Monday, February 01, 2010


This weekend Amazon removed all of Macmillan's books, both print and electronic editions, from their store. What that means is that only used copies of these books are available on Amazon, so the author has no chance of making any money from any sales off Amazon. Amazon accounts for such a large percentage of overall book sales that removing these books, even just for a weekend, could be crippling.

What happened? Briefly, Macmillan wants electronic versions of hardcover new releases to be priced somewhere between $12 and $15, instead of Amazon's ubiquitous $9.99. When Amazon wouldn't budge on the price, Macmillan said they would delay the release of e-book editions 7 months after hardcover release. Maybe this was the point where Amazon went ape shit and pulled all of Macmillan's books, in a knee jerk show of anger and power.

Macmillan is the parent company to St. Martin's Press, Holt, FSG, Tor, Picador, and others. Our agency has quite a lot of authors with Macmillan, particularly with Tor and St. Martin's Press. Obviously, our authors are deeply impacted. They are puzzled over how quickly their books were taken hostage in this sudden corporate war. And they are pissed.

What really gets me is Amazon's school yard bully response. The debate is over e-book pricing, so if they had to flex their muscles and beat their chests why not just remove the electronic editions? Why extend this to print editions, when there is no issue with that format? It seems petty and mean. What could Amazon possibly gain? Not any sales, and not any good publicity. See John Scalzi's post for a play by play on how they've taken every opportunity to forfeit business and alienate customers.

Sunday afternoon Amazon caved and offered this explanation to its customers (though as of this posting none of the Macmillan titles I've checked are available of purchase). Here's the relevant part of the letter:

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.

This made me laugh. I don't have a business degree or anything, but saying that Macmillan has a monopoly over their own titles, isn't that like complaining that Crest Toothpaste has a monopoly over Crest Toothpaste? In other words, can you really call having control over your own products a monopoly? It seems like Amazon is really trying to paint a picture where they're just some small honest retailer trying their damnedest to give their customers the best deal they can, but are being undermined by big bad Macmillan and their "monopoly." Give me a break. The relationship between publishers and retailers has been ludicrously lopsided for as long as I've been in the industry, with the lion's share of the power residing with the retailer. More and more books are packaged and repackaged to please Barnes & Noble, and an outdated returns systems protects retailers and guarantees that publishers foot the bill for any unsold stock. In this environment, publishers (even Macmillan), are the little guys. It's refreshing to see one of them stand up to a retailer, and win.

Which isn't to say that I'm happy with Macmillan. They recently rewrote their publishing contracts to stipulate that authors receive 20% of net for all e-books sold. This is significantly below what has been emerging as industry standard, and so far John Sargent has been unapologetic about such low-balling. I find his reasoning infuriating, and it's somewhat gratifying to see Amazon fall victim to his stubbornness. Also, it's possible that despite the price hike, the author's share may end up being less under this new model. No, I'm not normally disposed to take Macmillan's side, but it's an easy call here.

This latest Amazon stunt has pushed me over the edge. I can no longer in good conscious buy any more stuff from them. I've had this thought before, but hesitated to make such a declarative statement, not wanting to take it back later (and I can just spend hours reading Amazon's reader reviews). But this time it's personal. Amazon has just cost me money, and not in the I-can't-believe-I-actually-ordered-these-red-glitter-grips way. Not that they will miss my business. But I'm betting a lot of other authors (particularly Macmillan authors) feel the same way as I do. And the thing about authors? They buy a lot of books.


Anonymous said...

Excellent piece, Cameron.

Anonymous said...

Well Said. Amazon has lost my business too now