Who's Got The Real Monopoly On How You Get Your SF Books?S

Science-fiction books from Tor are back for sale on Amazon.com, after a few days when the online bookseller tried to pull all titles from Tor's parent company, Macmillan. At issue: how much Amazon can fix prices for e-book editions.

Now that Apple's iPad is available, Macmillan has already signed up to sell its titles in Apple's own e-book store. And Macmillan wanted to be able to sell its e-books via Amazon for more than Amazon's standard price of $9.99, widely regarded as a loss-leader to spur Kindle sales. Amazon removed the Macmillan titles, including all Tor titles, late last week, and then announced yesterday on its own Kindle discussion forum that it would have to back down:

Macmillan, one of the "big six" publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.

We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, we will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books. Amazon customers will at that point decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book. We don't believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced e-books as an alternative.

Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!

The accusation of Macmillan having a "monopoly" caused much hilarity on Twitter yesterday. You'll notice that Amazon says it will "ultimately" have to capitulate. There's no timetable for Amazon returning Macmillan titles to sale, and at time of writing, Macmillan's titles still had a dash where the "Amazon price" was supposed to be. You could still buy these books through third-party retailers through Amazon's site, of course.

Saturn's Children author Charles Stross has a fairly cogent take on this whole crazy mess, which actually explains why Amazon might regard the content producers as monopolists:

This whole mess is basically about duelling supply chain models.

Publishing is made out of pipes. Traditionally the supply chain ran: author -> publisher -> wholesaler -> bookstore -> consumer.

Then the internet came along, a communications medium the main effect of which is to disintermediate indirect relationships, for example by collapsing supply chains with lots of middle-men.

From the point of view of the public, to whom they sell, Amazon is a bookstore.

From the point of view of the publishers, from whom they buy, Amazon is a wholesaler.

From the point of view of Jeff Bezos' bank account, Amazon is the entire supply chain and should take that share of the cake that formerly went to both wholesalers and booksellers. They do this by buying wholesale and selling retail, taking up to a 70% discount from the publishers and selling for whatever they can get. Their stalking horse for this is the Kindle publishing platform; they're trying to in-source the publisher by asserting contractual terms that mean the publisher isn't merely selling them books wholesale, but is sublicencing the works to be republished via the Kindle publishing platform. Publishers sublicensing rights is SOP in the industry, but not normally handled this way — and it allows Amazon to grab another chunk of the supply chain if they get away with it, turning the traditional publishers into vestigial editing/marketing appendages.

Stross' whole analysis of the difference between Amazon's model and Apple's is well worth reading. Also, Scott Westerfeld's analysis is quite cogent.

Kindle image by isayx3 on Flickr.