[LINK] Fwd: Publishers Lunch Special: Amazon Removes Macmillan Buy Buttons In eBook Price Dispute
Jan Whitaker
jwhit at janwhitaker.com
Sun Jan 31 10:17:21 AEDT 2010
Saturday, January 30, 2010
Saturday Update
The Battle Over the Agency Model Begins, As Amazon Pulls Macmillan Buy Buttons
As originally reported last night and many readers know by now,
sometime yesterday evening the buy buttons for apparently all of
Macmillan's books--including bestsellers and top releases, and Kindle
editions--were removed from Amazon's site. Macmillan books remain
listed but can be bought only through third-party Marketplace
sellers, while Macmillan Kindle titles all lead to pages that read,
"We're sorry. The Web address you entered is not a functioning page
on our site." It is the first shot across the purchasing bow in big
publishers' efforts to reset ebook pricing above the loss-leader
$9.99 price point and retake control over that pricing by moving from
the wholesale selling model to an agency selling model (first
reported exclusively in Lunch Deluxe on January 19), at least for
ebooks published simultaneously with new hardcover releases. Kindle
customers further reported on Amazon forums that any Macmillan books
that were on their "wish lists" disappeared from those lists with no
explanation, as apparently did Macmillan sample chapters that had
been downloaded previously.
Macmillan has commented by way of a paid message to authors,
illustrators and agents, reproduced below this story. Amazon has
declined to comment thus far, either to the media or directly to
their customers.
Among the books subject to the greatest potential short-term effect
of Amazon's buy-button removal is Andrew Young's just-released THE
POLITICIAN, which curiously still ranks at No. 9 on Amazon's
bestseller list (and has been between No. 4 and No. 6 today at Barnes
and Noble.com). Hilary Mantel's WOLF HALL was at 69 on Amazon last
night, falling steadily today and now at No. 128. Atul Gawande's THE
CHECKLIST MANIFESTO: How to Get Things Right was at 34 last night on
Amazon, now at No. 66,--and has risen from 112 up to 86 at BN.com in
the same time period. (These numbers change slightly every hour we've
been checking them.)
We were able to reach a couple of agents for some of Macmillan's
current bestselling authors. Co-head of the William Morris Endeavor
books department Eric Simonoff, whose clients include Douglas Preston
(author of the January Tor release Impact), told us: "The current
model of Amazon selling Kindle editions as a loss-leader is fair for
publishers and authors in the short-term but as we have told Amazon
we don't believe it is sustainable in the long term. Something had to
give to prevent the ongoing devaluation of e-books. Macmillan is the
first to draw a line in the sand but we expect not the last."
Tina Bennett at Janklow & Nesbit, agent for Atul Gawande's new
bestseller, comments: "This development is very unfortunate for my
author, but it's also troubling for public health. The checklist
approach that Gawande describes in his book is a major life-saving
advance. It has been demonstrated to reduce harm to surgical patients
by more than a third, but has yet to be widely adopted in US
hospitals. To make THE CHECKLIST MANIFESTO unavailable for sale is
the equivalent of blocking the distribution of a book announcing the
discovery of penicillin."
Agent Robert Gottlieb at Trident Media Group offered this view: "The
agents I know feel the $9.99 price for new releases is not good for
the business. They want the publishers to work with all the retailers
in a peaceful manner. I don't think it is in any book retailer's
interest both short and long term not to do business with companies
like Macmillan and at the same time Macmillan needs Amazon. What will
Amazon do if S&S moves in this direction or Hachette? If consumers
can't get the books they want from Amazon they will move to other
retail sites for what they want."
One senior publishing executive called the move by Amazon "fairly
draconian" but added that their company had not received any threats
of similar action from Amazon. As we've said before--though consumers
have not yet gotten the message--the agency model that publishers are
trying to implement with Apple and across their customer base
actually lowers the publishers' proceeds from each ebook sale and
gives more profit to sellers versus the current loss-leading model
behind the $9.99 price point.
Another senior publishing executive said that "Amazon may 'spin' that
the consumer is at the heart of the decision, but really their goal
is a monopoly position in books. Publishers don't want a monopoly -
they want consumers to have choice through a number of partners and
channels. They want digital pricing which allows bricks and mortar
retailers to survive and thrive alongside a growing digital market."
That person added, "This reaction proves what Amazon's true motives
are. It is a signal to any other publishers not to change the model
and weaken Amazon's pathway to a monopoly. I hope authors, agents and
publishers see what these motives are and stand by Macmillan."
Among remarks from Macmillan authors posting online, perhaps one of
the most curious came from Sherrilyn Kenyon, who posted to Facebook
and then later in the day removed her entry, which read in part: "All
of you asking why you can't find my books on Amazon Kindle? It seems
that Amazon is the one to blame. They are in a disagreement with my
publisher and to prove a point, they have removed Macmillan books
from their Kindles.
"You know, as a Kindle owner, I have problems with this. They're not
cheap and I bought it so that I could download the books I wanted to
read. I don't like a store taking something from me like this without
warning. It's just like when Amazon removed books from my Kindle that
I'd paid for because they didn't have permission to sell them."
In comments over at John Scalzi's blog, bestselling Simon & Schuster
author Scott Westerfeld writes, "The real power we authors have is
removing links to Amazon from our websites and such.... Random
blackouts do not make customers happy."
Amazon's own forums have been quite busy with postings today, with
customers expressing a wide range of everything from support to
dismay with the etailer's move. The most damaging aspect of their
action in the short-term may be the removal of Kindle "wish lists"
and sample chapters. For some posters that action has echoes of the
incident last summer when Amazon deleted copies of certain books from
Kindle owner's libraries, in violation of the site's own terms of
use. As one person writes, "we do feel vulnerable, even if Amazon is
right to fight. Wishlists disappeared, with no backup of what the
titles were. Sample books we chose to download lead to links that say
Error. It reminds us that we do not have control over the situation,
even if we backup, since what is offered today may not be available
tomorrow." (Amazon apologized for that earlier incident, provided
refunds to customers, and eventually settled a customer lawsuit.)
While many customers support Amazon's efforts to provide low prices,
one "open letter" suggests that the company let customers decide for
themselves what is the right price. "Here's a thought Jeff: You list
them and I will decide if I want to buy them or not. How's that
sound? I agree with you they should not cost more than $10, but I can
enforce that with my pocketbook. I don't need you to make a big hairy
freakin deal out of it on my behalf and I certainly don't need you to
limit my choices based on this principle."
To listen in, and help explain by posting, check out
<http://click.publisherslunchdaily.com/cp/redirect.php?u=NTAwNnwzNDQ4OXxqd2hpdEBqYW53aGl0YWtlci5jb218Mzk1MjQzfDc2MDIyMjM2fDU5MjAzMA==&id=3236534>these
two Amazon customer
<http://click.publisherslunchdaily.com/cp/redirect.php?u=NTAwNnwzNDQ4OXxqd2hpdEBqYW53aGl0YWtlci5jb218Mzk1MjQzfDc2MDIyMjM2fDU5MjAzMA==&id=3236535>forums,
and look at the bottom of each page for the names of other
recently-posted forums worth following.
Comment
<http://click.publisherslunchdaily.com/cp/redirect.php?u=NTAwNnwzNDQ4OXxqd2hpdEBqYW53aGl0YWtlci5jb218Mzk1MjQzfDc2MDIyMjM2fDU5MjAzMA==&id=3236536>here
at PublishersMarketplace, or e-mail us.
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To: All Macmillan authors/illustrators and the literary agent community
From: John Sargent
This past Thursday I met with Amazon in Seattle. I gave them our
proposal for new terms of sale for e books under the agency model
which will become effective in early March. In addition, I told them
they could stay with their old terms of sale, but that this would
involve extensive and deep windowing of titles. By the time I arrived
back in New York late yesterday afternoon they informed me that they
were taking all our books off the Kindle site, and off Amazon. The
books will continue to be available on Amazon.com through third parties.
I regret that we have reached this impasse. Amazon has been a
valuable customer for a long time, and it is my great hope that they
will continue to be in the very near future. They have been a great
innovator in our industry, and I suspect they will continue to be for
decades to come.
It is those decades that concern me now, as I am sure they concern
you. In the ink-on-paper world we sell books to retailers far and
wide on a business model that provides a level playing field, and
allows all retailers the possibility of selling books profitably.
Looking to the future and to a growing digital business, we need to
establish the same sort of business model, one that encourages new
devices and new stores. One that encourages healthy competition. One
that is stable and rational. It also needs to insure that
intellectual property can be widely available digitally at a price
that is both fair to the consumer and allows those who create it and
publish it to be fairly compensated.
Under the agency model, we will sell the digital editions of our
books to consumers through our retailers. Our retailers will act as
our agents and will take a 30% commission (the standard split today
for many digital media businesses). The price will be set for each
book individually. Our plan is to price the digital edition of most
adult trade books in a price range from $14.99 to $5.99. At first
release, concurrent with a hardcover, most titles will be priced
between $14.99 and $12.99. E books will almost always appear day on
date with the physical edition. Pricing will be dynamic over time.
The agency model would allow Amazon to make more money selling our
books, not less. We would make less money in our dealings with Amazon
under the new model. Our disagreement is not about short-term
profitability but rather about the long-term viability and stability
of the digital book market.
Amazon and Macmillan both want a healthy and vibrant future for
books. We clearly do not agree on how to get there. Meanwhile, the
action they chose to take last night clearly defines the importance
they attribute to their view. We hold our view equally strongly. I
hope you agree with us.
You are a vast and wonderful crew. It is impossible to reach you all
in the very limited timeframe we are working under, so I have sent
this message in unorthodox form. I hope it reaches you all, and
quickly. Monday morning I will fully brief all of our editors, and
they will be able to answer your questions. I hope to speak to many
of you over the coming days.
Thanks for all the support you have shown in the last few hours; it
is much appreciated.
All best,
John
Melbourne, Victoria, Australia
jwhit at janwhitaker.com
blog: http://janwhitaker.com/jansblog/
business: http://www.janwhitaker.com
Our truest response to the irrationality of the world is to paint or
sing or write, for only in such response do we find truth.
~Madeline L'Engle, writer
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