One of the things noted yesterday in Amazon's white-flag statement yesterday was: "We want you to know that ultimately, however, we will have to capitulate and accept Macmillan's terms ..."
'What happens between now and "ultimately" should be somewhat interesting... 'In an optimistic mood for a change, I suggested that if there was time for a compromise arrangement, there might be a workable solution and suggested one, and am adding another one today.
1. The e-book pricing on a Macmillan NY Times bestseller could be $15 for the FIRST month of release and $9.99 after that. Most would be happy enough to either wait or buy.
The problem with that is that Macmillan has let it be known that they've wanted a SEVEN-month wait after hardcover release date before releasing an e-book.
To me, that alienates an entire customer base (much of which is not only not interested in hard-cover books but very active online in fighting pricing above $10 for bestsellers). I do get the impression Macmillan views e-book customers as very low-value unless they can get them to pay the same prices made for new bestsellers, always discounted heavily -- but in those cases there is a physical book without DRM restrictions and with the ability to loan or sell or even give away that book.
Worse, Macmillan's John Sargent actually feels that if they delay the
Think again. The one thing that Macmillan earns with that delay is an angry audience that had been eager to pay them, immediately, additional money while not interested at all in buying the mainstay hardcover books.
2. Amazon, with each Macmillan best seller sold at the proposed $15 (which affects Amazon's marketing ads promising that NY Times bestsellers are, in general, $9.99 in the U.S., could give
' "We are in discussions with Amazon about how to resolve our differences," Macmillan CEO John Sargent told The Associated Press Sunday. He declined to comment further. 'Let's hope they have a solution geared to the customer.
THE ADDED PROBLEM FOR AMAZON WITH THIS SCENARIO
There really IS a problem for Amazon's marketing and global description of its NY Times best e-book sellers costing only $9.99 (+ $2 outside the U.S.) on the Kindle. They have always carried a disclaimer along with the marketing blurb:
"New York Times® Best Sellers and New Releases are $9.99, unless marked otherwise" (U.S.)
Now they can awkwardly add "or published by Macmillan."
That's not even entirely a joke. There are so many Macmillan books (including its imprints) that unless Amazon makes this clear
( via the sudden temporary removal of book-buying capability for a publisher that insists on a bookstore owner becoming only their 'agent' with NO control over how it chooses its own sell-price for its own customers )
on its own new way for the bookstore owner to operate), customers and periodicals would likely blame Amazon for the sudden flow of $15 bestsellers books despite Amazon's advertising of its most popular feature.
In other words, Macmillan's insistence that Amazon act as an "Agent" for their books, rather than as an independent book store owner, creates a new situation that can hurt Amazon's entire Kindle premise. With Steve Jobs so heavily involved as is documented, one can wonder if that isn't a main goal. As we've seen, John Sargent is not e-book friendly.
WIDELY SHARED MISINFORMATION ON NET FORUMS
Macmillan authors are out in force on the forums everywhere, as are people who don't understand the normal setting of prices at bookstores anywhere.
Some authors think (or were helped in thinking) that their cut is based on a book store's sell-price for a book.
No, it's based, as I said, on a mutually-agreed percentage of the LIST price set by the publisher when the agreements are made. On a book with a list price of $25, Amazon is said to usually pay large publishers about 50% of that, or $12.50 (and from this the publisher pays the author). Note that $12.50 is more than $9.99 of course, but what counts for the publisher/author is the list price. They still get paid based on the $12.50 figure.
The correct but inappropriate mantra on forums today is
"The publisher should have the right to set its own prices."
Well, Of course they should. And the large publishing houses wanting to raise e-book prices do have that right and always have.
I follow publishing forums, and the information is consistent.
Normally, the bookstore owner buys from the publisher, and the cost, to the bookstore owner, of that purchase is decided by a mutually-agreed percentage of the Publisher-set LIST price. That is a given.
That is the price the publishing houses always get to set. And have been setting here. From that List price basis, set by the publisher, they pay the author also.
Bookstore owners set the actual SELL-price for the customers, based on their knowledge of their audience.
Price it too high and the bookstore has few sales and loses money.
Price it too low and the bookstore can lose money with low or nil margins.
The store, though, has the option to offer loss-leaders so they can make money from other items bought by customers attracted to the loss-leaders. (Regular buyers will note that some stray bestsellers are priced higher but there but I haven't seen much about this on the forums discussions.
Today, I signed up for email copies of Macmillan notes in ONE forum thread and received 486 of them in a short period, deleted them, and cancelled it.
Once more, the publisher AND author are paid according to the publisher's SET LIST price,
The bookstore needs to keep a profitable business and decides what SELL price will work best for it.
I don't understand the narrow-mindset of a few large publishing houses. All they're doing when delaying e-book releases is *losing* additional money that Kindle customers want to send on release day.
Money is spent on the Kindle specifically to read weightless books in a personal library, and the e-book purchases are used to justify buying an e-reader in the first place. The last thing wanted by that segment is a hard-cover book.
The world changes and the publishers should think more constructively about how they will deal with electronic/digital books instead of rushing to lose money for themelves and for the bookstore owner. Never mind the (e-book) customer (which is the last thing on some publishers' minds these days.
"Why can't it be like the old days?" Time just doesn't stand still for anyone.
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