Category Archives: Amazon

5

World domination

When Dan Slater of Amazon, a longtime friend of DGLM, was visiting last week, I jokingly asked him what new steps his company was taking toward its ultimate goal of world domination.  Discreet as Dan is, he did not let on about the new Kindle Fire announcement (although we’d all heard buzz) but he definitely did not deny that Amazon was in the process of taking over the universe (at least the publishing universe).

Well, as the HuffPost live blog of today’s announcement by Jeff Bezos about the new tablet shows, the Amazon juggernaut rumbles inexorably on.  Not having seen one of these babies in person, I’ve no idea whether I’m going to rush out and buy the new KF instead of the iPad I’ve been thinking of gifting myself for Christmas.   On the one hand, I use my current Kindle quite a bit and, given how lame the Apple book store is, I expect that I’ll continue to get most of my online reading from Amazon anyway.  On the other hand, it’s hard to root for the prohibitive favorite in sports or big business.  I’m not sure I want to live under an Amazon dictatorship, no matter how benign.

Is it as dire as all that?  Or is this all just healthy, good fun on the part of the superpowers?  Are they just giving us all more options even as we have less and less time to avail ourselves of them?

The price of admission

There was a little used book store around the corner from my apartment complex, when I was growing up in Miami, that was my second home.  Nerdy, latch-key kid that I was, I spent hours browsing the shelves, trying to get the owner to throw in an extra dog-eared paperback in exchange for the stack of Spanish language comic books I was trading, and generally getting high on the smell of old paper and ink.  I still have treasured editions scattered throughout my many bookcases whose provenance was that little shop.

Then, when I first got to New York, I was blown away by places like Shakespeare & Co., Brentano’s, Coliseum Books, Papyrus and that promised land for bibliophiles, The Strand.   A few years later many of my favorite haunts had gone out of business or been taken over by soulless corporate giants (you know who you are) but I never lost my love of browsing aimlessly in book stores.  These days, I still occasionally wander over to the Barnes & Noble on Union Square and spend my lunch hour in the fiction stacks on the fourth floor.

Of course, book stores have also traditionally been a place for authors to do their dog and pony show in support of their work.   Book tours are going the way of the Amazon forests but certain authors are still a huge draw (just try to get anywhere near the third floor at the aforementioned Barnes & Noble when David Sedaris is doing a reading).  Some of these events can make you fall in love with a book or its author, sometimes both.   They’re also the makings of a cheap date for grown-ups and an alternative to a $30 movie outing for young kids.  Except, it seems, no more.

Check out this  Gawker piece about the new trend of book stores charging admission to author events.  I actually understand and support independents in their efforts to get people in the door.  These are trying times for book sellers and if they are to keep their doors open in the face of the online juggernauts (you know who you are, cough, Amazon) they are going to have to figure out a way to make money.  But it does make me sad.   How many times did I walk out of a book store with a title I had no intention of buying when I went in after stumbling upon an author reading from his/her book?  I wonder if the days of the accidental book buyer are numbered as a result of these new pay-for-play tactics.

What do you all think about this new development?

4

Bummed about Borders

Seriously, I’m rather upset about this Borders news.  Yeah, they were mismanaged for years.  Their website was a disaster (and kind of still is), and letting Amazon be their online retailer for years?  I think just about anyone could have told you that that was a bad idea. But Borders, by being the “other” chain, has played a very important role in the publishing ecosystem.  While Barnes & Noble has had a larger share of sales for years, and therefore has exerted more control over what gets published, Borders was always an excellent counterbalance.  When publishers had a hard time getting B&N to order a book in the quantity they desired, they could hope that enthusiasm from Borders might make B&N reconsider.  They could go back to B&N and say, “Are you sure you’re not missing something?  Borders is taking a lot more than you!”  Granted, it didn’t always work.  Sometimes it took Borders actually selling a book for B&N to get behind it.  As an editor put it to me today about a particular book, “They got the ball rolling.”  Whether through their Original Voices Award or their Books You’ll Love program, when they supported a book, they made things happen.  And when the copies are flying out of one retailer, other retailers pay attention.  And not just B&N, but the big box stores and the indies, too.  You really can’t underestimate just how much that kind of broad, national, enthusiastic support can affect things.

I know that I’m taking this news particularly hard because Borders has supported a couple of my authors in really big ways.  While I know both would have been successful without Borders, I don’t think they would have been as successful as quickly.  Borders’s taste (I know it seems odd to think of a chain having taste, but hear me out) was always just a bit different, a little bit less obvious, maybe.  They could often see the commercial side of the not-so-commercial books, and in being the underdog, I think they paid particular attention to books that others might have been overlooking.

It’s terrible to be losing 200 of their stores, and even more terrible to think that it’s quite possible they won’t pull out of this mess ever.  I’m sad that great booksellers will be losing their jobs and that some nice retail locations here in SoCal will close—the Pasadena store was pretty great.  I’m sad to think the bookstore that I frequented most often in high school might no longer exist.  And I’m sad for the authors who won’t get championed by a company that truly believed in books.

7

It’s not a bestseller if no one bought it

by Michael

It seems that Amazon finally caught on to the fact that the top 10 books on the Kindle Bestseller list were all free books—they’re now creating two lists, one for paid books, and one for free books. As the LA Times Jacket Copy blog notes, at the very least, the “bestseller” label won’t be a misnomer any longer.

This is also as it should be. Comparing the downloads of free books to the download of paid books never made much sense—the whole point of making the book free is to entice people who aren’t willing to pay for the work in the first place. Without payment, it’s not a sale, it’s a gift. Including both paid and free books on the list is comparing apples to oranges, and I’m glad they’re making the distinction—as Apple does in their App and iBook stores. With more than half the books on the Kindle Bestseller list being free, it’s going to be interesting to see which books now appear in the paid list.

With more information about the paid books, I’m curious to see how pricing affects sales. We know that free books are frequently downloaded, but is there a big different between $12.99 and $9.99? Or $9.99 and $4.99? A quick look at the iBookstore bestsellers shows only 7 books under $9.99 in the top 50, and those books are not new and priced to move, but rather backlist titles available in mass market formats. But the titles in the iBookstore are much more limited, so it’s hard to really draw conclusions.

So what do you think? Was it a good idea to divide the lists? Or did lumping free and paid ebooks onto the same list tell us something important?

Publish or perish

by Jane

With all of the sturm und drang going on in the publishing business over the last few months with regard to Amazon, Apple and Google, there is an enormous amount of confusion—understandably.

I found this article in this week’s New Yorker to be quite enlightening. Even if it will “date” quickly because of the speed at which things are changing, I highly recommend that all published and unpublished writers read it. There is much to learn and absorb here.

I would be interested in hearing what you think.

8

Epocalypse now!

by Michael

April 1, 2010, marks not just April Fools’ Day (quite possibly my least favorite day of the year, in close contention with Halloween and New Year’s Eve), but also the day that the “Agency 5” switch to the agency model (see my last post for more on this). I think most of us knew the transition wouldn’t be smooth, as entirely changing your business model in, oh, three months, isn’t exactly easy. And indeed, there are some hiccups along the way, with Hachette Kindle books temporarily missing, and Penguin unable to close a deal with Amazon (we received an email from Peguin regarding the issue this morning). There’s still some tension between Amazon and publishers, as evidenced by the response from Amazon regarding the missing Hachette titles, and there will be more carefully worded missives publicly traded in the days to come.

Amazon can’t be happy with the iPad reviews that rolled in last night, either, because in several of them (great round up here at Gizmodo), the reviewers mentioned that they preferred the iBooks reading experience to that of the Kindle. I am officially excited for Saturday.

Does Random House know something we don’t?

by Michael

April 3 is right around the corner! For those of you who don’t pay attention to, well, any form of media, that’s the day that Apple’s iPad finally hits the stores. And, being the nerd that I am, I have to say I’m pretty excited. I love product launches, and Apple does them like no other. (I was very disappointed by the lack of excitement surrounding the launch of the Palm Pre when I went to purchase it on day one last year, but I digress.) I think our readers know how this relates to books, but in case you don’t, Apple is launching their iBookstore that day, as well. They’ll be offering books from all the major publishers, with one huge exception: Random House. When Steve Jobs announced the iPad back in January, he said that 5 of the 6 biggest publishers were onboard for the iBookstore. The absence of Random House was conspicuous, but they released a statement afterwards saying that they were working on an agreement with Apple. I’d assumed there’d be one in place by this point, but it looks like the iBookstore could very well launch without the largest trade publisher on board, as reported by the Financial Times. Honestly, I was really surprised. Until last week.

That’s when this article popped up on an iPhone fansite. It purported to show the working iBookstore, along with the prices. And the price for 27 of the 32 listed bestsellers that day? $9.99. The same price that publishers have been fighting against in the Kindle bookstore. I was thrown for a loop. The reasoning behind the to switch to the agency model was to take control of pricing and get rid of the expectation that ebooks cost $9.99. But here we were at that price again. Then, only two days later, a new screenshot showing most (but not all) of the bestsellers at $12.99. Color me confused. This pricing kerfuffle brought to mind this New York Times piece about publisher agreements with Apple. The piece suggests that Apple wanted the flexibility to drop prices for hot books that would be majorly discounted in print. As of today, it’s not at all clear what iBookstore pricing will be on April 3.

Thinking about the possibility of an ebook sold at $9.99 is troubling. In the agency model, retailers act as an “agent,” selling books at prices determined by publishers and collecting a percentage of each sale (30% in most cases). Authors are generally being offered a percentage of the net income from these sales—publishers are pushing for this to be 25%, so we’ll roll with that number for the purposes of this argument. In the agency model, with a book priced at $9.99, authors will earn $2.50 per book or less. Compared to the $3.75 they currently earn on a $25 hardcover (15% of list price), this is a dramatic reduction. Comparing this amount to what authors would earn under the current ebook market conditions is nearly as depressing. In the current sales scheme (the consignment model), a retailer is buying the book for about a 50% discount, then selling it at whatever price they like. Assuming the same $25 price list price for the ebook (which is pretty standard) and same 25% royalty for electronic books, the author receives a royalty of $3.13. (The question of why they would receive less than they do on the hardcover in this situation could be a blog post in itself.) If ebooks eventually make up 50% of the market (a number I believe is possible), that royalty arrangement will radically alter author compensation. That, obviously, concerns me. I’d really like to hear more directly and transparently from publishers on this issue. What effect will these arrangements with Apple and Amazon have on authors? It seems, from the Financial Times piece, that Random House may soon be having these conversations. But what about the other 5? Is it wrong of me to expect a little more openness? This makes me all the more impressed with John Sargent at Macmillan and his willingness to blog about their plans, admitting what they do and don’t know.

So, is there something in the Apple agreement that we don’t know about that Random House does? Or is it just, as Mike Shatzkin thinks, that Random House is trying to maximize their profits in the short term with the idea that they can jump on the bandwagon if the iBookstore takes off? We’re going to learn a lot more about all of this in the coming days.

On April 3, I’ll be picking up an iPad for myself (no willpower!), downloading the iBookstore, and most definitely tweeting about the experience. If I have important publishing observations, I’ll post them here, too. Looking forward to hearing what you all think about this.

5

Has Amazon met its match?

by Michael

There were two big announcements out of Amazon this week, both Kindle related. The first was that they are offering a new royalty structure for Kindle books: 70% of the price (minus a small delivery fee). But there’s always a catch, and in this case, several catches, including: the price must be between $2.99 and $9.99, must be lower than the hard copy price by at least 20%, and text-to-speech and other experimental features would have to be enabled.

The second and perhaps more surprising announcement is the release of a software development kit (SDK) for the Kindle, allowing developers to write applications for the device. What kinds of things programmers will do for the limited device, I’m not sure.

So what’s prompted all of this? Apple. The impending announcement of their tablet computer next week has everyone on pins and needles, and it surely has Amazon rethinking their own business model in order to stay competitive. I’m not convinced that the Apple device will be the publishing or world cure-all some anticipate, but if they can do for the tablet what they did for the smartphone (make a high-end, niche device a popular consumer product), Amazon–and everyone else–better watch out.

The art of hand-selling

by Jessica

Just before the Thanksgiving holiday, I attended the Middle East Studies Association conference, which is the yearly gathering of scholars of the Middle East. With its panels and papers, receptions and speeches, it is probably not unlike academic conferences of other disciplines, except that the music at the Sunday night dance party was Arab pop (if you’ve never heard the Middle East’s answer to Madonna, she’s worth a listen: check out Nancy Ajram on youtube) and among the post-docs getting down were a daunting number of accomplished belly dancers.

I go to MESA to get a sense of the ideas percolating in the field, sit in on assorted lectures, and meet with potential and existing clients whose research crosses over from an academic to a mainstream readership. This year, while helping out friends and former colleagues, I also had the memorable opportunity to moonlight as a bookseller. I have limited experience in the retail end of publishing; as an agent I’m in the business of selling books, but I’ve never tried it on a copy-by-copy basis. The experience was instructive, and I emerged from my adventure with a renewed sense of respect for the business of hand-selling.

It quickly became obvious that matchmaking between book and customer is both art and science—in this case I happened to know the books I was selling quite well, but to occupy that sweet spot between helpful and obtrusive was a wholly different challenge. When I convinced a browsing professor to purchase a novel I’d particularly loved, I was immoderately pleased. That she was already very likely interested in the subject I was peddling in no way diminished my sense of accomplishment. Other artisanal processes, like making cheese or crafting small batch whisky seem to be enjoying a renaissance, but hand-selling books, and the people who do it, ably and for real, are faring less well. Perhaps the book industry needs its own answer to the locovore movement. (Perhaps it’s out there—if yes, let me know).

Programs like B&N Discover and Borders Original Voices are efforts to scale up the hand-sell, and I like these programs immensely, but I note them professionally perhaps more than I respond to them personally. I’m curious to know how you all respond to them—ditto Amazon recommendations. Amazon’s ability to target my interests is undermined by the fact that I use the site as a research tool more often than I do to make purchases, but maybe you have better luck. Shelf talkers are great, but for me, nothing beats interested, widely read booksellers with whom I can speak; not only are they brilliant at suggesting books, they see the publishing industry from a perspective of the buyers who keep it alive. These days I’m particularly fond of New York’s Idlewild bookstore, which specializes in books on international themes—travel, world lit, etc.

But as I suspect is the case with many of you, indie bookshops have always had a special place in my heart. When I was growing up, each year, probably right about this time, my parents (both inveterate readers of nonfiction) would report to our local bookshop, where the owner would recommend a raft of novels that were just right for me. The stack that ended up beneath the tree, selected by Santa Claus, never disappointed. When, eventually I figured out that it was the bookstore owner and not St. Nick doing the selecting, it did not render the achievement any less magical. I was, however, crushed when the store closed (take that Virginia). Imaginary though he is, Santa’s position seems more secure than that of the independent bookseller, a figure whom I hope will not become a ghost of holidays past, as Jane touched on recently.

2

Rationing discounted books

Now, the Wall Street Journal and others are reporting that the big three retailers–Walmart, Target and Amazon–are rationing those selected bestsellers they have been deep discounting. This is ostensibly to prevent other retailers from buying from them in quantity and reselling these titles.

I believe that the only ones who are going to get hurt by the deep discounting and the rationing are those retailers who are doing it. First of all, they cannot continue to sell these books at these prices for a long period of time as they are losing a substantial amount of money by doing so; and limiting the number of copies per customer during the holiday season, especially, should discourage potential consumers and send them elsewhere.

In this poor economic climate for publishers and booksellers alike it would seem to me that working together to help our industry rather than undercutting each other would be far more constructive and productive.

What do you think?

-Jane