The spat was ostensibly over pricing, but actually it was about market control. Essentially, Amazon wants to become both wholesaler and bookseller, and to dictate recommended retail price of the stuff it sells. Macmillan, wanting to keep control of the stuff it produces, expects Amazon to act as an agency, supplying books to customers at prices dictated by Macmillan. There have been plenty of good analyses on various authors’ blogs of what happened and what it means; go check out these links if you want more detail.
It’s clear from the comments on those blog pieces is that an awful lot of people think that Amazon is the reader’s friend. No, it isn’t. Yes, it supplies a vast range of books at attractive prices: and in the case of ebooks delivers them to the reader’s Kindle directly and quickly. But it is also a very big capitalist enterprise that wants, quite naturally, to maximise profits and undercut the business models of its rivals. And it wants to do that selling as many Kindles as possible, by tempting customers with deeply discounted prices on ebooks and locking them into its supply chain.
It also became clear that many readers think that ebooks are too expensive. It doesn’t cost much to produce or to distribute them, the argument goes; in fact, duplicating ebooks is virtually free. So why aren’t they as cheap - if not cheaper - than paperbacks? Three reasons.
First, printing and distribution costs are a much smaller percentage of a book’s retail price than many imagine, and all the production work needed to publish a regular book - editing, design, typesetting, marketing and publicity - is also needed to produce an ebook. Second, publishers’ profit margins are a very small percentage of a book’s RRP. If they’re cut much further, the entire present-day publishing model will collapse.* Some think that will be a Good Thing, in the same way that some cock-eyed optimists thought the Internet would be full of nothing but stimulating creativity, high-minded democratic discourse, rainbows, and puppies; imagine trying to sort the good stuff from the fire-hydrant flood of the indifferent and bad if all authors were forced to self-publish through the kind of monopolistic content supplier that Amazon so dearly wants to become. Amongst other things, publishers are useful - albeit not always accurate - filters.
And third, books aren’t that expensive. No, really. My first novel, Four Hundred Billion Stars, was published in1988, a paperback original in the US, a hardback in the UK. The hardback was published by Gollancz, and most of the print run was sold to libraries (it was had one of the last of Gollancz’s famous yellow dust jackets, designed for easy recognition by browsers). Its RRP was £11.95, and that was the price you paid in every bookshop in the land, under the old net book agreement. My most recent book, Gardens of the Sun, was also published by Gollancz, in 2009. The RRP of the hardback is £18.99. Compared to the 1988 price, that’s cheap. The retail price index of 2009, the best measure of high-street inflation, is about twice that of 1988, so the RRP of the 2009 hardback, at 1988 prices, should be £23.61. But wait - there’s no longer a net book agreement. Booksellers don’t have to sell the book at the RRP, and many don’t. Amazon sells it at £12.28. And then there’s the trade paperback edition - same content, published at same time, at an RRP of £14.99, discounted by Amazon to £8.99. Much less than the price of the hardback of my first novel, even without taking inflation into account. What a deal!
It’s a slightly different story when it comes to paperbacks. Hardback prices haven’t kept pace with inflation; paperback prices have. Back in the late 1980s, Gollancz didn’t publish paperbacks, but it licensed publication of a paperback edition of Four Hundred Billion Stars to Orbit. The RRP of that paperback, published in 1990, was £3.50. Gollancz reissued the title in paperback in 2009 at a RRP of £7.99, an increase that’s slightly greater than the increase in the retail price index. Still, you can buy a copy at the discounted price of £5.56, roughly the same as the adjusted-for-inflation price of the 1990 paperback.
So, books are already a good deal. Especially if you consider that newspapers have more than tripled in price over the same period. The only way ebooks can really make a big difference to readers’ pockets is if the price at publication is the same or less than the price of the mass-market paperback. That’s what Amazon wants; to get rid of the pricing structure that allows publishers to charge a bit more (but much less than they used to charge) to readers who want to get hold of a title when it first comes out. And that will cut into publisher’s margins, which means that books will have to be produced more cheaply, and most authors will have to take big cuts in payment. Boo-hoo, you might say. Why don’t they do it for free? For, you know, the love of writing. Simple. Authors want to write the best book they can. They can only do that if they have the time and space to do it properly. And the simplest way of ensuring they get that, at the moment, is if their books are sold for what they’re worth, not as content-bait. And if you’re not convinced by that, remember this, dear reader: you get what you pay for.
*the current publishing model is probably going to collapse anyway, but hopefully it's going to collapse slowly, and into a new and useful form, rather than rubble.
EDIT 02/02/10: this is also worth reading.
Currently reading: Hitler's Private Library, by Timothy W. Ryback (and yes, I'm fully aware of the irony of linking to Amazon, but it helps to pay for the blog).