Which of these responses, in short, appears to be the work of actual adults?
The problem with any business that succeeded quickly (in geological time) is that adults in the company get rich and then they quit, leaving children to take their place. Because adults built a resilient business the demographic shift is not noticeable until something big and unplanned happens.
I just don't get Amazon's stance here. It's evident by other actions that they see the iPad as a serious competitior, which is smart. One of the announced features of Apple's book store is that publishers get to set their own prices. So Amazon...plays hardball with publishers who want to set their own prices. Seriously, WTF? Way to push those publishers away, guys. It's funny--Amazon's relationships with the publishers are its biggest advantage right now; Apple's reportedly moving fast here but Amazon has a HUGE head start. Way to blow your advantage. They're becoming like the Adobe of print or something.
If Amazon forces publishers to a price ceiling of $9.99 for Kindle eBooks; while the same books are selling for whatever price the publisher decides on iBooks/iPad, where do you think consumers will buy their ebooks? They're not blowing any advantage; it's a smart strategic move.
It seems extremely unlikely to me that this action was taken without careful consideration by a number of people at the very top of Amazon's organization.
This was not some off the cuff reaction, it had to be carefully planned. Any analysis that assumes it was a silly mistake therefore seems likely to be wildly off base.
Nope. Sorry. Don't buy it. This is not Amazon playing some deep game to drive the ebook market in directions that it wants. This was very plainly a screwup of epic proportions. I don't know enough about Amazon's internal structure or politics to finger a name but this does have the earmarks of an overreaching junior executive who was high on the idea that "hey we're Amazon, the 800lb gorilla, and we can call the shots and make publishers dance like monkeys." It may have been a group rather than an individual, but if this was an agreed upon action at the highest levels of Amazon... I'd say sell AMZN. Because that sort of hubris in management leads to bad decisions.
And think about what message this sends to other Amazon customers and suppliers. Would Amazon boot your startup off AWS if they decided you were serious competition? Would you want to bet your company on that?
I think this hurts Amazon more than it hurts MacMillan.
99% of Amazon's customer base will never hear about this little kerfuffle, so the good PR they got for "fighting for the little guys" will be fairly limited.
Meanwhile they've lost a lot of good will on the other side: publishers and authors. The reaction from authors has been almost universally against Amazon, and Amazon has been courting them for years to self-publish, especially on Kindle.
The slight bits of positive "yay! Amazon fighting for low prices!" I think is overwhelmingly erased by the author support lost.
Why? What influence do authors have on where their books get sold? Naively, my guess would be "none". As a reader, I am certainly unconcerned with the opinion of authors on where I should buy my books...
The publishers will be pissed, but Amazon remains a key market, so they will get over it.
Amazon has been trying to sell authors on the concept of cutting out publishers entirely, and just jumping on board with Kindle self-publishing.
Given the reaction by authors to this move, I don't think many would be receptive to this idea any more - Amazon has shown that it's willing to bend its suppliers over a barrel and strongarm people in pricing. Given that Kindle self-publishing is still in its infancy, and still has yet to sign a major author willing to ditch a publisher, this recent news hasn't really helped its case any.
The recurring theme here is that Amazon didn't properly communicate anything to most of the people who were affected. The publisher is behaving very strategically at this point in attempting to promote its newly formed partnership with Apple and Amazon basically played into their hands by not presenting their side of the story soon enough.
Specifically, I'm curious why wouldn't you want your representative (your publisher) to have the power to achieve the best possible outcome for you, the author. Disregarding the specifics of this case, why would you trust Amazon to set your books' prices, seeing as how they're trying to subsidize a platform, and they're in the volume business?
Thought experiment: As a developer, would you support a decision from Apple to set a price ceiling of $0.99 for applications in the App Store?
I haven't really seen a convincing argument from Amazon's supporters why they feel Amazon should be able to set prices to goods they don't produce. That is, apart from the fact that these folks would like cheaper books--and that misses the point of what's at stake here. Even if you agree with Amazon on their current pricing model, it seems like an arbitrary and likely momentary alignment of opinion.
If MacMillan's ebook price system doesn't benefit them and their authors, they'll almost certainly adjust it. They're a profit-seeking entity.
As a side note, this whole episode reminds me of Walmart squeezing down the price of pickles by sheer monopsonistic purchasing power.
If Apple were to buy my software for $9.99 and then sell it to consumers for $0.99 I'd be very happy.
Of course the publisher should be free to set the wholesale price to whatever level they want, but Amazon should in turn be free to set the retail price based on the margin they want to make (even if it's negative, like right now). Having the publishing industry fix the retail prices is going to be a total disaster for the ebook market, since there's a good chance just going to use that pricing power to protect their existing dead tree business.
Lower prices don't affect my bottom line, they affect the publisher's bottom line. If it means more volume, I make more money. (You could argue that allowing the publisher less profit means there will be fewer books of lower quality, but that is already the case for programming books. There is already no money to be made.)
Your initial claims here don't follow: Lower prices certainly do have an affect on author's income. Authors receive a royalty based on a wholesale price, which is (normally) directly related to the price you pay as a consumer.
Publishers' and authors' interests are fundamentally aligned. Volume and pricing affect everyone in this equation. It seems like they should be the ones discovering and ultimately setting the right price/volume ratio, not Amazon.
(I have no idea what you're driving at in your last two sentences.)
Author royalties are usually based on Suggested Retail Price, not the actual retail price.
My impression is that Amazon is primarily fighting over the right to set actual retail price, like bookstores all across the country have done for ages. The publishers don't want that to happen because they believe Amazon will set them low enough to affect hardback sales.
But actual retail price has no effect on the money most authors make. A discounted book still pays the author a royalty based on full SRP.
At least that's how I understand this whole thing.
Yes, you're quite right that there is an important distinction to make there.
To clarify one point: Authors typically make their royalties on the wholesale price--that is, the actual cash publishers receive from booksellers like B&N and Amazon. For a printed book, that might be 50-60% of the list price ('sticker price').
The actual retail price, wholesale price, and list price are all related. A higher list price does result in a higher wholesale price, which in turn affects the royalty payment.
Stross, at least, seems to see this as an attack on both his publisher and him (if nothing else, he ends up as collateral damage). Amazon demands more publication rights and a larger cut of the sale price, which means he gets less for his writing.
Which of these responses, in short, appears to be the work of actual adults?
The problem with any business that succeeded quickly (in geological time) is that adults in the company get rich and then they quit, leaving children to take their place. Because adults built a resilient business the demographic shift is not noticeable until something big and unplanned happens.