If you’re still playing catch-up on the news, this is what happened. Amazon and Macmillan books entered into discussions about the prices Amazon charges for e-books from the publisher, with Macmillan pressuring for a higher price–perhaps around $15, which is much more than Amazon’s strict $9.99 limit. It’s clear the move was inspired by Apple’s iPad and simultaneous iBooks launch event, which promises a fairer share, more favorable terms and conditions than Amazon, and higher price points. (It’s also akin to iTunes takeover of the music industry, a similarity Fast Company’s Adam Penenberg called out back in our June ’09 issue.) Amazon, of course, operates something like a supermarket giant does in the food industry–leveraging its huge size to force suppliers to sell to it at wholesale prices. This tactic has caused issues in the food market, and now its doing the same in the books market: Amazon refused, and without warning pulled all Macmillan books from its store. That’s one of the “big six” U.S. publishers, mind you. Macmillan’s CEO stood his ground, and explained his thinking in an open letter, and Amazon was forced to “capitulate” and return Macmillan books to the store.
Simple, eh? Cut-throat business politics played out in public, and swiftly concluded? Yes. But reading into the matter, it’s clear that Amazon really cares nothing about the publishing industry, about authors, about the book-buying public and about any other book seller it knocks out of business.
This much is clear from the way Amazon comported itself during the last several days. Firstly it refused to see eye to eye with a key publisher–one of its major suppliers–and preferred to stick to its bullying tactic that eats into the revenue of the publisher, and subsequently authors themselves, by basically insisting that it decide how much to pay them for their product. Then it petulantly pulled stock from the Amazon store without warning–meaning the book-buying public was denied access to around one-sixth of titles published in the U.S., with no explanation.
Then, when Amazon reversed its decision, it announced the news with a blog posting from anonymous Amazon spokespersons that contains some extremely twisty language. Firstly it paints itself as the victim, having to “capitulate” to demands that it clearly wishes the public to think of as unreasonable. Then it explains that it has to capitulate because Macmillan has a monopoly over its titles. Finally it suggests that Macmillan’s prices are unreasonably high for e-books, and it believes other publishers will think differently to Macmillan.
Hmmm. A “monopoly over their own titles” is the absolute key phrase here, because it’s plain dumb. It’s like complaining that Van Gogh has a monopoly over paintings painted by Van Gogh. Amazon here is revealing that it doesn’t care how publishers actually work (a vast and complex system that’s evolved over time, and which really seems to function pretty well) and only cares about getting the right price it wants–which will then earn it huge profits from the average consumer who sees merely a lower store price. It doesn’t care about the fleet of editors that a publisher has to maintain to shepherd books from author’s minds into reality, about reviewers who sample thousands of submitted manuscripts from wannabe authors, about artwork, marketing, and the designers involved in creating a final finished copy of a book–whether paper or digital.
Perhaps worst of all, Amazon clearly doesn’t care what its customers think (despite thanking them in the blog post) because it acted to axe Macmillan’s texts without explaining why or giving any warning. And though it tries to portray itself as championing customer rights, what its actually doing is trying to manipulate an entire industry to working how it wants everything to work, squeezing everybody from authors to other booksellers.
And the final, most fascinating twist of all this, is that there’s likely to be one main beneficiary of Amazon’s shenanigans, and it’s one Amazon will deeply resent over the next year or so: Apple, with its new iPad.