Kindle and books

Amazon v Hachette: the straight talk

If you haven’t been keep tabs on the ongoing dust-up between Amazon and the large book publisher Hachette (or can’t be bothered sifting through all the bullsh*t and rhetoric) the simplest and most clear-headed analysis of the situation was written by Matthew Ingram and published on GIGOM today.

It’s called:

If you love books then you should be rooting for Amazon, not Hachette or the Big Five

Ingram comes down resoundingly on the side of Amazon to control the market it created, that one major publishers didn’t pursue, within the store it created. It’s very hard to apply logic to the situation and not form this view. <MINOR IRONY ALERT>His name is Ingram and the Ingram Group is a service provider to Big Publishing. It’s a coincidence.

Yes, I’m going to keep doing that as I summarise the summary.

In a nutshell, in Amazon’s own business, Amazon want to use the normal wholesale/retail price structure where Amazon pays a wholesale price for an item and can then vary the retail price if it wants to discount the items. Sounds fair, right? Hachette want to set the final retail price (the Agency model) Amazon sells the items for.

But shriek! The conventional propaganda from major publishing and their mega-selling authors is that by making it difficult to buy Hachette’s titles on the Amazon store (this is happening now – it’s undisputed. Amazon are starting to play hardball) Amazon is acting like a monopoly and hurting Hachette and its authors.

Here are Ingram’s major points:

“What Amazon is doing is not only good for book-loving consumers but arguably good for authors as well — and even for some publishers (although not Hachette and its ilk).”

We’ve seen before that the “Agency model” of pricing drives up prices. Fullstop. Higher prices, fewer books sold, less people reading books, fewer sales and less money to authors.

Is Amazon a monopoly? Hmm – can you buy books or specifically ebooks anywhere else? Oh yes. Ask Kobo. And all the others.

As Ingram says:

Yes, the electronic retailer has a large share of the ebook retailing market, but this is also a market that it effectively invented, because publishers like Hachette and other members of the traditional “Big Five” cartel (formerly the Big Six, before Random House and Penguin merged) showed no interest in doing so.”

Now they are whining that because Amazon doesn’t want to open up the store, and market they created, to the old-school cartel, they’re a monopoly. <IRONY ALERT> 

Amazon has created a strong “lock-in” effect around their Kindle ecosystem by creating a ebook reader, easy ways to manage ebooks etc etc. Good for them. But they don’t make publishers (or self-publishers) use DRM. But Hachette have insisted that all their titles have DRM in Amazon’s store. Lock it all down, boys! As Ingram points out, and I explain here,

“Traditional publishers like Hachette have been the architects of their own destruction, by requiring that Amazon use punitive DRM restrictions on their books.” 

<IRONY ALERT>. Now, if they want to drag their readers away from Amazon, well, that’s going to be very tough.

Hachette and the Big Five publishing cartel are calling Amazon a monopoly – a threat to competition in the book publishing industry. <IRONY ALERT> <IRONY ALERT> <IRONY ALERT> <IRONY ALERT> <IRONY ALERT> <IRONY ALERT> 

Pick the party who, again, as Ingram puts it, has

“tried desperately to keep book prices high — especially ebook prices — and yet continue to pay their authors a fraction of what Amazon does”.

That would be the traditional publishing cartel. Those wacky funsters.

Cry us a river.


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