Amazon vs. [well, all of us?]

If you’re reading this post, you’re here because you’re somehow connected to or interested in the publishing industry. We’ve probably already gone silent for too long on the topic, so it’s time to get some sort of update here for any readers who aren’t yet in the loop about these pricing wars.

The issue of e-book pricing has been of growing importance since the time when, about two years ago, the Kindle came onto the scene. In the early days, Amazon announced that $9.99 would be their standard price for electronic titles, and most people agree that Amazon set this price at rock bottom because they were aiming to make their real profits with the Kindle reading devices. It’s a whole lot easier to buy a $300 gadget when you think– hey look at all the cash I’ll be saving on actual books! But Publishers worried that this pricing model wasn’t sustainable, and independent e-book retailers accused Amazon of “predatory pricing”, claiming that Amazon was moving to drive out all competitors who couldn’t afford to take a loss on each e-book sale (yes, Amazon loses money when they sell e-books at $9.99, read the articles linked below for a more thorough explanation).

Finally, last month Apple joined the e-book scene with the arrival of the iPad (side note: our author Sue Grafton had her book U IS FOR UNDERTOW featured in the iPad demo video!). Ever the trouble-makers (we say this affectionately), Apple put forth a different pricing model to the publishing houses– now referred to as the “agency model”. It allows for publishers to sell e-books directly to consumers, giving the retailer (Amazon and all others) a commission on any sales generated by their online store. Macmillan, one of the major trade houses, announced to Amazon that they would be exclusively operating under the agency model from now on… Amazon balked and tried to fight it by disabling the “buy” buttons for all Macmillan titles (that includes FSG, St. Martin’s, and Holt). The NY Times covered the issue in more detail in this article. Eventually, Amazon relented and (surprise?) several other major publishing houses have now joined Macmillan in adopting the agency model.

But the case really isn’t closed here, and Amazon customers have “fought back” by giving crummy user reviews to books that now have higher electronic price tags. To this we say– “Um, why punish the authors for decisions that are completely out of their control!!?” If you wrote one of these nasty reviews, really, shame on you. However, Amazon has some valid arguments concerning the ongoing controversy over e-book pricing, and we believe it’s important for you to know all sides of this discussion. The current issue of Publisher’s Weekly has an in-depth and we think, quite measured, piece on e-book pricing that should be required reading for anyone who has ever considered themselves a writer, reader or lover of literature in any form.

It’s imperative that we all continue to stay educated about this and all other digital developments. Whether we like it or not, the number of words that now have a variation that begins with “e” is growing every day… we welcome your thoughts!

4 Responses to “Amazon vs. [well, all of us?]”

  1. Lydia says:

    The job of marketers used to be to entice consumers. In the last 20 years, in a business model established by Microsoft, the goal of marketers has instead become entrapment.

    The process goes like this:

    1) Build a better mousetrap and establish an enormous customer base.
    2) Ride the wave making huge profits.
    3) Now that consumers rely on you, develop Machiavelian software, policies and systems that prevent anyone from ever leaving without personal hardship.
    4) Ignore any protests and become a billionaire.

    This approach is new to American business but it is a time tested strategy. Replace the $ motive with emotional gratification. Physically abusive partners have used it for years.

    This type of behavior puts the consumer, like the battered spouse in a tough place. We must learn the same lesson. We have to learn to walk away. Otherwise, the honeymoon is over too soon and all the power is theirs. We’re left with hurt feelings and a whole lot of bruises.

  2. Right again, Miss Lucy! Bravissima!

  3. admin says:

    Thanks Lisa!

  4. Nora McFarland says:

    One of the more straightforward summaries I’ve read on the subject. Thanks laying it out so concisely.

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