on Feb 1st, 2010 at 6:33 am
Oh, I have to add one thought to my last post: Of course, if P was really small in the beginning, later effects can hardly be interpreted and my conclusions are all wrong. And, of course, I subsum in P profit made by all parts of the chain: author, publisher, retailer and what else.
In short: My line of though only really works if that overall P is quite large.
73. Steve on Feb 1st, 2010 at 10:04 am
It seems to me that you’re looking at this from a very biased point of view. Why are you upset about amazon ‘using their size’ and not about MacMillan doing the same thing?
TB: I’m not upset about them using their size, but them about pulling a really dick move. No book retailer has pulled author’s books during a dispute. This is a whole new level of dick. You have a biased view.
As one of the largest book publishers in the US, THEY decided they could play hardball and tell amazon “If you want to sell our books, you either sell the way we tell you to, or we won’t let you sell them at all 7 months.”
TB: Nope, they said they’d like the same deal that Amazon’s competitor was offering them. Amazon said ‘only if you agree that you won’t sell any of your books anywhere in electronic form for more than 9.99′ which is a clause Apple doesn’t have. Macmillan said, no, you can continue selling eBooks under the current arrangement, we just will now delay new releases for a number of months before they get to you. Amazon said ‘fuck you then, we’ll pull all your business, not just ebooks.’
So in essence, you’re wrong.
With physical merchandise, the retailer can sell the merchandise for whatever price they want, including at a loss, once they buy it from the wholesaler. This is how things have always worked, and how they should work.
TB: Which Amazon can keep doing if they want. They said no.

The artificial restrictions placed on digital products via licensing and DRM must be stopped. A digital copy of a song, book, movie, etc should be treated no differently than a physical copy of the same item, and the buyer should have every right to do with it as they please once they’ve paid for it. (Sell it, loan it, burn it, give it away, deface it, etc.) ‘Licensing’ a product to try and restrict the consumer’s rights just makes the product less valuable in the long run.
TB: I don’t like DRM. It’s not the point here, if you read the last article of the above post, you’ll see Amazon has the same position as publishers on DRM. This is not about Amazon being anti-DRM and publishers being for it. They’re both for it.
So, you’re wrong on all your points.
Which kind of makes you biased.
74. Dennis on Feb 1st, 2010 at 10:14 am
Just to clarify one bit of publishing math (the $7,000 publisher investment):
“At 99 cents it takes 7070 sales to break even.”
“At $9.99, it takes 701 sales to break even.”
“At $15 it takes 467 sales.”
Well, yes, IF you leave out all royalties; all discounts to wholesalers or retailers (which run 40% to 65% in my publishing channel); all overhead to run accounting, customer service, and shipping; all marketing and publicity; you have the $7,000 in cash and don’t need a line of credit; and the most important “if”—IF you sell every copy directly to a consumer without any transactions fees on the Web. Of course, no one produces or sells books—print or digital—in this fashion.
The reality for the vast majority of one or two print-run books is that editorial and prepress cost are a minority of the cost. Printing the paper version at 5,000 copies would be cheap at $1.00. There’s another $5,000 in cost. Overhead and everything else adds another $5,000. So now we’re up to $17,000 for the book. If both print and digital editions are sold, then both have to contribute to the break even point. So if the actual cost is $17,000 to produce and market a $14.99 trade paperback, then the break-even point hinges on the AVERAGE discount between high-discount chains, wholesalers, retailers, and on-line resellers. If the average discount is 55% for all those sources and the royalty is 10%, then the publisher keeps $5.25. The break-even point is 3,238 copies, or more than half of the initial press run of 5000. If the publisher sells off the remaining 1,762 copies, he makes $9,250. Seems like a lot? In reality, a portion of that has to cover any other books that failed to sell through a print run and recover author advances and production cost.
Artificially low prices for digital versions, divorced from actual costs, means less contribution to the break-even point. The real revolution comes when the digital product is the ONLY product, and you dispense with printing cost. Yes, that lowers the cost by 30%. Everyone gets cheaper digital books. So, until the revolution, “digital always means cheaper” isn’t viable.
75. Keefieboy on Feb 1st, 2010 at 10:46 am
Isn’t it about time the government showed some interest in Amazon’s monopolistic practices? And wouldn’t it be great if all the big publishers got together and refused to deal with Amazon? I know that second point is probably illegal, but hey, it would be nice to see some concerted standing up to the bully going on.
TB: Yes, that would be illegal And I don’t think it would be good for anybody, actually, so I’d rather that not happen.
76. Gigaflop on Feb 1st, 2010 at 10:58 am
I’m a little confused.
TB: Really, what part of the article? Care to quote a line. I can help you if you explain what confuses you?

Are you writing this on behalf of the poor little authors, or are you writing this on behalf of the publishers?
TB: Oh, you’re being snarky and a dick. I get it. I’m writing it to explain the situation. Do you need that said in a way that confuses you less? I can use diagrams or blocks or very small words if these ones are a bit much for your poor, confused, patronizing brain.
The publisher is a middleman. And your LONG diatribe attempts to paint Amazon as the evil corp attacking the poor content creators, when in fact that’s not the case at all.
TB: The LONG diatribe, as you call it, does no such thing. I’ve gone through great pains to point out they’re both large corporations having a spat. What is dickish, is how Amazon went about trying to resolve its differences. No bookstore chain, no matter how large, has ever just pulled all author’s books by a publisher like this. Does your poor brain wrap around that?
The middlemen exist to bring the content from the “poor little authors” to the consumers. In the retail space, the retailers have the say on the price. PERIOD. This prevents price fixing. By Apple entering into “AGENT” agreements with the publishers they are allowing the publishers to set the prices instead of the “resellers.” Amazon is a reseller. The price that the publisher sells the product to Amazon is up to the publisher. (And not the poor little authors) And subsequently, if Amazon wants to take a loss on that, and sell it for less, then that, BY LAW, is Amazon’s right. They are trying to CREATE a new market here.
TB: Actually, the publisher is not a middleman. They helped develop the product and can be more accurately viewed as my ‘partner.’ Amazon is the middleman. Amazon isn’t trying to CREATE a market. They’re trying to OWN a market. Or they wouldn’t be so terrified of Apple’s entry.
Your rhetoric fails.
This doesn’t hurt the poor little Authors. I don’t understand why you’re being a corporate shill for Macmillan, but you certainly do not have the best interests in mind for neither the authors nor the consumers. You basically argue that you want the middle men (the publishers) to get the lion’s share of, well, pretty much everything.
TB: I don’t understand why you’re such a corporate shill for Amazon, and why you feel like talking down to me when you don’t even understand what you’re talking about it. Further posts like this from you will be deleted.
Shame on you.
TB: Shame on you right back.
77. Wizard Prang on Feb 1st, 2010 at 11:00 am
eBooks are horribly overpriced, period.
While I am not arguing with your “upfront” figures, those expenses also include the cost of producing hardback and paperback editions; eBooks are “at the back end”, as far as I am concerned (much like digital downloads in the movie industry), though I have no problem with flexible pricing.
TB: My upfront costs were just the non-printing ones, you’ll note. I didn’t add those in to demonstrate how much investment there is in creating a book *before its even printed.* The cost of printing is about $2/book.
From my point of view, eBooks have a poor value proposition. A hardback can be lent, given away or re-sold. Thanks to DRM, e-book is yours forever. Therefore it has poor value for me.
TB: I would agree, I’m not sure what your point is. Where did I argue it was a good value proposition? What are you arguing against in my above post?
At $4.99 each I would buy one or two eBooks a month. At $9.99 or more I will visit the library.
TB: What about $7.99? How many books will you buy if they’re 8.99. And what about $9.99 exactly, how many books are you planning then?
As far as the topic in question, each party is acting in their own self-interest.
TB: Well, of course, that was my point. One party is being rather more dickish, but yeah.
78. Richard Thomas on Feb 1st, 2010 at 11:01 am
Fantastic article, thanks for taking the time. As an author who is waiting for his debut novel to come out this June, a neo-noir thriller called Transubstantiate, I wonder what I should do? Let it sell on Amazon? Move it to other online retailers? UGH. This sucks. But thanks for the enlightenment.
Peace,
Richard
http://www.transubstantiate.net
79. demonio pellegrino on Feb 1st, 2010 at 12:16 pm
I disagree, but I appreciate your honesty and the time you spent explaining this to us. I didn’t know you, and I now will make sure to download (legally) some of your books to my Kindle.
BUT, I strongly disagree with some of your points. Strongly. This is all about publishing companies trying to make more money. A legitimate objective, make no mistake.
TB: How is that disagreeing with what I’ve said. I affirmed both company’s right, Amazon, and Macmillan, to try and make more money.
But one that goes against the interest of many consumers like me, and potentially against the interest of many writers. Because, for instance, if I am willing and ready (and I am actually doing this) to buy lots of ebooks at 9.99 for my Kindle, I am surely NOT willing and NOT ready to buy the same books at 14.99. So the result is not higher margins for the publishing house and the author, but NO margin.
TB: The observed fall off rate some were quoting is that 30% fewer customers will buy over 9.99. So if you have a 50% higher price at $14.99, that 70% who will buy and are not you, actually more than make up for your part. That’s the weird part about free markets and supply demand. Just like some people buy a Lexus, but others refuse, and Lexus still is going strong. So you’re claim of NO margin is actually incorrect.
Amazon is not the Red Cross: they also try to maximize their profit. It so happens that this time, the interest of readers coincides with that of Amazon. Surely not with Apple’s or MacMillian’s.
TB: Really? Because with Macmillan’s agency plan, the range of book prices goes down to $5.99. In other words, the bottom is generally cheaper than the current plan we’re seeing. The top end, is higher.
At some point in your post you say something that I agree with entirely: ebooks should be priced under the price of paperbacks. CORRECT! The problem is that publishing houses seem to think (or want us to think, as if we, the readers were stupid) that ebooks were an alternative to hardcovers. Which is, simply, not true. They are an alternative to a cheap paperback. Therefore, pricing them at the level of a hardcover kills the market entirely.
TB: Publishing doesn’t want you to think eBooks are an alternative to hardcovers, what they want is to recoup initial investment then lower prices. Just like devices or fashion come out more expensive at first, books come often in a more expensive format (hardcover) to recoup losses faster. The publisher wants to be able to do that in eformat as well. With books that come out right away in paperback, there would obviously be no higher price.
I surely as hell am not going to spend 15 dollars to own a file of something which I can have phisically for 9 dollars (the price of most paperbacks on Amazon).
TB: If the paperback of the book is out, it’s not $15. The $15 is for new releases and hardcover price parity. So I’m not sure what you’re arguing there.
Re the price of ebooks: it is VERY easy to calculate it. Take the price of a book (say 15 dollars) take out paper, distribution, storage. Leave all the other costs (editors, design, anything). Basically, take out 60%. Add a 2% for the conversion and other minor stuff, and you have your price: less than 7$ for a paperback.
Or am I missing something?
TB: Yes, yes you are.
80. Steve on Feb 1st, 2010 at 12:18 pm
“TB: Nope, they said they’d like the same deal that Amazon’s competitor was offering them.”
The same deal? What macmillan wanted was total control over the prices of their books at retail. And Macmillan told Amazon that if amazon wouldn’t agree to that, they couldn’t sell MacMillan ebooks until 7 months after they were released.
Do you disagree with those facts?
TB: those aren’t the only facts. Macmillan is asking Amazon for the same deal Apple is giving it on the iPad. It’s saying, the market has changed, here’s what your competitors are offering. If you match that, we’re cool. If you can’t, then we’re going to delay bestsellers 7 months.
“Amazon said ‘only if you agree that you won’t sell any of your books anywhere in electronic form for more than 9.99′ which is a clause Apple doesn’t have.”
Could you provide a source for that? I haven’t read anything to that effect from a news source.
TB: From Charlie Stross, an outsiders guide, which is linked in my above post. You did read the above post, correct?
“Macmillan said, no, you can continue selling eBooks under the current arrangement, we just will now delay new releases for a number of months before they get to you.”
In other words, if Amazon doesn’t like MacMillan’s forced pricing, they are shut out of the market for 7 months.
“Amazon said ‘fuck you then, we’ll pull all your business, not just ebooks.’”
Which is absolutely within their rights. If a supplier comes to a business and says “We insist you double your retail prices for our product, or we won’t sell it to you anymore”, there is nothing wrong with the retailer choosing not to buy from that supplier in the future.
TB: It is, in the post I wrote which you are commenting on (which you did read, right, you’re not just spouting off to things you THINK I said, like some internet troll, right? Right?) I said repeatedly, Amazon has the *right.* But it’s still a dick move.
Frex, if you tell me fuck off in a negotiation, and I say you’re a dick by you have the right to say that, and tell everyone you said ‘fuck off’, saying ‘I have the right to say that’ isn’t a defense. You’re still a dick. See? No bookstore retailer has ever done this to a publisher, or more importantly, targeted a publisher’s authors, during a negotiations like this.
Your arguing that I claim Amazon has no right to do this is what’s known as a ’strawman argument.’ By that, I mean you set up a position I actually didn’t argue, and knock it down.
You can stomp on the straws all you want and declare victory, and feel self important, but what are you accomplishing by trying to win an argument I didn’t propose?
81. SGT Mazzone on Feb 1st, 2010 at 1:23 pm
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bks shld NVR CST TH SM R MR THN TH PPR VRSN.
[Where are the vowels?]
SGT Mazzone is a troll. Since trolls can only grunt, his comment was adjusted as well
82. FRChris on Feb 1st, 2010 at 1:56 pm
Thanks for this excellent article.
I apologies for my English, I’m french (but I read primaly in english, and primaly SF .
I like Amazon and I’m not sure there are the only bad one in this, but I agree with you : What they did is not right.
Shame on them to keep authors hostage in this barbaing.
I am less convinced by your demonstration with the price of an ebook. When you’ve done the work for physicals books, I can’t believe that the extra effort to create the digital edition justify more than 10$ an ebook :
- Once the work is done, you have all the time you want to
cover back your investement. It cost virtualy nothing (no storage cost and permanent stock).
- A lot of ‘addict reader’ like me buy second hand’s book (in marketplace), this give no money to the author/editor.
With a fair price (6/7 $), I would not bother with marketplace. I think it’s really a good aspect of ebooks.
- Maybe an ebook should be sold a few month later, but I really think that an too expensive ebook will piss of customers and send them to piracy.
Anyway, thank you again for this really interresting author’s perspective.
TB: Well, thank you, but I posted the figures in the entry above. So far everyone who’s disagreed with me hasn’t provide an actual alternate model of sales vs price in a simple economic argument that proves me wrong. I’d love to see one. So far all I’m seeing is a lot of ‘the price *should* be’ and magical thinking.
Well, I’d like gas to be $2/gallon and a free Camry. But that ain’t how free market economies work.
83. Duiker on Feb 1st, 2010 at 2:20 pm
Here’s my bottom line. A product is only worth what people will pay for it. I will not pay $14.99 for an e-book. Period. I also do not think I should have to wait for an e-book to be released well after the hard copy. I don’t think I’m alone in this. You know what I CAN do? I can go online and download that book for free (often times before it is even released in stores). Yes, yes I know it is illegal and morally wrong and if I had the authors address I would gladly send him/her a cheque, but I won’t pay $14.99 for a digital file. The end.
TB: What does this comment have to do with my post? Are you arguing an actual point I made. I can’t tell. Because I didn’t say you had to pay 14.99. Just that in capitalism, and with a supply and demand economy, some things are priced out of reach.
I mean, I refused to pay more than $10,000 for a car. I’ll never pay 10K for a car. As I said in my article above, I don’t pay more than 9.99 for an eBook unless it’s by a super favorite author. But I support the right for people to choose whatever price they want. I also don’t buy design clothing. That’s the beauty of free market economics.
If you can’t afford 14.99, I understand that too. Pirate away. I really don’t care. I’ve been down on my luck too, and used libraries, for many years.
The end.
All that means is that I don’t buy expensive things. Apparently you don’t either. Your comment is noise.
84. Al Jigen Billings on Feb 1st, 2010 at 2:42 pm
I will add that the interlinear commentary is a bit disruptive to the original comments from people here. If you want to comment within the same comment to people, can you do it to the end? I’d like to read what people have to say without an interjection every line or two from you. It detracts from the message of the original party to read your responses inline with their original statements.
I do know it is your blog so that you can do what you want but I’ve been blogging since 2001 and any inserts or edits in comments by a blog owner are generally considered to be a violation of etiquette, if nothing else.
TB: This is entry is a special case entry. Most people have tossed etiquette out the window on arrival, most aren’t actually reading my post but attacking strawman arguments. Thus, I’m commenting in line.
85. Al Jigen Billings on Feb 1st, 2010 at 3:16 pm
All right. Makes sense.
86. Raphael on Feb 1st, 2010 at 3:25 pm
TB, I understand that you get upset about some comments or even only their phrasing. Almost all (mine included, btw) seem to be badly informed (how could they be different?) and some are formulated such that they can be taken as offense. This seems to be an emotional topic for you — one can see you care. But it does help _nobody_, the least yourself, if you keep insulting commenters, even using only their own words back at them. I remember that from back in the kindergarden. I thought it was silly even then. For the sake of objectivity, you should read such comments you feel offended by, wait an hour and answer with a cool head.
Why do I even care? Because I think you are better than that (not knowing you better that what you’ve shown on this very page) and because it speaks for us commenters that we have no outright flame war here despite your, lets say, not diplomatic or even mediatory attitude.
If nothing else helps, think of Hanlon’s Razor
(For the unknowing: http://en.wikipedia.org/wiki/Hanlon%27s_razor )
87. aardman on Feb 1st, 2010 at 3:37 pm
Wow, we once had the Age of Enlightenment. Now we are in the Age of Entitlement.
#82 Duiker claims if it’s not available in terms that suit him then he has every right to steal it. Amazing. These are the children we have raised. We blame ourselves.
88. Ev on Feb 1st, 2010 at 4:20 pm
Absolutely fascinating article, no need to apologise for it being long – it’s this sort of depth and thought that’s needed to understand all positions.
I found you through Charles Stross’ posts on the subject, really glad I did.
Thanks for posting it.
89. Jason Venter on Feb 1st, 2010 at 6:16 pm
Thank you for taking the time to explain everything with excellent examples and information. I now understand where authors and your publisher are coming from and I appreciate that information.
I’ve noticed in other industries (video games in particular, which is where I focus much of my energy) that people truly do feel that there is no victim if digital media is stolen or if a low price is paid. It’s nice to see someone point out the costs associated with the digital media and the very real impact on those who create the media that people such as myself enjoy downloading.
Similarly, some people believe that the capitalist system is inherently flawed and that authors and other artists should do what they do for the love. I disagree, of course, because someday I would like very much to earn a decent living while producing fiction that I and my hypothetical readers would love. I resent anything that gets in the way of skilled authors doing so now and in the future, and I wish nothing but the best for those who take a stand against harmful retail practices now so that my future as a non-starving artist is assured. Keep fighting the good fight!
90. Travis Butler on Feb 1st, 2010 at 6:43 pm
“There is another thing I do not understand in (not only) your math: How come you can say “X% of a book price is for covering initial expenses”? That _has_ to be untrue because books are often sold infinitely long (read: for a long time)”
This is ignoring the cash flow factor. A company has to meet expenses *today* – payroll, rent, utilities, etc. etc. They can’t tell their creditors ’sorry, we’ll pay you when our next 5 books earn out.’ As a requirement for staying in business, they have to arrange things so that they cover those initial expenses within a timeframe that lets them keep their creditors paid. I don’t claim to know what that timeframe is, but I’d bet it’s less than a year, and it’s certainly not ‘infinitely long’. Perhaps a more accurate statement is “X% of a book price is for covering initial expenses within a timeframe that allows the publisher to pay its own expenses.”
“I am less convinced by your demonstration with the price of an ebook. When you’ve done the work for physicals books, I can’t believe that the extra effort to create the digital edition justify more than 10$ an ebook :”
I think the point he’s trying to make is that if an eBook edition is released at the same time as a hardcover edition, it needs to bear the same share of the initial production cost as the hardcover edition. You have a ‘cost to prepare a book for publication’ – call it C – that has to be paid before you can publish a book in *any* format, which is what Tobias is talking about. There may be additional costs related to producing the hardcover or eBook edition, but C is the cost for producing *any* edition.
Now, let’s say you release the hardcover and eBook editions at the same time. If you include C in the price of the hardcover, but not the eBook, you are subsidizing the price of eBooks at the expense of hardcovers, which causes the following problems: 1) It’s unfair to hardcover purchasers; 2) Every time an eBook sells instead of a hardcover, the publisher loses the money that was supposed to cover C, meaning it loses some of its ability to meet expenses; 3) It’s unsustainable in the long run if eBooks replace hardcovers, because then there will be no hardcovers to pay for C.
91. Ronald Calitri on Feb 1st, 2010 at 7:39 pm
Great news that Amazon has refused to continue its boycott. The issue made its way into several of the major economics blogs; so that was that.
Wish you luck in selling more than 700 copies, and will certainly buy one of your books when the come out in paperback. But not in the new $9.99 joke format the people who want to sell paper now that newspapers are gone are foisting. Old style, thanks very much, for my income is too low. Even if it were not, as a practicing economist I must act as I can to oppose the monopolistic competitors who have brought the world economy to such a sad state.
One major issue I hope you will learn: the purpose and economic benefits of price floors and ceilings. You are correct: all those $140.00 economics textbooks I have my students buy in a prior edition just as good for $0.49 condemn floors and ceilings.
You say, “During the 70s the government tried to put artificial prices on gas, resulting in shortages as hoarding occurred. Most economists that I’ve read demonstrate that while artificially blocking a higher price sounds like a good idea (populism), it’s actually bad economic news.”
To the contrary, the practice of policing markets (Adam Smith’s word) with price floors and ceilings is one of the most ancient and effective methods of economic stabilization. Several thousand years, ago they became common once it became notable that when harvests were bountiful, prices fell so low that farmers were unable to sustain themselves; and when harvests were bad, people living in towns were unable to survive on limited incomes.
In the absence of ceilings, speculators purchased stocks and drove prices well above any affordable level, resulting in mass starvation. See the poverty laws of Queen Elizabeth I. Without floors, speculators would offer less than the living costs of farmers, driving populations to the mountains and marshes. See FDR and the Great Depression, though you need not look so near. Nor so far, as sadly hundreds of millions of farmers in the developing world suffer lower prices during harvest season every year, unable to hold due to dire necessity and rent.
The situation in farming words is similar. From your position, it may be that the reason average sales in Sci Fi are so low is that the average youth cannot purchase enough to become an addict. The future died because it became too expensive.
For myself, I’ve been buying paperbacks since the days of Heinlein, Anderson and Dick. Only 3 hardbacks over ~10,000 paperbacks, 1 Weber, 1 Stross, 1 Moon. Critical mass my friend, and a good bicycle!
Regards
TB: thanks. The range will actually be $5.99-$14.99, not a single set price, as many seem to have misread. I’ll be quite happy to move lots of eBooks at the lower price range of cheaper than a paperback!
92. MathMan on Feb 1st, 2010 at 9:14 pm
Nice article. Long, well thought out, however, your math doesn’t add up and the fundamentals on a pure ebook publish.
A up and coming artist $3000 for a painting
(E-Books don’t need a painting, quality internet web designers do their work in software anyway. I’d say $1000 for a decent “image”.)
A proofreader $1,000 to go over and copy edit
(OK)
A designer $1,000 to design the book’s look and feel all throughout.
(We’re talking SF e-book correct? For what? $0)
A freelance editor to help 2,000.
(Seriously, you could save the 2 grand and coordinate the web designer to do the one photoshop drawing, the editor yourself over the internet. Sorry $0 here as well)
I’d say costs would be more in the $100’s dollar to 2-3K range and you the author would get 70% of the cost you (the author) decide to charge. Redo your math at 70% of 6.95 a copy and see if its appealing to you.
Have you looked at Amazon’s DTP and what it would take for to publish your next book direct to your fans?
TB: The editor is not for coordinating, its for making the book better. The leanest presses that put out a quality package (well edited, proofread, visually appealing) cite $7,000. Are you involved in creating books? Or are you just pulling numbers out of the air? Would you care to up the cash and go into producing some eBooks and get back to me on how my numbers don’t add up? B/c this is how I make my living, and I’ve crunched the numbers, and I’m not risking my mortgage on your method. Are you? Because if you’re willing to pay me for the 6 months dedicated time it takes to write a whole novel, I’m willing to try what you’re saying here. I don’t see it making more than a few thousand but I’m happy to be proven wrong if you’re willing to foot the risk.
93. Rick on Feb 1st, 2010 at 10:53 pm
>Proofreader: this final pass looks for any final typos that have slipped through everyone else.
I wonder why this step seems to have been missed out of most paperbacks I read. And it’s not just a few “final typos”. They often seem to be rife in the second half of books, and in the later books in any series.
94. D on Feb 2nd, 2010 at 10:36 am
It seems like your point on DRM needs updating?
http://news.cnet.com/8301-19882_3-10439335-250.html
TB: No it doesn’t. Amazon will let anyone who *direct publishes* (ie: self publishes) not use DRM. That’s because self publishing sales are so miniscule, according to Amazon, they don’t care if they’re DRM or not. But so far Amazon requires use of DRM from large houses. It also uses DRM for all Audible products (makes sharing my audiobooks with my wife a pain). Cory Doctorow at Boing Boing has been hammering at this forever.
So I’m sorry to say, you’re not right here.
95. KingTaco on Feb 2nd, 2010 at 11:01 am
I’ve read quite a few of the links from authors on this Amazon vs. Macmillan, Stross, Scalizi, here, etc. No business wears a halo, so it’s not necessary to believe one side or the other is fighting ‘the good fight’. However, without any offense meant, most of the author take’s read as ‘When my Ox gets gored…’ material. This is a straight up fight for turf between supply chain and publisher/producer, happens all the time. When I read, as in this post, a storm of geek-bait about ‘monopolies’, ‘DRM’, etc., it looks like authors are chumming the field a bit to get internet-geek support.
The nut graph of your argument is that Macmillan is standing up for ‘dynamic pricing’, while Amazon is *dickishly* sticking with a medium-low fixed price point. Apple also makes an appearance as a guardian of the right and true.
The reality with the ‘dynamic pricing’ argument comes off as slightly semantic, and the shot about price fixing seems a bit of internet-bait. Amazon is not a Government price-fixing a commodity or food staple, they are a successful, large supply chain making a price point decision. If they set the price point too high, their market will suffer, and you’ll see it (the price point) change. “Monopoly’ is thrown around a lot in this spat, but no business is forever. Amazon maintains it’s edge through volume, and staying lean and mean in pricing. You know that, as you said you were an Amazon Prime customer. The assumption is given that they’ll sell cheap for a few years, then diabolically jack up the price. There’s a ring of possibility in that, but also a whole lot of internet-geek bogeyman too. If Amazon suddenly explodes the pricing, a new service will come along and start to chip into their business; Amazon does not own the internet, nor are they the only distribution company in the US.
To also carry the ‘Macmillan stands for the consumer with dynamic pricing point’, to me you have to be making the argument that Macmillan thinks that many new books should start off less than 9.99. Let us not attribute to any business the qualities of saintliness vis a vie the customer, including Amazon or Macmillan. The question is what business’s have a profitable business model that gets the product to the customer with the best pricing. If Macmillan is arguing many new releases should be sub 9.99, as a consumer I like that. If, as I suspect, they are arguing that most all release should be 14.99, with the eventual option to slip below 9.99, now I’m not liking that so much. As a consumer I’d rather be able to bank on the medium-low price point of $9.99, then leave it to publishers to ‘back off’ the pricing in a timely manner.
Macmillan is a publisher, fighting to keep it’s traditional share of revenue from the old distribution system. Amazon is a large middle-man based on a volume model, looking to eat a bigger piece of the pie with the argument they occupy a large point of the old distribution model. Macmillan’s way has more money/freedom going to authors, and most authors are on that side. I don’t begrudge any author that view. However, money is the bottom line for both sides in this, let’s not play to a fiction that only Amazon is throwing their weight around. Macmillan, leveraging Apples appearance, appears to have won this round, and time will be the fair judge of this issue. If in six months time many new ebooks are at or below 9.99, or new books at 14.99 quickly (4-8 weeks) reduce to sub 9.99, the argument can be made that authors/publishers retain their more traditional slice of the business model and customers see a decent value. If in six months we see many/most new ebooks appear at the 12.99-14.99 range, and the aggregate price stays there for a long time, then we can say authors/publishers kept their traditional place at the expense of customers compared to Amazon’s 9.99 price-point.
96. Eric on Feb 2nd, 2010 at 11:05 am
A few critiques. Let me start by saying that I agree with dynamic pricing. I also agree with Amazon. In a free market, different market participants can take different approaches – which is exactly what Amazon, Barnes & Noble, Apple and other competitors are doing today. This competition will typically drive us to a stable market relationship that will be mutually beneficial to producers and consumers.
First, Amazon is not a monopoly player. They have to compete with Barnes and Noble, Borders, Costco, Wal-mart, Apple iBooks, and other book retailers – both physical and eBook. Amazon is within their rights to determine if they want to take a loss on an eBook. Monopolies control entire markets. Amazon only controls its storefront.
Second, you list the costs of book production. These costs are recouped across both the physical book and eBook. If you were to sell the eBook exclusively, then I could understand the argument of requiring the eBook to recoup the full $7,000 plus generating enough revenue to cover the author’s advance/writing effort. But, if you’re selling tens of thousands of physical books (with their additional physical production costs) then the cost of production has been recouped. Selling the eBook at any price at the point provides additional margin to you. The risk here is that you cannibalize sales of your physical books with lower priced eBooks.
Book production is the same essential model as software production – very high fixed costs with very low variable costs. eBooks eliminate all the variable costs because they require no physical production. In fact, the only variable cost for an eBook is the wireless delivery – which Amazon incurs (to the best of my knowledge).
Third, a $14.95 price for a new eBook is essentially what I pay for a new hardcover purchased at Costco. Using a non-scientific test – just checked Costco.com – I can buy most any new release in hardcover for roughly $15 to $20. So, why should the eBook price be the same? The eBook version has lower production costs (no paper, ink, binding, etc.) and no distribution costs (packing, shipping, unpacking, stocking shelves, etc.). The other competition with dynamic pricing is book sharing (see DRM discussion below) and used book stores. Why pay $5.95 for a book that’s been in print for a while when I can get it for the same (or less) at a used book store?
My biggest complaint with the Kindle is the DRM. When I buy a book, I retain full rights to resell, give away, or otherwise share the book. With the Amazon Kindle, I can’t do that. I believe this issue will resolve itself over time with the introduction of new competitors in the marketplace. Just as the situation has improved with music via iTunes. Fortunately, correcting DRM is a simply software upgrade and shouldn’t require a change in hardware. In fact, I can already download software that will strip the DRM off the eBooks on my Kindle.
Reading eBooks on an iPhone or BlackBerry is not the same as using an eBook reader. I hate reading on the smaller screen. Plus, reading using an LED screen is harder on the eyes. The e-ink displays are much better – it’s the same as reading a physical book.
Long response shortened – I agree with you regarding dynamic, market driven pricing. But that will happen with competitors in the market. Amazon is within its rights to try to keep eBook prices down. And McMillan is within its rights to not sell to Amazon. This time, Amazon blinked.
If prices are too high, the eBook market may not develop. Why pay $250 for an eBook reader, when the books cost the same at the local bookstore?
97. Bob on Feb 2nd, 2010 at 11:30 am
(Apologies if this has already been mentioned in comments, I only skimmed.)
Could the case not be made that Amazon’s prime interest is in growing the e-book market? This market is still relatively small (as you indicate). My feeling is that when people consider buying an e-reader, they look at the price of e-books and compare them to paperbacks. I’d say that 9.99 is a pretty good magic number for that, and every single e-book priced above that will turn people off. It follows that by setting that maximum price, Amazon is speeding the uptake of e-books.
98. ameryx on Feb 2nd, 2010 at 11:41 am
I’m trying to think of this from a microeconomic point. If we do a marginal analysis on the pricing of e-books, the question becomes: what is the marginal cost or producing the e-book, and what is the marginal revenue?
The way you have answered that is to estimate the fixed costs of pure e-book production, attributed that to e-books, and tried to recover those costs from the sales of e-books. (I refer to the $7,000 in production costs.) But the bulk of those costs are incurred whether an e-book is produced. You correctly identify the incremental costs of an e-book (the software to convert the computer typeset of the physical book to a format compatible with the e-book reader; and maybe someone to proof the output.)
Microeconomic analysis would ask what those incremental (marginal) costs are. Profit is maximized where marginal revenue equals marginal cost.
Now, I’m not an expert in the publishing industry, but here are some marginal costs that are NOT incurred by e-books: raw materials (paper, ink), production (printing, binding, boxing), inventory carrying costs, distribution costs (there may be some tiny cost for using the network to “deliver” the e-book, but this does not compare to the cost of shipping tons of physical books). Nor is there any risk of over-producing e-books: you’ll never see a “remainder” table for e-books. The number produced is exactly the number purchased.
Publishers derive other benefits from e-books, especially if DRM is applied: there is no after-market of used e-books to undercut sales of new books.
Another way of looking at this dispute: I own a Kindle. As a consumer, I “justify” the purchase price of the unit by looking at what I save in buying books, compared to buying them in physical format. The narrower the difference in price between a physical book and an e-book, the more books I have to buy to justify the price of the Kindle. The universe of people who buy 100 books a year is smaller than the universe of those who buy 10 books a year. So, from Amazon’s perspective, one might conclude that the narrower the difference in price, the lower the demand for the Kindle itself.
As for the negotiating tactics: Amazon could have yielded to MacMillan’s demands, then explained to Kindle owners why the pricing on MacMillan books is different. My guess (based on the whining seen in book reviews for any Kindle title priced higher than $9.99) is that Kindle owners would have effectively boycotted MacMillan titles until the price dropped. But if e-book sales are so small, that may not have bothered MacMillan very much. Once MacMillan provides proof of the concept that a publisher can make Amazon back down on the price-points for e-books, I would expect to see other publishers lining up to get the same deal MacMillan got. Perhaps Amazon thought the same, and so treated the negotiations as affecting ALL e-books, not just those from MacMillan. So, they took measures, “pour encourager les autres”. Measures which seem extreme when seen in the context of a single publisher may seem more rational when seen in the context of all publishers.
And now I read that Amazon has backed down. I hope that some enterprising journalist writes the story of this negotiation. There are lots of lessons to be learned…
99. D on Feb 2nd, 2010 at 12:22 pm
I’m confused:
http://toc.oreilly.com/2009/04/over-160-oreilly-books-now-in-kindle-store-without-drm-more-on-the-way.html
It appears from this that the compulsory DRM was one of the main reasons O’Reilly had not made their catalogue available in the Kindle Store, and that they made their catalogue available, DRM free, in April of last year after the removal of that restriction. O’Reilly is certainly not an independent or small publisher, so it seems like this restriction has been gone for nearly a year now doesn’t it?
TB: Doesn’t seem to be. Ask Cory Doctorow and Jeffrey Carver.
Let me explain. I’m not saying Macmillan is championing DRM free. They’re not. What I’m saying is, Amazon and Macmillan both agree they want DRM free. Amazon is not some white crusader asking for DRM free. In order to get rid of it, places like O’Reilly have to bargain hard for it. They’re the exception. And people who try to get DRM free with major publishers are being told amazon won’t allow that.
Make sense?
100. jgreene on Feb 2nd, 2010 at 12:22 pm
You were correct. Your commentary is really too long. My initial impression is that Amazon is running its business the way it thinks is best for it’s customers and stockholders.
Sony and now iPad are competitors to Kindle. McMillan and Amazon, I am certain, will probably work something out. If not, I’m not going to concern myself with the EVIL AMAZON and David-Like McMillan. Life isn’t fair; neither is business.
101. Kevin R.C. O'Brien on Feb 2nd, 2010 at 12:27 pm
What struck me about this whole thing, is this: why only Macmillan? Then I realised: Amazon wants to make an example.
It’s a bit like the pattern bargaining that the UAW practiced when they didn’t own any of the North American auto companies. They’d strike one company only, generally the one with the hottest products at the moment, attacking the company’s market share, while obligingly going to overtime for the others, as the competitors picked up the sales slack. The struck maker would soon concede, and the UAW would take that contract to the competitors in turn. They’d usually accept the terms without forcing a strike. This tactic lost much of its utility when, beginning in the 1970s, import and transplant makers disrupted the cozy cartel. (There had always been imports, but they were numerically insignificant before this — a bit like independent publishers vis-a-vis the giants).
This pattern negotiation only works if you have what’s essentially a cartel — so it works against modern Big Content (five publishers, what is it, four record labels?). Right now, Macmillan and its various captive labels (and, of course, their authors) are losing market share as would-be buyers choose, at least in some cases, substitute products.
I don’t mean to drag the UAW/Big-3/bailout battle in here. This isn’t really about that, except as an example. I do think that you can look at how pattern bargaining benefited or harmed the players in that tableau (workers, union managers, corporation, its managers, its stockholders, and last but perhaps most important, consumers) to see how pattern publishing may play out.
An economist would probably say that some disruption to consumers and producers is an ineluctable result of the rise of a cartel.
102. David on Feb 2nd, 2010 at 12:58 pm
Question: can we agree that the eBook market and the printed book market are two different markets? That seems to be what you’re saying in your commentary — at least that’s what I got out of it. I think we can mostly say that if you own an eReader such as a Kindle, that your preference would be to buy an eBook and that if you don’t own an eReader, your preference would be to own a physical book.
TB: Well, I don’t know if we can agree, because that isn’t true. Studies are showing people will use/buy both. And from the fact that the publisher that develops a print book is also usually developing an eBook, the economics are tied together, which is what makes this hard for people to understand. Until eBooks are most of the market (they’re at 1% now), it’s all bound up together.
If that is indeed true, then pricing for one market ideally should have nothing to do with pricing for the other market. As such, this becomes more of a conversation around: taking cost out of the supply chain (or removing links in total), making access easier and cheaper (i.e., downloading an eBook for $9.99 instead of driving to the store to buy a physical book at $15), and trying to jump-start a business model / market.
TB: Except that your foundational point to think that, isn’t true. The making of almost all popular books right now are done print & eBook. They have to be. eBook sales represent 1% of the market. If an author moves to specialize in only eBook sales, they’re giving up most of their income. You see almost no full time eBook only authors making a full time living. The few that are, are writing romance, at Ellora’s Cave. So you’re saying “if you give up 99% of your market, you can decouple prices! Isn’t that great!” And anyone who actually runs a business or tries to make a living laughs at you. If you don’t believe me, start a publishing company. You’re saying it’s easy, it doesn’t require any startup costs. Prove me wrong.
It’s the last arena where I suspect most of the conflict arises. Basically, people can see the “new business model” train coming, and everyone wants to be the engineer driving it. Amazon had established an approach to this market with their pricing and terms, and Jobs essentially stepped in and “bought” parity by offering publishers something they wanted: 1) high prices, 2) more price control, and 3) more control in general of the supply chain.
TB: Right, I wrote that in the above post.

Oh, and by the way, by giving publishers what they want and gaining access to the market, Apple is going to sell a TON of iPads . . . so from the publisher and Apple’s perspective, this is win-win.
TB: Um, the only way Apple is going to sell a lot of iPads is by making the consumer happy. I don’t understand how Apple only making publishers happy sells a ton of iPads. That doesn’t make sense. Apple’s goal is the same as Amazon’s: sell a lot of devices with a high margin, make at least parity on the flow of goods through them. Apple doesn’t make a profit on music sold through its store.
As a consumer, however, when I look at the direction this is going (high prices and new, more expensive hardware on which to read it), I can’t really call it a “win”. To me, recent events have set back the development of the electronic book/publishing marketplace by a couple of years. Most people, unfortunate as it may be, are “price point” buyers. Amazon’s $9.99 price point was a very good idea from a consumer’s point of view. We’ll see how consumers respond to the Apple/McMillan $14.99 price point.
TB: Again, Amazon doesn’t sell only $9.99 books. It buys books from the publisher for 50%, then it subsidizes a cheaper price point. So for example, Amazon chose to subsidize my Sly Mongoose (2008) eBook at a price point of $12.49, costing it $1 per book. So Amazon chose that price and how much to subsidize me. Since I’m not a megaseller, they don’t subsidize me much, they’re willing to do that. With my old backlist book Crystal Rain (2006), it’s $7.99. Amazon pays my publisher $3.99 for the book, and sells it for $6.99, making a $3 profit.
Under the new system proposed, my publisher chooses a range of $5.99 to $14.99, depending on the newness of the book.
So Sly Mongoose, when it first comes out, would be $14.99. Crystal Rain would be $5.99. Or $2 *cheaper* to the consumer. Sly Mongoose would then be bumped down to $9.99 or cheaper once that initial 5 month period of ‘newness’ comes out.
Thus in many cases, particularly for midlist writers, you would be able to get Macmillan books cheaper than the current system. Backlist books are, from what I’ve been told, going to be the same price, if not probably cheaper. Hot big books like Dan Brown type stuff, would spend 5 months or so being $14.99 as the book, overall for the whole company, in both hardcover and eBook, earns out the cost to develop it.
103. Varne Oafsen on Feb 2nd, 2010 at 1:27 pm
I really appreciated the time you spent explaining your perspective on the Amazon-Apple-MacMillan price fixing scheme. As an author you see things from a different perspective, and I expect you purposely left out a discussion of the concurrent struggle between Amazon and Apple.
The way I see it, Amazon was trying its best to ensure that there’s an advantage (cheaper books) for people who buy the Kindle, in order to protect the edge they have enjoyed as the 1st on the block. Apple was using the lure wealthier average customer to ink a deal w/ MacMillan, establish a relationship as a an eBook distributor, and cut into Amazon’s share of device sales. And MacMillan was taking advantage of what will probably be a short-lived opportunity to increase their profit margin on the eBook sales. They can’t manage without the tech companies that are defining the digital marketplace-in-a-device, and if they don’t exercise their power now, it’ll only be harder in the future.
TB: Actually, in all instances, the publisher loses short term income on this deal, if you slow do the math on how an agency deal works. They’re doing this because Amazon is subsidizing the lower priced eBooks, and publishers think long term it will be destructive.
Amazon’s tantrum did little more than generate free publicity. If they pulled MacMillan’s books, they increased the desirability of Apples iPad which might further erode the Kindle’s early lead and decrease revenue from physical books as well.
TB: Agreed. That’s why I was shocked Amazon chose the nuclear option. They could have dropped eBooks, seen a small argument between publisher and Amazon, maybe some small negative PR, and who knows how that would have turned out. Doing this, shows that Amazon’s running scared of the iPad (and I don’t know if they should be, Amazon took the market first, it’s hard to knock someone off a pedestal).
104. Joe McCell on Feb 2nd, 2010 at 1:44 pm
I have to say, I’m delighted that Amazon is doing this.
Having a $9.99 ceiling makes sense. Keeps things simple. If publishers don’t want to abide that I understand and they should be fine with amazon not selling their books.
The arguments in this long post prove my point. A bunch of non sequitors about DRM and how the author would pay $50 for some book he likes.
Free market does not mean every sale has to be free of other things. Amazon built something, and to use it, they have to get something out of it. That power came from the free market. There is no such thing as a monopoly on online ebook sales. That’s ridiculous. anyone can sell them. Amazon wants to keep things nice and neat and fair, and $10 for electronic books is more than fair for their customer friendly system. I know, I know, Amazon is rich and powerful and evil and should be demonized. They certainly didn’t handle the PR here well at all and were blindsided for no good reason.
TB: They were not demonized in the post. There is a monopoly, they have most of the eBook market. They’re scared they’re not. Publishers are negotiating (free market). Amazon wants to keep cornering the market using its current agreement. Thanks to the magic of the free market, the publishers can now say there’s a new kid in town offering a different agreement.
If a car maker gave away free cars for a while, to gain market, that’s free market as well. But don’t believe they’re going to do it forever, and don’t try and tell me, a parts maker, that all cars should be free. That’s entitled communist bullshit.
But I’m happy with amazon’s ripping down McMillian’s books. Go to a good publisher instead of one that can’t get along with Amazon if you want to succeed. I am an aspiring author and I will keep this in mind.
TB: Because I actually understand the economics of my business, I’ll be making a living at this for quite a while, thanks.

The authors are getting screwed here first and foremost, and those authors who blame Amazon forget that they contracted with McMillian. It’s your publisher that let you down and cost you money in a long term game. They think they can leverage ipad, with some help from other players, to keep prices high on e-books. They will probably fail, you will be the one to pay the price, and they won’t really care.
TB: They’re not trying to keep prices higher. They’re trying to keep prices on bestsellers and new books higher for small initial period, then lower them. In most cases, my backlist will be cheaper with this new deal. Care to address that?
No prob. I can always just get your books illegally if Mcmillian won’t let me pay for them on Amazon. I want to pay, but I guess I’ll just pretend the internet is a library until McMillian lets me.
Wow, that’s so mature. As a matter of fact, my publisher offered Amazon to keep my books, Amazon yanked them. Amazon has the option of sticking to the old 50% of list price, and subsidizing the price, but it *wants* the agency agreement b/c it makes it money. What it is fighting is who gets to choose the price. So it’s not Macmillan that’s stopping you from buying books, it’s Amazon.
105. DensityDuck on Feb 2nd, 2010 at 2:55 pm
Wow, that was a big long blog post just to say “I’m not selling enough e-books to make $9.99 a workable price point, but Amazon won’t let me charge more.”
I think we all recognize that you aren’t in the business of helping Amazon loss-lead its way into being a major publishing concern, but seriously: Lighten Up, Francis.
****
“Cars sold on launch day are NOT cheaper than cars sold a year later.”
Actually, a new-printing paperback of Starship Troopers is $7.99; I have a copy on my bookshelf with a cover price of $0.99.
106. Francis Hamit on Feb 2nd, 2010 at 3:08 pm
Dear Tobias:
Feel free to link to my comments on Jerry Pournelle’s “Chaos Manor” blog today. (A link there is how I found this thread). Let me add that I had a Kindle version of my novel “The Shenandoah Spy’ which I pulled because they refused to disable the “text-to-speech” feature on it. It did not sell that well in Kindle, about one percent of what the print edition has. Come to that, the print edition sales in Amazon.com are only about ten percent of the total. Most of my sales have been in the “brick and mortar” space, primarily with Hastings Entertainment stores , where I have done 16 book signings (so far).and “table events” at Civil War Roundtable meetings and the like. We are selling for the long term and expect sales to increase as the 150th anniversary of the Civil War passes by in the years ahead. Ebooks are a niche market. I have lots of them up on services other than Amazon. None of them sell very well. The demand simply is not there. It’s very hard to justify spending money to create more of them when the paybaxk is so slow. And that is simply a business decision.
107. jukin on Feb 2nd, 2010 at 3:47 pm
Looks to me like Big Books wants to screw the little guy. I’m going to write my congressman, senators, and our beloved leader Obama to attack you for profiteering.
Don’t like that? Too damn bad. You shouldn’t be making anything more than what government thinks you ought to. The people will rise up against this profiteering.
E-V-I-L Capitalistic writers and publishers will not be immune.
108. Doug on Feb 2nd, 2010 at 4:04 pm
Thanks for your good summary. However, I don’t think you’ve given enough credit to Amazon for proving that e-books could be a viable business in the first place. If they hadn’t underwritten the costs for the Kindle and eaten the costs to provide bestsellers at $9.99, I sure as hell wouldn’t have gotten into ebooks. And neither would Apple.
Still, what Amazon did with Macmillan (and its writers) was stupid. A much better ploy would have been to simply raise the prices of all Macmillan books to full face MSRP (no discounts) during the impasse with a note that if the publisher wants to set the retail price at Amazon, well, knock themselves out. And here’s Macmillan’s email if you want to leave them a message. Just a thought.
TB: I do give Amazon credit, though. Like I said, Amazon has a right to try and keep the market it cornered. Just as Apple has the right to fight to keep its catalogue going. What you said above is the reason why I read Kindle books happily. They beat the path in!
And yeah, the proposal in your second paragraph would have been a clever tactic to piss readers off that would not have turned writers against Amazon. If they’d done that, they would probably have gotten writers pissed at their publishers LOL.
When you use the nuclear option, you have to expect fallout
109. D on Feb 2nd, 2010 at 4:28 pm
“No it doesn’t. Amazon will let anyone who *direct publishes* (ie: self publishes) not use DRM. That’s because self publishing sales are so miniscule, according to Amazon, they don’t care if they’re DRM or not. But so far Amazon requires use of DRM from large houses. It also uses DRM for all Audible products (makes sharing my audiobooks with my wife a pain). Cory Doctorow at Boing Boing has been hammering at this forever.
So I’m sorry to say, you’re not right here.”
The article explicitly says that large publishing houses which submit their books as DRM-free MOBI are sold DRM-free. So you’re saying CNET and/or Amazon is lying?
110. D on Feb 2nd, 2010 at 4:37 pm
Should qualify my last post – the article says these are new developments (as of the middle of last month), so I am merely questioning if you or Doctorow are coming at this with outdated information.
111. Doug on Feb 2nd, 2010 at 4:42 pm
OT – as someone who wandered over from Instapundit, I was wondering if you’re not on Amazon, Tobias, where’s a good place to pick up some of your stuff in ebook format?
112. Kasmir on Feb 2nd, 2010 at 11:42 pm
Tobias,
Great, well reasoned and supported argument and thread. You changed my mind.
For background. I’m an elderly Amazon fan boy, but also in general a many-sigma early adopter. I already have over 300 ebooks on my Kindle, and am also Amazon prime for just about everything I can. Despite having innumerable books collected over 50+ years — including near complete collections of Vance, Van Vogt etc amassed along the way — I now will only buy hardcopy over Kindle ebook if the format dictates it, i.e. inherent graphical orientation and the like.
But please note this is a necessarily very selfish rant by one very active book purchaser.
The Amazon buying experience has completely changed my buying expectations, and I no longer enjoy the shopping experience in retail mini-warehouses stocked with arbitrarily fractional selections. Nor do I enjoy prudes of any stripe disapproving of my apparent curiosity in (say) LGBT or Military History as I “shop” the aisles.
Almost all my author exploration these days is by collaborative filtering, which I have found is vastly more predictive of my proximate tastes than some pretentious dweeb at New York Review of Books. Macmillan “marketing” is irrelevant to me, as it mostly seems to be an expensive attempt to pre-cache brick and mortar distribution with books I will almost never buy there again.
Macmillan means absolutely nothing to me as a brand. I couldn’t name anything that they publish. TOR, Baen etc means little more to me, although I was aware if them, and even after researching it I still don’t fully understand the connection to Macmillan. Nor do I want to care. Macmillan is completely generic to me, while Amazon has changed my life.
So I was prepared to disagree with you out of sheer brand loyalty to Amazon, but you’ve absolutely convinced me that they were wrong and wrong headed in responding to Apple/Macmillan the what that they did. They apparently now understand that.
Finally, I specifically agree with your point about the importance of value-pricing new book releases to maximize return on talent. Ironically, ebook distribution should eventually allow for much more dynamic and creative pricing policies compared physical distribution. So I’m willing to pay a premium to get early access to an ebook I’ve been waiting for. So Amazon was wrong in this case. They make plenty of mistakes, but all in all seem to be a organization that learns from its mistakes as well as its successes.
Thanks for helping them learn.
I’d like to express my thanks by ordering Crystal Rain (to start), but as of 2010-2-2 20:41 PST it’s unavailable for the Kindle — what gives with that?
113. Melissa on Feb 2nd, 2010 at 11:59 pm
I found your ‘what price should an eBook be’ section to be very interesting. You mention that there is an added cost to transferring a book to an e-format, but not the cost for the tons of paper, ink, printing, binding, packaging and shipping of paper books. (Not to mention the ‘hidden’ cost of producing paper, operating printing machines, the amount of fuel it takes to ships paper books to bookstores nationwide, and the wages of all those printers and shippers in between point A and B). Considering the amount of raw materials and human labor that are required to produce paper books verses an ebook, producing an ebook should save publishers money in the long run. You’re going to have a hard time convincing me that publishing an ebook costs a publisher as much as a paper book or that ebooks should be more expensive than a paper book.
That being said, I wish you a speedy resolution to this problem. The fact that you and many other authors are stuck between a book publisher and a book distributer is unfair to every author of books.
114. Travis Butler on Feb 3rd, 2010 at 3:18 am
(My apologies if I sound snarly; I’m starting to get rather savage at the amount of misinformation floating around in the comments section here and elsewhere.)
“But, if you’re selling tens of thousands of physical books (with their additional physical production costs) then the cost of production has been recouped.”
No, it *hasn’t*, if the eBook is released at the same time as the hardcover. That’s the entire point. If you release the HC and eBook at the same time, the cost of production has not been recouped yet for ‘the book’, regardless of the edition, and needs to be charged across both formats. If you charge the fixed costs against the HC only, you’re subsidizing the eBook at the expense of the HC, and every sale of an eBook copy instead of an HC is a share of the production costs that is not being recouped.
Now, if you delayed the release of the eBook edition until *after* the HC edition had recouped the production costs, then you’d have an argument that they shouldn’t be charged against the eBook edition. But if you’re releasing them at the same time and selling them against each other, you should be treating them the same way w.r.t. production costs.
“Selling the eBook at any price at the point provides additional margin to you.”
Only if you sell it after the HC has earned out the development costs.
“The risk here is that you cannibalize sales of your physical books with lower priced eBooks.”
Yes. The same situation exists with paperback/HC, which is why PB release is delayed. If you want to read it now, you pay a higher share of the development costs; if you want to get it cheap, the tradeoff is that you wait until the HC has a chance to earn out. Everyone seems to understand that this is the way the system works with paperbacks; why, then, should it work any differently with eBooks? If you want it early, you pay for the privilege; if you want it cheap, you wait until the development costs have been covered and the price drops.
But for the people who somehow think they’re entitled to have the book early without paying for development costs, just because they get the electronic edition? Reality check time.
115. Travis Butler on Feb 3rd, 2010 at 3:44 am
“Considering the amount of raw materials and human labor that are required to produce paper books verses an ebook, producing an ebook should save publishers money in the long run. You’re going to have a hard time convincing me that publishing an ebook costs a publisher as much as a paper book or that ebooks should be more expensive than a paper book.”
Right – and if you pay attention, the proposed pricing plan is right in line with this. When the hardcover is released at $20+, the eBook edition is released for $15; when the paperback is released for $8-9, the eBook price drops to $6. Exactly as you suggest, the eBook is cheaper than the comparable paper book.
The kicker here is that lots of people want to compare the cost of an eBook first edition, released simultaneously with the *hardcover,* against the price of the *paperback*, released up to a year later. Sorry, no dice. Like I said in my last post, if you want it early, you pay a share of the development costs; if you don’t want to pay for those, you wait.
116. Bruce Albrecht on Feb 3rd, 2010 at 9:11 am
My biggest concern about this whole thing is that despite whatever MacMillan claims, I believe they’re really not interested in selling ebooks because they are afraid that a rise in ebook sales will ruin the rest of print industry. Sure, they claim now that they want to have a graduated price range, with the ebook price pegged to the price of the cheapest print edition, but in practice, are they doing that? No. For example, your book Ragamuffin is available as MMPB for $7.19 at B&N, but the ebook is $11.90 at Fictionwise and Books on Board. Check Sue Grafton’s backlist books. They’re all $7.99 in print in MMPB, but the price of the ebooks is all over the map. B&N seems to have the best ebook prices, mostly under the MMPB price, but not always, whereas Fictionwise and BoB prices are mostly at $11.90, with a couple of backlist ebooks at an outrageous $25 and $30 at Fictionwise. Maybe the $25 and $30 are pricing errors, but the mantra at Fictionwise is that the publisher is setting these prices. There are plenty more examples of MacMillan ebook prices left at HB prices after MMPB release at all of the ebook stores. Up to now, MacMillan has never consistently had a policy to lower ebook prices to correspond to lower priced releases.
Amazon, on the other hand, wants to have the Kindle succeed, and they’ve observed that Kindle buyers stop buying ebooks when the publisher does not lower the ebook price to match the lowest price print edition. Does the ebook need to be $9.99 when there’s only a HB edition selling for $27? Probably not, but nobody’s going to be buying Kindles if Amazon is forced by its Agency contract to sell ebooks at HB or trade PB prices when there’s a MMPB out for less than half the price of the ebook.
Lastly, I think there’s a form of pricing feedback to the publishers with print books that’s missing with ebooks. The publisher pays a credit and ends up with a lot of excess stock if the book is priced too high and doesn’t sell. With an ebook, it just doesn’t sell, and the publisher can hope that it makes money over the long haul thanks to the long tail, since it doesn’t cost them anything (well, pennies on server storage), and they don’t get taxed on inventory, like a print book, if they keep selling the ebook until the author’s contract expires, if ever.
As an ebook consumer, I’m willing to let the publishers recoup some development costs by charging more when a book is released, I have enough backlog that I can wait. But I’d like to know that the publishers aren’t going to gouge us forever. I know that when the publisher puts out a $25 HB, I can wait another year and pick up the $8 MMPB, but when the publisher puts out a $25 ebook, I have no way of telling whether I’m ever going to see it at a price point I’m willing to pay for it.
117. Doug on Feb 3rd, 2010 at 11:07 am
Unfortunately, Travis, what you overlook is that we’re dealing with two completely different pricing structures here. For hardbacks, Amazon can buy at wholesale and sell them for whatever it wants, but for ebooks, now Amazon is stuck with the agent structure for Macmillan and has to charge what the publisher says.
A quick scan of upcoming HC releases on Amazon shows that while most have a cover price of around $28, Amazon sells them for around 14 bucks. So there’s a good chance that the Macmillan ebooks will cost more than the HC at Amazon.
For your argument to be valid, the publishers should either wholesale books or epublishing rights and let the distributor set the retail price, or control the MSRP of both the HC and the ebook. Instead, they want to have it both ways.
My concern is that to make the locked-in price of the ebook attractive, Amazon will eventually just raise prices on the HC. And this won’t add a dime to the bottom line to writers – all it means is that consumers get screwed.
118. DensityDuck on Feb 3rd, 2010 at 1:12 pm
Oh hey, looks like your books are still available on Amazon. Used. I’m looking forward to reading “Ragamuffin”.
119. Dr. Phil on Feb 3rd, 2010 at 4:39 pm
I can’t believe it’s the end of the business day on WEDNESDAY and this still isn’t over. Tobias’ books are still not really for sale on Amazon — and least not by Amazon itself — in book or eBook forms.
And for the record, buying the book used doesn’t pay the author either — the author having been paid the first time the book sells only. So the Amazon nuclear response is actually serving to replace author payments with nothing and nothing.
Sigh.
Dr. Phil
120. S.Bowdish on Feb 4th, 2010 at 12:37 am
Thank you kindly for taking the time to write this all out. You offered a very clear explanation no matter one’s views on the issue.
121. Ravan Asteris on Feb 4th, 2010 at 4:07 am
Ummm, IIRC it was the publishers that demanded that Amazon load their ebooks with DRM, not vice versa. I seem to remember several publishers balked at letting Amazon publish their books in electronic format unless they put DRM on all of them (I guess they wanted a “level playing field”). http://medialoper.com/amazons-kindle-the-price-of-free-evdo-and-proprietary-drm/ sort of touches on that briefly.
In April 2009 O’Reilly published DRM free titles for the Kindle.
This blog post – http://booksquare.com/joining-the-kindle-fray/ – from 2007, when the Kindle was released, is almost prescient in a way about the stuff going on now.
122. biggfredd on Feb 4th, 2010 at 8:44 pm
Amazon recognizes two things:
1) In order to get people used to the concept of ebooks, there has to be a large variety available at a viable price.
2) In order to justify hundreds of dollars for a reader that is for all intents and purposes a $50 electronic picture frame, you have to have some cost savings on the books, even if it means taking a loss on them to establish a market for the player.
If publishers want to develop a market for ebooks, they should practically give them away to get everyone to buy a reader. People started buying lots of computers once the Internet would allow them to access the world easily.
123. biggfredd on Feb 5th, 2010 at 4:33 am
One thing I have not seen addressed on this or any of the related discussions of this event is the cost of producing and handling a physical book from publisher to buyer.
If a $25 HB takes $5 for the physical production and handling of the book, then the ebook should wholesale for $7.50 instead of $12.50. The publisher would make the same dollar profit on the intellectual/overhead part, which would actually be a higher % profit, since the expense of printing and storage isn’t a cost.
Factor in the cost of the reader and the fact that you are only renting the data, and it makes a retail higher than $10 pretty hard to justify.
TB: Publishers don’t store or ship, the wholesalers do. Printing costs are $1-2 a book. Publishers make 4% profit a year on this system. Please do the math again.
124. biggfredd on Feb 5th, 2010 at 8:40 am
I guess the poster of #71 has never seen $7 paperbacks at Dollar General with $1 price tags printed by the publisher (not remainders).
125. CharlesP on Feb 5th, 2010 at 12:53 pm
So, being the curious type, I grabbed all my words from your blog, and all my words from “My Friend the New York Times Best Selling author Jamie Ford”’s blog (I gave him that title… we were roommates in a writing workshop thing in ‘06, I still write code, he’s on the NYT lists… because he doesn’t screw around on the internet as much as I do, productivity yeesh) and did a word count… I’m almost up to 5000 words (and I haven’t counted any of the extra ones on my own blog or writing site)… that is just SAD (for a guy without a horse in the race anyway).
126. DensityDuck on Feb 5th, 2010 at 1:28 pm
“And for the record, buying the book used doesn’t pay the author either…”
Yes, I’m well aware of that.
127. Mark on Feb 5th, 2010 at 1:35 pm
A really interesting and clear explanation of the issues involved. Thank you very much.
128. Aaron Pressman on Feb 5th, 2010 at 1:49 pm
Don’t take this the wrong way, but you sound out of your mind when you argue that publishers aren’t trying to raise ebook prices. And your mishandling of the facts surrounding the Kindle ebook store doesn’t help your credibility one bit.
The big six book publishers are suppliers and wholesalers. In general, they do not get to set retail prices, a policy backed by sound economic and business theories although legally muddied by a 2007 Supreme Court decision. In any event, suppliers or wholesalers colluding to set prices is both economically unwise and illegal. As long as they don’t collude, however, they have total control over the prices they charge retailers. And they have total flexibility to set the prices as they see fit and in the best interests of their financial and business needs.
Amazon has not set a “fixed” price of $9.99 for ebooks and if you look for more than 10 seconds, you’ll quickly see that ebook prices are all over the map and even change over time for the same book INCLUDING FOR NEW RELEASES FROM MAJOR PUBLISHERS. Amazon and web retailers in general are engaged in the greatest ongoing real-time experiment in pricing theory and maximizing total revenue the world has ever seen. Far from driving down prices, as I and others were writing about a year ago, Kindle prices had been creeping upwards prior to the current wave of new competition. There is total pricing flexibility in this model and the market — the customers and their actions — are a key variable in setting prices. Another key input, no doubt, is the wholesale price (Amazon may be able to absorb some losses but it’s not an infinite capacity and hence many ebook versions of new books start well above $9.99).
For you to say stuff like Amazon wants to sell my books for $9.99 and my publisher wants to sell them for $5.99 to $14.99 (or the flat out lie another author used: “Amazon prices ALL its Kindle e-books at $9.99 or less.”) strikes many readers and book buying customers as kind of funny. Amazon prices flexibly and tries to maximize revenue over the long-term in part by building customer loyalty with discounts. Many new Kindle ebooks are priced above $9.99. Many older titles, already out in paperback, are priced well below $9.99.
Contrast that with what publishers have financially backed, supported and/or praised in the ebook space over the past few years. Sony’s 2006 rollout of an online ebook store where most prices equaled the hard cover list price or more! Scrollmotion’s failed iPhone app model that priced new ebooks at the hard cover list price. And on and on. Right now on Fictionwise, where publishers set prices through the agency model, you can see vast numbers of Macmillan titles that are available in paperback priced at $14.99 for ebooks. And, as a related side note about “flexible” pricing, music publishers said they wanted to replace Apple’s decreed price of 99 cents/track with a range of 69 cents to $1.29. Consumers have seen how that ended up, with the vast, vast majority of tracks sold priced at $1.29 or 99 cents and almost none at 69 cents, even for really old music that has no doubt earned back upfront royalties decades ago.
That’s why we don’t buy it. The big six publishers don’t want more flexible pricing, they don’t want “fair” pricing and I doubt they give much of a darn about 90% of the authors and books published every year or the fans and readers of those works. They are pieces of large conglomerates fixated on maintaining high profit margins. And like many other old-line media, they appear hostile to the digital marketplace because ultimately the digital world does not require the kinds of capital-intensive infrastructure to produce, distribute and promote books and other kinds of content that is the raison d’être for the existence of those giant publishers.
p.s. It’s also funny that I don’t see authors and publishers up in arms about the deeply discounted hard cover books sold by big box retailers like Costco and Walmart (I have even seen cases where Kindle ebooks cost more than Costco’s hard cover price). Publishers cannot have much credibility on this issue when some of the largest sellers of print books are deeply undercutting the “value” of these works, crowding out demand for lesser-selling works and destroying independent book sellers far, far more than ebooks.
129. J Thomas on Feb 5th, 2010 at 2:19 pm
I have had a very good experience buying new and used books from ABE Books. Usually considerably cheaper than Amazon. I’ve consistently had good service and fast deliveries although it’s a lot of individual bookstores shipping the books so YMMV.
130. Victor on Feb 5th, 2010 at 3:04 pm
As a writer, you should start thinking of self-publishing. Seriously, get rid of the middlemen, buy 500-1000 copies at a time, and KEEP ALL PROFIT. Do you really want to make $.99 to $2.00 for a book that THEY make $20 from?
That is the future pipeline: Author–>customer.
TB: Do you think I’m an idiot that hasn’t considered this? Please read this:
http://yuki-onna.livejournal.com/563086.html
Educate yourself.
131. Elie on Feb 5th, 2010 at 10:31 pm
Tobias, thank you. I always like to see other points of view and you helped me see the other side of this argument. I haven’t paid more than $7.99 for the books on my Kindle before (I’m one of those that still thinks $9.99 might be too high for me), but I now understand the prices and I might have a little less reluctance to spend that on a book I really want in the future.
Either way, I appreciate you opening my mind to something other than Amazon = fighting for the consumer; publisher = bad. I knew if I kept looking I’d find a reasonable argument supporting this.
132. Joseph Keller on Feb 5th, 2010 at 10:52 pm
Great post I am glad that I found it. I have read several other entries and have book marked the blog. I will be reading it regularly Thanks.
133. Anthony on Feb 6th, 2010 at 5:06 am
All I see when I read this post is
“Holy Hell, you etain the services of a professional editor, proofreader and copy editor for $3000? And authors have been taking $1 royalties on $20 hardbacks for how long?
My suggestion: As an author, type your Manuscript in Textedit and convert it to Epub. Grab a public domain/creative commons image and put your book title across the front. Your ebook readers won’t mind.The Kindle’s got a limited shade greyscale screen, and it’s going to reflow your text anyway, so I really hope you didn’t blow (as in the example) 60% of your production budget on the cover art and totally unnecessary typesetting. Take a cue from the Penguin Classics – They’ve sold a squojillion copies with nothing but an orange cover and a sans-serif font.
134. Anthony on Feb 6th, 2010 at 5:42 am
I think you’re overestimating the marketing benefit a publisher provides you with too
I can only relate my personal experience, but I bought both both Ragamuffin and Crystal Rain (From Book Depository) as a result of hearing your short story, Waiting for the zephyr, which I heard replayed on Starship Sofa, a podcast I heard about from reading a ‘zine (Flurb), I heard about from reading a blog (BoingBoing).
I’d be interested to hear from other readers, but I’m guessing very few of them discovered your (excellent) work by walking past it on a rack at the bookshop you got in to because your Publisher has a rep who’s buddy-buddy with the buyer at the bookstore.
135. Rashkae on Feb 6th, 2010 at 10:44 am
I’ve been trying, desperately, to buy McMillan ebooks from non amazon sources for *years.* (Referring specifically to the Tor / Baen Webscriptions debacle). I know this has nothing to do with you as a writer, and I agree that this so called negotiation by Amazon is a dick move that hurts publishers and readers alike. But there’s a big part of my brain that thinks McMillan is reaping what it sowed, and they are welcome to it.
136. Jack on Feb 6th, 2010 at 11:23 am
Cr nlgy = FL
cr s fxd sst. bk s nt. Cmpltly nvld nd rdcls cmprsn. cldn’t gt pst tht t rd th rst.
[Where are the vowels?]
Jack is a troll. Since trolls can only grunt, his comment was adjusted as well
137. Gustavo on Feb 6th, 2010 at 12:04 pm
This entry of mine is a little longer than it should, but I find such a topic deserves a little verbosity. It’s also somewhat messy, such verbosity having been ill-implemented, but bear with me.
I agree with Raphael (#10, #71, #72 and #86). eBooks have no advantage at all over print as long as they cost the same. The main feature of the digitalization of content is the near-zero cost of reproduction, and that should be reflected on the pricing. Otherwise all it’s going to amout to is an extra buck at the publisher/distributor’s pocket at the end of the day.
Talking about markets, publishing is already pretty screwed up. Always has been. Ideally a writer would sell his book to a publisher for whatever he thought fair and the publisher would resell it with a fair margin to a distributor, who would then to the same to the end user. The publisher would have to be wealthy as to invest a lot initially, in print and paper, and hope for a good ROI in the long run. That’s his only role, of an investor. Had the writer the means, he’d be able to print and sell directly to the retailers.
The writer should be the prime dictator of the book’s pricing. If we wanted nothing, then the book would cost only a little more than the variable costs, meaning what was necessary to print and distribute it. This “little more” representing the publisher and distributor’s fees – enough for paying all the employees involved at the end of the month. Those are the fixed costs.
eBooks represent no such variable cost – they’re made only of almost free bits and bytes. That should eliminate completely the publisher’s part in the trade, since his purpose is to be the one who can afford the variable costs and invest heavily. Furthermore, those bits and bytes readily distributable via internet, the fixed costs for distribution being only a server (if we don’t want to talk peer-to-peer) and whatever ISPs charge for, allowing for the dismissal of the distributor.
So the virtual book costs virtually nothing to print and nothing to distribute. Why are publishers and distributors still playing such a major role in publishing? That’s part of a past zeitgeist that persists and will persist for a long time. The industry is trying to protect itself its superfluousness notwithstanding, and it’s going to succeed at it because it has a lot of momentum: we’re used to buying from bookstores, so they embody a great deal of advertising and convinience. For now.
I’ve babbled long enough. Bottom line: Macmillan is trying to protect its profits, and Amazon is farther along the line, trying to save itself. A victory for Amazon here is also a victory for everyone in the industry. And to win, everyone involved is going to have to take a little loss, because nothing is going to get better from here. If prices don’t fall tremendously by the point when reading eBooks become mainstream, along will come heavy piracy.
138. Mark on Feb 6th, 2010 at 12:31 pm
Hey, I totally agree with you on the point of flexible pricing. I always keep a list of my next-to-read books on my amazon wishlist and buy when the price becomes affordable for me. As far as I saw amazon seemed okay with real world books being treated like this. It would be a shame not to grant the same options for published ebooks. Maybe what we need is a common format for ebooks so you don’t have to commit to a purely apple based or amazon based store for the rest of your reading. Granted amazon owns the masses but as i see it if those “bullied” publishers could just open their own shop with their own prices selling me stuff i could read on my kindle, iPad i would go for it as soon as the price would fit for me.
Thanks again for giving us an insight into this argument, yours seems not tainted by any other intention but to educate.
139. Justin on Feb 6th, 2010 at 1:11 pm
I’ll keep my comments to a minimum for you. Very interesting read for someone considering starting a book. Makes you wonder if it’s worth the frustration at times. Thanks for the insight.
140. Bill Jackson on Feb 6th, 2010 at 3:59 pm
I find this entire controversy is a reflection of the decline of print based and the rise of e-books.
As it sits the publishers use price to defend their classical turf, and thus want e-books priced close to print books, forgetting that there is no paper, freight, returns and no remainders etc. I wonder if they also want the authors portion to stay the same and grab all that freight, paper, returns. It seems to me that their persistent complaint about low publishers margins could be satisfied by a realistic e-books policy.
I understand process of reading and editing is hard to eliminate as a cost but it could be reduced by the use of online fee based readers/editors who do not have head office costs. There is a real threat to the publishers here. That is a large part of their fight against it. Who needs them when Tobias can self publish for $2 and keep it all, and pay his own reader editor, and write enough to offset those costs or give the editor/reader 15% or so of his take, to give him some skin in the game.
A company like Baen, or a self organized group of writers should perform this function, for again 10% or so of the take. A declining sales price as the product became staler sounds reasonable. Is there such a venue now? Not being an author, but a rabid SF reader from 1955, I would like to see one run on that basis.
141. Martin on Feb 6th, 2010 at 4:05 pm
First: I haven’t read all 140 comments, so if somebody already brought up my arguments, just ignore my post.
I work as a bookseller in germany, where the discusion about E-books has been warming up over the last year (in parallel with discussions about Google, but that’s another story). There has been a similar article in the german bookseller magazine “Börsenblatt” which reminded me of your article, as it also argued that producing E-books isn’t cheaper than producing books and therefor they shouldn’t cost less (at least I understood this to be your message, sometimes my english is not the best and I get stuff wrong). So here’s why I believe that E-books should cost less: at the moment, E-books are extra sales. Publishers have to produce books. And at the end of this process (editing and proof-reading and all) they have a text that’s only one step away from being a E-book – by name conversion. So, as any of the other steps of publishing has to be done anyway, the costs of a E-book seem to be only the conversion cost. Even if you distribut cost for publishing on books and E-books, the book for the bookshop has to be printed, transported and sometimes even send back to the publisher if it doesn’t sell (at least in germany, don’t know how it works in your country) – which probably are much higher costs than for conversion. So, of course the publisher should have the right to charge whatever he wants for his books. Please just don’t pretend E-books aren’t cheaper (at least for now), as the are spin-off products of books that would have been produced anyway.
142. Mike F on Feb 6th, 2010 at 11:15 pm
You can’t think of e-books in terms of supply and demand. You need to think of it in terms of “value.” How much is a new release worth to readers? Would you pay hardback prices, paperback prices, something in between? It is up to the publisher to price its product at a point to maximize its profit. If it thinks that by charging more for it at the beginning will do that, it should be allowed to try. Say it works, but after a month or three those willing to spend that much have spent and everyone else says… something unpleasant. It drops prices until people buy again. Interest wains, they are then free to drop prices again until interest increases.
The question for the publisher must ask “how much will people spend for this?” In short how much do people value this. Note, that nothing has changed about the E-book itself, if you need to wait three months for the price to drop from $14.95 to $9.99. It is the newness that you are buying for $5. If that isn’t worth it to you, wait.
143. Mike F on Feb 6th, 2010 at 11:43 pm
“The publisher is a middleman. And your LONG diatribe attempts to paint Amazon as the evil corp attacking the poor content creators, when in fact that’s not the case at all.”
Guess what? AMAZON is the MIDDLEMAN and even worse it is a middleman that adds no VALUE to the product. The publisher adds something to the product (editing, proofing, art, formating). Ignoring the cost, these add value to the book. What did Amazon add? As best I can tell from the discussion: DRM. Which LOWERS the value. The middlemen that need to be gotten rid of is the retailers, which are making a profit from just storing a file on a hard drive. Nothing more and nothing less.
144. Lee on Feb 7th, 2010 at 12:41 am
Nice write up Tobias. You are right of course that this isn’t really about ‘the customer’. You hinted at the true reason when you talked about Amazon selling books at a loss to gain you as a customer for other things.
The deal today with Macmillan is pretty simple. They sell the ebooks to us at whatever price they want and Amazon sells to its customers at whatever price Amazon wants. Macmillan and other publishers don’t like this setup because Amazon sells some of these books at a loss, including new releases, to gain customers who buy other items (as you mentioned). The publishers believe this cuts, or will cut,deeply into their profits for hardback and new release ebooks sold through non-Amazon channels. Note that today Amazon is paying Macmillan full price at whatever price Macmillan wants just like every other channel.
Macmillan, and now Hachette, are changing the terms of the deal to have the power to dictate what Amazon can sell their books at. Amazon is NOT trying to force publishers to sell ebooks at $9.99 (although Amazon would probably like that as well). So while your write up what it costs to make a book is enlightening it is beside the point. Macmillan is getting paid exactly what they ask for their books today.
So it is a battle between Macmillan wanting to preserve its high profit hardback or new release ebook channel vs Amazon wanting to preserve the right to sell books at a loss to make more money later. That’s what it’s all about. Since publishers should be able to sell a book or ebook for whatever price they want shouldn’t Amazon have the same right?
TB: You are confusing the move to ‘agency’ from ‘wholeseller’ with price argument. Amazon agreed to go to agency. It uses it for its deal with individual authors (direct publishing agreement). In the direct publishing agreement Amazon has, it lets publishers (individual authors) set the prices for their work already.
If your argument were correct, why wouldn’t Amazon be demanding wholesale prices with its direct publishing agreement.
It isn’t, it hasn’t.
145. Paul on Feb 7th, 2010 at 8:47 am
Videogames and ebooks.
One flaw in this “the price always comes down” argument – this is digital content.
You may not be aware of this, but I’ve been living in the digital content/marketplace world for years now with other content. Look at XBox Live / Playstation Network / WiiWare.
It’s actually rather uncommon for price reductions to happen. Unlike manufactured goods, where the price to produce the goods decreases (often being part of what leads to the cheaper price) and the technology advances (leading to new goods being of higher quality) digital things don’t enter the same sort of obsolescence. Well, video games do, but they’re not decreasing in price over time except on Steam which is much more platform agnostic than XBL/PSN which are the closest videogame analogs to the Kindle (other than the iPhone store). Heck, how many songs on iTunes have decreased in price over the years?
Even paperback books usually don’t change in price over time unless the store itself chooses to discount them. There’s usually two editions – hardcover and paperback at set prices. Sometimes there’s anthologies, saving you money on individual books by mashing them into one. The price differences always come with different manufacturing costs.
I mean, yes, it’s possible they’ll release books at $14.99 and then discount them over time. I just think it’s a bit naive to actually *expect* this to be the norm, rather than the exception. The digital marketplace doesn’t seem to follow the same rules as the physical one.
146. biggfredd on Feb 7th, 2010 at 9:49 am
“TB: Publishers don’t store or ship, the wholesalers do. Printing costs are $1-2 a book. Publishers make 4% profit a year on this system. Please do the math again.”
Thank you for replying.
My point is, regardless of who is paying storage and shipping (you mean it costs nothing for the publisher to ship to Amazon?), those costs are eliminated in ebooks, and this should be reflected in the price, along with a discount for restrictions on ebook use.
Considering it costs $1.50-2.00 to ship a book and 60¢ per cubic foot per month for storage (Amazon charges this), I still feel the retail price should be $5 less, even if a paper book can be produced for $2 (and for a HB, that sounds awful cheap to me).
147. Alan on Feb 7th, 2010 at 10:50 pm
I have thousands of books. Most of them are related to my field of study. I also read a lot of fiction. Most of the fiction I read I buy from second-hand retailers. But I do now have a Kindle and a Sony eReader. When I buy books on these devices the authors are making money. I guess they aren’t when I buy the books used. But as most consumers, I go for what is best on my wallet.
148. Bruce Morgan on Feb 8th, 2010 at 12:41 am
“But the genius of a market economy is that we let companies try to charge what the market can bear, and let sales and results sort it out.”
This only works if there is a large enough consumer base to support more than one supplier, allowing competition between suppliers to keep prices at a reasonable level (provided they don’t collude to set prices, as the insurance companies have been known to do).
Fine if you live and breed in the U.S. of A.
Elsewhere, companies charge what they like, being the only show in town, or just don’t release products at all. For example, when I asked Sony Australia, they explained they took the decision not to sell their eBook reader at all here in Australia, as “there are not enough potential customers”, even though the Reader just needs a 240V adapter to be fully compatible. HP made the same decision with their PDA accessories. Amazon shipping costs more than the book does.
Etc., etc.
149. Gigaflop on Feb 8th, 2010 at 8:03 pm
I’m quite amused that for someone who is talking about how Amazon used the “Nuclear” option and how it was a “dick” move, I am in complete shock as to how you handle your comments.
There are numerous posts here that disagree with you, that are well written with well articulated points, but instead, you chose to only address a select few of the posts, ones that you feel compelled to attack ruthlessly with an attitude that goes far beyond “holier than thou.” You reply in-line with the comments (something another commenter pointed out, and you had the audacity to basically say, “well, they were mean first!”)
I actually did think your post was intelligent and gave me a lot to think about, though I still find myself disagreeing with your conclusions, it was interesting to see another perspective. I do apologize for my snarky comment, but the amount of disrespect you show other people is startling.
You basically paint Amazon out to be the bad guy because they are trying to negotiate with a publisher, and according to you made a “dick move.” I agree with another commenter that posed the very interesting idea of selling the tree versions at MSRP to stick it to the publishers, that would have ultimately been a much more interesting and Marketing-wise superior implementation. (Although, as all the publishers jump on the bandwagon, can they afford to sell ALL publishers books at MSRP without losing ALL of their customers to B&N?) Switching from Amazon to B&N is faster and easier on the internet than walking from one bookstore to another. Customers will move. Amazon can’t afford to do that. Amazon did the only thing they could do in the situation. Better to save face with the customers in this situation than the authors, who, lets face it, don’t really have any power in this situation. (And something they apparently willingly hand over to their publishers)
While this might appear to be the “nuclear” option or a “dick move,” I don’t see what other choices they had.
I find your comments to be completely hypocritical. I’ve never seen someone treat their “customers” with such disgust and extremely elitist attitude.
Not only do I disagree with your post, I find you… well.. to be exactly like how you feel Amazon is. Feel free to delete this or ban me. I care not for your power trip.
150. Steve on Feb 9th, 2010 at 11:38 am
“TB: those aren’t the only facts. Macmillan is asking Amazon for the same deal Apple is giving it on the iPad. ”
Maybe that’s what you don’t understand. What apple offers is irrelevant. The negotiation is between Macmillan and Amazon.
The fact is, it was MacMillan who was making demands, and you choose to ignore that.
“TB: From Charlie Stross, an outsiders guide, which is linked in my above post. You did read the above post, correct?”
Of course I did. Have you bothered to read the post you’re linking to? The Charlie Stross blog post describes an offer amazon has made to independent authors, to be the publisher of their ebooks. Those newly offered terms have nothing to do with the negotiations with MacMillan. And, it sounds like MUCH more favorable terms than any traditional publisher would offer. Have you ever been offered 70% of the sale price for books you write?
Again, you make a weak attempt to muddy the waters by throwing in misleading information which has nothing to do with the discussion at hand.
“TB: It is, in the post I wrote which you are commenting on (which you did read, right, you’re not just spouting off to things you THINK I said, like some internet troll, right? Right?)”
I think it’s clear to everyone reading this blog post and comment thread who the troll is.
“I said repeatedly, Amazon has the *right.* But it’s still a dick move.Frex, if you tell me fuck off in a negotiation, and I say you’re a dick by you have the right to say that, and tell everyone you said ‘fuck off’, saying ‘I have the right to say that’ isn’t a defense. You’re still a dick. See? No bookstore retailer has ever done this to a publisher, or more importantly, targeted a publisher’s authors, during a negotiations like this.
Your arguing that I claim Amazon has no right to do this is what’s known as a ’strawman argument.’ By that, I mean you set up a position I actually didn’t argue, and knock it down.
You can stomp on the straws all you want and declare victory, and feel self important, but what are you accomplishing by trying to win an argument I didn’t propose?”
Your OP and responses seem to imply there is only one party acting like a dick in this situation. I think at the very least, the question should be “Who was the bigger dick in this situation?”
Sure, if you ignore MacMillan’s “Dick Move” that started all of this, it makes Amazon look bad. But, if you step back and look at the whole situation (and screen out details that have NOTHING to do with the situation), it becomes pretty clear that Amazon’s move was self defense tactic.
Really the only thing they did wrong was backing down on the issue.
So, when you look at it from the perspective of “Who is the biggest dick?” involved here, the choice isn’t nearly as obvious:
1) MacMillan for trying to screw over the customers and resellers of it’s product
2) Amazon for making a strong play in trying to defend themselves against the publisher’s attempts to screw people over
or
3) The author who clearly doesn’t have a grasp on the situation, yet writes a blog post trying to make one of the other guys look bad, then is belligerent towards commenters, and resorts to calling names whenever someone points out his errors.
Gosh, it really does become a tough call at that point!
151. Ben on Feb 9th, 2010 at 7:53 pm
I think your missing one major factor to this whole story. The Writer’s Guild loves DRM. If Amazon didn’t have DRM on Kindle books, then anyone could use any Text to Speech system they want. Normally being able to use TTS would be considered “fair-use” but the Writer’s Guild still wanted to leverage DRM to take it away. As a result, customers are restricted to only using the Kindle 2’s TTS and only when the restriction flag is not set on the eBook.
What is the most upsetting is that there are several books in which there is no audio book and the TTS is disabled. So publisher’s aren’t just protecting the “worth” of their audiobooks but also protecting the worth of audiobooks they *might* decide to provide but never do. The alternative is the Library of Congress Book for the Blind (of which several sound even worse than the TTS). And the idea that the flat canny sound of TTS would somehow replace audiobooks is a joke! But for some reason the Writer’s Guild has to protect authors from the big bad TTS.
Bottom line, Writer’s Guild played hardball with Amazon, now Amazon is playing hardball back.
So, is Macmillan really a victim here? If I pay the full $14.99 for an eBook, does that always entitle me to fair-use TTS of the eBook? Or am I getting a crippled eBook with an anti-TTS flag placed in the DRM header for my $14.99? If Macmillan promised that all eBooks with anti-TTS will also be made available as audiobook and any books of which there is no audiobook can be used via TTS, then I would feel better. However, for such crippled media, I would still support Amazon strong arming a $9.99 price point. If Macmillan promised that all eBooks can be played back with TTS, then I would support Macmillan demanding to set any price they feel is valid for the market.
As long as publishers leverage Amazon’s DRM to force TTS to remain off for whatever title they choose, then I think these broken eBooks should be sold for a fixed price that reflects that they have had their voice removed.
152. Howard on Feb 13th, 2010 at 5:52 pm
I should write an equally long blog piece entitled why I will no longer buy Tobias Buckell books. Because I won’t be buying your books again. You have gone against the best interests of your readers in this case so your publisher can fix prices higher. Rationalize away as to why you pulled your books, but at the end of the day you have sided with your corporate publisher instead of your readers.
153. Andrea on Feb 18th, 2010 at 11:09 pm
What Amazon needs to do to reach the largest audience is to drop the propitiatory format. I’m constantly frustrated by wanting X book by X author that’s obscure/hard to find, and Amazon is the only one that has it, and only in Kindle format. I bought my reader because it would read the largest number of formats, that bothers me more than the DRM issue.
154. Theresa M. Moore on Feb 25th, 2010 at 3:23 pm
Granted that all your points are valid, but there are some of us who have NEVER made any money off their print books ON AMAZON. There are a lot of people here who like to read SF/F and genre fiction, but where are they when it comes time to buying books? My books are available on my own site, but nobody ever looks there, they look to Amazon. I’m sick to death of Amazon IMHO, so if you want to buy my books, look to ME, not Amazon.

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Tobias is a Caribbean-born SF/F novelist who lives in Ohio.

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tobias@tobiasbuckell.com
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