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[Writer Post] Amazon vs. Apple vs. Publishers vs. DOJ

Posted by reudaly on April 18, 2012 in Writing |

I love writing and publishing. I really do. It’s one of those “calling” things that I have to do or I’m miserable. That’s why a lot of us write-because there’s something in us that says we have to-it’s certainly not the money. The Current Big Issue is the DOJ Anti-Trust Lawsuit against Apple and five of the Big Six Publishers that seems to completely benefit Amazon.

DISCLAIMER: I’m not a fan of Amazon’s current practices. This post is more of my views of the current situation. If you discuss it-be civil.

One of the problems with this suit is that it’s being played out in mainstream media. What it looks like to Joe Q. Public is that Amazon is trying to save them money while Apple and the Mean Old Publishers are trying to be Evil and push up costs on eBooks. This is COMPLETELY SIMPLISTIC and untrue.

There’s been a huge debate over Agency vs. Wholesale pricing. Now, frankly I don’t care which pricing policy wins out. VERY simplistically, Agency Models have publishers setting a price for a book and giving retailers a 30% commission on the sales. Wholesale says the retailers buy books at a set price then can sell them for whatever they want and keep the profits of anything over what they buy from the publisher.

Where this turns into this ginormous issue is that Amazon has made a practice of “selling for a loss” which means they think they can sell books for less than they paid for them and they can make a profit by OTHER things they sell – like their Kindles. Where this turns “Evil” is when their ability to do this causes other outlets to go out of business. The small independents are the first to go out of business because they can’t compete, then we see bigger chains (like Borders) fall. Barnes and Noble is fighting a good fight…but if they go down, we’re FORCED into Amazon’s playground. IF (and it’s a big if, I know) Amazon became the only place to buy books (whether print or electronic) just how long do you think they’d continue to sell at loss? Really. Think about that hypothetical. It’s a sound marketing/economic principle that “Selling for a Loss” isn’t a sustainable business practice. Amazon WILL NOT be able to maintain it forever.

But, the masses cry, all those self-published authors can set their own prices and make major royalties! Yes, IF they either only sell on Amazon for a set period of time through Kindle Select. Or don’t sell/advertise anywhere else for less. Amazon has a very aggressive price matching policy-which would seem to benefit consumers. It does NOT benefit the authors/publishers. There is evidence of mistakes and/or times when Amazon has “discovered” a book sold or promoted on a website for less (or even free sample chapters) and has discounted the book accordingly-for long after the original promotion.

So? The author wins by getting more readers right? Wrong. Amazon pays royalties based on THEIR SELLING PRICE not the price set by authors/publishers. You set the price at $2.99 and somehow they see it for $1.99? You get royalties on $1.99 not $2.99. If they screw up and give away your book? You don’t get paid. And they WILL NOT make good on the difference. You MIGHT get an apology, but you’ll never see that money.

There are those who’ve called traditional publishing dead. Paper books are dinosaurs sinking into the Tar Pits. Long live eBooks. Yeah. NO. This can be argued until pixels turn blue. Consumers are showing they want paper AND pixel. I have all the ereader apps on my iPhone, but I still read paper books 90% of the time or more. I’m still struggling for a print career because we all still want to see our names in books stores and on spines in a bus/train/airport. And the biggest…print does NOT have DRM. There is no digital rights management on paper. IN MY OPINION DRM is the evil that is perpetuating piracy in electronic media. Telling someone they can’t have something unless they buy it for a specific device an in a specific manner make them want to find it without out those restrictions. It’s the stubborn “Stick it to the Man” attitude that only makes matters worse.

The idea that Apple colluded with publishers to “fix pricing” may seem “obvious” on the surface, but this is a much deeper and more insidious problem which needs careful thought and consideration. The reins can’t be handed to a single company EVER. I won’t get into eBook pricing-it’s not as cheap as many think, this is going to long. But the more content is fought over and devalued, the more you’re going to get what you pay for because those of us who care won’t be able to afford to do it anymore.

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1 Comment

  • Daniel Myers says:

    I agree with your assessment of self-publishers completely. One thing I did want to point out, after reading the Petition by the United States, is that Apple was, for all purposes, an agressor, with regards to fee setting. Job’s philosophy was to force Amazon into a conformaty of pricing and not let the market forces proceed.

    Daniel…

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