On the pricing, fixing, and price-fixing of ebooks
by Dan Herman
Amazon is selling too many books too cheaply!” shouted the publishers. “People want to read ebooks when they’re priced cheaply!” Amazon shot back. “I’m torn as to whether I should be rooting for the people who are selling my books to Amazon or the company that sells millions of books to consumers,” wailed the authors. “Hey guys, you all should sign agreements that give you price control over books then set them to the level we’re telling you to, which’ll get you $3-5 more per book, on average,” Apple sent in an email (from its iPad, no doubt). ”Uh, I’m pretty sure you can’t do that,” observed the Justice Department (who was probably tracking the whole thing from MSN.com on Internet Explorer or some such nonsense).
As an avid reader of ebooks, I feel that my voice (and voices like mine) is the only one that has been entirely ignored throughout the whole Amazon/Big Six/Apple/Justice Department ordeal.
First, a few points: I buy lots of ebooks. I have purchased lots of ebooks in the past, and will likely continue to purchase more. When ebooks were only $9.99, I bought them almost without thinking. Whenever I go to Amazon now and see them for $12.99, $15.99 or even $17.99, I will only buy them if I absolutely have to read it now — and there are no $9.99 books that interest me.
Now, there are many valid (and some not-so-valid) viewpoints in this whole debate, somewhat humorously condensed and exaggerated above. I’ll let you take in their arguments in full on your own time. But there are a few of note that I want to point out.
First, a story from the New York Times today, which points out:
Not surprisingly, booksellers and publishers hated this price with the force of 10,000 suns because it made physical books sold for $25 or more seem outrageously overpriced.
Guess what, sports fans? A pbook sold for $25 seems outrageously overpriced regardless of how much ebooks are selling for. Even growing up, I always gravitated toward used books, which typically retailed for less than $10. When I bought a new book, it was usually a paperback (market price of around $14). The $25 price for hardbacks seemed to me to be a result of the physical presence of the book itself: It paid for the sustaining power of the hard cover, which theoretically “protects” your $25 investment.
That’s the only way I could even justify spending $14 on a paperback book, which theoretically was inferior and wouldn’t last as long. Thus, when I first started purchasing $9.99 ebooks, it seemed perfectly natural: I wasn’t paying for the physical printing of the book, so the cost difference should reflect that. And when it got raised to $12.99, it not only broke the psychic “under $10″ barrier, it also broke the pricing model implicit in book-buying — if the information itself was worth $13, and the paper a softcover books used to print cost only a dollar more, where the hell was the $10 hardcover markup coming from? Unless the spines of the books were literal spines torn out from some precious animal, the hardcover price seemed ludicrous.
In the same article, a paragraph starts with “But pull back a few thousand feet and take a broader look at the interests of consumers,” only to pull back and rehash the complaints of every publisher (big and small) against Amazon. I’m not saying the complaints are invalid, or something to be waved off. But they’re (at best) only tangentially related to readers, and definitely not their biggest concern.
It’s not just that the actual reader’s perspective is ignored. We’re also being assailed for daring to take a side at all in what apparently is not our fight.
Amazon is not on your side. Neither is Apple, or Barnes & Noble, or Google, or Penguin or Macmillan. These are all corporations, not sports teams, and with the exception of Macmillan, they are publicly owned. They have a fiduciary duty to their shareholders to maximize value. You are the means to that, not the end. The side these companies are on is their own side, and the side of their shareholders. This self-interest doesn’t make them evil. It makes them corporations.
He ends with this exhortation: “In other words, ditch the simplistic binary framing. You’re not watching a sporting event, with simple rules and clear-cut goals.”
But the problem with this argument is the metaphor itself: I don’t think anyone’s arguing that they’re on the same team as Amazon, or the publishers (with the possible exception of the authors). Reducing the argument to a binary sporting event means you’re a fan of one of those teams, which I think is entirely apt.
Personally, I’m on Team Amazon (used in the “Twilight” sense, not “I’m a member of the Patriots in the same way Tom Brady is a member of the Patriots”). I’m aware that Amazon is a corporation whose sole fiduciary responsibility is to the shareholders. I’m fully aware that Amazon is trying to lock me in to its walled garden of content, with the Amazon Kindle (and assorted apps) as the key.
I’m OK with that.
Thus far, and likely due to the fact that they’re the only entity in this fight who directly interacts with consumers, Amazon’s moves are the ones that seem aimed at making my experience better. They’re the ones arguing for lower pricing, the ability to use the content on all my Amazon apps (which includes my Android phone, iPod Touch, iPad, PC, Mac, Web reader and Kindle) and a larger availability of ebooks. Given all that, why shouldn’t I be waving my Amazon pennant around?
I’m not saying this is the best long-term solution for publishers to continue making their profit margins, or for authors to get the best deal or even for the consumer, should Amazon decide to unilaterally raise prices. There is a dizzying array of variables involved in each of those arguments for both sides, and anyone who claims doing A is inevitably going to bring about X is playing with algebra where differential calculus is required.
To extend (and torture) the sports metaphor, I don’t particularly care what the front office is doing so long as the team on the field is winning. And since most of the players save for Amazon are treating the fans with indifference, at best, it’s not hard to see why I’m rooting for the home team. If any of the other teams want to engage some fan interest, they might want to remember that, after all, we’re why they exist in the first place.