Understanding the “Great Ebook Price War”

So AMZN pulled the buy buttons from all Macmillan’s books this weekend. At issue is the publisher’s ability to set the base price for their ebooks (as they do for their print books). AMZN’s response is the nuclear/6-year-old tantrum option (pick your metaphor, there have been plenty floating around Twitter all weekend)–their way or the highway. Authors are concerned their sales will suffer. Other publishers watch eagerly.

Macmillan CEO John Sargent explains why the two giant companies are at odds.

The authors’ view:

John Scalzi at Whatever — lots of discussion in the comments!

Cory Doctorow at boingboing

Several commentators attempt to unpack the bigger picture:

Charlie Stross at Antipope

Tobias Buckell UPDATE: Tobias’s site is went down under the strain. His post is mirrored at SFWA.

Chris Meadows at Teleread

Mashable on the The Great Ebook War (a title worthy of many of Macmillan’s affected authors).

Caleb Crain at Steamthing

Can a publisher insist on minimum pricing? Apparently so.
Can a retailer refuse to sell a publisher’s books (some or all)? Of course.

Every bookstore passes on some of a publisher’s books because they’re not right for that store’s customer base. However, using a publisher’s entire print catalog as a bargaining chip in a separate negotiation is a completely different order of magnitude.

Personally, it’s my understanding that publishers are prohibited from charging one retailer a lower price for their physical books than all the others. I don’t see why it should be any different for ebooks.  (Not being privy to the discussions, I have to assume Macmillan’s desired pricing would be the same for all ebook retailers.)

AMZN think they can get away with this because they are the largest gorilla in town. Macmillan seems to be anticipating Apple quickly establishing themselves as an equally large gorilla in the ebook business. AMZN have one thing to bargain with that Apple does not, the sale of physical books.

Indie booksellers have sensed the opportunity to use this brouhaha to support Macmillan authors and take some mindshare from the behemoth. WORD in Brooklyn are doing their part to publicize what’s going on, and the ABA have added banners highlighting the availability of Macmillan’s books to the indiebound.org website. These are encouraging first steps, but I hope to see indies following up with events and promotions that lead directly to tangible sales for the affected Macmillan authors. This is not only a chance to serve the large market of readers that AMZN have chosen not to serve,  it’s also a chance to re-emphasize indies’ vital role in bringing a wide choice of books to their neighborhoods and to connect readers with writers. Two roles that indies will not relinquish in an effort to corner a different market.


New links added as I find them.

Digital Book World’s roundup of discussion.

Galleycat readers discuss.

Brenda Cooper.

A heavy reader who sides squarely w/ AMZN (even above the authors he enjoys).

Author Jay lake weighs in by severing his connection with AMZN.

Mignon Fogarty, aka Grammar Girl, does the same.

Ed Campion says “not a single bookstore chain has ever discriminated against a publisher like this before”

Update #2.

Amazon claim to “capitulate and accept Macmillan’s terms.” Although, right now (Sunday 6pm) the “buy” functionality does not appear to have been restored to Macmillan titles.


Finally, Macmillan buy buttons reappear (6pm ET, Friday Feb. 5, 2010).

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  1. Michele’s avatar

    But why did the tempest in the teapot brew to begin with? I may be simplifying things too much here (likely), but for the last couple of years a few of the publishers have been complaining that Amazon setting their e-book prices at $9.99 leads consumers to *expect* lower prices for hardcover books, ergo degrading a publisher’s hardcover sales.

    I don’t see the connection. I may not be the sharpest tool in the shed, but as a consumer even I understand that a physical, hardcover book should and will be more expensive than the e-book version. Common sense tells me that.

    MSRP is just that: Manufactuer’s SUGGESTED Retail Price. Suggested. If Amazon wants to take a hit by selling ebooks less than what they paid the publisher, that’s their prerogative.

    Removing an entire publisher from Amazon? Yes, that’s childish. But so is a publisher threatening to remove their books from a retail outlet because they are worried about us idiot consumers and our “price expectations.”

    Shame on all parties involved.

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