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Amazon Versus the E-Book Universe
May 26, 2012 10:55 AM   Subscribe

The E-Book Wars: Amazon Versus the Rest. Publishers, distributors, booksellers, and authors weigh in on Amazon's ever-increasing presence and influence in the electronic publishing world. The author also takes a stab at forecasting the future for the major players in the e-book industry.
posted by Rykey (32 comments total) 14 users marked this as a favorite

 
Yup. Amazon are hugely dominant in a market WHICH THEY BUILT*. Worth pointing that out from time to time. They are also very good at doing what they do, which is something the competition and publishers agreived by this new source of money might want to look into before leaping straight to price-rigging.

* sorry Sony e book readers and other pre-Kindle efforts, what you were doing didn't really work and got swept away.
posted by Artw at 11:13 AM on May 26, 2012 [6 favorites]


There was an excellent discussion of this on NPR's On The Media several weeks ago. Recommended listening.
posted by hwestiii at 11:47 AM on May 26, 2012 [1 favorite]


Amazon are hugely dominant in a market WHICH THEY BUILT*.

I don't know if that really matters how they got their market dominance, it's still pretty scary in some ways. I think the fundamental aspect of this is that Amazon doesn't care anymore about selling books than they do about selling Special K protein shakes, or underwear, or socks. The powers that be were wildly inefficient, and ripe for disruption, but they cared a bit more about what they were selling. A massively indifferent seller who is smart and agile scares the shit of people, because they will get every dollar out of the deal they can, eventually. You may say that's capitalism, but the bookmarket was more full of gentlemen's agreements and the like before this. Google and Apple scare people for much the same reason. The only thing worse than a big dumb greedy corporation is a big smart greedy one.

I mean, I can hardly talk, I buy all the above, and all my books from amazon. But a antiquated old business is meeting modern transnational capitalism, and they probably don't have a chance.
posted by zabuni at 11:59 AM on May 26, 2012 [7 favorites]


From Apple's legal response (pdf) to recently being sued by the Justice Department for alleged price fixing:

"The Government sides with monopoly, rather than competition, in bringing this case. The Government starts from the false premise that an eBooks “market” was characterized by “robust price competition” prior to Apple’s entry. This ignores a simple and incontrovertible fact: before 2010, there was no real competition, there was only Amazon. At the time Apple entered the market, Amazon sold nearly nine out of every ten eBooks, and its power over price and product selection was nearly absolute. Apple’s entry spurred tremendous growth in eBook titles, range and variety of offerings, sales, and improved quality of the eBook reading experience. This is evidence of a dynamic, competitive market. These inconvenient facts are ignored in the Complaint. Instead, the Government focuses on increased prices for a handful of titles. The Complaint does not allege that all eBook prices, or even most eBook prices, increased after Apple entered the market."
posted by fairmettle at 12:01 PM on May 26, 2012 [2 favorites]


Oh and I should also say that I agree with the DoJ in all this. Apple's response really doesn't say more than, "Amazon sucks". It does not address the fact that it wasn't the number of titles that was the issue, it wasn't even the agency pricing, it was the collusion to induce agency pricing. The "but Amazon's a mean monopoly" doesn't cover the fact that being a mean monopoly really isn't against the law.
posted by zabuni at 12:05 PM on May 26, 2012 [4 favorites]


So I'm pretty sure it's taboo to talk about one's own sales, but I'm gonna go ahead here because I feel like it's relevant. I really hope this doesn't sound like bragging (I'm not ready to quit my day job or anything); I just think it's a worthwhile perspective.

I self-pubbed an urban fantasy e-book. I have it up on Amazon and also on Smashwords. Amazon is all Kindle-only; Smashwords offers pretty much all the e-reader formats (everything from plain .pdf files to Nook, as well as Kindle), and Smashwords automatically put my book up for me on B&N and several other online stores. It's shockingly easy to use.

When the book first went up last year, I had an audience waiting for it through free fiction websites. Amazon definitely outsold all the Smashwords channels (combined), but I got well more than enough sales through Smashwords to make it worth my while.

Now it's a year later. I see one, maybe two sales through Smashwords in a week. Conversely, I could potentially hit 200 sales this month on Amazon. My sales on Amazon have steadily increased since December. I haven't really made a significant effort at marketing my book in months, and I never did anything that favored one vendor over the other. I figured that was just because lots of people had gotten Kindles and/or Amazon gift cards for Christmas, but it's the end of May now and it's still rising.

Further, Amazon keeps asking me if I want to put my book up on the lending library, which would let readers borrow & read it for free--yet I would still be paid. The only catch is that I need to make my book exclusive to Amazon. I haven't done that yet because I don't want to shun anyone who has a Nook or a Sony e-reader or whatever, but I've got to concede that it's a pretty tempting offer.
posted by scaryblackdeath at 12:50 PM on May 26, 2012 [8 favorites]


The article can be pretty much summarized as 'the publishers wanted to protect paper book sales as amazon was charging too low prices for ebooks'.

“There is a way to avoid this and Amazon knows what it is,” Esposito notes: “Charge more for the products. Amazon’s strategy is to try to drive the price down so that their competitors have to match their pricing. This,” he says, “is how they continue to grow by using the market as a scale to continue to shift the market to lower and lower priced goods.” However, as Esposito points out, “Some types of goods aren’t going to be able to be produced any longer.” While Amazon claims it is representing the best interests of the consumer by driving the prices down, Esposito questions how consumers are being served if prices are being driven down to a point where the editorial quality is being compromised.

Without more information on the exact nature of the issues with IPG, it is hard to know if Amazon is seeking to separate print book distribution issues from ebooks, which, being electronic, might not require the presence of middlemen in the distribution cycle.


They also note that the 'natural' price for an ebook, after accounting for cutting out printing and distribution of the paper product, is $10. Which surely is the hard-back price. Once the mass-market paperback is out, the ebook prices should drop to a percentage of those, not remain at the higher hardback price, which is what they often seem to.

Apple must have seemed like a lifeboat to the publishers. Someone who wasn't amazon, offering a premium product (the iPad) and wanted to charge more for ebooks? The problem is the collusion in switching to the agency model instead of the wholesale model, and the Most Favored Nation clause - i.e. that nobody could undercut Apple on pricing. That collusion lead directly to a higher price for customers - which was the intended goal - and eliminated others from being able to compete on price. Collusion to raise prices across the board is classic anti-competitive behaviour and is correctly being investigated.

Amazon has driven ebook sales by cheaper and cheaper Kindles (a torch that's now been taken up by Kobo in the UK, as kindle's are substantially more expensive than in the US). It wasn't publishers that introduced cheap ebook readers. The market is growing fast (366% last year) as the price of the hardware continues to drop, or be incorporated into other devices. Yet the prices of the books themselves remain stubbornly high - usually substantially higher than the paperback version, new or old.

And that's because of the collusion between the publishers and Apple to keep prices artificially high, which still seems pretty much in force in the UK. I have an epub reading kobo, so I can buy ebooks from google books, the kobo store, waterstones, ebook.com, the publishers directly... Hell, I can even buy from amazon, strip the DRM and convert. The point is, they should all be competing to sell me ebooks, just as the various paper book sellers do, and they should cost less than the paper version, not more.

I accept that much of the costs of editing and marketing apply to both types. I can even accept ebooks being sold at near hardback prices at book launch, as that's the profit-making section of bestsellers. But the prices should come down in line with the paperback, and they should be lower due to the much lower distribution costs.

And publishers, drop the DRM. Seriously, it achieves absolutely nothing, it's trivial to circumvent and has no impact whatsoever on piracy. It just annoys people, and locks them into amazon and the kindle as with one of the most common e-readers, having their own DRM means end-users can't easily shift their existing ebooks to another device. Without DRM at all, it makes it easier for end-users to switch to other platforms and away from Amazon, they could even offer an 'import' service - which is what you want, right?
posted by ArkhanJG at 1:15 PM on May 26, 2012 [6 favorites]


the prices should come down in line with the paperback, and they should be lower due to the much lower distribution costs.

This times one BAZILLION.
posted by incessant at 2:12 PM on May 26, 2012


Well there was some breakdown of the cost of a book a while ago that made the claim that the actual physical cost of either paperback or hardback was pretty neglible, so most of the price was the editing and shit.

But it is rather hard to believe. Tex cab replace the typesetting too, if authors learn it.
posted by Chekhovian at 2:27 PM on May 26, 2012


Particularly hard to believe that it's justified in the case of the eBooks given how obviously most of the ones on the kindle store haven't been even casually proofread when they made the leap from paper to digital.
posted by DRMacIver at 3:24 PM on May 26, 2012 [4 favorites]


I recently wrote an assigned piece (the topic wasn't assigned, I chose that) on a blog for the Association of American University Presses called Digital Digest, where I imagine what a bookstore might look like in the next few years, particularly in response to Amazon. It was picked up by Inside Higher Ed and on the Against the Grain blog. An experiment that's trying some of the elements is beginning in Berkeley.

Dang, I just discovered it got picked up by Andrew Sullivan on the Daily Beast. Neato. Anyway, it might be relevant here.
posted by Toekneesan at 4:13 PM on May 26, 2012 [4 favorites]


Apple's price-fixing efforts are very hard to defend, and I wouldn't imagine doing it. Amazon got the market advantage they have in large part by underselling competition; Apple chose to ensure that Apple would not be undersold by...actually making it contractually impossible to undersell them. Amazon's way benefits the consumer (regardless of what else may be problematic about it), and Apple's way pretty much just benefits Apple and takes benefit away from the consumer. What Apple was doing was illegal, and it well should be.
posted by kittens for breakfast at 5:08 PM on May 26, 2012 [3 favorites]


being a mean monopoly really isn't against the law

Evidently, this is true. Otherwise, the DoJ would have been going after Amazon, instead of a small player with, by most estimates, little more than a tenth of the market. All the federales did was hand the eBook market back to Amazon.
posted by Blazecock Pileon at 5:36 PM on May 26, 2012


If Amazon didn't break the law and the small player did break the law, that's exactly what the government is supposed to do.
posted by Justinian at 5:44 PM on May 26, 2012 [3 favorites]


If Amazon didn't break the law

Dumping products on the market under cost in order to gain and maintain control has always been a dodgy practice.
posted by Blazecock Pileon at 5:52 PM on May 26, 2012


we are seeing the development of a “hybrid market” of both ebooks and pbooks

I like it. Lets all call physical books pbooks hence forth. No one will ever confused when you ask for a "pbook", unless you're german of course.

But seriously, this article kind of sucks. The author totally ignores the role of fan fiction stuff in roughing things out, completely ignores kickstarter like possibilities for crowd funding, completely ignores the changing role of typesetting and the possibliities of on demand book printing. Fail.
posted by Chekhovian at 6:03 PM on May 26, 2012


Dumping products on the market under cost in order to gain and maintain control has always been a dodgy practice.

Yeah, I've heard that argument, and basically waht I hear is WAAAAAAHHHHH! THEY GAVE US A BUNCH OF MONEY AND SOLD STUFF AT A LOSS TO ESTABLISH A MARKET THAT WILL MAKE US A BUNCH OF MONEY!!!!! WAAAAAHHH! WAAAAHHH! WE WANT TO SELL AT A HIGHER PRICE, TO NOBODY, AND MAKE NOTHING BUT AT LEAST DO IT THE RIGHT WAY! WAAAAAAAHHHH!

Seriously, publishers are such utter crybabies.

They can't handle anything being out of their control on an order that makes record companies like adaptive and flexible forward-thinking organisations. AT least they've more or less got over being buttsore at iTunes for handing them money.

And, hey, publishers and people who like customers? If you guys want to be taken seriously you might wnat to consider that "price rigging is awesomeone because it gets at Amazon!" isn't really great if you are also getting at us, the consumers. We tend to sit up and notice things like that.

An apology AND sensible prices would be good.

Anytime you guys are ready.
posted by Artw at 7:24 PM on May 26, 2012 [1 favorite]


And Apple, Apple is just Apple. It's kind of hard to be that pissed at them in this when they are just doing the kind of thing they usually do, and to whatever extrent they've been assholes it's no more than other tech players are assholes from time to time.

The crime of the publishers is that they are both assholes AND stupid, and that is more difficult to ignore. And whiney, so very, very whiney.
posted by Artw at 7:29 PM on May 26, 2012 [1 favorite]


Evidently, this is true. Otherwise, the DoJ would have been going after Amazon, instead of a small player with, by most estimates, little more than a tenth of the market.

Yes, Apple, that struggling underdog. We're all pulling for them. By definition, though, you can't have a tenth of a monopoly market, unless I'm mistaken?
posted by kittens for breakfast at 7:43 PM on May 26, 2012 [1 favorite]


C'mon, Apple's market cap is only 525billion. They're clearly struggling little guys.
posted by Justinian at 7:47 PM on May 26, 2012


Yes, Apple, that struggling underdog. We're all pulling for them. By definition, though, you can't have a tenth of a monopoly market, unless I'm mistaken?

Well, I guess you could counterague that they wouldn't have gained that 10% without illegally jacking-up prices, thus making it totally necessary for everyone, and without iBooks would have been dead in the water from the start. Not sure I entirely buy that, Barnes and Nobel managed to bring an eBook reader to market and have success with it without fucking around like that, but hey, they had no way of knowing the iPad would be a roaring successand act as a big sales driver, maybe they thought it necessary.
posted by Artw at 8:30 PM on May 26, 2012


This is a complicated issue (and a long article) but I pretty much side with Amazon on this one. It seems to me that they're the only player who's truly acting in the interest of customers and who are competing as market economics dictate they should. (Supply/demand and all that.) But it's worrisome any time a big corporation corners a market as certain people and views can become marginalized. However, I'm not aware of any such behavior by Amazon on this score.

I'll be a little sad to see the gentleman's world of publishing wane. But some people were surely pissed when Gutenberg's invention killed off hand copying of books.
posted by nowhere man at 9:26 PM on May 26, 2012


> Seriously, publishers are such utter crybabies.

Yup. And the "poor gentlemanly publishers who actually care about books and readers are being crushed by evil capitalists who care only about profits" idea is at least thirty years out of date; all those plucky publishers who cared were bought up by profit-oriented capitalists back then (with a few honorable exceptions who make hardly any impact in the world of bookselling). Now it's just rich assholes fighting each other, and as nowhere man says, Amazon is the only player who's truly acting in the interest of customers. I'm perfectly happy to buy my books from them when I'm not buying used paperbacks at the bookstore in town.

> Dumping products on the market under cost in order to gain and maintain control has always been a dodgy practice.

"Dodgy practice" does not equal "against the law." And the idea of Apple as a 98-pound weakling being kicked around by the big boys is just silly.
posted by languagehat at 8:43 AM on May 27, 2012 [1 favorite]


It seems to me that they're the only player who's truly acting in the interest of customers and who are competing as market economics dictate they should.

That's both true and sad, since to buy an ebook from Amazon means I then immediately have to break the DRM and convert its format in order to read it on my ereader.

Amazon's not consumer-friendly, it's just a bit less hostile in the one area.
posted by rewil at 9:19 AM on May 27, 2012 [1 favorite]


Well there was some breakdown of the cost of a book a while ago that made the claim that the actual physical cost of either paperback or hardback was pretty neglible, so most of the price was the editing and shit.

While the singular of data is not anecdote, I'd like to share mine.

A friend wrote a novel for a major publisher in exchange for a high five-figure advance. It was a featured book at a nationwide bookseller (on a table right by the entrance to each of their stores.)

The publisher had some minor advice about content, but most of the interaction with the writer was to choose the title.

With regards to 'actual editing and shit' I think I can tell you which of those two categories the publisher and their contractors spent more time on ...

My friend's experience was this: he had written the book in Word (I know) and sent it to the publisher electronically.

The publisher then had someone hand-enter the text into ... some system the publisher uses. They didn't say "send us the plain text file," or "we can't read Word docs," they retyped the damn thing.

Writer knew this because when the work came back from the publisher, there were loads of new typos.
posted by zippy at 9:54 AM on May 27, 2012 [1 favorite]


eBooks often cost more than their paper cousins in the UK as they are not VAT exempt. So there's that.
posted by mippy at 12:32 PM on May 27, 2012


Was slightly sad to see over here in the UK that Waterstones have just capitulated to 'the devil' rather than at least trying the Barnes and Noble route
posted by fearfulsymmetry at 1:34 PM on May 27, 2012


the "poor gentlemanly publishers who actually care about books and readers are being crushed by evil capitalists who care only about profits" idea is at least thirty years out of date; all those plucky publishers who cared were bought up by profit-oriented capitalists back then (with a few honorable exceptions who make hardly any impact in the world of bookselling).

The question then becomes whether Amazon will encourage a return of publishing as a profession rather than a evil capitalist business. I suppose it could go either way.
posted by IndigoJones at 3:03 PM on May 27, 2012


publishing as a profession rather than a evil capitalist business

My suspicion is that it is going to go neither way. Look at that whatever shades of grey novel, the mom porn that all the moms are reading. It started out as twilight fan fiction, now its a hugely popular novel.

Hopefully someone will figure out how to use that system to publish actual quality writing some day.
posted by Chekhovian at 5:03 PM on May 27, 2012


I'm late to the party but is the link dead or what?
posted by RolandOfEld at 9:08 AM on June 4, 2012


I'm late to the party but is the link dead or what?

Mine still seems to work OK.
posted by Rykey at 4:56 PM on June 4, 2012


Works now, go figure. Thanks.
posted by RolandOfEld at 8:21 AM on June 5, 2012


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