Amazon vs. IPG dispute

[Ormond]

I just ran across this on the Locus website:

http://www.sfwa.org/2012/02/sfwa-is-redirecting-amazon-com-links/

The links found at the bottom of the above page include the following:

From the Publishers Lunch link, a quote from IPG's President:

Suchomel writes: "Amazon.com is putting pressure on publishers and distributors to change their terms for electronic and print books to be more favorable toward Amazon. Our electronic book agreement recently came up for renewal, and Amazon took the opportunity to propose new terms for electronic and print purchases that would have substantially changed your revenue from the sale of both. It's obvious that publishers can't continue to agree to terms that increasingly reduce already narrow margins. I have spoken directly with many of our clients and every one of them agrees that we need to hold firm with the terms we now offer. I'm not sure what has changed at Amazon over the last few months that they now find it unacceptable to buy from IPG at terms that are acceptable to our other customers." Suchomel reiterated to us that the company's terms of sale for ebooks have not changed.

And one of the most disturbing things to me comes from the first comment under the Publisher's Weekly article about the independent bookseller featuring IPG titles:

As an IPG client publisher, I am very grateful for this support. We are trying to stand firm even though we have an author on tour and Amazon's actions are hurting us badly. Amazon has pulled the ebook from the website and also eliminated any discounts for the print edition of the book to discourage sales. I do understand these tactics but Amazon's unilateral attempts to shock the industry into doing what it wants are less than helpful if they want any loyalty at all from authors and publishers. But maybe they really don't care about that, sometimes it is hard to know why they are doing what they do.

That Amazon would "eliminate any discounts for the print edition...to discourage sales" seems particularly egregious to me.

It seems that Amazon is becoming the WalMart of the book business in the unethical way they treat suppliers. I think I will avoid buying anything through them if possible as long as this behavior lasts.

[Lummel]

Something similar came up in, I think, a general chatter thread regarding how Amazon dealt with Macmillan. In that case Amazon backed down and while possibly they may well do so again I wouldn't be surprised if they periodically attempt to change terms of trade to their favour with the suppliers that they work with. The bigger a player Amazon becomes in the market place the more likely it is to be successful over time I suppose.

[Dr. Tachyon]

Publishers exist because printing and distributing books is expensive and somebody has to pay for all that in advance before there's revenue from the sales. Distribution in digital form removes almost all of that cost. That greatly reduces the role of the publisher and thus the amount of money they can expect to make from a book. Nobody likes it when technology makes their business model obsolete but that's what's happening.

[Mr. E]

Publishers exist because printing and distributing books is expensive and somebody has to pay for all that in advance before there's revenue from the sales. Distribution in digital form removes almost all of that cost. That greatly reduces the role of the publisher and thus the amount of money they can expect to make from a book. Nobody likes it when technology makes their business model obsolete but that's what's happening.

You know, I kind of disagree with that. Unless Amazon wants to open its own editing, galley and proofing divisions I think publishers have to stick around, at least in the "novel" business--for all the crap publishers get, they are the "gatekeepers," as it were--I don't know if I want to live in a world where anybody with half a mind can publish anything they want on Amazon regardless of editing, construction or quality.

[Joe Abercrombie]

Publishers exist because printing and distributing books is expensive and somebody has to pay for all that in advance before there's revenue from the sales. Distribution in digital form removes almost all of that cost. That greatly reduces the role of the publisher and thus the amount of money they can expect to make from a book. Nobody likes it when technology makes their business model obsolete but that's what's happening.

This just isn't true. Printing and distributing books actually isn't very expensive, and accounts for a pretty tiny proportion of the retail cost of a paper book. Publishers exist because commissioning, editing, marketing, publicity, design, production, budgeting, managing relationships with retailers and international publishers and numerous other functions are all pretty skilled and specialised jobs. Distribution in digital form removes almost none of those costs. Indeed it sometimes adds some extra ones.

[Mr. E]

This just isn't true. Printing and distributing books actually isn't very expensive, and accounts for a pretty tiny proportion of the retail cost of a paper book. Publishers exist because commissioning, editing, marketing, publicity, design, production, budgeting, managing relationships with retailers and international publishers and numerous other functions are all pretty skilled and specialised jobs. Distribution in digital form removes almost none of those costs. Indeed it sometimes adds some extra ones.

Yeah, what I was trying to say, only six hundred times better.

[Dr. Tachyon]

Like it or not, the traditional publishing industry as it has existed for the last 100 years depends on the sale of paper copies through retailers, and that's going away. The transition to ebooks will change the industry profoundly. If they don't find a new business model soon they are on their way out.

Amazon already has direct deals with a number of authors, IIRC.

[kcf]

This is just another example of why I don't give Amazon my business. They use these strong-arm tactics that in the end hurt their customers (readers) and the creators of products (authors).

[thistlepong]

Amazon declined to renew it's ebook distribution contract with IPG. They were obligated to remove those titles, regardless of how evil it sounds.

IIRC the Macmillan thing was responsible for the sudden jump in price for a lot of eBook titles, which was followed by re-negotiations with all major publishers that ended with a lot of new ebooks costing more than hardcover copies and a ridiculous situation in which the paperback is often cheaper then the electronic version. (They retained the right to control pricing for self published titles and that kind of sucks; and kind of doesn't. 70% is a pretty good deal while you're enjoying freedom or courting major publishing.)

I hate to be a corporate standard bearer, but when Amazon announced its own publishing venture, B&N was first in line to deny any sales in their storefronts, followed by a slew of retailers and major distributors. They just aren't the only crappy party in this.

[fionwe1987]

I think what people are failing to note is that it doesn't matter that the actual printing and distribution of hard-copy books isn't that expensive, its other services like design, editing, etc. What matters is that to the average customer, 14.99 for an ebook is an absurd price. Especially with the DRM, the inability to share that book, or resell it.

I'm not saying Amazon's tactics are fine, though they aren't the only players in this game who're playing dirty. Wasn't there a story about publishers refusing to sign contracts with authors who had used Kindle Direct Publishing to some success? Or the B&N refusal to sell Amazon's books that was mentioned above...

The point is, the ethical considerations of these tactics aside, Amazon is on the winning side of this debate. The business model for publishing needs to change, or digital reading will bulldoze it anyway.

[Seli]

Stuff like this makes me happy I haven't bought from Amazon in years. They are trying hard to destroy all the middlemen between them and authors that due to size and expertise are able to act as a counterweight to their demands.

[Grack21]

This is why I miss borders. It's either B&N or amazon for me now. And the B&N here...man don't get me started. It's less then 50 percent books for fucks sake.

[polishgenius]

This is why I miss borders. It's either B&N or amazon for me now. And the B&N here...man don't get me started. It's less then 50 percent books for fucks sake.

This makes me pleased that Waterstones- the only bookstore chain of any size remaining in the UK, and which was struggling before last year- has been taken over by a man who clearly loves books (as opposed to just making money from selling them, though I'm sure he'll expect that too :P). He's a Russian fella who's installed as managing director James Daunt, previously owner (well, still owner, but no longer day-to-day running) a small (six shops) London chain, and given him mandate to instill a business plan that will lose them money in the short term in the hope of making the shops more friendly and more adapted individually to each area they're in as opposed to the bookdonald's they were and thus getting people to come back in the long term (doing things like cutting 3-for-2 displays, thus losing both the money from sales and the money they get from publishers to promote their books in such, and allowing sellers to push books they like and think their locals might like rather than just focus on glossy bestseller of the day).

Also: he dislikes Amazon.

[Spring Bass]

I like Amazon, and I don't care about publishers. If Amazon can use its size and buying power to lower the prices for us consumers, we benefit.

[Seli]

I like Amazon, and I don't care about publishers. If Amazon can use its size and buying power to lower the prices for us consumers, we benefit.

Also if it leads to slowly starving the source of our enjoyment? It is not worth it to me, a system that ensures that I as a consumer will still be able to find new content I like in the future is worth preserving. And Amazon is not helping.

[kcf]

I like Amazon, and I don't care about publishers. If Amazon can use its size and buying power to lower the prices for us consumers, we benefit.

Do you care about authors? Do you care about reading good books?

What Amazon is doing is de-valuing the product that is a book (whether physical or electronic). This will force costs to be cut - so, authors will make less money, editors will be utilized less (or not all), copy-editing (proofreading) will go away, there will be less marketing/promoting, etc.

This will erode the overall quality of books. It will all but insure that only the biggest names in writing will be able to make a living writing (most writers already need to have a 'day' job). This will make writing less viable of a career. This will be a roadblock to new writers entering the market.

It takes a lot of people to make a good book, not just the writer. Editor, copyeditor, marketer, graphic (cover art, page set-up). And this is needed for all books, whether digial or not. Devaluing books will insure that products will be lower in quality.

I want high quality stuff. Good writing. New, exciting authors. And I'm happy to pay for it, to make sure I get more of such things in the future.

[Arthmail]

I like Amazon, and I don't care about publishers. If Amazon can use its size and buying power to lower the prices for us consumers, we benefit.

I love ultra-simplistic views of economic matters. It shows me that my schooling was important.

[unJon]

This is a good thing. Ebook prices are truly out of whack at the moment. It will settle into an equilibrium eventually. Some publishers won't survive. Only stasis is peaceful.

[Dr. Tachyon]

One of the things the publishing industry's apologists don't seem to grasp is that an ebook isn't just a pdf version of a printed book. With an ebook the publisher no longer has full control over how the text looks because that needs to be decided (at least to some degree) by the device it's read on. The parts of the production process that deal with that sort of thing will go away. Forget about bound volumes and the text formatting done for that form of publication. We are going back to scrolls.

Writing itself will probably change too. The reason novels are so dominant is because a novel can be sold as a product by itself while a short story can't. Once paper copies are gone that's no longer the case. I'd expect a shift away from novels and towards novellas and short stories.

[Grack21]

As someone who regularly buys hardcover textbooks on programming and history, seeing people complain about a 15 dollar ebook makes me want to kick a baby. People are greedy asshats.