Posts Tagged Amazon

Amazon Presents: Fan Fiction

In the ever-growing push to monetize more and more of the written word, today Amazon announced a new arrow in their quiver: Amazon Worlds. The shortest explanation, the one getting the most play around the internet, is that Amazon is now getting into fan fiction. Which is close enough to correct that anything closer is splitting hairs. Perhaps one might look at these more as tie-in works, but what are tie-in works other than licensed and approved fan fiction and I’m getting ahead of myself.

Deep breath, try again.

It sounds like Amazon Worlds isn’t what most people think of when they think of fan fiction. For one, their first content guideline is “We don’t accept pornography or offensive depictions of graphic sexual acts.” Their last, “No crossovers from other Worlds are permitted.” So good-bye slash fiction, random sexual romps, and crossovers, some of the pillars of fan fiction. It’s also not what most people think of as fan fiction, because it’s going to be officially licensed. Amazon has lined up the rights to three “Worlds,” those of Gossip Girls, Pretty Little Liars, and The Vampire Diaries. Right now, that’s it, though they’re hinting more in the future. So for now, that Heathcliff fan fiction where he saves the world from an asteroid won’t be paying your mortgage.

Through the licensing of these worlds, it also means that the original content creators will get a piece of the action. How big of a piece, Amazon isn’t saying, which means it might be on a case-by-case basis, or they might just not feel that it matters to enough people. This is good. People getting paid for their creations is the basis of the creative industry. Always has been, always should be.

However…well, we’re creating now a situation where the canon lives side-by-side with the non-canon. Right there in the Kindle store, right there on your reader. Chuck Wendig, in commenting on this, says it perfectly:

Someone might read Book 3 of the Miriam Black series, The Cormorant, and say, “But this doesn’t refer to that time when she time-traveled back to the Old West in that novella, Booby Nuthatch.” And you’re like, “That wasn’t real, though, someone else wrote that.” But then they say: “I PAID FOR IT SO IT FELT REAL TO ME” and then they sob into your shoulder and you wonder suddenly how they got that close and should you call the police? Probably.

Now, there are theoretically going to be “content guidelines” offered by the original creators of these Worlds, “and your work must follow these Content Guidelines.” But these guidelines aren’t up yet. In theory they’ll create a sort of show bible under which the tie-in media is produced, but ultimately this is the creation of non-canon within an author’s world which is given a stamp of authenticity and sold to the consumer. At a reduced rate.

As this is opt-in, there’s no worry about this sneaking up and reducing someone’s brand. Anyone who wants their creation to be thrown open to the Kindle Worlds writers can freely do so, anyone who doesn’t…won’t. It’s potentially great for franchises that the author has reached the end of, as it wouldn’t create the canonical confusion that Chuck Wendig is worried about, allowing for a continued monetization of the world. I like the idea of authors getting paid.

It does create an interesting new twist to rights management. Over on Twitter agent Evan Gregory was kind enough to respond when I asked if this created a new right. He explained these agreements would fall under the derivative rights that are often reserved by the writer and bundled together as part of TV/film rights. “Though I suppose now, for a popular book series, those rights could be licensed separately.”

Welcome to the new frontier in control over rights: the fan fiction rights. Though I didn’t press further, I do wonder what implications there will be if this takes off. When digital published emerged there were a lot of questions about who controlled digital rights on contracts that were negotiated before that was a thing. This will be different. This will be a case of derivative rights being negotiated before a new market for them opened up. If the platform is successful, I suspect we’ll see at least one fight over this.

So…yeah, it’s an interesting platform. It’s opt-in, there’s no immediate sign that any rights holders will be begrudgingly opted-in, the original creator gets a part of the take. It’s an interesting experiment, just not one I see myself taking part in on either end. The only conclusion I think anyone can have right now is a resounding “we’ll see.”

Oh, and…

  • Amazon Publishing will acquire all rights to your new stories, including global publication rights, for the term of copyright.

But that’s a matter for another day.

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Used E-Books?

You’ve probably seen it by now. If you haven’t, the news broke this week that Amazon filed a patent “to create a secondary market for used digital objects purchased from an original vendor by a user and stored in a user’s personalized data store.” Now, Amazon has its fingers in a lot of digital soups, so this would mean music, this means movies, but what most folks are focusing on is that this means ebooks. If you want opinions of people who matter slightly more than I, Chuck Wendig has posted about this, as has John Scalzi. Twice, in fact, with the second post making the point that he’d rather you pirate his ebooks than buy them used from Amazon if he’s not going to make money off of them.

I know people are going to find that last point a little extreme and alarmist. I get where he’s coming from, but I’m not sure I completely agree.

If you’re still here, then you get to hear my opinion.

First, let’s pump the brakes on this a little. It’s trendy in modern reporting to focus on patents awarded to one company or another. Frequently that means focusing on patents awarded to Apple and Amazon. In the case of Apple, it’s an attempt to guess at what will show up in the next iPhone or iPad, though a huge number of the patents don’t end up in any electronics. It’s been with increasing frequency that patents aren’t about protecting a product you are preparing to sell, it’s to prove you had an idea first. It’s to keep other people from using that idea or, if they do, force them to license the idea through your company. This is the land of the patent troll.

Note, I am calling neither Amazon nor Apple patent trolls. However, both company do have multiple patents that do not reflect current, or even future, products. It’s impossible to know whether this used digital object patent is such a patent or not. It will remain impossible up until the point Amazon rolls out the new service. However, let’s go with the assumption that Amazon will move forward, because assuming it won’t means my blog post ends here and I have nothing else to do with this space but post pictures of my baby or cats. This is not that part of this internet, this is instead the part where I opine about things I really lack enough details to really opine about.

It’s called blogging, damnit.

Alright, so let’s assume that Amazon is going to go through with this. They want to create a process by which you can sell back your used digital music, movies, and books, allowing someone else to buy it at a reduced price. What are the problems with this?

To start, let me say that I am an unabashed fan of used bookstores. This past Martin Luther King Jr. Day when I found myself with a day off work and no wife or baby, I didn’t sleep in, I didn’t veg out with the television, or finally finish Dishonored. No. I went on an odyssey to visit seven used book stores in the Northern Virginia area. This weekend my wife and I are talking about hitting two more near Eastern Market. One day I’ll hit I-270 and do all three locations of Wonder Books. I love used book stores.

And I understand something about used book stores. I understand that the purchases I make do not benefit the authors or their estates. Those books have already been bought new and the royalties paid out. While I mostly buy out-of-print titles and books by deceased authors when I go digging through the shelves, I do occasionally buy from a living author, one who would actively benefit from the royalty. That’s how I got the second and third titles of the Old Man’s War series. I’m not making a stand here that every book should be bought new, that any literary transaction should put money in the author’s pocket, because if I argue that I’m a hypocrite and turning my back on every one of those used book stores that I so dearly love.

Of course, as Scalzi points out in his opening reply to the second blog post linked above, “usually, the used bookshop down the way is not an aggressive multinational corporation aggressively pursuing a monopsony position in the market, with billions in yearly gross revenues.” That’s not the point I’d like to focus on. I would like to focus on his very next sentence. “And also, it’s really hard to sell a physical book and keep it at the same time.”

This is where things get a little thornier.

If I go into a used book store and buy a copy of Old Man’s War, I know that the person who originally owned it and read it sold it to that used book store. That he or she no longer owns that copy. In theory this is the case with digital media. In practice, it’s not. While breaking DRM on digital media is illegal, there is software available to do exactly that. So there’s no guarantee that the digital copy of Old Man’s War sold back to Amazon doesn’t also still exist on the original purchaser’s computer. Or another Kindle. Or anywhere else, really. And, actually, Old Man’s War is a horrible example anyway, as Scalzi’s publisher is quite proud of the fact they no longer use DRM, so that makes this problem even more challenging.

Amazon may have considered this, they may have a solution. Again, we don’t know.

So let’s go back into that used book store and its science fiction section. When I go into Hole in the Wall Books, or Wonder Books, I know how many copies of Old Man’s War they have. In my experiences this is typically between zero and two. As a consumer, I know when they sell those two copies they have no other copies. Amazon will need a hell of a lot of transparency with this particular issue, proving that they are only selling the number of used copies that they have the authority to sell. I doubt the methodology for moving these used copies will be keeping a copy of the file in some separate folder then deleting it when someone else buys it. No, it’ll come as a copy from the same master file that they use when serving up any other request for the book. I’m not saying I don’t trust Amazon in this respect, only that writers shouldn’t have to rely on nothing but their trust of Amazon. After all, the words “Amazon” and “transparency” do not go hand-in-hand.

However, that does raise another point. What actually makes this copy “used.” I’ve bought books from used bookstores with brittle pages, with broken spines, with covers nearly coming off, with notes written in them. I’m paying less money (well, that’s usually a lie, I’m often buying books labelled as 35-75 cents originally for $2-5), but I’m also getting a copy of the book that isn’t in nearly the condition that it was new. If used ebooks are served from the same master file…what makes them used? What’s the difference in the file I receive, other than the price?

This creates an incentive to buying the books used. Which means an incentive towards the copy that doesn’t produce royalties for the original author. If I can get the exact same file for less…why would I pay more? As long as there are “used” copies on hand, would anything drive people to buying the “new” copies other than some loyalty to authors and creators. Most people don’t have that. Which meshes in nicely with the question of how Amazon proves they’re only selling as many “used” copies as they have.

Again, with any or all of this, Amazon may have considered these problems and has solutions in place.

There’s no way of knowing this is how Amazon will work the market, they may simply provide a service to link sellers with buyers while skimming just a little off the top. Or they may act as the internet’s new used book store, the alibris of electronic copies, and take a much larger cut.

Amazon may even intend to compensate creators for used copies moved through this process.

Amazon may not even do a thing, and just wants the patent to keep anyone else from doing it.

We don’t know their plans right now. That doesn’t mean that we can’t voice our concerns or look at the possibilities of what’s to come. There’s no reason to necessarily distrust Amazon, but there’s also no great reason to trust them, either. They are a business looking out for their own interests, and they are increasingly such a massive share of their market that they can dictate terms. We’ll just have to wait and see what those terms end up being, and hope that they don’t negatively affect the ability of creators to profit from their intellectual property.

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Shakeup, Shakedown

Today is Monday, April 16th.  The 11th, with its suit from the DOJ against Apple and five of the Big Six publishers is most of a week behind us, and lines are still being drawn in the sands.  In the end there’s one guarantee, this entire issue is bringing the future of publishing to much more public light than anything has in a good long time.  That’s probably for the best, it’s good that there is an informed public seeing, perhaps for the first time, just how their sausages are being made.  Even if it comes hand in hand with many of the predictable questions about why digital books should be so “expensive,” considering there’s no price to printing.

So a rundown of what I’ve been reading and what I’ve been thinking, starting with what’s turning into one of the bigger lightening rods, Charlie Stross’s weekend post “What Amazon’s ebook strategy means“.

And the peculiar evil genius of Amazon is that Amazon seems to be trying to simultaneously establish a wholesale monopsony and a retail monopoly in the ebook sector.

He makes an interesting point about DRM as a player in this game.  I’ve always had a rather funny feeling about DRM, embedded technology intended to prevent pirating of copyrighted digital material.  As a producer of intellectual property (even if it’s not all that intellectual), I’ve got a stake in the protection of copyright.  However, in the end, most DRM technology has proven only to make it difficult for legal owners of material to enjoy it, rather than stemming any actual piracy.  DRM on music, DRM on eBooks, DRM on movies, all are non-trivial to overcome, but all are also nothing more than annoyances for those who know their various workarounds.  So in the end, DRM misses its mark by hindering not the pirate but the casual user.

Stross says that DRM allowed Amazon’s near monopoly of the eBook market, they very one that the alleged collusion of Apple and the publishers was meant to combat.  It was the DRM/wholesale one-two punch that created the problem.

So, because Amazon had shoved a subsidized Kindle reader or a free Kindle iPhone app into their hands, and they’d bought a handful of books using it, the majority of customers found themselves locked in to the platform they’d started out on. Want to move to another platform? That’s hard; you lose all the books you’ve already bought, because you can’t take them with you.

By foolishly insisting on DRM, and then selling to Amazon on a wholesale basis, the publishers handed Amazon a monopoly on their customers—and thereby empowered a predatory monopsony.

Amazon could take a loss on its sales of eBooks purchased under a wholesale basis (this loss is not in question), then have books locked to the Kindle thanks to the DRM.  Publishers didn’t entirely understand how the DRMs would work, but they wanted them because they would prevent piracy.  This was the advent of the modern eBook market, where most selling sources lock you into one format readable on only one reader or a family of readers.  Which means that consumers aren’t buying books, they’re buying licenses.  Stross sees the next move being the death of DRM.  Even as a content creator, I’m for this, as I don’t believe there would be any significant uptick in piracy, but there would be a significant uptick in availability of intellectual properties.  This is a net positive.

Want a dose of pessimism?  Baldur Bjarnason in his post Today is Not Tomorrow (reblogged with some additional commentary by Charlie Jane Anders on io9) looks at what the effect of an Amazon ruled eBook market could have on eBooks as a whole.  He identifies five problems:

  1. No margins (mostly due to hardware)
  2. No moat
  3. Subsidised hardware
  4. Integrated silo
  5. Specialised user-base (expert readers)

Basically by creating a specialty market, like the rise of the comic book store, Amazon ends up bracketing off a portion of the market that is more than happy with the developments, but makes it harder for someone new to get into reading eBooks.  They’re not on the newsstand, so to speak.

But, having captured the expert reader populace, Amazon is in the position to squeeze the market dry as it slowly fades away over the next twenty years. They won’t have the margins to expand novel reading and the Kindle is in many ways as unfriendly to casual readers as a comic book store is.

The Kindle as a device is a shibboleth for expert readers and as such drives casual readers away. ‘Why should I buy a Kindle? I only read a couple of books a year.’ It’s a symbol for a clique they know they won’t ever be a member of.

A free app, on the other hand, is a no-brainer decision for most people. They’ll download it, just in case.

But none of that addresses the problem of renewal once novels are removed from the public sphere. Comics have taught us that you can’t rely on parents training their children to love a medium, it needs to be instilled through exposure. The industry needs strong, healthy, and vibrant libraries. Ask any adult expert reader and they’ll all rave about how much time they spent in libraries as kids.

And here we get into another core issue, one that I don’t talk about much.  Libraries.  Publishers serve libraries in a way Amazon as yet doesn’t.  This makes sense.  Publishers support libraries because they benefit from people stumbling across new and interesting stories.  Amazon doesn’t because libraries buy one copy once and there’s no profit margin in that.  Publishers envision better profit through support, Amazon through neglect.

So what do we do?  We the writers who are just pounding away on keyboards and seeing the publishing world outside our windows going to hell in a handbag?  We do what we should always do: listen to Chuck Wendig on Prepping For The Publishing Doomsday:

Calm down.

Breathe easy.

In. Out. In. Out.

Maybe have a drink. Take a walk. Sip some oolong tea.

Then, when you’ve relaxed: keep writing.

Stay the course.

Which is what I’m going to do.  Because it’s all I can do right now.  Anything else is a course to madness, or worse, distraction from writing.  So yesterday I finished the rough draft of Chapter 34.  The outline goes 38 chapters plus an epilogue.  So I’m just going to keep writing it.  Then editing it.  Then see what comes when it comes.

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April 11 2012 News Wire

Rare direct cross post from Unleaded. There are two big developments today in the battles between Amazon, Apple, the publishers, and the DOJ, both of which deserve attention of anyone who cares about the future of ebook and regular book pricing, with the potential of both affecting the future of author compensation.

First, from The Bookseller, Two US publishers turn backs on Amazon.com. Don’t let the headline underplay this, this isn’t another dispute between Amazon and a smaller group like IPG, this is at least two of the Big Six fighting back, though specifically which two is not yet known.

At least two of the big six publishers in the US are refusing to renew contracts with Amazon.com, with the giant internet retailer said to be downplaying the promotion of their titles as a result of the dispute.

The news was first reported by Salon reporter Alexander Zaitchik, who noted in a longer piece on Amazon, that “for the first time, the ‘Big Six’ publishers—HarperCollins, Random House, Hachette, Simon & Schuster, Penguin and Macmillan—have refused to sign Amazon’s latest annual contract”. Overnight PaidContent reported that “people familiar with the situation” confirmed to its reporter that at least two of these big-six houses have refused to sign new annual contracts, but it could not confirm whether the remaining four had taken a similar stance.

Interesting to see they’re not completely yanking the titles like they did with IPG, but then I always suspected they went after IPG because Amazon felt they were a weaker target, someone that would just roll over, and someone whose business they could afford to lose. Can’t yank two of the Big Six, that’s a significant portion of the market, and that’s going to hurt Amazon far more than it would likely hurt the publisher.

Second, from the Washington Post, among others, Justice Dept. sues Apple, publishers over e-book prices. This is what we’ve been expecting for a few weeks now, ever since the threats came down. This follows close on the heels of HarperCollins, Simon & Schuster, and Hachette settling with the government.

The U.S. Justice Department announced Wednesday it was suing Apple and five major publishers, alleging they colluded to keep the price of e-books artificially high.

“As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles,” U.S. Attorney General Eric Holder said. “We allege that executives at the highest levels of these companies–concerned that e-book sellers had reduced prices–worked together to eliminate competition.”

The suit was filed against Apple as well as HarperCollins, Simon and Schuster, Hachette Book Group, Penguin Group, and MacMillan.

I’ve made my side in this fight known. I side with the publishers, which means I side with Apple, largely because I stand by a standardization of prices across digital formats. I’m not going to say that the Agency Model is the end all and be all, but as I say in that post:

If I comparison shop between Barnes, Amazon, and my local independent book seller, I may get three different prices for a book. I can pick the cheapest one, and I can read it without any worries. However with three major formats for eBooks, comparison shopping is limited by my ability to then read the book I picked up. Finding a book cheaper through the Nook store isn’t going to do me a damned bit of good when I have a Kindle. So if one company, say Amazon, consistently undercuts the other two, it’s going to push people exclusively to the Kindle. One company can control the market by being the most able to sustain a loss.

The DOJ isn’t intentionally acting to help Amazon create a monopoly, but stand by my concerns that that will be the outcome.

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Get the Popcorn Ready

It’s time to watch the battle lines form and opposing sides to form.  The DOJ is threatening action against Apple and five of the six big publishers, suggesting collusion in the pricing of eBooks.  Even though the issue is complicated and the sides are the DOJ vs Apple and the publishers, I suspect within a few days the narrative will be presented as Amazon vs iBooks, as this looks to be a battle between the Wholesale and Agency pricing methods.  However, I’m sure it’s also going to morph into questions of why eBooks are “so expensive” and play into the standard debate of whether or not traditional publishers still have a place within publishing.

The agency pricing method is a product of the last round of scraps, which saw the combined force of Apple and the publishers on one side, and legitimately Amazon on the other.  The iPad was a new piece of technology, iBooks looked to be the first Kindle competitor Amazon would take seriously, and Apple offered the publishers a more lucrative pricing arrangement whereby the publishers set prices for books and got better revenue splitting than Amazon offered at the time.  It was a move that stabilized publisher profits and writer royalties, though in doing so created a model unlike how books were distributed to brick and mortar locations.  Not that Amazon’s old Wholesale pricing method was exactly the same, either.

The crux is just how the Agency model came into place.  Apple offered it to the publishers, knowing that it would result in higher eBook prices than Amazon was offering, but also knowing that the publishers would readily agree and use it as ammunition to strong-arm Amazon into the same changes.  The publishers at the time felt that Amazon was undercutting prices on eBooks, even to the point of taking a loss on best sellers.  This created arbitrary price points that were lower than could sustain profitability, but were also training consumers that these were the prices eBooks were “supposed” to be.  To that extent there probably was some collusion that happened, these companies worked together to set a price point that they were able to enforce on Amazon through the power of their collective bargaining might.  Amazon didn’t want to lose the publishers to Apple, they folded, and today we have the Agency model ruling the day.

What specifically launched all this was a quote by Steve Jobs in his recent biography:

We told the publishers, “We’ll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway.”  They went to Amazon and said, “You’re going to sign an agency contract or we’re not going to give you the books.”

That’s pretty damning when read on its own, but it’s also the kind of bravado that Jobs was well known for in life.  On the flip side you have the CEO of Barnes & Noble allegedly testifying to the DOJ that abandonment of the agency model would likely give Amazon the power to create a monopoly.

When you boil the fight down to Apple v Amazon, it’s hard to take sides.  As a reader, I don’t want to see book prices set arbitrarily high.  As a writer, I don’t want to see them set arbitrarily low.  In the end, what I care the most about is writers getting the royalties they deserve, whether purchases come from a printed copy or from a digital edition.  Right now the Agency model protects those better than the Wholesale model did, but neither protects them as well as the model actually used in bookstores.  The model whereby an author gets the same royalty for a hardback whether bought full priced on day one of sale or for $1 on the ultra discount rack eighteen months later.

The central issue of all of this is the question: how much should an eBook cost.  And it’s a question with lots of strongly held opinions.  Amazon’s original theory was $9.99.  Apple and the publishers put into place a plan similar to the way print books are priced, with a premium for books that are in hardback, on recent releases, and from well known authors, with lower prices on older or back catalog releases.  Compounding the issue are two variables: the recent move by the self proclaimed “indy” authors to undercut novels put out by publishers by putting their novels out there for 99 cents, or even free, and lack of consumer understanding on just what portion of a book’s cost is related to the physical production.

Go into any discussion about the pricing of eBooks, and there will be a lot of them over the next few days, and you’ll inevitably see the question as to why eBooks are “so expensive.”  After all, the argument goes, the publishers are saving money on printing and distribution, so why aren’t those savings passed on to the consumer.  In large part it’s because these savings aren’t that great.  The costs of publishing a book are largely tied up in those things that don’t go away with eBooks.  Things like acquisition, editing, and advertising.  Digital distribution even has its own unique costs that offset the savings from printing and distribution.  Questions about why eBooks aren’t cheaper also don’t get into the above mentioned premium that the publishing industry has always put on new publications, especially by established authors.  A premium that has largely been understood in the past, and that exists across all media.  A new movie, a new DVD, a new game, a new CD, they’re all going to be more expensive than the movie in the second run theaters, the bargain rack DVD or CD, or the game from last year.

The Agency method also standardizes prices across formats, which is something that you don’t need to worry about with books.  If I comparison shop between Barnes, Amazon, and my local independent book seller, I may get three different prices for a book.  I can pick the cheapest one, and I can read it without any worries.  However with three major formats for eBooks, comparison shopping is limited by my ability to then read the book I picked up.  Finding a book cheaper through the Nook store isn’t going to do me a damned bit of good when I have a Kindle.  So if one company, say Amazon, consistently undercuts the other two, it’s going to push people exclusively to the Kindle.  One company can control the market by being the most able to sustain a loss.

This discussion is understandable.  And it needs to happen.  This is a new economy, and people are now paying money for things they feel less of a physical connection to.  You have a digital song, not a CD.  You have a file, not a paperback.  It’s probably fair that people pay less for these items, as they have fewer options of what to do with them.  I can’t sell back an eBook to a second hand dealer to recoup some money, for example.  It’s likely going to take a few more years for a pricing model that is fair to the electronic distributors, the publishers, and the writers to get sorted out.  This DOJ warning (and it’s good to stress it is only a warning at this stage) may end up being a very positive move towards finding something that is more evenly equitable for everyone involved in the production and distribution of intellectual digital property.  But it’s not going to be pretty along the way.

Final note, since I’m a day late on posting this due to yesterday’s technical difficulties, Apple has now responded:

But this allegation just strings together antitrust buzzwords.. Nor does this “Kindle theory” make sense on its own terms. For example, if Amazon was a “threat” that needed to be squelched by means of an illegal conspiracy, why would Apple offer Amazon’s Kindle app on the iPad? Why would Apple conclude that conspiring to force Amazon to no longer lose money on eBooks would cripple Amazon’s competitive fortunes? And why would Apple perceive the need for an illegal solution to the “Kindle threat” when it had an obvious and lawful one which it implemented – namely, introducing a multipurpose device (the iPad) whose marketing and sales success was not centered on eBook sales?

All we as readers and entry level writers can do is watch this play out.  If I had to pick a side…damn, it’s tough.  I’d stand with the Apple/Publishers side, largely because I’m concerned that this is happening so close to Amazon’s push to change revenue distribution with those publishers and distributors it believes it can push around.  That’s going to be pretty standard for me.  I’m usually going to side with content producers, because I am one, but I suspect there will be content producers on both sides of this.  As you may have figured out, this post is largely me just trying to make sense of it all myself.  Ultimately this fight will affect us all, but so many of us are going to have so little say in the resolution.

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Trying to Understand the IPG/Amazon Fight

If you’re like me, you’ve probably seen the online hubbub about a fight between Amazon and IPG over the pricing of Kindle editions.  I’m writing this post free-style as I work my way through some research to try and understand just what the hell is going on, in a hopes that others might understand as well.

First question, who is IPG?  They are the Independent Publishers Group.  According to their website, they were “the first organization specifically created for the purpose of representing titles from independent presses to the book trade,” a mission that dates back to 1971.  In this capacity they act as the distribution point for several smaller publishers, giving them a larger collective voice than they could muster on their own.  Most importantly, for this discussion at least, they offer digital distribution options to the publishers they are contracted with.  Again from their website:

IPG’s e-book program is a turn-key system for its client publishers. They submit—through an automated feature in the private Publisher Resources section of the IPG website—the digital file used to generate the print edition. From that point on the IPG staff is responsible for checking, storing, and disseminating the files; selecting and monitoring trading partners; negotiating the terms of trade with them; and setting the rules as to how much leeway they are allowed to give their customers in regard to viewing content before purchase and duplication after purchase.

They boast a catalog of “about 10,000 e-book titles.”  According to the New York Times, they had 4,443 titles available for Kindle.  “Had” is the important word there.  As of the 21st, none of these titles are available from Amazon electronically.  Amazon pulled the entire IPG catalog from the Kindle store, reportedly over a pricing disagreement as the two sides came to the table to negotiate an extension of their sales agreement.

If this sounds familiar, you’re probably remembering two years ago.  On January 30, 2010 Amazon did the same thing.  To Macmillan.  Though Amazon went a little farther, pulling both electronic and print, where now it is only pulling the electronic titles.  The disagreement in 2010?  Macmillan was leveraging their new agreement with the Apple iBooks store in an effort to raise electronic book prices on Amazon, and in general to control what prices Amazon was charging.  This is the so called “agency model” of pricing, contrasting with the older “wholesale model”.  The dispute lasted nearly a week, with Macmillan emerging with an agency model agreement on February 5th.  Harper Collins and Hachette soon followed suit.

This conflict is a little different.  Not because it isn’t still Amazon and a distributor sparring over prices, but because Macmillan is a member of the fabled Big Six, along with Hachette, Harper Collins, Penguin, Random House, and Simon & Schuster.  You’ll note that IPG is decidedly not on that list.  Why the different tactic?  Dennis Johnson, co-founder of Melville House and former distribution client of IPG, wonders if “[p]erhaps this time it’s simply sacrificing a smaller fish first, trusting there will be little media coverage for a lesser-known indie than a big, household-name publisher.”  There may be a grain of truth to this.  The Washington Post, for one, has no articles mentioning the IPG situation, whereas they did cover the Macmillan incident two years ago.  The story is, obviously, making its rounds in the industry press, however, and has been well covered by Publishers Weekly.

Johnson goes on to wonder whether this is all “a message to the big houses.”  If nothing else it could be an attempt to create a precedent for a new pricing arrangement, one that can be strong armed against “the kind of companies that don’t have the resources to absorb something like this so easily.”

They will be more damaged, more deeply endangered, than a Big Sixer could have imagined. There’s every likelihood that some of those little publishers sell most of their books on Amazon. This could put them out of business. For others, we could be talking about 20 or 30 percent or more of their business. It’s hard to recover from losses like that.

IPG is not taking this lying down, which is fantastic.  According to the New York Times, they’re asking their “publishers to immediately begin stressing that their books were available in other electronic formats, including from the Amazon rivals Barnes & Noble and Apple.”  IPG’s Mark Suchomel has even told Publishers Weekly that most IPG clients, “will be fine if they never sell another e-book through Amazon.”  IPG is also circling the wagons, attempting to stave off Amazon poaching away a client or two in an attempt to weaken their bargaining power.

In the end, I think I share much of Dennis Johnson’s concerns.  This is an attack that Amazon has launched before, but now against much weaker targets.  I hope IPG keeps fighting.  I hope more people see what’s going on and ask questions.  Look, I love my Kindle.  I like Amazon, in spite the impression my blog may give.  But I don’t want to see them competing unfairly in the marketplace, and attempts to strong arm special deals is exactly that.  We’re already seeing Amazon forced into more equal competition, especially with states like Virginia working to close the so-called “Amazon loophole” with regards to sales tax.  We’ll see how this fight for competitive equality fares.

In the closing words of Dennis Johnson, “Good luck to IPG and its publishers.”

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Stop Scaring Me!

For the second time in recent months, Barnes & Noble is making a move to protest Amazon electronic exclusivity.  Salvo number one was fired back in October when Barnes & Noble pulled a significant number of DC comics off their store shelves after Amazon made an exclusive distribution arrangement for those titles on the Kindle Fire.  This resulted in particularly nasty press when they removed Sandman comics, and thus set themselves opposite Neil Gaiman and his more than 1.5 million Twitter followers.  At the time it struck me as a potentially self destructive move.  In order to protest not being able to sell DC comics through one distribution method, they’d refuse to sell them through all distribution methods.  It was a fantastic boon for independent comic stores, however, who were more than happy to absorb that customer base.

In the end, it was fine.  Whatever.  I’m not actually sure how much of the comics market Barnes actually holds versus the more tradition comic book store venues.

Now we’ve got Amazon looking to expand their new publishing empire.  The first move was opening the Kindle store to self published authors.  The second was to lure these self publishers into exclusivity agreements by dangling money in front of them, a clear move to undermine self publication to the Nook and iBook stores.  Now Amazon has an new venture: print publication.  This isn’t a Lulu POD set-up that Amazon is doing, rather they are taking the form of a publishing house, vetting and selecting manuscripts, and giving the ones they feel deserving a print run.  It’s an intriguing move, and one that has the potential of turning the Big Six publishers into the Big Seven in a hurry.  If anyone has the clout to muscle into such a long standing fraternity, it’s Amazon.  Or, rather, they could provide the muscle behind their publication partner, Houghton Mifflin Harcourt, to assail the Big Six.

What’s standing in the way?  Barnes and Noble.  Survivors of the great bookstore feud, the company that is still standing after Borders crumpled and shut down.  Really, the last bastion of the big chain book store in America.  They’ve decided they will not stock copies of the books published by Harcourt in their partnership with Amazon.

For the second time in six months Barnes & Noble, the nation’s largest brick-and-mortar bookstore is refusing to sell books.

I’m not taking Amazon’s side in this fight.  Exclusivity bothers me, as I suspect I made clear when deconstructing their new KDP Select practices.  Clearly authors have the right to do with their stories as they want, especially when self publishing, but using corporate might to pressure for exclusivity strikes me as a stepping stone towards monopolistic practices.  However, even though I can understand Barnes & Noble’s position in wanting to protest exclusivity so their Nook is can compete on hardware quality rather than catalog depth…well…their methodology concerns me.  It creates a question of whether they’re using their might in the brick-and-mortar world in the same way Amazon is using their might in the digital world.

My concern comes out of my love of Barnes & Noble.  Even before Borders went under, Barnes was my clear favorite.  Oh, sure, they didn’t partition their fiction nearly as well as Borders, opting for broader genre categories, not shelving a horror section, but their stores were always more welcoming, more inviting, and better stocked.  Really, I guess my concern here is an entirely irrational and selfish one:

I’m terrified we’re going to lose Barnes & Noble, and that these are the first two steps along the way.

I’ve long said that Barnes & Noble is in a better long term position than Borders ever was.  They embraced the internet early, rather than allowing Amazon to control their web presence.  They’ve created an eReader on par with the Kindle.  Now Amazon is striking at them with a two pronged attack of exclusivity and print distribution.  I’m not sure what the best course of action is for Barnes & Noble here, and I’m not here to create a new strategy for the chain.  Rolling over and taking it will just embolden Amazon to expand its exclusivity, but refusing to stock titles for the second time is worrisome.  Certainly they’ll have plenty to stock their shelves with, but it makes me wonder what will happen if one of the Big Six enters into any kind of eBook exclusivity arrangement with Amazon, will Barnes continue to cut of their nose to spite their face?  It’s a disturbing pattern.

Two last little bits of interest.  First, clearly Barnes & Noble is only so unwilling to deal with Amazon, as the Nook is carried on Amazon.  However, the Amazon search engine is also salted so that a search for “Nook” returns the following products, in order.  Kindle Fire, Nook Color, Kindle Touch, Nook Touch, Kindle eInk, Nook Wifi.  No really, go see for yourself.  This is going to be a tough fight for the future of bookstores, and while I still don’t think Barnes is going anywhere anytime soon.  But I’m scared.

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Amazon Price Check

For anyone who hasn’t been following the tech blogs this week, or any of the other sites that have talked about the Amazon scanner promotion, a brief background.  Amazon is looking to encourage what it calls “comparison shopping” by those who have smartphones and the Amazon Price Check app.  Simply take your smart phone into a regular store, scan the bar code, and see what the price of the item is on Amazon.  This past Saturday, they were even offering 5% off up to three items, maxing out at $5 each.

It was seen by many as an aggressive move, another shot across the bow of brick-and-mortar retailing from a company already largely credited with destroying book selling giant Borders (though I still contend they did as much to hurt themselves as Amazon ever did to them).  And it created a backlash against the company as many accused them of using everyday people as price spies, and encouraging people to go into mom-and-pop stores that they had no intention of shopping at just to get up to $15.  How much of this is true, it’s hard to say.  I can’t imagine no one walked into a store intending to do a quick price scan, and didn’t buy something anyway.  Someone somewhere generated a sale they otherwise wouldn’t have.  And most people buying from Amazon that day were probably already going to buy from Amazon anyway, and were just looking for a quick sawbuck.

I’m not defending Amazon.  I’m just not looking to engage in nearly the rhetoric I’ve seen against a company that is always looking for a new way of changing the way consumers approach products.  This is the same company that created Amazon Studios, a project that I’m thrilled to say I was wrong about when I approached it with some cynicism at its launch.  It’s a company that is now directly publishing and selling books, a move that I’m still cynical about.  It’s a company that took a flagging market in eBooks and has turned it into a commercial success.  This campaign was largely a PR miss for them, but that’s something they can brush off.

What I found much more intriguing about this promotion was the way it embraced smart phone technology.  There’s no doubt that the devices are rapidly changing the way we live life, and are an increasing share of the phone market.  Hell, I have two of them.  Nearly three if you count my iPod Touch.  And one of my desires when buying a new phone was one that could do on-the-fly barcode reading, something that my old Pre could just never quite handle due to the fixed focus lens.  It’s a step towards a world where we’re in more direct contact with companies, and where information can be delivered to us on the fly.

Consider the QR Code.  Those are the little black-and-white squares showing up in more and more advertising, especially in places where people tend to have smart phones on them.  They can be quickly scanned and decoded by most modern smart devices, delivering a website address or up to 250 characters of text on the fly.  And that’s really the intriguing part of all of this, on the fly voluntary advertising.  People have to make an active decision to pull out their phone and scan the code, transforming what is typically passive advertising into much more active advertising.

Why?

Because it’s fun, and cool.

As someone occasionally obsessed with new channels for self promotion, this strikes me as intriguing.  I’ve already heard of tech conventions that include, on every badge, a QR Code containing all the typical business card information for that participant.  It cuts out the in-between activities of adding someone into your phone’s contact list by directly dropping them in with a quick scan.  On my own, I’ve played with the idea of QR codes that contain links to my blog, links to my book on Smashwords (when that was a thing) and have even considered the idea of original fiction short enough to put into a QR Code.  Hell, people have created twitter-length fiction, QR gives an entire 110 extra characters for just a bit more plot depth.  That’s almost twice the length.

Where does all of this lead us?  I can’t help but wonder when the active will become passive again, with QR giving way to augmented reality.  I also can’t help but wonder when it won’t be just a barcode that Amazon wants you to scan, but a product itself.  Can I take a picture of my desk and see how much each item on it would cost to replace?  It creates new lines of self promotion, something that every author engages in at least a little of.  Just that slightly intriguing different take on letting the world know who you are, just enough to get eyeballs.  And it digitizes things one step further.  It changes the way people interact with their world, with their commerce, and with content distribution.  QR codes could easily point someone to a short story, or even a novel, available free for quick download.

I can’t say that Amazon is changing the world for the better or worse by asking people to scan barcodes.  I can’t say that QR codes are going to be anything more than a fad.  But it is all a new form of digital interaction with our world that is already the new normal for many, and something that any self-individual, writers included, needs to keep up on.

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