Friday, April 2, 2010

Amazon and Hachette e-books

The Amazon forum had a posting yesterday
from "The Amazon Kindle Team" about missing buy-buttons
for some Hachette e-books.
' We recently signed an "agency" agreement with Hachette and we are working with them to offer their books under these terms in the coming days.  This means we will not be selling Hachette ebooks in the interim.

  Update: Hachette has disallowed the sale of Kindle books except on agency terms effective as of 12:01 am this morning.  We came to terms late last night but we cannot be operationally ready to sell their ebooks on agency terms until two days from now -- April 3 -- when we will also cut over for the other publishers that are switching to agency.

  If we can get a two day extension from Hachette to continue selling their ebooks under the prior terms, we can have the Hachette ebooks promptly back for sale today.  If not, then they will be back on April 3. '
People who do business programming know how true this all is, but the rush (requested by publishers) to get contracts in place -- so one CAN sell books at all because Apple's conditions of selling iBooks in its iBookstore require that publishers do not allow any other bookstores to sell at lower prices than Apple's -- has invited not a little chaos.

Sony has announced it will be doing the same with some temporary inability to access certain books not yet priced in the site software to show the Agency plan.  See FinancialTimes for some detail on that.

  Under Apple's Agency plan, Amazon and other online bookstores are no longer wholesaler bookstores, now having to agree instead to being an 'Agent' with no say on actual selling prices.  The traditional way had booksellers buying at about 50% of the higher List pricing set by the publisher and then setting the bookstore price, with special sales possible. (No longer.)  The bookstores are now pushed to make customer prices 30% to 50% higher.

  This will be true for Barnes & Noble as well as for Sony and other bookstores online, thanks to Apple and Steve Jobss' preference for stiffing customers rather than participating in an atmosphere of 'competitive' pricing and they've ensured that other bookstores will not be allowed by the Big 5 publishers to price ebooks lower than Apple's e-book prices for the Big 5.

  If Amazon did not agree to Apple's Agency pricing, then the publishers would have had to choose either Apple or Amazon to sell their books.  They naturally would go to the bookseller-agency that will allow them to set higher prices.  So, in the name of competition, we get much higher prices thanks to a company that has not sold one e-book before this Saturday.

 From all I read, there will not be many buying e-books at $15 for a digital book that cannot be loaned or given away -- one that is not 'owned' in the traditional sense.  Macmillan appears to not want e-book sales at all unless they can price them close to discounted hardcover prices.

  Random House, who has not gone with the Apple plan yet, has estimated they could lose 7% in revenues from the plan, probably because they may actually calculate in consumer interest in buying the e-books at higher pricing.

  If Random House doesn't sign with Apple under Agency terms by Saturday, the books won't likely be sold there -- or Apple may allow them to use Amazon's traditional plan while having e-books in the Apple store, which would make the Amazon Random House e-books more competitively priced.  But it would cause other publishers to feel they could choose one plan with Amazon and an Agency plan with Apple, so Apple's not quite as likely to allow that.

  I noticed that a tech news-site's Amazon' columnist characterized Amazon's agreements Thursday with Simon & Schuster and with HarperCollins as "caving" to the publishers while at the same time describing Apple's as "agreeing to" their pricing (nice difference) without mentioning that Apple was reported by the Wall Street Journal a week before the iPad launch as *recommending* that the publishers set the higher pricing.

  My comment about that was posted for the night but was deleted the following morning and no comments allowed after that.  One has to wonder about newspaper publishers' fear of making Apple unhappy.  Or it just could be that the columnist did not want to display any disagreement with what he said (at least not anymore).

When the Hatchette e-book buy-buttons were missing on some books, he of course chose to characterize that as Amazon "wielding its power" ... but it's Hachette that doesn't want the books made available until the software is in place to sell them for higher prices starting immediately.  At least today he wrote, finally, that Apple had "forced" the higher pricing on Amazon.

  But, back to columns less bent on spin.  The Wall Street Journal reported it this way:
' There are clear signs of the glitches and confusion that many expected would accompany the adoption of a new e-book pricing model.

E-book titles sold by Lagardere SCA's Hachette Book Group were absent from Inc. Thursday due to technical issues, for instance.  The publisher said it had reached a deal with Amazon to sell e-books under the new "agency" model but its titles won't be available on Amazon until Saturday.

"It's not about retaliation, it's about logistics," said Maja Thomas, senior vice president of Hachette Digital.
  A note on Amazon's Web site states "we cannot be operationally ready to sell their e-books on agency terms until two days from now—April 3." '
Amazon will still be able to sell other, smaller-publisher books at lower pricing but with a higher net amount going to the publisher and authors.  Apple is of course trying to prevent that by snagging the other publishers and not allowing them in the iBookstore store unless they agree not to give their books to other bookstores unless those other bookstores adopt the Apple pricing plan.

  Apple has a dazzling product and they don't need to spoil it with these shenanigans but it's been Jobs' way of operating.

MediaBistro's Jason Boog writes that Hatchette explained the situation of unavailable e-books, in a letter to its agents and authors:
' ...The email continued: "However, as with any transition, we expect there will be a few hiccups along the way, and you may even see some short-term interruption in the availability of our eBooks, especially in the first few days, as systems are being adapted to accommodate changes.  We fully expect any such issues to be resolved within the first week, as we smooth out the new processes." '

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  1. I've been re-reading some old favorites on Kindle - books by Diana Wynne Jones that I've long since given away. Some of the shorter books have been collected into compendiums, so it's a little confusing to determine which ones I have and which ones I don't. I was looking at one in particular this week thinking it must be a compendium because it cost $9.99 compared to some I bought last week for $3.99. Nope, $9.99 is the new agency price for the SAME BOOK I bought last week for $3.99. I think I won't be buying any more Diana Wynne Jones e-books. Too bad.

  2. Crystal,
    That is really awful. I'd say What are they Thinking, but that obviously they're not.

    That's the worst I've heard so far. Sorry that happened with a favorite besides. It's just crazy. They are now outrageously out of touch.

  3. Crystal,
    Jones's books are with HarperCollins, owned by Robert Murdoch.

    I was going to say that some are writing to the publishers and some to the authors (the latter can't do much). I was hoping it was a glitch in the software but too obviously it's not.

    At the Kindle ocmmunity forums this is all being discussed quite a bit and some have been contacted to see if they can't help them further (Amason support -- but this is exceedingly rare). But maybe someone at Amazon will be monitoring the reaction as they would have to be worried about it with the Apple Agency changes they now have to follow.

    You can get there with

    There might be a thread discussing which books have been seen going up. Maybe it'd be good to post where people are comparing notes and where they might be noticed by someone at Amazon. Also of interest is whether or not Apple's istore is charging the same prices and whether Barnes and Noble Online is.

    To go from $3.99 to $9.99 on older material?

    Again, it hurts the author and the consumer.

    - Andrys


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