In This Space

I’ve spent a good part of the weekend following the skirmish between Amazon and Macmillan. To sum it up, Macmillan wants more control over the price of eBooks at Amazon, essentially they want the “agency model” which has been worked out with iBooks/Apple.

Amazon who is selling eBooks at a loss, to support Kindle, says no.

Macmillan counters that they would then window the eBook editions of new releases i.e. issue the eBook copy later (I’m unsure if that would be windowed just at Amazon, simultaneously being released for other retailers.)

Amazon proceeded to remove all copies of Macmillan’s books from their site – this being the digital realm this means the “buy” button was removed for both print and Kindle editions of Macmillan titles.

DOH! Out of the negotiation and into the world. It’s an aggressive move. There are six major trade publishers, and Macmillian is one of them, so you have to figure they represent a good percentage of the books sold at Amazon. And I’d further extrapolate that this move both has all the other 5 trade publishers talking and it probably pissed off a number of Amazon customers.

Twitter was tweeting up a storm, and more influential bloggers than I (this is an extraordinary, endlessly, long list) blogged about it and the populace, in and out of the industry, commented on those blogs. It was hard to keep up I tell ya, much less leap into the fray.

Today, Amazon released a statement saying ultimately they will have to capitulate.

I don’t know who really wins the round. Both sides seemed intent on flexing their biggest muscles.

On one hand, does the publisher have the right to dictate a minimum cost for books being sold to readers (consumers) by a third party?

On the other hand, does a single retailer have the right to devalue an emerging product because at the moment they have an enormous market share on hardware that supports that product?

I guess the essential question I’m thinking about is what is an eBook worth in relation to the printed book?

If you were to create a pie chart of the costs in producing a book, the costs associated with printing may end up equaling the new costs associated with digital conversions. The bigger slices of pie are reserved for the creation of the content in any form. In no particular order, these pieces would constitute the costs associated with advances, royalties, editing, marketing, publicity, and sales.

I don’t know what the right cost will be for an eBook but the Verso Advertising study showed 37% of the eBook reading population have not made up their minds. In the study 28% are willing to pay over $20 and 27% won’t entertain prices above $9.99. That tells me the sweet spot is above $9.99.

Publishing has never had very big margins. And sitting from my displaced seat within book publishing, its not like the publishers are currently rolling naked in big piles of cash. A little bit of profit would be nice for everyone working in the book business.

Digital Book World Day 2 was even better than Day 1 and I came home both exhausted and energized. I directed my energies into getting the photos up on my website. I apologize in advance for any inaccuracies in my “take aways.” Please comment any corrections!

In the morning there was a presentation of the BISG data showing increasingly positive attitudes toward eBooks in most segments, although their sample of 800 was a bit small. And, amusingly, the Nook did a good job branding itself as several recipients claimed to be using one before it was available.

Liza Daly of Threepress Consulting, accounted some shamefully sloppy editing in eBook editions that are more than a little alarming. She also pointed out that the pirated versions of these same releases are edited correctly, presumably by the pirates (argh! Not to make light of it but I can’t help picturing editor pirates armed with sharpened pencils.) On that note, I didn’t mention something very interesting from Tuesday’s piracy presentation by Brian Napack, most pirated versions are generated from pre-publication copies.

I really enjoyed some of the panel discussions where really good questions were raised regarding everything from sub-rights to contracts to xml conversion to pricing and windowing.

During the lunch break there was a BLIO demonstration, I couldn’t help but think the timing, an hour before the big annoucement out of Cupertino was a bit, well, sad. No matter what your feelings on either BLIO or Apple, the only eReader people were buzzing about yesterday was Apple’s.

And speaking of the unicorn, we now have the skinny on the iPad. The name leaves a bit to be desired but I think as an eReader it looks great – sexy even, especially the page turn. And I love the price point making real competition for Kindle. Of course, it is also the lowest model that I have my eye on – I am really not interested in a netbook (I do need an iphone, erm need may not be the right word here, but I am holding out for the Verizon rumor to come true.) The iBooks App looks pretty darn cool too, and I think that the agency model may have some real merits for the publisher (apparently 5 out of big 6 are currently in, and I have no comment on that.)

The great thing about shooting DBW was I could easily wander in and out of all the breakouts, I wanted to listen to everything in full but in real time obviously that was not possible so I tried to get a taste of everything. DBW = smorgasbord?

In a discussion about eBook release timing the dvd model was raised, I’m not sure that’s a fair comparison. The ensuing marketing budget commentary was certainty not fair – although I’d like to know what percentage of a movie’s total’s costs become the marketing budget versus a book’s total cost compared to its marketing budget. I bring that up because I also learned that apparently the Titanic made 1.1 billion dollars and in comparison Bertelsmann bought Random House for 1.1 Billion dollars.

And lastly I learned, “comments gauge the importance of a blog.” So, clearly, I need to become more important here.