>'We also take seriously the impact it has when, however infrequently, such a business interruption affects authors. We've offered to Hachette to fund 50% of an author pool - to be allocated by Hachette - to mitigate the impact of this dispute on author royalties, if Hachette funds the other 50%. We did this with the publisher Macmillan some years ago. We hope Hachette takes us up on it.'
Wonderfully slick move.
It makes Amazon look good, Hachette look bad and builds good will with the authors and spectators while turning the screws on the economic pressure that Hachette is already facing.
A $10 billion media conglomerate is small potatoes next to $143 billion Amazon. Plus, Hachette is not the dominant player in its industry, while Amazon is.
Amazon's revenue is only 7% books, or about $5B. Then again, Hachette is just a part of a conglomerate and is not itself a $10B company and may be way smaller than that. Regardless of the nitpicking of who is the bigger fish, both companies are well-equipped with clever people, bankrolls, and influence to fight this one out.
How does it make them look bad? If they had said "Hachette chose not to take us up on this", then sure, but as it stands, Amazon made the offer, and Hachette is deciding what to do with it. That's entirely reasonable.
Because sometimes "We offered x and they refused" looks like a he-said-she-said scenario. Amazon are demonstrating that the offer is still on the table, and the ball is entirely in Hachette's court.
This trivializes everything interesting about this case. Because this argument was previously had with Microsoft & Netscape. And Comcast and Netflix. And Amazon has a huge stake in two major policy issues upon which this touches:
> And Amazon has a huge stake in two major policy issues upon which this touches:
> (1) Monopolistic collusion in e-books; and
Pray tell who is Amazon colluding with?
> (2) Net neutrality
Amazon doesn't offer last mile internet service as far as I'm aware. Are you alluding to some neutrality violation in their role as ISP for AWS customers or ...?
To play the devil's advocate... couldn't Hatchet just pull out of selling ebooks through Amazon and roll their own and/or start an distribution platform for ebooks structured like Hulu? If the rest of the big 6 publishers got on board that would be pretty catastrophic for Amazon and they wouldn't be able effectively retaliate without crippling themselves.
The (only) issue is the Kindle (which I love, and own four of). Amazon sold e-books at what some called "predatory pricing", using their large profits in other parts of their business, to allow them to sell below cost on their DRM-encumbered reading device. I would guess that close to 90% of e-book reader who purchase books, do so on a Kindle capable device (iPad, iPhone, or E-Ink reader).
These people (and I am one of them) - only purchase e-books from Amazon. Because it's DRM encumbered, we need to make sure we purchase content from a supplier who is going to be around 10-20 years from now.
Only Amazon (and possibly Apple) has any strong probability of being in that category right now.
This gives Amazon an outsized ability to negotiate with vendors - Amazon is close to being a Monopoly for both the ebook purchasers, and Monopsony for the ebook sellers.
There was a small chance to correct this back when Apple attempted to negotiate agency and MFN rights for their book selling business, but they did it in heavy handed and clumsy way that appeared to the DOJ to be collusion. Some have argued that what Apple did with the book publishers was not that different than what Apple did with the Music publishers - the key difference, of course, is that there was no "Amazon" to complain about their market position being disrupted by a new business model.
I'll still continue to purchase books from Amazon, as distasteful as I find their current negotiating strategy, but I would be (very) happy to see the book publishers decided that DRM encumbered books will ultimately be their downfall because of the negotiating leverage it gives the DRM platform owner.
I'm one of these Kindle-owners. I want to correct a misconception: it's not inherently DRM-encumbered.
Books you buy from Amazon can have DRM or not, depending on the publisher[1].
Books you buy from other stores will work fine on Kindle so long as said other stores aren't using DRM themselves.
Admittedly, if you buy a book in EPUB format from another store you'll have to convert it to one of the formats Kindle supports. Amazon provides a program to do so, and independent stores like Baen[2] tend to give you a choice of formats anyway.
(Kindle not supporting EPUB natively seems pretty blatantly designed to avoid competition, since it's the non-Amazon industry standard at this point. No argument there.)
Thanks - I had no idea that I could purchase books from Amazon.com that did not have DRM. This even more strengthens the responsibility for DRM to be on the publishers hands - simply by eliminating the DRM from their books, I could purchase their books from any publisher, and read them on any device - which would eliminate my need to go to Amazon for a new book.
I wonder how much discussion has gone on with the publishers about eliminating DRM on their content. The music publishers certainly went that way...
To the best of my knowledge (I'd love a pointer to details if I'm wrong), the reason Kindle has DRM at all is entirely due to publisher demands for it.
Yep. DRM is totally optional. I sell ebooks on Kindle Store which are based on OpenStreetMap data. CC licence (at the time) meant that I couldn't use DRM. Not a problem.
And not only that, but you can email them directly to your Kindle. So a third-party store could just ask for your Kindle email, have you add it to the whitelist and "then" provide a fairly streamlined experience.
I own several Kindles. I load my own content onto them, including ebooks I make myself. Owning a Kindle simply does not lock you into buying books from Amazon.
> couldn't Hatchet just pull out of selling ebooks through Amazon and roll their own and/or start an distribution platform for ebooks structured like Hulu?
Sure, just like, any one of the computer manufacturers that Microsoft was pressuring in the 1990s could have just pulled out of selling computers with Windows and rolled their own OS.
> If the rest of the big 6 publishers got on board that would be pretty catastrophic for Amazon
OTOH, if the rest of the big 6 didn't, it would be catastrophic for Hachette.
"Sure, just like, any one of the computer manufacturers that Microsoft was pressuring in the 1990s could have just pulled out of selling computers with Windows and rolled their own OS."
Setting up an independent ebook sales portal isn't as hard as writing a new operating system and getting it adopted. Not by many orders of magnitude.
> Setting up an independent ebook sales portal isn't as hard as writing a new operating system
I'm sure some PC vendors like HP could probably have figured out how to put together an OS -- because many of them did. effectively marketing a consumer OS in the market Microsfot had dominated, and where all the app development was focussed on windows, OTOH...
No. Getting a user to adopt a new OS requires convincing him to format the drive (or create a partition), download a gig of data, then go through an hour or two of installation and configuration, then go through weeks to months of learning how to use the new OS.
Getting a user to set up his Kindle to read books from your indy store requires that he enter the Kindle's email address on your site, and your site's email address on the Kindle.
Can you force Walmart to put your products on shelves? How is it OK for Hachette to force Amazon.com to put the physical books on shelves?
One easy way to fight Amazon would be to include a DRM-free digital copy download for free with every physical book purchase. Of course, the scummy publishers won't do that.
Retailer's like wal-mart commonly extract rents for product placement. Comcast thinks this is a great business model. Paying such rents to comcast for "product placement" in the last mile? Not so clear cut for Amazon.
This whole discussion turns on whether Amazon is a monopoly. That's the reason it's such a problem for Comcast to do it -- they have a hard monopoly on access to Comcast subscribers. You can't gain access to any Comcast subscribers by peering with Sonic, because the number of customers who simultaneously subscribe to multiple residential ISPs is effectively zero. Whereas you can sell your product to "Amazon customers" without selling through Amazon, because the percentage of customers who patronize more than one retailer is substantially all of them.
> Whereas you can sell your product to "Amazon customers" without selling through Amazon, because the percentage of customers who patronize more than one retailer is substantially all of them.
For online purchase of books? Not even close to "substantially all of them".
The market is that because the numbers say that's where the market is. What's wrong with selling your book at Wal-Mart is that the numbers say you will not sell enough to make a living.
As for "what barrier," well, consider a website that is visible on Bing but not on Google. Go ahead and tell them "but visitors have no switching cost!" The cost of not being visible where customers are actually looking for you is very high indeed.
> As for "what barrier," well, consider a website that is visible on Bing but not on Google. Go ahead and tell them "but visitors have no switching cost!" The cost of not being visible where customers are actually looking for you is very high indeed.
That isn't a cost to the customer, it's a loss to the supplier. The problem suppliers have is that customers have lots of competition to choose from. A customer might have equal preference for two books that each cost about the same amount and therefore choose the one which is easier to find. That choice makes all the difference in the world to the publisher but negligible difference to the customer.
That's why the customer places such little value on searching for alternatives. Because there is negligible harm to the customer. If there would be customer harm, the customer could instead exercise the option to spend only the few seconds necessary to find the book at another retailer. Unfortunately for the supplier, there isn't, so the customer doesn't.
> The cost of not being visible where customers are actually looking for you is very high indeed.
Does it constitute a monopoly though? I doubt the folks at Google love Amazon.com but if this became the sufficient to declare Amazon.com a monopoly, then the obvious next step is to immediately declare Google web search a monopoly. With over sixty percent of the eye balls (the last time I read any stats), Google would be in the cross hairs.
This topic has generated a variety of coverage, presumably in part because the negotiation is with a book publisher instead of a supplier of a different type of product. Some of the coverage has expressed a relatively narrow point of view. Here is one post that offers a wider perspective.
Apart from the amusing optics of "this topic has generated a lot of coverage, but here's a blog post that sees our side of the story", it's worth knowing that this "wider perspective" is that of a very small literary indie publisher that basically says two things:
* Hachette is gigantic
* Selling books online is great for indies
Neither of those points has much to do with the issue at hand, and, in particular, I'd suggest that selling books online is great for indies so long as Amazon sees the dollars involves as a tiny rounding error.
Charlie Stross (cstross here on HN) has an interesting post on this:
By driving down the unit revenue, Amazon makes it really hard for publishers—who are a proxy for authors—to turn a profit. Eventually they go out of business, leaving just Amazon as a monopoly distribution channel retailing the output of an atomized cloud of highly vulnerable self-employed piece-workers like myself. At which point the screws can be tightened indefinitely.
Well, by that logic the record studios were proxies for musicians. Sorry, not buying that argument.
If I were Stross I'd certainly be peeved at the loss of access to customers and, by extension, income. Especially if I were obligated by contract to stay with a publisher on the outs with Amazon. But arguing that Amazon's endgame is to put him out of business seems a stretch. We're still in the early stages of the ebook publishing disruption and I suspect that as with music, direct commercial channels between producers and consumers is the future.
I'm an Amazon Prime subscriber, and have been for years. For most of that time, I've automatically bought stuff from Amazon, aware that occasionally I'm paying more than elsewhere. The reason is convenience. Order almost anything, get it fast, with no extra shipping cost.
This spat has forced me to occasionally shop at Barnes & Noble. And I gotta say, if I have to go to two stores to get items, Amazon's convenience edge is much smaller. Just the other day, since I was on B&N I bought things there that I would normally have gone to Amazon for. Again, it's the pure convenience.
I have no idea whether I'm typical or not, but if I am, then I think this will hurt Amazon more than Hachette.
I agree, this saga is hurting Amazon a lot. From a PR perspective at a time when American citizens are worried about monopolies and the implications of technology conglomerates, this very public spat seems ill timed. The New York Times has had five articles negative of Amazon on this issue in the past two weeks alone.
Even if you are a typical user, how much would it possibly hurt Amazon? If this becomes a regular occurrence I can see Amazon's leverage eroding but the company regularly goes toe to toe with many different industries and holds it own against half trillion dollar a year giants like Walmart. Amazon's core competencies are growing and the network effects are difficult to quantify.
I suspect encroaching on Amazon's market dominance would be a hard task even for Google, let alone B&N
If the typical behavior of their current multi-year Prime subscribers is to shop around because they no longer like the company that is a BIG problem for Amazon.
The day publishers like Hachette start selling their publications directly and unencumbered by DRM is the day Amazon will slowly start losing their leverage. (And get me as a customer.)
Sure, it will take a while, but that's only because these publishers have spent the last two decades sitting on their asses counting their money whilst Amazon ate their lunch.
I don't subscribe to the doctrine "disruption = good", but publishers are part of the fat and lazy copyright exploitation industry that truly deserved to be disrupted.
If Amazon tried to stop Hachette from competing that would be a different matter. But they are handing Amazon this leverage simply because they still can't be arsed to innovate themselves.
That doesn't help much when only a handful of smaller publishers sell their books in DRM-free formats. I read a lot, and really like e-books. I don't buy very many e-books though, because the condition in which they're sold is so hostile to the consumer.
We also take seriously the impact it has when, however infrequently, such a business interruption affects authors. We've offered to Hachette to fund 50% of an author pool - to be allocated by Hachette - to mitigate the impact of this dispute on author royalties, if Hachette funds the other 50%. We did this with the publisher Macmillan some years ago. We hope Hachette takes us up on it.
I have to say, this is a classy move on Amazon's part.
Sure, it's a public relations ploy. But it's a public relations ploy which helps out the group which is most negatively impacted by the current situation.
They may be doing it for cynical reasons, but I still like it.
It is sad that hachette is getting authors to write badly about amazon on blogs and on facebook. It is evident that Amazon.com is right and hachette is wrong.
Why do we need these scummy publishers anyways? Good riddance.
We would like for publishers not to be scummy. But even if they are, scummy publishers are better for the authors than scummy Amazon.
If they manage to force publishers out of the picture, they will force writers to reduce their income as far as they can push it. Which in a world without publishers is very, very far.
By the way, you look like an Amazon shill, not providing any argument for your position and appealing to emotion (scummy publishers die!)
> If they manage to force publishers out of the picture, they will force writers to reduce their income as far as they can push it. Which in a world without publishers is very, very far.
This seems an odd statement to me. It implies that publishers pay authors well only because publishers are inherently nice guys. Isn't it more likely that publishers pay authors well because authors deliver the goods, and would not otherwise?
If Amazon was the publisher, why wouldn't Amazon also pay a bestselling author well in order to entice that author to produce more/better books, which Amazon can make more money off of?
No, this has nothing to do with niceness or evilness. It's just monopoly versus competition. If Amazon kills every publisher, there will be incentives for Amazon to be less nice than otherwise.
Confirms what has otherwise been in the press for 2 weeks. However, it's helpful to hear it from Amazon directly. Sidesteps the need to "shoot the messenger"--An unfortunate direction of earlier discussions on HN.
The 1.1% of Amazon sales (by item count) for Hachette is an interesting metric if only to determine overall sales volume for Amazon should someone happen to have the approximate Hachette numbers.
they made it clear that was "weighted demand" though, so items sold, not items provided. You'd need "Hachette sales through Amazon", a number unlikely to be available beyond Amazon/Hachette employees/execs.
This is a lengthy piece that makes the point that these publishers aren't entirely innocent (there's delays on both sides, and the publishers are owned by some pretty big companies themselves)
1) Customers aren't mine. I'm not allowed to send any of the people that buy from me a link to my website or collect any of their data. This means that this income channel can be taken away at the whim of Amazon.
2) Amazon regularly uses your sell data to undercut you and put you out of business. I regularly would sell rare books with no other listings. As soon as I had any sales, Amazon would popup with their own listing at half price. My sales would go down when this happened.
3) Strange things would go on with their listings. I was in business for 5 years. I saw patterns and know when my sales would be up and down.
None of these rules applied on Amazon. I would be going strong for weeks at a time. One day, I would have no sales and this might last for a month. From 100 sales/day to 0 just seems to be a bit funny to me.
Customer support would of course deny everything. However, after running my own tests, I could see that from certain IP addresses and on some Amazon servers, I would get random errors on checkout of my own listings.
Amazon eventually banned me. I had near 100% feedback and 1 complaint from a user that I sold them the wrong book. Before the user complained, I even paid to have it shipped back to me. This wasn't good enough. The customer wanted to keep the >$200 book and not send it back. I nearly went broke because I couldn't access my money for 3 months.
It took me a year to get my business back to where it was, but I am now in a better place (with many sales channels).
Amazon is an evil company and anyone that does business with them is risking everything for short-term gains. It's the destroyer of small businesses.
As a customer I see it as a feature that Amazon don't allow people to to collect my data, I bought the book at Amazon, nobody else should know the details.
That does not change that Amazon is scummy but that they don't allow you data is actually a customer protection feature.
> As a customer I see it as a feature that Amazon don't allow people to to collect my data, I bought the book at Amazon, nobody else should know the details.
I'm not sure the situation is that simple. You bought the book through Amazon, but (in this case), you bought the book from the other poster. Putting them closer to, say, a shopping mall. As a shopper, who's has a stronger relationship to you—the store you bought something from, or the mall you bought it in?
And for the seller, it means that your only "customer" is Amazon. Who doesn't really care about you at all. If I were a seller, I'd rather have my customers be the people who are actually interested in the product I'm selling.
When commerce goes well, the buyer and seller create a relationship that benefits both of them. With Amazon being a strict gatekeeper, there's no way for that relationship to form, and the seller ends up being an interchangeable name on a screen.
> The issue here is not who has the right to the data, it is customer satisfaction.
It is. But for me, part of customer satisfaction is buying from a seller that I know and trust. So I like buying things that Amazon is the seller, since I know and trust them. But Amazon doesn't make it easy to build up trust with the other sellers in their marketplace.
I'm not sure the situation is that simple. You bought the book through Amazon, but (in this case), you bought the book from the other poster. Putting them closer to, say, a shopping mall. As a shopper, who's has a stronger relationship to you—the store you bought something from, or the mall you bought it in?
I cannot see how a mall is analogous. In the mall, you choose the stores you go to and then look for the product there. You are explicitly entering different stores, and you have the obvious ability to return to that store. That builds affinity with the store.
With Amazon, the typical entry point is to search for the product you want. You don't particularly care who is selling it so long as the price, delivery, and trustworthiness are there. Maybe if all other things are equal, I'll choose a vendor that I bought from before. But, to be honest, for most purchases, I've only ever thought of it as being fulfilled by Amazon or someone else.
Anecdotally, I literally can't recall the names of any vendors I've bought from in Amazon. But I do know the places I like in the mall.
> You don't particularly care who is selling it so long as the price, delivery, and trustworthiness are there.
> Anecdotally, I literally can't recall the names of any vendors I've bought from in Amazon. But I do know the places I like in the mall.
That's exactly my point. There are stores that you're buying from-many of them with physical locations as well. But because of the way Amazon sets things up, their identity fades into the background. They could be stores you like, just like the places you like in the mall. But Amazon makes it hard for you to know about them, and build a relationship with them.
With a business-guy-hat on, selling "lead-gen services" and keeping the leads locked-yp and propreitary ...is a great business model. So this is a no-brainer from the supply side. The question for the "buyers" of this kind of quasi-lead generation svc...however are what else is outhere as a substitute? Demand aggregation, lead-gen, and overall simplificatation, and modular-expandability are all good selling points but hard to create/compete with from scratch.
Suggest engaging directly with your potential buyers, ask them "what are you using for Lead Gen now? What do you like/dislike about the quality?" Those conversations will yield insights.
I feel exactly the same way about the app business. I don't want an arbitrary and disinterested third party in between me and my customers because I believe very strongly that in the long run a strong and direct relationship with my customers is the key to a sustainable business. The iOS app store is particularly egregious in this respect because I can't even contact users that report problems. The Google Play store is slightly better in this respect but I'm still not comfortable with the idea that my entire online presence can be switched off at will by some overzealous algorithm.
Yeah but what's left for you?write a web app for firefox os maybe.
Apple created Ios,Google Android.While Android is more open(you dont have to sell your app through Play),both vendors own their respective plateform,even Microsoft wants to adopt that model.Things will not get more open in the future,definetly less and less open.It always works like that.
Every other day it's someone saying they'll never use Facebook again, they'll never use Amazon again, they've quit Dropbox, they'll never use Google again. People in HN are quitting startups, quitting established companies, forswearing this and that, and getting angry at all kinds of shit day in and day out, and to be honest, I'm not sure it's ever made any bit of difference ever.
Even GoDaddy is still alive and strong and not one of these other companies has a founder go and shoot elephants and post about it on their official blog with pictures, after supporting SOPA and demeaning women on national television. Boycotting does nothing, and crying about it even less.
Trivializing someone's experiences by dismissing them as crying might not be the way to go. It doesn't seem like you're arguing against anything at all. Comments like the one you responded to are some of the most important, because (a) they're from direct experience, (b) people rarely talk about the topic, (c) they're thorough and substantive and present their opinion well.
The last thing the world needs is to mock people for speaking up.
I'm not mocking the person and I appreciate his post, I am simply fed up with having to keep track of all the things I am supposed to be boycotting right now though. I do apologize if what I said came across as mocking. I'm just saying boycotting does nothing. Voting with your purse is about as effective at getting what you want as voting at the polls.
Their comment might have more teeth than it appears. It's a datapoint to potential Amazon competitors about how they might coax away some of Amazon's clientele. While an Amazon competitor is unlikely to pop up, it's not completely impossible, either. The recipe is for Amazon to make mistakes and for those mistakes to be scrutinized by the public. In the internet age, people's low tolerance for injustice and inconvenience equals a business opportunity.
Actually for-real boycotting and similar types of actions like calls for coordinated divestiture do often cause changes, sometimes very big ones; but a few people posting on some internet forums is by no means a real boycott.
Personally I also have a number of issues with Amazon but none of them are serious enough to overcome the fact that they do retail sales on the Internet about a billion times better than anyone else (only Newegg comes close, and only in the narrow band of computers/electronics).
Other times it's about boycotting, but this comment isn't. It's about "doing business", and it is a very relevant warning to other entrepreneurs who need to choose if they should bet on Amazon as a distribution platform.
What about Paypal? I've heard complaints against them time and time again, and alternatives have popped up in competition because they sucked too much. Stripe, Square?
I use PayPal every day nearly. I like Stripe, Square not so much. I don't know, the people that seem to complain about PayPal are people who take donations but aren't registered non-profits and even if PayPal was evil, I doubt any of these boycotts have made a difference.
Stripe exists because they have a really awesome API and they make refunds super easy without penalties.
Square exists because Jack Dorsey is able to drum up a lot of VC money and engineering talent from followers of his personality cult. Not a lot of profitable business though, apparently.
Many regular people are comfortable with Paypal, specifically using it instead of giving out their credit cards (almost half, in my experience). Can't say I blame the motivation, given that I've had to report fraud 4 times on my 3 credit cards in the last 6 months. Knock on wood, Paypal has gotten better, anecdotally.
I closed my Dropbox account in response to the Condoleezza Rice thing, but it was an easy action to take since I hardly ever used it anymore anyway (because Google Drive works much better for me).
This is a just a possible outcome (or maybe inevitable if you look at history) when you build a business on someone else's platform. Whenever humanly possible, try to have a more direct path to your customers. Of course, I realize that's easier said than done.
Wonderfully slick move.
It makes Amazon look good, Hachette look bad and builds good will with the authors and spectators while turning the screws on the economic pressure that Hachette is already facing.