Authors Get Hosed in Amazon-Publisher Conflict

slfisher 1 265 Views

Authors of books published by Macmillan discovered early Saturday morning that all their electronic books been pulled from Amazon sales, and even wishlists, in a dispute between Amazon and their publisher over e-book pricing.

How the dispute is resolved will help determine the price of e-books in the future.

"Macmillan, like other publishers, has asked Amazon to raise the price of electronic books from $9.99 to around $15," reported the New York Times in its technology blog. "Amazon is expressing its strong disagreement by temporarily removing Macmillan books, said this person, who did not want to be quoted by name because of the sensitivity of the matter."

Part of the dispute is related to the Apple iPad, using iBooks technology, the Times reported. "Macmillan is one of the publishers signed on to offer books to Apple, as part of its new iBooks store," the blog read. Apple will allow publishers more leeway to set their own prices for e-books, the Times said in an earlier story.

In a today, Macmillan CEO John Sargent said he had met with Amazon in Seattle on Thursday, and gave them a proposal for new terms of sale for e-books -- or, as an alternative, greatly reducing the number of titles it would sell with Amazon. "By the time I arrived back in New York late yesterday afternoon [Friday] they informed me that they were taking all our books off the Kindle site, and off Amazon," though books will continue to be available on Amazon.com through third parties, he added.

It's not the first conflict Amazon has had with e-books, nor the first time it has removed books, though it attributed that incident to an error.

"If nothing else, this bit of asshattery on the part of Amazon has well and truly cured me of any desire to ever get a Kindle," posted John Scalzi, one of the affected authors, and one of the first to blog about it. "If Amazon is willing to play chicken with my economic well-being — and the economic well-being of many of my friends — to lock up its little corner of the ebook field, well, that’s its call to make. But, you know what, I remember people who are happy to trample my ass into the dirt as they’re rushing to grab at cash."

Four other major publishers -- Pearson's Penguin, News Corp's HarperCollins, Lagardere's Hachette Book Group and CBS Corp.'s Simon & Schuster -- which signed similar agreements with Apple, are expected to renegotiate their Amazon prices, according to an article in the Wall Street Journal. It will be interesting to see how they respond to Amazon's action.

Ironically, the lead book on Macmillan's website is Priceless: The Myth of Fair Value (and How to Take Advantage of It). "People used to download music for free, then Steve Jobs convinced them to pay. How? By charging 99 cents," the website describes. "That price has a hypnotic effect: the profit margin of the 99 Cents Only store is twice that of Wal-Mart. Why do text messages cost money, while e-mails are free? The answer is simple: prices are a collective hallucination."

Dani AI

Generated

As noted, this thread records the January 2010 standoff in which Amazon briefly stopped directly listing Macmillan titles while the publisher tried to change e-book terms. That action was a short, visible flare-up of a much larger shift: major publishers pushed to move from Amazon’s wholesale-style pricing to an “agency” model (and related most-favored-nation clauses) after Apple’s iPad/iBookstore entered the market. Amazon pulled titles, then re-listed them under new terms — the incident exposed how quickly retail power and publisher rights can collide. TechCrunch (techcrunch.com) The Guardian (theguardian.com)

The legal and economic mechanism matters. Under the agency model publishers set retail prices and retailers take a commission; many publisher agreements also used MFN language that prevented retailers from undercutting those prices. Those contract features were central to the later antitrust litigation the Department of Justice brought and described in its court filings. Justia (DOJ complaint excerpts) (law.justia.com)

That litigation changed the landscape: publishers reached settlements in 2012–2013 and a federal court found Apple liable in 2013; appeals followed and the government’s position was affirmed on appeal, with remedies and consumer restitution coordinated across cases. Those rulings limited use of MFN clauses and changed how major retailers negotiate. DOJ summary (justice.gov)

Practical takeaways for authors (useful regardless of whether a title is currently affected): confirm who owns digital rights in your contract; avoid or renegotiate exclusivity where possible; diversify distribution (use KDP plus aggregators like Draft2Digital or Smashwords) and keep your files in multiple formats; build a direct-sales option and an email list to maintain contact with readers; and monitor royalty statements so delistings are caught quickly. Draft2Digital and Smashwords are common aggregator choices that explain multi-retailer distribution and why nonexclusive distribution reduces single-vendor risk. Draft2Digital blog (draft2digital.com) Smashwords blog (blog.smashwords.com)

This episode explains why ’s concern about platform lock-in is valid and why ’s point about alternative stores is practical: authors who depend on one storefront are vulnerable when publishers and retailers renegotiate the rules.

Member Avatar for liketoread
liketoread 0 Newbie Poster

As soon as I saw that Apple was going to charge 14.99 for e-books I was shocked and dissapointed. The new device is incredible, but it's also very expensive for the 3G models. There is no USB to upload books from your PC if you bought them elsewhere, no SD card slot to transfer material with....so what this means is, you become Apple's hostage if you want to read and they will make you pay dearly....It was obvious with that announcement that prices would go up across the board, which is a shame---- what good is technology if we price litteracy out of the market...reading should not become an elitest luxury.

Member Avatar for CZAnna
CZAnna 0 Newbie Poster

liketoread -- Bluetooth. That's how I get most of my books onto my Palm TX or my G1 phone. Or, since the iPad has WiFi, download directly from Fictionwise, ereader, Baen, Barnes and Noble. Only the Kindle thinks Amazon is the only source of content. Since the iPad can use any iPhone app, and there's already an ereader app, the iBookstore is just a possible store, not the only store.

Member Avatar for slfisher
slfisher 0 Posting Whiz

Apparently Amazon has dropped the paper versions of Macmillan books as well as the electronic versions; I got conflicting information last night.

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