I will be laughing when its proven that this tactical move was the equivalent of running into a swarm of army ants nude……..

cut off nose to spite face…..

just a fact that every time a new medium comes out, those people/entities/companies who are heavily invested in the old way of doing things endup trying to fight change.

Jay, I respect your point of view, but I think your a bit naive if you really think that ebooks cost only 10% less then physical books to produce and distribute, but thats your opinion, I am assuming its due to information your publisher gave you to prove how bad they are being screwed by lower ebook prices.

Publishers are saying they wont be making any extra money on this that they may even make a little less…….

thats clearly BS, no business is going to do something to cut their profits, its not logical.

little exorcise in logic

raise prices from 9.99 to 25.99(or even 14.99)on ebooks that already require a pricey reader.

Higher prices=less sales, especially in a weak economy like the one we are living in today.

so less sales at higher price COULD cover the loss in sales, But if people cant afford to buy more books due to higher prices your effectively killing the chicken for the eggs.

conversely, you may make less per ebooks sale by having lower prices, but you will sell alot more books, I think the fact that amazon and other ebook sites are selling books as well as they are kinda proves that point, eReaders arent cheap, people need to see the value in buying an ereader AND ebooks.

Jay, dont you see, this will just drive people to piracy the way music prices and movie prices have been for years?

iTunes many times costs you MORE then buying a physical cd now, or the cost is so close that you may as well buy the cd from amazon or another site, and rip it yourself(with the great benefit of no DRM and you being able to control the format and quality settings used for the encode)

if you buy a cd from amazon you also get credit on amazon mp3 store so you can download music “free”

Now what would possibly work is selling people the physical book AND including rights to download the ebook as well, contrary to what I am sure the publisher would tell you, Every download wouldnt be a lost sale or lost profit, because how many people are logically going to buy the hard cover and ebook as well?

also note that my comments about piracy are from my many years as a computer tech and uber geek, I have sat and watched piracy grow and grow and companies try in vain to stop it, the fact is, If its out there in a physical(book) or digital form, people WILL find a way to copy and share it.

The only way to combat this thats going to work is NOT legal, because , and lets be honest here, your never going to track down all the people who are downloading, and your never going to track down all the sites sharing, like the hydra of myth, each time you cut a head off(get a link removed or site taken down) more sprout up.

The best way to combat this is to make the price attractive AND make the content available to anybody who can pay, as Stevie said, people in the UK cant even get ebooks from amazon, the UK and EU are prime markets that are from what i have been told, being ignored by most larger ebook services, and those that do sell to the EU/UK dont have alot of the larger titles.

when this dosnt work out as a great thing for everybody involved, you will see why so many people are saying its dumb/stupid.

Don’t mind at all the link salad love though I’ll have to look for it. Very nice of you.

Re the question about my “tone and intent” toward Jobs, what you’re reading did not come from a void.
I’ll have a different take from his actions than you. As an owner of an iPod I am not anti-Apple, but I don’t like his actions in this case and am not alone in that. You imply that I just have vitriol toward him and that this influences me. They are strong words against a real problem area (as seen by others), and my words have been not nearly a strong as words against Amazon.

The funny thing about worrying about Amazon’s near-monopoly is that people agonize over what Amazon will do when they have the power to, gasp, charge what they can, without competition.

So, to prevent that, they’re forcing Amazon to charge what they can right now

When Barnes & Noble and other places sell the same books and can choose a sell-price based on what works for them (they could also charge more for older books to allow the loss-leaders in new books), Amazon is not a strong near-monopoly.

But publishers want more money than they are getting from the new world of declining hardcover sales and they are pushing the Agency plan rather than being creative, making special editions and charging more for those, in a win-win situation.

Amazon didn’t “set” prices for other bookstores. The other bookstores chose to compete with them on price without apparently adjusting for that on other books as Amazon has.

Comparisons of older-book pricing have shown tjat the other stores are often lower than Amazon on those. That’s one way to make up losses.
I’ve no question that Amazon would eventually have raised the prices – that’s the way of the world. But the irony is that a lot of energy from publishers and authors is pushing them to do it right now. A good excuse to have high pricing for all customers of all bookstores.

B&N has tremendous expenses as a bricks & mortar store but also advantages when it comes to selling the hardware. In Macmillan’s case they said that if they didn’t get their $15 vs $10, they’d delay the e-books 7 months while offering them to the other stores. Talk about monopoly manipulations.

Authors won’t recognize this but when customers see that there is no price competition anymore and that they must pay the fixed amount at all stores, there’ll be resentment and a passive non-buying.

Re moving from an anti-competitive environment to a competitive one, this concept is usually used for improving a situation so that the prices are lower and more reasonable for customers.

This situation is the exact opposite. I think that as one who depends on Macmillan for obviously well-deserved revenues, you’ll have a bias to overcome and will somewhat rationalize what has happened with Macmillan, Jobs and the others as they work together to fix pricing at a cost 50% higher for customers.

It would be hard for you to see that as wrong-headed. I read that Macmillan reduced percentage pay for many authors from 25% to 20% recently but don’t know if that’s true — but it would be added pressure on authors.

As I’ve said, the irony is that Macmillan will sell far less books now — the many who’ve written often that they buy probably 10 times as many books now and are more adventurous when it comes to unknown authors will stop doing that.
I’m one of them.

Re “setting prices” — the use of the phrase in this situation has involved a crucial misundertanding, since other authors have said “Macmillan SHOULD set their own prices.”

What most people don’t know is the publishers DO set the prices. They set the List price and the store owner pays Macmillan based on THAT list price.
NOT on the $9.99 sell-price. The publisher receives the money based on the larger amount.

If the bookstore chooses to use loss-leaders to get many buys, adjusting in other areas, that’s always been the storeowner’s prerogative.

The worst misunderstanding of too many authors who depend on Macmillan is that they argue they get less money with a $9.99 book when, in Fact, Amazon pays the publisher based on the LIST price. I’m being redundant because this point has been missed in many other discussions and because a friend sent me another post decrying the loss of author money when books are sold for $10. No.

The storeowner, knowing his audience’s buying habits, can decide what to sell at and the store lives or dies on that type of decision.

If he prices it too high, the store doesn’t sell the books at all. The store doesn’t get much out of that, but the publisher and author HAVE already been protected with the traditional arrangement (rather than the ‘Agent’ route).

That’s why we see store Sales advertised.
Starting March, that won’t be possible. All stores will have the same pricing. Same fixed pricing. No store sales on those books.

Re youre seeing a lot more nuance – my point of view is that I’m cutting the fat so you might see what is actually underneath all the verbiage.
Nuance is a search for rationalizations in this case. But we’ll definitely disagree on that one

To end, there has been no cutting off of Macmillan’s revenue streams by Amazon, as you’ll have seen. They got their money upfront. They did not lose money from the $10 book price.

But Sargent, in his narrow way, cannot see that e-books are not eating away at hardcover prices because the bulk of us were not buying hardcover books and never intend to in today’s world.

He has to stop blaming the e-book and face market realities and adjust and not by forcing higher prices.

Anyway, thanks for the welcome atmosphere to explain our varying viewpoints. I really will try to let your responses to this one stand, as I’ve said plenty

Gave your post some link salad love this morning, to highlight a different view from mine. Hope you don’t mind.

My ‘vitriol’ toward Jobs (an easy out for you)

Why is that an easy out? Am I misreading your tone and intent toward him? Also, I think you extend Jobs too much credit for Machiavellianism in being able to influence the boards and C-level officers of six other companies. He’s certainly taken advantage of Amazon’s near-monopsony on purchasing, but that’s a fall they set themselves up for. Jobs just may have given the push.

So far as price fixing goes, I don’t see how opening a market from a single player (Amazon) setting prices for all suppliers to two players (Amazon and Apple) interacting with all six major suppliers is price fixing. Quite the opposite. That’s a move from an anticompetitive environment to a competitive environment. Amazon’s been setting prices for years without consultation with the publishers. Further, when Macmillan came to Amazon with the agency model, their alternative was to keep the current Kindle contact with deep windowing. Hardly price fixing.

I also see a lot of the Kindle community complaining about Macmillan’s ‘take-it-or-leave-it’ tactics. First of all, they weren’t take or leave it — two offers were extended, and in business it’s quite normal to expect counteroffers. Was the Kindle community outraged about Amazon’s take it or leave it negotiations with Hachette UK, Diogenes in Switzerland or the US POD community in recent years? One offer, no compromise hardball has been Amazon’s style for a long time, complete with nonnegotiable price setting. That they got a partial taste of it back is perhaps ironic justice, but hardly oppression.

That you’re not bothered by what he’s doing does concern me, as I have seen the David vs Goliath silliness in much of the reporting (not yours). They’re all Goliathes. Every single one of them, and that includes Amazon.

I honestly think you assign far too much importance to Steve Job’s role in upsetting what was an essentially untenable (for the publishers) market position. Catalyst? Yes. Master coup planner? No. On this I am certain we’ll have to agree to disagree. And per my comments above, I see a lot more nuance here than you do, apparently. Including Amazon’s own history in similar negotiations when they’ve been the power player.

But the shortsightedness of publishers falling fast for the Agency plan is that they actually think that if they keep e-books away from the customers by either delays or pricing, that customers will go to hardcovers or pay the 50% higher price for a digital version.

Again, we disagree here. I don’t think the agency model is the end of this. I think it’s the breaking of Amazon’s monopsonistic logjam which will allow eight (or nine, if Sony gets into the act) players — six on the supply side, two or three on the distribution side — to work out multiple market and pricing models without bending to the business model and dictates of a single key player. Ie, far more competitive, not less.

The large publishers need to spend more time adjusting goals and methodologies to work in a more creative way with the current realities that include digital offerings.

On this I couldn’t agree with you more. But they have to get there from here, and cutting off their revenue streams today to build new ones tomorrow would be just as much business suicide as doing nothing.

Best,

Jay

Add that it was the WSJ that reported he had asked the publishers to raise the prices and that he is interested in selling hardware and not so interested in the books relative to a bookstore.

That you’re not bothered by what he’s doing does concern me, as I have seen the David vs Goliath silliness in much of the reporting (not yours). They’re all Goliathes. Every single one of them, and that includes Amazon.

But the shortsightedness of publishers falling fast for the Agency plan is that they actually think that if they keep e-books away from the customers by either delays or pricing, that customers will go to hardcovers or pay the 50% higher price for a digital version.

They are in for a surprise. That comes from even columnists that admire them for the plan but who themselves would not be paying that price for an e-book.

The large publishers need to spend more time adjusting goals and methodologies to work in a more creative way with the current realities that include digital offerings.

In the meantime, I have spent hundreds of dollars recently on non-fiction history and travel hardcovers with charts, diagrams and other illustrations needing more than e-book can offer for proper display, but I would not do that for novels in e-book form.

In my wanderings of pro-con discussions on all this, I see that I’m not at all alone in that.