This is a follow-up to the
earlier blog entry about
The New Yorker piece by Ken Auletta on the grand e-book pricing battles involving the Big 5 publishers,Apple, and Amazon and their strategies.
In his
The New Yorker Q&A, Auletta let us know he did not realize, when writing the article, that Apple is also bypassing publishers to work with some authors directly.
ASK THE AUTHOR
Ken Auletta had the scheduled “Ask the Author” live chat with
The New Yorker readers on April 19, and the
Q&A transcript gives some context indicating a bit of his own perspective on all this as well.
IS AMAZON, ALONE, GOING AFTER SELF-PUBLISHING AUTHORS?
One thing I’d forgotten to include earlier was one interesting piece of sleuthing from the March 18
New York Times article by Motoko Rich (lead) and Brad Stone, which
I've quoted from quite a bit, noting the article's word choices when reporting information
straight from publisher reps who were in the middle of negotations and conveying to The New York Times their unhappiness with what they called Amazon’s “threats” to them.
It was brought back to mind when I read Auletta’s interesting live-chat responses, one indicating he may not have seen that NYT article when he replied that
' I don’t believe that Apple is offering self-publishing services aside from people submitting apps. '
That's actually fairly important, as the
thrust of the last part of
The New Yorker article is how Amazon is offering authors a high royalty which "
one irate publisher said,"
' was meant “to pit authors against publishers.” '
I went back to Rich’s article, remembering what she wrote about a job position that Apple had posted, noting that
' Apple is not likely to give up on smaller publishers. A new job posting on its Web site is for an “independent publisher account manager, iBookstore.”
The posting says the person would be “responsible for building and growing relationships with small- and medium-size book publishers, self-published authors and other content providers for the iBookstore.” '
The mention of “self-published authors” in the job posting was of course interesting, I'd thought at the time. They were entering that arena too. Neither Bezos nor Jobs is shy about expansion, to say the least. Also, Barnes and Noble publishes its own hard-copy books.
PUBLISHERS DON'T MIND IF APPLE IS ALSO GOING AFTER AUTHORS?
Notice that the publishers are not complaining, in this article, about
Steve Jobs' interest in going straight to authors. The quotes from publishers and "Apple insiders" about Amazon sound almost frenetic.
For one thing I'd been surprised to see Auletta (whose historical detail is very thorough) focus on the anger toward only Amazon -- "
a close associate of Bezos" was reported to have
"put it more starkly," Auletta tells us.
' "What Amazon really wanted to do was make the price of e-books so low that people would no longer buy hardcover books. Then the next shoe to drop would be to cut publishers out and go right to authors.” '
MORE BLACKHAT STUFF
Publisher Tim O'Reilly characterized Amazon alone of the battling groups as "ruthless" saying that
'publishers have good reason to be anxious. “Amazon is a particularly farsighted, powerful, and ruthless competitor” he says. I don’t think we’ve seen a business this competitive in the tech space since Microsoft.” '
The one dastardly corporate entity in the publishing arena!
THE MAN IN WHITE, OR AT LEAST A WHITE HAT
Apple's Steve Jobs, who had never sold a book, comes into the biz and tells all the large publishers he'd like to give them the higher pricing he recommended they charge (sourced in earlier stories here) but that if they wanted to publish with him, they
must use his Agency model's structure and pricing for all the other bookstores, getting rid of the decades-old bookseller-wholesaler pricing that allowed bookstores to sell books lower than the publisher-set List Price if it helped drive sales in a competitive business.
In effect, as others have noted, Jobs was successful in immediately killing the long-time bookstore model as applied to online e-books, especially Amazon's, that made lower prices on most new books possible for e-book-buying consumers, a selling point for the Kindle. Barnes and Noble e-book pricing, with brick and mortar stores an emphasis, was not as competitive.
WHY THE WHITE HAT?
However, as is mentioned often in the news, Steve Jobs and the iPad together are being touted as "savior" to the publishing industry that also prints our news or information. So we won't be reading such adjectives for Jobs from Auletta's quoted publishers, or from "
several literary agents, the latter reporting to Auletta that "
a senior Amazon executive asked for suggestions about whom Amazon might hire as an acquisitions editor."
ENLARGING THE FIELD OF VISION
Publishers and literary agents, watch your back. You're overfocused on just one book-selling party's interest in going direct to authors.
Auletta balances publisher anxiety (if not their blackhatting) with matter-of-fact reality from Amazon's Russ Grandinetti, but that isn't likely to soothe publisher nerves. I don't think reason or history has much to do with it at this point.
Publishers have TWO strong book- (and hardware) sellers interested in offering authors (
primarily those who'd never get a look from large publishing houses) deals for rights to their work. Of course, if already successful authors are free from contracts or have back-lists of books they own the rights to, Amazon and Apple are just doing what comes naturally in this digital age.
I don't think, though, that Amazon ever required that all publishers listing books with Amazon use only Amazon's own traditional wholesaler arrangement (which publishers admit gives them more revenue, on the lower-priced e-books, to share with their authors), nor would they have been interested in keeping selling-prices higher and the same at all bookstores.
THE NEW WORLD OF DIGITAL MEDIA
The new digital world brings added possibilities, and the large publishing executives need to find ways to maximize their business, including taking advantage of the intense interest in e-book reading.
They have literally millions of customers wanting to pay them for new e-books, with that audience growing at an exponential rate, but they treat this new market as a negative force only because of fears that e-book sales, if encouraged at lower prices than normally heavily discounted bestselling hardcover books, could "cannibalize" hard-cover sales. They try to ignore that people who buy expensive e-readers in order to gain portability and convenience, while easing the need for physical storage space, are not going to be rushing out to buy hardcover books. They'll have plenty of material from which to choose when wanting to read (and even more entertainment to choose from with an iPad or other e-reader-included tablet, the latter market also exploding in the next couple of months).
They ignore that e-book buyers remember (with the help of licenses that come with digital books) that they are not allowed by the publishers to re-sell or give away the e-books they buy (although with the Nook
some publishers will allow one and only one person to borrow a purchased e-book, ever, in the life of that e-book). Macmillan's John Sargent does not allow Macmillan's e-books to be included in public libraries.
Hardcover books will just share more selling space with e-books. Publishers should print as many hardcovers as actually wanted by the market and lower the costs in doing that with a realistic look at the changing audiences.
They should offer e-books with the book text only and add value-added "enhanced" editions with multimedia features, with background, context, and author interviews, in video or with informational links.
MAGAZINES AND NEWSPAPERS
There's no question that Apple's iPad is a much better match for magazines, so there is essentially no competition there vs a device focused mainly on text accompanied by infrequent black and white photos.
AGGRESSIVE COMPANIES WITH LOWER PRICING POLICIES
Going back to the topic of aggressive companies (this is not new). Apple apparently did not want to compete with Amazon's lamented lower pricing so they encouraged the raising of e-book prices nationwide, knowing that the publishers would of course appreciate this and feel supported by Apple, who would give them leverage with Amazon who does want to continue lower pricing, which publishers say "devalues" their books. Of course, publishers do also fear a "too-powerful" Amazon who they feel might be able to dictate terms as publishers and Apple are doing. There will always be competition, as we've seen.
E-BOOK PRICING MODES
I've already explained how, on a $26 dollar book, under the old wholesaler method, the publishers would have received approximately $13 on a $10-book while the new Agency method gives the publishers only $7.
The NY Times's Rich
also wrote in the March 18 column:
' ...Apple, which has effectively said that any publisher that wishes to sell its books on the iPad must offer the same terms to all booksellers.
In other words, to do business with Apple, publishers must export Apple’s business model to all retailers. Amazon, by contrast, has not promised to adopt the agency approach for any but the largest publishers. ”
OH, YES, BACK TO THE Q&A :-)
Some interesting responses by Auletta.
' [Yes] Authors would get a higher percentage of royalties by signing directly with Amazon to publish their books. The question is: Would Amazon be able to provide the editing and marketing support that publishers provide? '
Publishers provide this for a tiny percentage of hopeful authors.
Auletta responds to another questioner:
' What I think midlist or unknown authors would miss if bookstores, particularly independent bookstores, keep shrinking is the word of mouth spread by bookstore salespeople customers know and whose taste they trust.
Yes, though most today read the reviews readily available from several periodicals and they also read the customer reviews on several book sites, from interested readers like themselves.
To a thought from a questioner that "
the publishing industry just doens't get it yet" - Auletta replies:
' They’re getting it—probably too slowly. '
(I didn't see indications, in the article, of their getting it.)
To the question "
Do you believe that e-books will become popular and accessible enough to make independent bookstores obsolete? If so, what would you estimate the time frame for this?"
'That is my fear, and the fear of many publishers. Independent bookstores are shrinking fast. As e-book sales continue to grow exponentially, without being able to offer e-books in stores, or if they do offer them to be able to match the lower prices of Amazon or Apple, independent bookstores are menaced. How soon? Too soon.'
So, he does share with the publishers the fear of the success of e-books and its anticipated impact on independent bookstores.
They are reacting to what they experience as a Volcano of E-books threatening (for some) to cover all with ashes.
The solution: Preparation, keeping in mind that could actually be, instead, a mountain of opportunities for mining.
Barnes and Noble is wisely encouraging visits to their store with the Nook's bonus store-features and encouraging discovery of its e-reader by non-store regulars at Best Buy stores.
I liked the advice he gave to a questioner.
'You’d have to be a fool not to worry. The challenge, however, is not to be immobilized by fears, to think of the digital world as a challenging opportunity. '
I couldn't agree more.
See the ongoing Guide to finding Free or Low-Cost Kindle books and Sources
Check often:
Latest free non-classics, shortcut
http://bit.ly/latestfreenonclassics.)
Now that things are quieter on the Apple front except for the Gizmodo Lost iPhone prototype story (the latest stories in chron order: Cnet analysis; Daring Fireball's John Gruber look at the laws; Dilbert's take; Wired's team finds "finder"; and CNet finds helpers) with dramatic night visitations apparently encouraged by Apple, reporters are now writing about the Kindle again, without relating it to the multi-function iPad except to remember that the Kindle is a smaller, less expensive, dedicated e-reader for those who like that kind of thing. 
I see a flood of articles headlining that the Nook seems to have sold more units than the Kindle in March, these lead assessments being an unusual use of the word 'sold' as used in in news articles about sales of ereader-units.
Once you have this software (most of us in late May), we would still go up to the top of the HOME screen and navigate the SORT options, which will now include "Collections," which are categories we create. The set-categories given us before (Personal Docs, etc.) are no longer shown. 
The HOME screen will look the same, but when we go up to the SORT options area at the top of the screen, we'll be able to view the Collections we've created. You can see that the categories or collections are shown along with the number of books or documents in those collections. The default option will remain "Most Recent First" unless we arrow over to Collections option and click on it.
For some reason the Google RSS-feed reader will not move updated older posts (past 25 days) to the latest date, and so yesterday's update, about RetroRead, added to the Million Free Google books blog article is not showing up on the Google Reader.
Billy Blockade
2. A discussion of the New Yorker Article and the pricing wars, on Stacey Cochran's 
This is an update to the earlier blog article written when the Amazon Kindle software update v2.3.3 first came out for 
These are a couple of stories today that I found interesting -- the Kindle one a bit more so as it involved increased interest in reading by less-enthusiastic young readers due to interactive functions such as the ability to add notes (something that's not possible with the iPad iBooks software yet), maybe because many young people today are more in tune with electronic gadgets than with printed works. 
This will be a "
MEDIUM PRICED KINDLE BOOKS - $2.01 to $6.50