Business, eBooks

War between IPG and Amazon…

I’ve been watching the fracas between IPG and Amazon from a distance, and was unsurprised when the Science Fiction/Fantasy Writers Association came down on IPG’s side. The dispute basically boils down to eBook pricing. Amazon wants IPG to sell its books at a lower price, IPG doesn’t want to. When IPG refused Amazon’s terms, Amazon decided to stop selling the books.

I don’t want an Amazon monopoly on eBooks any more than anyone else does, but it’s difficult not to come down on Amazon’s side on this, at least as far as the facts go on eBook pricing. Publishers want us all to accept the idea that eBooks ought to sell at nearly the same price as physical books (at least, the same as trade paperback rates). Production costs on eBooks, however, are a fraction of the cost of producing physical books. We all know this–especially indie authors who have first-hand experience producing eBooks. No physical production, no printing, no distribution. It’s cheaper, and that should be reflected in eBook prices.

Publishers think that Amazon’s low prices are “unsustainable” in the long term for publishers. That’s probably true: because publishers are unwilling to change their business practices and fully embrace the eBook. Amazon is right in this: publishers are going to have to lower their eBook prices and change their business model to accommodate those prices. Either that, or go out of business.

Dear Author puts it quite well:

Publishers have called on readers to be okay with their high priced ebooks, forego discounts, struggle with DRM, limit sharing, turned their backs on libraries, reject the money of our reading brethren outside of North America, but they want our help in shunning Amazon? What have you done for me lately?

Major print publishers have done what they could to slow down the adoption of ebooks. In adopting agency pricing, the major print publishers have helped to eliminate discounts and reader reward programs for digital books. Most print publishers have adopted a DRM policy, locking customers into one device or one retailer. DRM also impairs preservation of digital libraries, implementing a lease v. ownership system which instantly devalues the product for many readers. Many print publishers do not allow lending of digital books from reader to reader, not even Harlequin, even though the lending of digital books run by retailers works exactly the same way as a print book. Once that digital book is lent, the lender has no access until the book is returned by the recipient. Of the big six publishers, few will allow their books to be lent via library usage. Many, many books are not available outside the U.S. and Canada or are outrageously priced.

In sum, publishers are jacking readers over in regards to digital books but now we are supposed to act against our own financial interest or our own convenience to help publishers fight against Amazon?

I’ve said this over and over again: publishers cannot win this fight by circling the wagons around their old business model. They need to fight Amazon on its own turf. For a long time now they’ve had the benefit of a monopoly of their own: on writers. And writers want to write for publishers. I cannot emphasize this enough. Even now, with indie publishing so appealing, most of us would love a writing contract. But that window is closing. Amazon is very attractive to new writers in many ways. Publishers are so busy protecting what they have that they don’t seem to understand that their advantage in this fight is evaporating. They need to embrace the eBook model and fight Amazon in new ways.

I have doubts the publishing industry can do this. Eventually someone else is going to have to compete with Amazon. A new start-up, catering specifically to writers and their needs. Amazon is quickly getting to the point where it doesn’t need publishers. The opposite is not true–hence the cry of foul from IPG. It’s not like this response from Amazon is a surprise. Amazon has a gun to IPG’s head. IPG and other publishers would be wise to change the rules of this game, but it may be too late for that.

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