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Amazon/Hachette Business Interruption

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Re: Amazon/Hachette Business Interruption

#101

Post by cstross »

bsder wrote: post #51
jamesaguilar wrote: post #36

Earlier quoted context omitted.

> Also, why would Amazon care so much about how others market their content, to the point of trying to interfere? They make $3 on every sale, so obviously it is in their interest to set the price to maximize revenue. Your whole bit about "everyone doing it" and "race to the bottom" is an instance of the zero-sum fallacy.

And your evidence that this isn't a zero-sum game, is, exactly, what? All of the evidence points to the fact that people have more than sufficient entertainment options and have set their budgets at a fixed point. It wasn't piracy that killed music. It was the fact that the prime purchasers of music had a fixed entertainment budget and switched to buying video games aka. zero-sum market.

My take: the zero-sum game is not solely about people having a fixed entertainment budget in purely financial terms -- incomes go up and down and it depends in the aggregate on the economic cycle. Rather, people have a fixed entertainment budget in terms of leisure hours per week that want filling. You can get a pay rise, but you can't get 5% more hours in the week than the 168 that your clock gives you.

Another issue is that some recreational products are rivalrous of time; you can't read a book and play a computer game simultaneously, or combine one of those with doing the ironing or cooking dinner. You can watch a video or listen to music while you're doing something else. Oh, and some products are use-once, while others are use-many-times (and in some cases this varies from individual to individual: do you re-read books, or read them once and discard?).

TL:DR; There's a zero-sum game in the picture but nailing it down is a whole lot more complicated than it looks at first sight.

Re: Amazon/Hachette Business Interruption

#102

Post by opendais »

cstross wrote: post #99

John Scalzi's response to this piece of self-serving agitprop is worth reading in full: http://whatever.scalzi.com/2014/07/30/amazons-latest-volley/ (Shorter Scalzi: Amazon are presenting as "good for authors" policies which, in fact, are only indisputably "good for Amazon"; the only authors they might be good for are those who cleave unto Amazon like limpets and don't do business with the other 70% of the book distr…

Scalzi, like usual is ~90% correct and what little he is off about is easy enough to ignore. ;)

I easily see #3 resulting in the bottom end selling at $5 and the top end selling at $9.99 because I suspect the reason Amazon picked that number is, overall, it generates more total sales [by dollar volume]. One of the few things Amazon is good at is accurately pricing products to maximize gross revenue.

That being the case, I don't think its likely to be the disastrous price point Scalzi thinks it is even if it squeezes the publisher's margins on the higher end books. Ebooks, once created, are a sunk cost...not an ongoing one so maximizing gross revenue works in everyone's favor.

Re: Amazon/Hachette Business Interruption

#103

Post by moistgorilla »

romaniv wrote: post #95
JulianMorrison wrote: post #91

Earlier quoted context omitted.

I suspect that books are way undersaturated. The reason is: paper. Dead tree books weigh a lot and waste space. Therefore owning a library is a cost . Costs to move, costs storage space, costs effort to collate and maintain and protect. E-books do not have that cost. Having a hundred e-books in your purse is a normal thing. Having a thousand? Well, it might make sorting through your personal equivalent of a branch li…

Therefore owning a library is a cost. Owning a library has a higher value than owning a library of ebooks: social, decorative, nostalgic, works without power, easy share, can resell, etc. It more than evens out. But there is Steam effect - people will stockpile ebooks they don't read.

> social, decorative, nostalgic

This is subjective and not monetary value. The only people that care about social, decorative, and nostalgic value of books are also the people who probably wont resell books.

> works without power

finding a place to charge your device is easy and ereaders last months without recharging

> easy to share, resell

Sure but the money you save by reselling a book is probably less than what you save by buying the ebook

Space and weight are real, expensive costs. Owning a library has negative monetary value. Owning a library of ebooks doesn't. It's stored on the internet and you can access it from anywhere.

Basically, if your books aren't furniture and you aren't sharing your books multiple times a month ebooks provide more value.

Re: Amazon/Hachette Business Interruption

#104

Post by joedrew »

andor wrote: post #78

It's also important to understand that e-books are highly price-elastic. This means that when the price goes up, customers buy much less. But what is the alternative for those customers: do they maybe buy the paperback version instead? If that's the case, Hachette might miss out on revenue, but they also keep their paper-based business running and stay somewhat independent of Amazon.

They don't buy, or they buy something else. If there's one thing that economics has taught us, it's that people will reduce their consumption when prices go up; even water demonstrates price elasticity: http://www.nber.org/papers/w13573.pdf

Re: Amazon/Hachette Business Interruption

#105

Post by mseebach »

riffraff wrote: post #88
mseebach wrote: post #74

Earlier quoted context omitted.

>1984 Isn't the fact that we're still discussing a single screw up that was immediately rectified from 5 years ago evidence that Amazon is actually going about this DRM business in a pretty sensible way? Also, Amazons complete lack of interest in "fixing" the very easy DRM removal process seems to provide further evidence to the same end. Sure, it'd be better if there was no DRM, but there's the perfect world and the…

FWIW, I just bought a book (sequel to "a fire upon the deep" by vernon vinge) on kindle yesterday and it came with a "this book has no DRM at the request of the publisher" disclaimer. So maybe we should complain about publishers rather than amazon at this point?

We can complain all we want, but I struggle to see how we can place meaningful pressure on publishers.

I wanted to say that it's like iTunes and the switch to non-DRM, but I think the dynamic is different with Amazon as there isn't any meaningful competition on the e-reader device market as there was (and is) on the MP3 player market, where DRM was a major pain and thus a driver for DRM-free.

Short of Amazon pressuring publishers to drop DRM (which could well happen, but there's not a lot of business upside to it, although do downside either), I guess it will take a viable competitor to the Kindle that Amazon can't or won't provide an app for for DRM to get pressured out by end user market force.

Re: Amazon/Hachette Business Interruption

#106

Post by jessaustin »

mseebach wrote: post #105
riffraff wrote: post #88

Earlier quoted context omitted.

FWIW, I just bought a book (sequel to "a fire upon the deep" by vernon vinge) on kindle yesterday and it came with a "this book has no DRM at the request of the publisher" disclaimer. So maybe we should complain about publishers rather than amazon at this point?

We can complain all we want, but I struggle to see how we can place meaningful pressure on publishers. I wanted to say that it's like iTunes and the switch to non-DRM, but I think the dynamic is different with Amazon as there isn't any meaningful competition on the e-reader device market as there was (and is) on the MP3 player market, where DRM was a major pain and thus a driver for DRM-free. Short of Amazon pressuri…

...I struggle to see how we can place meaningful pressure on publishers.

I've never "bought" an e-book with DRM. (With DRM it isn't really a purchase, but rather a lease of indeterminate term.) I don't find it a struggle.

Re: Amazon/Hachette Business Interruption

#107

Post by thinkling »

wdewind wrote: post #21
coryl wrote: post #4

We believe 35% should go to the author, 35% to the publisher and 30% to Amazon. What do publishers even do with regards to e-book distribution? Are they going the way of the record label company?

They are giving people advances so that they can live while they write the book full time. An example is someone who used to be a journalist can use their success as a journalist to sign a book deal and work on that. It's similar to raising a seed round. IMO they are going the way of the record label. Some publishing houses and record labels will continue to add value, while larger ones who used to use their brand to…

Publishers are kickstarter for authors, raising the money from previous book sales by other authors... :-p

Re: Amazon/Hachette Business Interruption

#109

Post by matthewowen »

coryl wrote: post #4

We believe 35% should go to the author, 35% to the publisher and 30% to Amazon. What do publishers even do with regards to e-book distribution? Are they going the way of the record label company?

Editing takes a lot of time. They also assume some risk by paying advances.

Are venture capital firms going to go the way of the record label company?

Re: Amazon/Hachette Business Interruption

#110

Post by cafard »

chatmasta wrote: post #45
IgorPartola wrote: post #31

While I believe they saw these numbers, specifically that lowering the price from $15 to $10 lead to a 74% increase in purchases, I don't believe that this is a good general rule of thumb. Here's the problem: there are only so many potential ebook readers out in the world, and they only have so much time. This means there will be market saturation at some point, or at least market movement. This elasticity is there,…

I don't know exactly what you mean by market saturation in this case, as your logic seems to imply that each book has a finite market of N customers, and enough of a subset of them, M , are willing to pay $1000 (or whatever), such that M (1000) > N (5). The error in your logic is that the size of the market for a given book actually depends on the price of that book. There's millions of books out there. Why would I p…

There is no book I can think of at the moment that I'd buy for $1000. There are plenty I'd buy at $20 to $50 in preference to a comparable dollar value in $5 ebooks (or other inexpensive editions).

Some books have only so much market. Amazon could declare an August special, The Critique of Pure Reason, leather cover, sewn binding, acid-free paper, yours for $5 and free shipping. Do you think that this would rocket it up on the charts?

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