Posts Tagged Macmillan

New York Times covers reader reactions to Amazon price increase

The New York Times has an article covering the implications of the impending agency pricing model for book sales. It mentions the one-star ratings that have shown up when e-book editions have been delayed or perceived as too expensive, and warns that publishers may be in for more than they bargain for with the increase in price.

Many of the arguments that we have covered in detail over the last couple of weeks make their appearance here: the cost of printing and shipping a paper book versus price of e-book, the sense of “entitlement” displayed by consumers, and the risk of increased price leading to increased piracy.

There are a few notes that might come off as ironic to those who have been following along. In particular:

“There are people who don’t always understand what goes into an author writing and an editor editing and a publishing house with hundreds of men and women working on these books,” said Mark Gompertz, executive vice president of digital publishing at Simon & Schuster. “If you want something that has no quality to it, fine, but we’re out to bring out things of quality, regardless of what type of book it is.”

As many mistakes as readers have been finding in Kindle editions (springing, apparently, from automated conversion without subsequent proofreading), this declaration is laughable. If they want to increase their prices, they had darned sure better start paying attention to the sort of “quality” they are putting out.

The publishers seem to be hoping that the Americans who have not bought Kindles or Nooks so far, and are not used to the $9.99 price for best sellers, will find $12.99 to $14.99 a reasonable price to pay for the electronic version of a more expensive hardcover book.

A number of consumers interviewed for the article had other opinions, however. Author Douglas Preston expressed astonishment at reader “entitlement,” calling it “the Wal-Mart mentality”.

Amazon commenters attacked Mr. Preston after his publisher delayed the e-book version of his novel [Impact] by four months to protect hardcover sales. Mr. Preston said he was not sure whether the protests were denting his sales. But, he said, “It gives me pause when I get 50 e-mails saying ‘I’m never buying one of your books ever again. I’m moving on, you greedy, greedy author.’”

This is the sort of experience a number of authors are having lately. Certainly judging from a recent post on Whatever, John Scalzi has been getting a number of that kind of e-mail in the wake of his series of posts on the Amazon/Macmillan affair, but he doesn’t let it bother him.

If the article has a flaw, it is that it simplifies e-book readers’ complaints to the price increase and release windowing, which does make readers seem a little “entitled.” On the other hand, as Ficbot and I have made clear, some of we early adopters do have a few more issues than just those. (But then again, most of the people complaining will probably be relatively new Kindle users who may well have a simpler outlook.)

In any event, the article also quotes publishers saying they can take advantage of the opportunity to experiment with different prices and find out what the best prices are for their content. And if the publishers’ track record on pricing so far has led to the sort of frustration Ficbot and I expressed, we can at least be hopeful that this is a chance for them to make a fresh start.

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Susan Piver: Publishing industry repeating mistakes of music industry

spiver[1] Found via TechDirt: Ex-music-industry-exec Susan Piver, who I covered a few days ago for her comparison of Macmillan’s pricing change to the way the music industry went down the tubes around the turn of the century, has made another post comparing the two industries.

This is actually an article she wrote after being badly shaken by what she saw at 2009’s O’Reilly Tools of Change conference. She reposted it in preparation for 2010’s TOC conference coming up at the end of this month.

Piver sees history repeating itself: publishers, she says, are reacting to e-books and file-sharing in much the same ways as the music industry reacted to digital music ten years earlier.

In particular, she casts blame on the way both industries were or are focusing on finding big sellers (hit records, bestselling books) at the expense of lesser-selling but more diverse talent.

Rather than developing artists, exploiting regional marketplaces, and building financial models that can easily support a mid-range list, both industries focus on entertainment at the expense of art and expression. (Difference between selling entertainment vs art? Entertainment starts with the customer and works back to the product. Art begins with the product and works forward to find/create an audience.)

Piver also remarks on how a number of people at the conference parroted the assumption that peer-to-peer downloading “killed the music business” and might do the same for publishing.

Downloads did not kill the music business. Shortsightedness and turf-protection on the part of music business executives did. Piracy and changing distribution schema will not kill the publishing industry. Shortsighted infrastructure-protection on the part of publishing houses will.

And this put me in mind of something I saw spring up in the wake of the Amazon/Macmillan dispute and John Sargent’s letter to publishing-industry staff. I wrote in my “Appeal for Understanding” of e-book fans upset by the way Sargent referred to Amazon as Macmillan’s “customer” without ever mentioning them.

Piver writes:

At Tools of Change, Sara Lloyd of Pan-MacMillan nailed it when she said, "Publishers understand markets, but not customers." As anyone in the music business could have told you years ago, the customer is now a human being, and publishers–who still see retail as their customers–don’t know how to build products for individuals who might want to discuss, interact with, congregate around, or add their own $0.02 to the content. The customer has stepped out of the bookstore and into the foyer of the publishing houses, they are knocking on the doors of authors, and asking to be addressed as individuals.

This is exactly right, and I am sure Ficbot would agree.

At present (or at least, at the 2009 Tools of Change conference), Piver says, she sees a lot of people in the industry uncertain what direction to take—hoping someone else does something that works so they can copy it. (Perhaps the Macmillan pricing change was such a “something”, though Piver does not say so.)

As I wrote yesterday, media executives such as Elisabeth Murdoch are starting to recognize the importance of social media and interactivity in promoting their products. Perhaps it is time publishers took a page from that book.

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More Amazon/Macmillan feud fallout, conversations, and conspiracy theories

TechCrunch’s M.G. Siegler reports that another “winner” in the Amazon vs. Macmillan feud is Barnes & Noble, who is getting a lot of new purchase traffic for books Amazon is currently unwilling to carry.

I would add, from the time I have spent reading various discussion forums about it, that a good many of the people who comment in discussion threads at Scalzi’s Whatever, Charlie Stross’s blog, and Making Light have said they are shifting all their purchases over to Barnes & Noble—and some have said they are going ahead and buying Nooks, too.

Furthermore, the SFWA today announced it is removing all links to Amazon.com from its website. If Amazon keeps this up much longer, it is going to exhaust much of the goodwill that authors and publishers have previously had toward it—and after some of the other disputes publishers and author-advocacy groups have had with Amazon already (the pricing issue, the Kindle text-to-speech issue, the listing-used-books-with-new issue) there may not have been much of that left to begin with.

Different Sites, Different Discussions

I find it interesting how different the conversations are at the blogs I mention above from discussion here and on MobileRead. At the aforementioned blogs, more people by far are taking Macmillan’s side and feel Amazon acted reprehensibly, while here and at MobileRead (as well as Kindle users’ communities, I understand, though I have not been reading them) it is largely the other way around.

(By the way, I would like to call out Tor.com for sticky-posting Sargent’s open letter at the top of the blog, but disabling reader comments on it. Very classy, guys. I know you’re part of Tor, which is part of Macmillan, but still, this one-way barrage of corporate-speak seems quite at odds with the notion of community you’ve worked so hard to build up. Someone get them a copy of The Cluetrain Manifesto.)

I suppose it is that Whatever, Stross, and Making Light serve communities made up of Macmillan writers, editors, and their friends, while more readers and small-press folks hang out here and on MobileRead. And needless to say, none of these discussions may represent the opinions of the great silent majority of readers who have not bothered to take part in any of them.

E-books’ “Grassy Knoll”?

Over the last few days, we have seen a number of posts here espousing the opinion that publishers have a not-so-secret agenda to destroy or delay the market for e-books.

This is not exactly a new idea, of course—it has had ten or fifteen years of publisher mismanagement of e-books to take root. Still, with Macmillan’s actions in attempting to raise e-book prices, it is finding newly receptive audiences.

I’m still looking for someone to write a guest column from an opposing viewpoint; LiveJournal user “barbarienne” has posted a (slightly blue) screed against this “conspiracy paranoia”, but it is not something I could reprint on the front page.

On a related note, writer Sean P. Fodera has made an LJ post concerning the “misconception” that e-books should cost significantly less than printed books—and unlike many others, he actually had a fairly reasonable response when I brought up the counter-example of Baen.

John Siracusa: “People don’t get e-books”

And from the point of view that it might be better not to ascribe malice to something that can be more readily explained by incompetence, this Ars Technica editorial by John Siracusa that I covered here a year ago suggests that most people, including publishers, have simply never “gotten” e-books.

If you’ve forgotten about or not read it, it is worth going through again—it’s still as true now as it was then (and interesting as well for the way it essentially predicts the iPad a year ahead of schedule).

Siracusa suggests that the industry’s “sabotage” of e-books could be laid at the feet not of some overarching plan, but the exact opposite—general cluelessness about e-books and the market in general, born of fear of what happened to the music industry with Napster and, yes, fear of e-books cutting into their hardcover margins.

Though even so, Siracusa does note:

All of this is to say that the publishers effectively sabotaged the e-book market from day one. The DRM, the pricing, the general treatment as second-class citizens, it all added up to an insurmountable drag on a budding industry. Without some minimum level of buy-in from content owners, there was simply no way to break through to the mainstream, no way to ever sell enough copies of those popular novels to recoup a large up-front fee, and no way to persuade content owners to allow the most desirable best-sellers to be sold in e-book form.

So whether there was or is any sort of overarching plan may not make much difference in the end if the results are the same.

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Amazon capitulates in Macmillan e-book disagreement: Higher e-book prices ahead?

japansurrender It appears the feud is over, with the publisher winning this time. Turns out Amazon’s pulling Macmillan titles was just a token gesture.

Amazon has posted the following announcement to its Kindle Community forum:

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.

I can’t help but find this decision disappointing.


As I said before, allowing the publisher to set the standard retail price is anti-competitive. (Attorney C.E. Petit explains more about that aspect, in a post Paul Biba has since reprinted on TeleRead.) If the publisher is allowed to dictate these terms to every e-book vendor, then it becomes harder for consumers to find a bargain.

On the other hand, it’s interesting that Amazon doesn’t mention that Macmillan claims its $14.99 price point represents the high end of a variable pricing scheme that could range down to much less than Amazon’s $9.99 after a time. If Macmillan is serious, that could be good for the consumer—especially if it applied universally, to places such as Fictionwise or BooksOnBoard as well.

On the gripping hand, as a commenter to my previous post on this story pointed out, Macmillan has had a pretty shoddy track record of instituting variable pricing so far, with e-books still selling at full hardcover prices at Fictionwise on titles that have long since gone to paperback in print. It would be nice to see a little “variable pricing” love there.

I suppose we could say that Amazon’s $9.99 pricing has driven Macmillan to compromise with its $13 to $15 price range, which is much better than $20-$30 for new hardcovers. If so, that is definitely an improvement.

And the variable pricing will allow Macmillan to get a better idea of the price elasticity of demand for its books and might end up resulting in even lower prices overall.

I would not be surprised if other members of the “big six” publishers followed suit with similar agency arrangements, despite Amazon’s “belief”. It just does not make sense for them not to.

It is some consolation that the e-book market is still relatively young, and there is still plenty of room for things to change. And the same consumers who have announced they will boycott books priced over $9.99 and have complained so vociferously about e-book “windowing” tactics now have something else to blame the publishers for.

Here are some other interesting editorials and analyses of the situation from Charlie Stross, Tobias Bucknell, Andrew Wheeler, Henry Blodgett (Silicon Alley Insider), TechCrunch, and GalleyCat. Here are MobileRead discussion threads on the original incident and Amazon’s capitulation.

Previous coverage on TeleRead:

Related: Techmeme roundup.

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Legal analysis of the Amazon/Macmillan brouhaha

Editor’s Note: this is reprinted, with permission, from Scriviner’s Error blog of C. E. Petit. As a lawyer I’ll just say that I agree with this conclusions. Numbers in brackets refer to footnotes at the end of the article. PB

Screen shot 2010-01-31 at 4.41.27 PM.pngDepending on how one counts, this is either the second or third major AmazonFail arising from egotistical — and ultimately stupid and self-defeating — mass delistings of material by Amazon. A pox on all their houses; although Amazon bears the most blame for this, Macmillan is hardly blame-free.

Let’s get the Macmillan problem out of the way first, because understanding it sheds an awful lot of light on other issues. Andrew Wheeler offers a useful introduction that, unfortunately, doesn’t go far enough in assigning responsibility. First, one should note that Macmillan is willfully and misleadingly mislabeling its “new model”; leaving aside that it isn’t at all new, it is not an agency model. It is, instead, a fewer-layers version of the amazonkindle.pngpresent book retailing model, which is not a sales model: Instead, the “new” model is a single-layer consignment instead of a multilayer consignment. This does have some significant legal implications, particularly for taxation purposes and timing of payments… but, as important as those are, they are ultimately less important than the industry’s refusal to accept that the Copyright Act of 1976 and the Bankruptcy Code of 1978 operating together fundamentally changed the legal nature of the author-publisher relationship.

Under the older law (the 1909 Copyright Act and 1898 Bankruptcy Act, respectively), an author-publisher arrangement was inherently a sale: Publication required ownership — even if fleeting — of the entire copyright. This language continues to pervade author-publisher agreements and arrangements, even though the fundamental change from unitary copyright to separable subrights should have resulted in a fundamental rethinking of contracts, economics, and virtually everything else. Combined with the formalized pro-creditor and pro-secured-interest provisions in the Bankruptcy Code, one would expect things to look rather differently, at least by now, thirty-two years after the enabling legal landscape changed irrevocably. Instead, Macmillan’s position depends fundamentally on assuming full ownership and control of not just the rights actually transferred in publishing agreements with the authors, but of a full, unrestricted ownership interest in Macmillan’s packaging of the author’s intellectual property for market. Crucially, Macmillan could not maintain this position without having oligopoly power to exert — and we’ll be returning to that shortly.

Nonetheless, most of the blame here goes to Amazon. [1] It’s actually fallout from a bad Supreme Court decision from a couple of years ago regarding ladies’ leather accessories. (Sadly, this is about the closest we’re going to get to “leather” in this whole discussion.) In Leegin, [2] the Supreme Court overturned a 95-year-old decision holding that resale price maintenance agreements represent a per se antitrust violation, holding instead that they must be judged under the antitrust “rule of reason” doctrine. In practical terms, that means that a plaintiff complaining that a resale price maintenance agreement violates antitrust law can win if, and only if, the plaintiff hires outrageously expensive lawyers, and has a smoking gun, while the defendant hires a bottom-of-the-class graduate of a bottom-of-the-heap law school who never took antitrust law and has never handled an antitrust matter before. [3] It doesn’t matter for antitrust purposes that Leegin directly concerned only agreements to maintain a minimum price; antitrust law may be a tangled brier patch indeed, but the restriction is on agreements concerning any fashion of price restrictions.

I suppose that’s all suitably theoretical and eye-glazing. Just what does it have to do with the Google Book Search settlement? In the simplest possible terms — so that even the legal staff and management at Amazon can understand — it demonstrates the direct antitrust-violating consequences of precisely the same arrangement as the settlement establishes for orphan works and other unclaimed works. Prettying that arrangement up with an illusory trusteeship concerns only the cosmetics and exact mechanism; it does not change the substance. This particular incident (that will, no doubt, be cleared up in a week or less, even if it takes longer than that for a public announcement) demonstrates that oligopoly power over distribution harms consumer choice. That is all that is necessary to state an antitrust claim, Leegin notwithstanding.

Too, this dispute also makes all too clear the oligopoly problem with putting the publisher class and the author class sharing from the same pot of rights. Bluntly, under the 1976 Copyright Act, there is no real question that the publishers’ rights are subordinate to those of the authors (excepting, of course, works made for hire… in which the patron/publisher is wrongly defined as the author). If Amazon’s and Macmillan’s missteps since Friday result in Judge Chin seeing that even more clearly, and therefore severing the two improperly joined lawsuits and torpedoing the GBS settlement as failing under Rule 23, then perhaps some overriding good can come of this fiasco. Even if all he does is reject the purported dispute resolution mechanism — a mechanism that fails under the Federal Arbitration Act, but that’s another story entirely — that will at least slow things down enough for some wiser heads to speak up.

————
[1]. I suppose Amazon’s legal staff might argue that it’s a power relationship with management that’s the real problem… but that violates the old rule “do not ascribe to malice that which can be explained by ignorance or stupidity.” Jason Stackhouse would probably be the smartest guy on Amazon’s legal staff.

ANDY BELLEFLEUR: It’s interestin’, because … um … this’s the only videotape we found in Maudette’s apartment.
JASON STACKHOUSE: Well, I guess that means somebody took ‘em all, right? Somebody didn’t want you to see them?
ANDY: Or somebody only wanted us to find this one? Because it supposedly clears him of a crime that maybe he came back later to commit?
JASON (at first nods — then laughs softly): Aw … come on, Andy. I’m not that smart!

True Blood 1.02 (”First Taste”) I hold Amazon’s in-house legal staff in lower than minimal high professional regard; I’ve had too many dealings with them. And remember, y’all, if you decide this is defamatory, I can defend with the contents of those past dealings… and that might prove far, far more damaging.

[2]. Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877 (2007), overruling Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373 (1911).

[3]. I do need to dispose of one comparison that some others are making. This may bear some superficial resemblance to disputes between cable companies and content providers, but one must recall that those are regulated monopolies… and there’s nothing “regulated” about publishing whatsoever. Further, the regulation extends to actual pricing terms to customers.

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