Althouse: "Amazon must be unbelievably happy today."

April 12, 2012

"Amazon must be unbelievably happy today."

"Had they been puppeteering this whole play, it could not have worked out better for them."

18 comments:

BigFire said...: Amazon was forced by the publisher to jack up the prices. You'll note whenever you buy a Kindle edition of the books that prices are set by the publisher. Well, we might get something out of this afterall.; 4/12/12, 11:42 AM
Michael P said...: I don't really understand the argument that without these illegal cartels that agree to have minimum prices, the market might be distorted by monopoly power.

Sure, maybe Amazon would become something like the Wal-Mart of electronic books, exerting pressure on their suppliers (authors and editors) to lower prices and passing those on to consumers. I'm just not sure why the general public is supposed to be upset by that turn of events. Just as there are other places to shop besides Wal-Mart, there will be other places to buy (or license) electronic books than Amazon.; 4/12/12, 11:58 AM
wyo sis said...: This is a step in the process that has libraries wondering which way to jump. We know almost everything will be different, we just don't know exactly what will change or when. It's exhilarating and frightening at the same time.
I love being at this crossroad for its excitement, but it makes me very nervous. Now I know how saddle makers and livery stables felt when the internal combustion engine caught on.; 4/12/12, 12:00 PM
Synova said...: Publishers cut off their noses and blame Amazon.

Bah.

The ebook prices are far too high and consumers know it. The ebook prices are too high and the author's royalties too low. And somehow Amazon is the bad guy?

It doesn't take a degree in rocket science to understand that the *cost* of an ebook is minimal compared to the cost of a paper book. The ebook and paper book have equal editing, artwork, and typesetting expenses, and after that the ebook is electrons. The paper book has additional print set-up expenses, print runs, distribution (physical books sent all over the country) and shelf-space, retail overhead costs. And THEN they all get sent back again as "remainders" and the publisher gets to claim a loss. (And the author doesn't get royalties until long after finding out how many of those physical books actually sold to the end-user, and the publisher does their taxes.)

And yet... we're supposed to believe that ebooks need to cost the same as paper-books, or even more. And that objecting to that is an evil attack on publishers. They're all doing RIAA math and have decided that they're going to lose sales if someone buys a $5 ebook instead of a $15 trade paperback or $25 hardcover.

They are right about that! Because consumers make smart economic choices and if they have to chose between an ebook for $5 from one publisher and an ebook for $12 from a different publisher, what idiot would spend $12 when there are so very many other books to read?

And they are profoundly wrong, as well, because it's not ever a choice between a $5 ebook and a $15 ebook... it's a choice between a $5 ebook and THREE $5 ebooks.

All of which are published by someone *else* because the publisher has decided that they can use ebook price inflation to force paper-book purchases.

Because they do nothing but have cocktails with the corner-office-Lexus execs from the music industry, and they think this is how the world works.; 4/12/12, 12:43 PM
Shanna said...: As a kindle reader, I am really happy about this.

If Target can sell your crappy romance for 5.99, Amazon shouldn't have to sell it for 8.99.; 4/12/12, 12:51 PM
Shanna said...: This is a step in the process that has libraries wondering which way to jump.

Speaking of, my library has a limited selection of ebooks. A few months ago, I was able to borrow them by checking them out on the library website and then going to amazon, hitting a button and then when I turned on my kindle wifi it would download. After 2 weeks, it automatically goes away.

Well apparently in the last month or two, publishers decided to make you MANUALLY hook up a cord to your kindle in order to borrow books. Ridiculous. I have ZERO sympathy for the publishers in all this.; 4/12/12, 12:54 PM
Salamandyr said...: Now Amazon just needs to sell their books in EPUB format and they will be the dark overlords of all.; 4/12/12, 1:13 PM
Smilin' Jack said...: What's good for Amazon is good for America.; 4/12/12, 2:11 PM
Delayna said...: Synova said:

"And they are profoundly wrong, as well, because it's not ever a choice between a $5 ebook and a $15 ebook... it's a choice between a $5 ebook and THREE $5 ebooks.

All of which are published by someone *else* because the publisher has decided that they can use ebook price inflation to force paper-book purchases."

(Cough) baen books...(cough); 4/12/12, 2:29 PM
MDIJim said...: With a Kindle i have read more books in the past 6 months than i read in the previous 6 years, or so it seems.

First, Amazon has made available free to all the great books that are out of print because their copyright protection expired. Who can argue with that? Only publishers who are selling you their own editions of these books and paying zero to the authors.

Second, Amazon sells at a very low price books that are still protected but which are out of print or otherwise unavailable in hard copy because demand is small. Those books are normally available only from small specialty retailers and only at the publisher's obscenely profitable list price.

Third, Amazon is fighting global warming by selling me books that i'd like to read but cannot get unless I drive 50 miles to the nearest major book store, or order them through a local library or book store and wait weeks.

I suppose there is something to the fear that Amazon will acquire so much market share that it will be tempted to act as a monopolist. That doesn't work anymore. Just ask Microsoft or AOL.

Question: why do journalists always give such sympathetic coverage to protectionists and Luddites? Is it because they themselves participate in an industry facing the same pressures? Or is it because they are dummies who do not understand economics 101? I suspect that it is the latter.; 4/12/12, 2:42 PM
Alex said...: I fail to see what Amazon is so deliriously happy about. Apple has $110 billion cash, $0 debt. Amazon has only $10 billion cash and $23 billion debt.

So who's laughing?; 4/12/12, 3:54 PM
Kylos said...: People should remember that publishers dont only print books; they also provide other services such as publicity and editing. They should have a right to decide the terms by which they make their catalog available to resellers to remain profitable.

That said, their e-book prices are too high, but I fail to see why the government should force them to accept Amazon's terms if they can make Amazon agree to theirs. I still don't buy many e-Books because of price. I think the publishers will eventually have to realize that they can dramatically increase volume by significantly slashing prices. Otherwise they will face strong competition from upstart electronic-only publishers.

I guess I don't see how the government can charge collusion when the publishers are simply trying to defend against Amazon's aggressive tactics, regardless of the publishers' unwillingness to adapt to new market conditions.; 4/12/12, 5:39 PM
Alex said...: Apple could buy Amazon with their pocket change.; 4/12/12, 5:53 PM
Shanna said...: I think the publishers will eventually have to realize that they can dramatically increase volume by significantly slashing prices.

I can't imagine why they haven't realized this already. I buy tons of those 99cent books, but when they charge 8 bucks for something I can get much cheaper at Target, they just piss me off.

They should have a right to decide the terms by which they make their catalog available to resellers to remain profitable.

But why should they force Amazon to charge more for an ebook than a physical book? That makes no sense...unless they've been price fixing with Apple.

What trips me out about this is the Apple cultists coming out full force against amazon. It's not going to hurt the iwhatever consumers, so why are they freaking out?; 4/12/12, 6:45 PM
Synova said...: "People should remember that publishers dont only print books; they also provide other services such as publicity and editing. They should have a right to decide the terms by which they make their catalog available to resellers to remain profitable."

Publishers provide few other services anymore, but they still think that they do. (Publicity? In what reality?)

But what they seem to be trying to do with ebook prices is force consumer behavior in preference of reading paper... because "best seller" and other counts are based on paper... because that's how the publishers have it set up... etc., blah blah blah. And it's not working and they still aren't profitable because they're pushing a business model that is working as hard as it can against both the authors (and please let us not *imagine* that authors are getting the attention of editors or marketing departments) and the consumers.

Do they have a right to drive their business into the ground?

Yes, I suppose that they do.; 4/12/12, 10:27 PM
Synova said...: It is also harder to do the sort of twisty business that delays royalties for months upon months or longer and then not find a way to give accurate counts of books sold.

Because books sent to bookstores get "remaindered" and then the publisher has to figure their losses and taxes and twist the numbers some more and finally decide how much to eventually get around to paying the author.

Ebook sales are *done*, the money collected, and the numbers instantly available.

Hard to justify six months or longer of secret book-keeping shenanigans for the quarter ending last year some-time, and be happy you got anything at all where is your next book.; 4/12/12, 10:33 PM
Almost Ali said...: When I see a Kindle edition going for $12.99, I'm reminded that there's hardly anything new out there worth reading.; 4/13/12, 5:45 AM
Kylos said...: But why should they force Amazon to charge more for an ebook than a physical book? That makes no sense...unless they've been price fixing with Apple.

What trips me out about this is the Apple cultists coming out full force against amazon. It's not going to hurt the iwhatever consumers, so why are they freaking out?

First, as I understand the case, the government does not allege that Apple was involved in setting prices, just that it stipulated that the publishers use an agency model to set prices so competitors will not be able to undercut them with hot deals. There's some sense to this: unlike physical commerce, consumers are able to take advantage of extremely low prices in a way that makes the publishers fear a race to the bottom.

While I want to see much lower prices for e-books, I want to see that happen as a result of market forces ( consumers largely ignoring high prices, upstart publishers forcing the big houses to cut the organizational bloat,etc.) not because the government gave power back to a monopolistic e-tailer looking to drive out competitors.

Synova, I agree with much of what you said: the publishers are acting foolishly now, but I don't think it's anti-competitive for a couple reasons: their position is unsustainable – it should be easy for anyone with half a brain and a little startup money to provide all services any author needs to publish e-only – customers can still buy paper

However, I can't be too hard on the publishers since they can't just shut down their print business since the majority of consumers still buy paper books – even though their paper numbers are going down they still have the overhead of setting up the print run.

In the end, I'd much rather let this play out in the market, and I'm helping that process along by purchasing far fewer e-books than I would like at the present.; 4/13/12, 7:39 AM