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Amazon & Macmillan: Dumb & Dumber

Posted on : 03-02-2010 | By : Dean | In : Gadgets, Publishing, Rants, Tech and Teaching

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The other day, I decided to buy a copy of Cherie Priest’s Boneshaker, a novel that received praiseĀ  from Publishers Weekly and several other sources. I logged into my amazon account, hoping that I could pick up a digital copy, something I normally buy first, and then if I like the book, I buy the print version.

And like most readers trying to buy Macmillan books on Amazon that day, I found myself in an annoying click-loop that didn’t get me to the checkout. I had not yet read about the little war with Macmillan and Amazon.

The outcome of this war could be just plain bad, or it could potentially be a reader’s worst nightmare.

First, let me say that the kind of electronic editions of books that can be bought on Amazon aren’t really books that you own. The DRM on them basically means that you are paying for the right to read them, not own them. They can be removed from your device, and they cannot be moved from that device. It’s analogous to building a room in your house that can hold 3500 books, and after you have paid to build it, the people who built the room and sold you the books to put in it start putting conditions on reading the books you thought you owned. Pretty bizarre.

Really, the only thing that would entice a savvy consumer to buy into such a raw DRM deal would be other nifty things that Amazon could offer. And they did that. They gave us cheap pricing, a nice base of books transmitted on a free 3G network, built-in dictionaries, text-to-speech functionality (well, for a while it was nice), and customer reviews, all easily accessible. They had a good thing going with the market share that gave them.

But then Macmillan decided that an e-book should cost exactly what a discounted print hardcover book costs. You know the ones I am talking about. They’re in the windows and in neat piles on the tables at Barnes & Noble. The ones that cost money to print, use ink, paper, have fancy color images. And oh, yeah. You own them after you pay. You can give them to whomever you want. You can read them without the person who sold them to you coming to your house and taking them back (thanks, amazon for deleting my copy of 1984!).

See, there’s a difference. And the same people who argue about books going digital say the reading experience and our relationship with print books is fundamentally different, too. The publishing industry has argued that a book is a special artifact, something that is physical and touchable and that reading in print is something that we will always want to do. There is a certain mystique associated with the experience, they argue, that is ancient and quite human somehow. I tend to disagree with this notion. While I am a one of those readers that loves to read a real book, fewer and fewer younger people feel the same way I do. In fact, the success of e-readers (not just the Kindle) are the cause of Macmillan’s repricing and Amazon’s dispute with them as much as their fear that amazon is moving into their territory. The proof is in the balance sheets, and Macmillan’s decision to raise pricing can be read as an admission, of sorts, that the e-market is growing at an alarming rate, or at least one that will eat into their traditional print revenue stream.

This isn’t a unique phenomenon. The music industry has been fighting the same digital content fight for years, and they’re losing for the same reasons that Amazon’s approach will. Macmillan has actually done consumers a favor by spotlighting it.

I know a few musicians who pay the bills making music. They are quick to point out that their record sales are dwindling. Most of their money is made on concert ticket sales, promotional material, bags, shirts, ring tones, you name it. And the ironic thing is that the corporations who produce these records do very little to manage those alternative revenue streams. These are the same companies who have made the same arguments that the book industry is now making. They once claimed that there was “something about a record” that people liked. It was something that you could hold, something tangible–which is exactly why there are hundreds of millions of Americans maintaining their phonographs! Or not.

DRM has been and is currently destroying the music industry. We recorded albums on vinyl and gave them to our friends to listen to, then we recorded tapes and did the same thing. Miraculously, people still made music and record labels still made money. That’s because the average person likes to pay freely for things that they find valuable and (this is important and what the industry doesn’t get) that they own.

It’s obtuse for the publishing industry to try the same failed approach. And it’s worse with print books. Talk to any writer with any of the big publishers. Ask him or her about how book tours and promotions work these days. Writers are free to do them, pretty much at their own expense, except maybe the top one or two percent. Why don’t these companies get that their services in the future won’t be merely (or maybe even primarily) the production of books any more than, say the music industry produces records? or more aptly, in the case of companies more suited to adapt to the shift in content delivery, the movie industry is solely is in the business of producing DVD’s.

Rather than get creative, the publishing houses are taking the low road. They will start by trying to muscle e-books out of existence by not only speaking dreamily about how lovely it is to curl up with a book, but now by trying to make the problem go away by charging the same for the book and the limited license to read the book. The latter is equivalent to producing a booklet of color photos on nice paper, with a nice cover, and then producing a series of jpegs of those photos, and then trying to make the insane claim that they cost the same. Anyone who has made a photocopy and downloaded an image knows that one of those two has no real production cost.

And let me guess. Once the readers react to the pricing on books they don’t own by finding places where they can get the real rights to their texts, the industry will react by trying to legislate p2p e-book transfers out of existence. They might even give the company that they sue a face, maybe one with nice little cat-like Napster ears.

Today, the Author’s Guild and Literary agents lauded the move by Macmillan as one that will be good for the industry. Of course it will. It will nearly double revenue on something that costs zero to reproduce. I am guessing that amazon won’t fight too hard on that score. They have nothing to lose by charging more, really. The readers will pick up the bill.

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