Over the weekend, Amazon pulled a move that amounts to a tremendous hissy-fit.
Friday, Amazon pulled the buy button on all of publisher Macmillan's books, both paper and e-book. This bit of muscle-flexing was intended to frighten Macmillan into falling in line with its pricing structure for e-versions of brand-new, best-selling hardbacks.
If you missed the kerfuffle, I suggest you might want to visit John Scalzi's blog for a recap. On Scalzi's blog, the links are marked by underlines of tiny dots rather than being highlighted in a different color. Be sure to follow the links to get a fuller understanding. Also, in the comments trail was a link to an author's blog explaining how all this looks to authors. It's an interesting read.
I have to admit that I'm leaning more toward the publisher's side of this disagreement than Amazon's. Neither side is doing what it's doing for altruistic reasons, regardless of Amazon's claims that it's doing it to keep prices down for customers. They're selling the e-versions of new bestselling hardbacks at a loss simply to entice people to invest hundreds of dollars in their Kindle e-reader. Don't let them convince you otherwise.
On Macmillan's side, they're looking at the bigger picture. Amazon's pricing ploys endanger the higher-priced hardback sales, which is where the company makes back most of the cost of producing the books. (If your information on what it costs to produce a book, from acquisitions through release, comes from rumors and innuendo, I suggest you do some more research. It's mind-boggling what it actually costs.) Their reasoning is that the dramatically lower price Amazon wants to charge for e-copies will undercut the hardback sales to the point where they cannot earn back the cost of production.
Additionally, they're concerned about keeping the chain of sales venues open, which includes not just Amazon, but big box stores and independents, who cannot compete with Amazon in the long-term, since Amazon's overhead is much lower than a physical store's operating costs. It means Amazon can sell at a much lower price and still make a profit. That's often cited as a reason when independent bookstores close, which they're doing at an accelerating rate. Even the big boxes are feeling the impact.
Having grown up in Wal-Mart's back yard (we're a 30 minute drive from Wal-Mart's corporate headquarters), I tend to have more sympathy for the publisher than I do for Amazon, because I see what Amazon is doing as pulling a Wal-Mart. The problem with the Wal-Mart model is that it kills all competition as quickly and ruthlessly as it can, while at the same time destroying some of its suppliers by demanding products at a lower cost than the suppliers pay to produce them. You can find details of their practices online--just Google. I'm not going into them here. Wal-Mart wants to be the be-all and end-all in the retail market, and Amazon's showing signs of wanting to be the online Wal-Mart.
Amazon may well have succeeded in throwing its weight around on this issue, if not for the arrival of the Apple iPad, which, among other things, will supply a ebook platform that supports the new ePub format. Apple's iBook store will offer more publisher-friendly pricing, so Macmillan already had somewhere else they could take their books to. This, in addition to the fact that consumers who tried to buy Macmillan-published books on Amazon over the weekend were quick to go to places like Barnes & Noble's online store instead (this according to a report I read that tracked rankings of Macmillan books on both Amazon and B&N). Macmillan had a bit of muscle to flex as well.
Yanking Macmillan's listings was not a wise move. Amazon does not have the stranglehold on the market that it perhaps thought it did.
As a personal disclaimer, I am not a Macmillan author, and do not expect to become one. My publisher's books list at $4.99 for ebooks, and variably, according to length and whether they're trade paperback or hardback, for the printed copies. But this touches all publishers, and by extension, all authors, because by not allowing Amazon to dictate pricing to levels that threaten publishers' ability to produce books and stay financially afloat, it gives all of us a chance to continue doing what we love, rather than becoming the suppliers that Ama-Mart put out of business.
Life gets interesting sometimes, doesn't it?
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