Monday, February 1, 2010

And the Feathers Fly! Amazon & Macmillan Duke It Out

Whew. Just hours after I posted on Friday that it looked like a battle was brewing between big publishers and Amazon over e-book pricing, the fight broke out. I won't attempt to give a blow-by-blow here, but Mike Shatzkin gives a good summary here and there will be plenty of other accounts to come. 

In brief, Amazon went to the "nuclear option," as Shatzkin puts it, by delisting Macmillan titles and it blew up in their face. Many others will analyze this event and I'm not sure the dust has settled yet, so I'll restrict myself to a couple of observations: 

First, it's very interesting to read the Kindle forum posts on Amazon. Their announcement is clearly intended to cast Macmillan as the bully in the situation, even though it was Amazon who punished the publisher. On Amazon's Kindle page, not surprisingly, a vocal audience of Kindle owners, who have come to regard $9.99 as the inalienable right of e-book buyers, are ready to see it that way. (In fact, even before both companies' announcements, posters at the Kindle forum tended to assume Macmillan was boycotting Amazon rather than the other way round.) 

Still, even among Kindle owners, there are several posters who say, "geez, 14.99 doesn't sound so bad, it's still a lot less than a hardcover." Completely lost in the conversation is the fact that all these Macmillan titles might be available for $9.99 if you're willing to wait for them, the way you do for a paperback. I think Macmillan (and other publishers who want to "window" e-books) need to make consumers much more aware of that. 

Also interesting, I also read a hundred or so comments at the NYT Bits blog post on the controversy. There, many readers knocked Macmillan but a greater number (though not at first glance a majority) saw this as bullying by Amazon. In other words, among a sample of people who aren't all Kindle fans, opinion is much more divided. (Naturally there are plenty of "plague on both their houses" opinions and a few gimlet-eyed, "hey, they're both just rational actors attempting to maximize their profits" types.) 

I don't know whether we'll see $14.99 hold as the new standard price for e-books but I think it was fortunate for publishers that Apple came along when it did, before Amazon was able to get a stranglehold on the e-book market. 

Granted, there's much debate, especially outside the Big Six publishers, over whether it's really desirable to raise e-book prices. I'm frankly of two minds about it. Will have to take that up another time. But as Shatzkin points out in the comments threat on his post, publishers who are still absolutely dependent on print books have powerful incentives to slow the erosion of prices, and even the adoption of e-books in general, which are a serious threat to bookstores, still by far our biggest sales channel.  

(Full disclosure: Bloomsbury Press titles are distributed by Macmillan, but Bloomsbury has a separate relationship with Amazon and was not a party to the dispute.) 

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