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. [emphases mine]
Whenever a company talks about how it is looking out for your interested, Jim Henley’s consumer-surplus version of reality notwithstanding, check for your wallet; it’s probably missing.
The first italic is obvious: any firm that calls complete stopping of sales “expressed our strong disagreement” is either really stupid or exercising monopoly power—and no one thinks Jeff Bezos is stupid.
The second is even sillier: Amazon accuses Macmillan of exercising “monopoly power” and declares that they “will have to capitulate.” Someone ask the people at Hachette about how Amazon has to yield in a clash between it and publishers.
We’ve all seen the claim that starts this article: “On Christmas Day, for the first time in its history, Amazon.com (AMZN) sold more digital books than the old fashioned kind.” Not for the Xmas season; just on the day. And even there, it’s an Amazon declaration—not verifiable from the publishers, since e-book sales are confidential information. But Tobias Bucknell lays out the details from his royalty statements:
Well, I have my eBook sales figures of Crystal Rain, a book that has sold in the five figures in print, meaning people who have purchased in print, print online and in bookstores. That’s a nice run, it’s my bestselling book of the 3 Xenowealth books (Crystal Rain, Ragamuffin, Sly Mongoose), but leaves me still a midlist writer….
In 2008, for a brief while, Crystal Rain was available for free via download. Number of Kindle users who downloaded it: low thousands. Number who’ve purchased it for sale after that: low hundreds.
So five figures in volume compared to three figures. That’s an order of magnitude difference.
This magnitude difference holds steady. I sell hundreds of copies of eBooks, and thousands of paper copies.
The difference between Hachette and Macmillan isn’t one of size. It’s that the Amazon monopoly—the proprietary e-reader format of the Kindle—now has another viable rival: the poorly-named iPad, which uses the ePub format that is the standard among non-Kindle readers.
Apple is confident: the iPad will do more things than read books, so it can sell books that can also be read on other devices. Amazon, for all that it offers other products, lacks that ability, and is trying to protect itself through proprietary formatting.
It appears—given the speed with which they ended their ostracizing of Macmillan—that they may need a new business strategy soon.