Seems to me that Macmillan threatened to play hardball (see "extensive and deep windowing of titles": i.e. we will forbid you to sell our books on your Kindle until after your competitors have sold them to your customers) and Amazon decided Macmillan deserved an object demonstration of who needs whom in this relationship.
Amazon are being perfectly reasonable, every large retailers operates in a similar fashion. Retailers try to get the lowest prices from their suppliers, and charge the highest price to their customers. It's how the retail industry works. Cutting a relationship with a supplier isn't an uncommon negotiation tactic.
You could argue that in this case Amazon are abusing a monopoly, but they're nowhere near a monopoly position. Their income from book sales in North America is only $6 billion (B&N at $5 billion, Borders at $3 billion).
Even if Amazon did have a monopoly, Macmillan can still sell their books directly on Amazon via Amazon marketplace at whatever price they choose. I don't think there's any ethical question for Amazon to answer here at all, this is just business.
In my option, in e-book business, a company like Macmillan is unneeded middle-man. "unneeded" is probably too big word, I don't know publishing industry. But their added value to an e-book is much less than in case of printed books distributed via traditional sales channels.
In long term, economics is on Amazon side. Macmillan is loosing power so they play hardball to survive.
By analogy, think about Apple app store and developers. Developers do not need middle-man companies like Macmillan.
Conversation snippet between publisher and author: "Hey, we haven't gotten the updates from you yet. Everything OK? Need some help? We really need to get this published, while you're still fresh in readers' minds from your last book."
Conversation snippet between Amazon and author: "Oh, you wrote a book? We'll let you know if anyone buys it."
There are a set of relationships and business practices in old publishing, and there are another set in new publishing. No one piece of either is enough to validate or invalidate the entirety of either set.
I would like publishers and editors to continue. I think we would not have had a lot of excellent books published by excellent authors who needed coddling; not all excellent authors are excellent self-starters and business people.
I like cheap books, but that doesn't mean I want to see a publishing world where Amazon can and does lay siege to publishers or anyone else.
Again, I like cheap books. But if Amazon wins the larger aspects of this conflict, the book business is going to be as free and open as the Apple device and media ecosystem.
[Edit: added "Apple" in last sentence. I wish I had an editor.]
Actually, as I think about this a little more, the logical conclusion of Amazon's efforts to control publishing is more Google-like than Apple-like, where an author will suddenly find his "self" published book removed from the Amazon store, and no more indication as to why than a vague reference to Terms and Conditions.
Of course I agree that publishers add value. I am saying just that proportions of how much each party gets, have to be changed for e-books.
App developer get 70%. Writer probably 10%, publisher probably 20%. And my question is if publisher work is still worth that much, actually more than writers work.
I don't see how Macmillan has a long-term future under their current business model. Arguably their best hope is to go into competition with Amazon and sell eBooks directly, at razor-thin margins. Technology is driving their margins down just like everybody else's; the only question is if Macmillan will be around (and lean) in ten years, or just a memory.
I have a hard time believing that Amazon is not greatly in the wrong here. Perhaps there are details yet to be revealed, but to me it looks very much like Amazon is abusing its power trying to make a point. Regardless of its goals, that's just not kosher. If I go into a bookstore and find that suddenly a huge swath of books have been removed from the shelves due to some retarded corporate back room strategery that will almost certainly be the last time I visit that bookstore. Amazon is treading dangerous ground here in its seeming wanton disrespect for both books and its customers.
I hope I am mistaken or that they will remedy the situation in a way that alleviates my concerns but I fear that I may be forced to stop giving Amazon my business in order to maintain a clear conscience.
You have a point - but bear in mind that "corporate back room strategery" in this case involves Macmillan trying to raise prices by 50% for consumers. This isn't David vs. Goliath.
In a serious PR war, I don't see how MacMillan can win this one.
With which constituency? Authors are, understandably very upset with what they see as a power grab by Amazon. You can get a sense of the sentiment in that community by looking through the comments here http://nielsenhayden.com/makinglight/archives/012148.html#01...
But in a larger sense, most readers understand that authors do need to get paid if the flow of new books are to continue.
My take is that Amazon will come to regret this action.
Yes, not a very random selection of people, but IMHO a decent enough approximation of your average consumer. Note that all of the upvoted comments are congratulating Amazon on fighting for the little guys.
I too am disturbed by this power play, but in a large PR battle with the general public I don't think MacMillan is going to win many points.
I disagree. It should not be Amazon's business what MacMillan charges for its books (in this case, specifically its e-books). I think this is a slippery slope situation. When Amazon has so much power to throw around, what's the limit of their demands? Today it's pricing, what will it be tomorrow? And the day after? It is rare for any large corporation to avoid abusing any newly acquired power to the utmost extent in seeking advantage for itself. If consumers roll over and don't raise a fuss about Amazon's use of power in this instance, I have little doubt that Amazon will find future uses for its new found power.
Amazon has a right to buy books for the price they can negotiate and sell them for whatever price they want. MacMillan is trying to force them to sell ebooks at the same price as every other ebook retailer. Let's see, what would we call that... How about price fixing? --Something generally considered bad for the consumer.
Amazon is doing exactly what any other business with bargaining power would do. And really, Amazon is doing what customers want - they're trying to keep prices down. So really, who should consumers be mad at - Amazon for working to keep prices lower, or MacMillan for trying to prevent competition in the market and make sure their books are being sold for the highest price possible?
It's exactly the business of a retailer to decide on how much its sells goods for. That's one of the single most important functions of a retail business. It can also be great for the consumer--do you think Wal-Mart would have just as low of prices if the prices were set by the manufacturer?
If you want to be able to set your price you just open your own store. Retail isn't as fun of an idea at that point though, there's a lot more to it.
Amazon is just following the model set by Apple. Apple pays whatever they want to recording companies, and we are OK with it. Amazon and Apple are now doing the same to book publishers, and I don't see how they will be able to fight back.
It turns out that the digital future will look even more centralized than the previous world. And one day people may even start missing the old world of big record labels and book publishers.
