Kindle, iPad, MacMillan, and the Death of a Business Model
If you visited Amazon.com this weekend, hoping to buy a book that happened to have been published by MacMillan, you got a rude surprise. You couldn’t do it. Whether you hoped to buy an e-book for the Kindle, or an old-fashioned physical book, Amazon wouldn’t sell it to you. In a protest against the pricing model that MacMillan and other publishers had negotiated with Apple for the iBookstore, Amazon simply removed the “buy” button from MacMillan’s books.
The protest didn’t last very long — just long enough to be noticed and to make the New York Times on the evening of January 29. By the evening of the 31st, Amazon had relented, with the following statement:
Dear Customers:
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!
Thank you for being a customer.
What was behind this? It begins with Amazon’s original price policy for the Kindle, where most new mass-market hardcovers would sell in the Kindle edition for $9.95.
This was, from the start, a bit of a “loss leader.” Amazon was paying for the books at the usual 50 percent discount. That is, a book that lists for $29.95 was sold to Amazon for $14.98. This is just like your local grocery store setting the price for milk and eggs below cost so that you’ll come in and buy other things on which they make a profit, and was done for the same reason — once you have a Kindle and are used to buying books on it, you’ll start to buy other books on which Amazon does make a decent margin.
The book publishers didn’t like this much. They thought, quite reasonably, that if you could buy a Kindle book for $9.95, you wouldn’t want to buy their hardcovers for $29.95. They were afraid that the e-books would cannibalize the market for old-fashioned paper books, on which they had built their businesses for centuries. As long as Amazon had a near-lock on the market though, publishers didn’t really have a lot of choice. And after all, they actually made just as much profit on a Kindle e-book as they did on the physical hardcover.
Then Apple developed the iPad, and the iBookstore to go with it. Apple negotiated a different model with the publishers. In the new model, instead of selling the book to Apple for half the cover price and letting Apple set its prices as it pleased, it would instead set the price at which Apple could sell the book and allow Apple to keep a 30 percent “agency fee” or commission. This works well for Apple. Instead of selling loss leaders and losing money like Amazon, Apple is guaranteed 30 percent of the publisher’s price. On the publisher’s part, they get to set the price but they agreed with Apple to set a “reasonable” e-book price, normally between $12.99 and $15.99.
Let’s compare these models, with our base being a new mainstream novel that will be published in hardcover for $29.95.
| Amazon Model | Agency Model | ||
| List price | $29.95 | eBook list | $15.99 |
| Discount 50 pct | (14.98) | Agency Fee | (4.80) |
| Paid to pub | 14.98 | Paid to pub | 11.19 |
| Net to Amazon | ($5.03) | Net to Apple | 4.80 |
So, as you can see, the publishers are fighting for the right to charge more, make less money per book, and guarantee Steve Jobs a 30 percent margin. Amazon, on the other hand, is fighting to charge less per book even though they are losing money with every sale. Now it all makes perfect sense.
Right?
Don’t let Washington hear about this fight.
They’ll call in the Magical Oracle O’Blamer to Heal All Your Wounds and Make You a Better Person(s) —
and He’ll either launch a Punitive Tax on You Both for your GREED, and Outrageous Salaries, and for not taking TARP funds —
or he’ll simply TAKE OVER your businesses and give your Stocks and Bonds to the Unions, because you clearly don’t know anything about running your business and HE DOES! (He knows everything!)
“Macmillan has a monopoly over their own titles”
Huh? What does this MEAN?
It’s “death throes” not “death throws”.
Combine this with Amazon deleting Orwell’s 1984 and Animal Farm from their customers’ Kindles last year and it just may be that people may decide to shy away from e-books. I’ll never buy a Kindle for that very reason. Perhaps I’m a Luddite. But at some point, Amazon’s hubris is going to get the better of them.
As much as the Kindle and iPad might encroach on the “business model”, I still believe we have a long, LONG way to go before it dissapears…
Maybe our grandchildren’s children will finally decide beyond any reasonable excuse (and many versions of ipads and readers later) that physical books are just antique relics…but even then, who really knows?
CDs are still sold (even vinyl pressings!) especially for those audiophiles who care to enjoy music on something other than an MP3 format.
The pleasure one gets from turning actual pages, reading on the beach (who wants to risk sand in their iPad?), the collecting actual print editions of a favorite author, or the simple joy of lending a good book to a friend to read…will never be eliminated by ebooks or readers.
Ebooks will have their place…but a Kindle or an iPad look awful lonely by themselves perched on a shelf of an empty bookcase.
I bought a Kindle 3-4 months ago. Met a guy in a coffee place, and he essentially did Amazon’s sales pitch for them, told me how wonderful the thing is. I don’t regret the purchase, it really is pretty much what he told me it is. You buy a book, and you’re reading it within two minutes max. While the selection of stuff available isn’t overwhelming, it’s clear that most of the publishers are aware of what’s going on, and most of their books are available. The newer ones, anyway.
When the iPad came into play, I looked at the articles, and thought about it. The Kindle has a very weak and inconvenient web browser on it; I’ve barely used it, because I don’t really want/need such a thing. I have a laptop, and I use it for my computer tasks; I have a Kindle, and I use it to read. I suppose if I had something that could do both things I might be willing to combine them, but I don’t know if the iPad is the thing. And I’m certain it’s not much competition for the Kindle.
For one thing, it’s more money. The Kindle (when I bought it a few months ago) was $300. The iPad is $530, with another $80 or so if you want 3G wireless connectivity, so you can log on wherever you are. The Kindle does that for the base price. So the iPad is about twice the price, to start. Then, if you’re going to buy books through it, the prices in the iBookstore are higher. You can do more on the iPad, though many people are grumbling about the lack of Flash support and the absence of a webcam.
So, you can spend a lot of money, and buy a bigger iPhone without the phone. It can do a lot of stuff, but it can’t do webcam stuff or Flash. It can do books, but it costs about twice as much as a Kindle all around. To my mind, as it stands, why wouldn’t you stick with your laptop or desktop, and buy a Kindle? Maybe the iPad will, in the future, get competitive, but for now it’s a big toy that can do books. If you have to have one (for your business, for instance) the book feature might be worthwhile, to save you carrying a separate piece of hardware. That is, if you have the extra money to pay for the books.
The trouble with e-books is DRM.
If i buy a physical book i can read it when i want where i want and when the publisher is broke i can still read it. Heck, i can read my Great-grandfathers 1890´s edition of Shakespeare and it looks quite decorative on the bookshelf.
e-books on the other hand? Break your kindle and you have to convince Amazon to transfer your bought books on another device. Worst case scenario, if the DRM servers go offline (for example in case of bankruptcy) your whole e-book library becomes useless, unreadable data junk.
Not probable? Maybe, both Apple and Amazon are doing fine right now, but who can tell how things will be in 10 years. Even without bankruptcy, some drm-protected MLB videos and Microsofts “plays for sure” music has become useless, even though the customers bought it and paid the full price.
Sorry, no e-books for me as long as there is DRM involved.
There will always be a call for solid print. Electronic failures will assure that all is lost otherwise.
It was only a matter of time before the printed book went the way of the buggy whip. I know everyone does not have the financial means to buy a Kindle, but ain’t that what the government social programs are for? /sarc
Good story; thanks for the explanation.
How many times have I heard this? Death for publishing books is just around the corner! Again! No, really, we’re serious this time!
http://www.youtube.com/watch?v=lQnT0zp8Ya4
you got to watch this …way too funny. after seeing this I will not be getting an ipad.
I probably purchased two books a year before Kindle. Now I purchase two books a month. But when I encounter books that are priced over 9.99, I pass.
I agree with your essay Charlie.
either way I will not welcome the death of printed books.
What the episode really showed is how easy it may become to control the sale and availability of books.
I am always looking for books and once out of print they become difficult to find and or extremely expensive. I am looking for some books by Oriana Falleci (her earlier works) and they are difficult to find.
#2 Aqua: Huh? What does this MEAN?
:MacMIllan can sell their books to who they damn please.”
#3 Ben-David: It’s “death throes” not “death throws”
Augh.
Some people need to get with the times. There has already been a general boycott of Kindle e-books over $10. Some may argue that some highly specialized books will need to have a higher prices. This may be true but on the other hand, the high price of specialized books is due to the low number of printed copies. This raises the per-book cost. This breaks down with e-books, because there is practically not per-book cost.
The question is, if authors are paid a couple dollars a book and there is no need to actually print an e-book, then why should the publishers get the $4 or more dollars? What have they done?
Books will not die, but the business model will have to change or it will die.
As desirable as it might seem for electronic publishing to displace paper publishing, some of the consequences will be negative.
First, print publishers impose a degree of uniformity on their offerings that, so far at least, has been absent from the lines of E-publishers. When you buy a paper book from a known publisher, you have a fair idea what you’re going to get, whether the marque be G. P. Putnam, Penguin, Signet New American Library, or Harlequin Silhouette. So far, E-publishers have been less effective as regulators, whether we speak of the form or the content.
Second, as we know from Amazon’s recent shenanigans, E-books are “remotely deletable.” An E-reader’s content can be abridged as well as increased by an E-publisher. The justifications for that sort of action range from barely respectable to ludicrous, but in all cases the capacity constitutes a grave threat to the transmission, dissemination, and preservation of information, to say nothing of the possibilities for government censorship of unapproved political ideas.
Third, the current E-reader offers no “path out.” Its contents cannot be safeguarded in any way. This is a consequence of publishers’ desire to control dissemination, but all the same it limits the ability of the user to compile a substantial “library.”
Time was, it was said that the advent of xerography doomed copyright utterly. That proved not to be the case. Admittedly, some books have been, and are, copied electronically or otherwise to avoid having to pay for them a second time. However, the security of a “legitimate” edition has overwhelmed the desire for free edification or entertainment, largely because the cost of books has remained modest. The cost of publishing an E-book is of course far less than that of publishing a paper volume, which must have paper publishers badly rattled. But the countermeasures the paper houses will demand and deploy, and the purchaser’s uncertainty that comes with E-publication, are likely to keep paper publication in business for decades to come.
The music industry and the RIAA couldn’t stop the technological innovations that led to music downloading.
The dead tree infomarts couldn’t stop the Internet from becoming the de facto news medium.
Internet TV is just beginning to ping broadcast and cable TV companies’ radar.
Book publishers aren’t immune to this evolution.
It’s a little surprising that all these educated brains here don’t know of, or at least mention the wide variety of other ebook readers out there. From Sony on to your Blackberry (using mobipocket), Kindle is just an overpriced contender. All it offers is the ability to instantly by a book wirelessly. In exchange you can then have it repossesed by Kindle, wirelessly. Using my Sony I download a book, save it on flash media, burn it to a disk (if I want to archive), and permanently have copies. I can even loan it to a friend on a small (very cheap) flash card. Eink marks the eventual end of most print media. It will eventually be like those burned out hippies or music snobs you see buying vinyl. Time to move on.
I have always loved books, but it dawned on me when I was moving this last month that all my boxes of books (and DvD’s)are a huge pain. They could all be replaced by a few memory sticks and some off-sight backup.
I am slow to pickup on new tech. When I am ready to change the game is already over.
16. You hit upon an interesting point. E-readers make private publications downscalable to very low levels. Now that a publisher’s only purpose is marketing, authors can cut out the middleman, triple their income, and still sell the books cheaper.
Falconsword – you can do the same with the Kindle. The same books you bought for another reader can be copied to the Kindle. I have a few sources for free ebooks, e.g. Project Gutenberg http://www.gutenberg.org/wiki/Main_Page. I have every one of my home appliance manuals in PDF form on my kindle. I have all of my status reports for every one of my projects on my Kindle. All of these are archived. Kindle books are a huge convenience, but I can also use whispernet (the 3G connection on the kindle) to read from Google Books or Safari Books Online – or download from the free sources.
I agree that there should be mention of the explosion of e-readers at CES this year – I think I counted 15 different products. That in itself suggests that Macmillan, et al will have to surrender.
Oh, I think it will be a long time before physical books disappear — if ever. And the DRM problem is an interesting one — we remember Amazon deleting 1984 from the Kindles, forget that it was because that edition wasn’t licensed by Orwell’s estate. Being a writer, making sure that the writer’s royalties are getting paid is dear to my heart. But looking around my place, which looks a lot more like disorganized book storage than an apartment, a whole lot of the books are really essentially transient. The four or five year old AppleScript manual could go away, should go away; it would be a lot better if it had been an ebook if there had been a convenient ebook reader.
Some of the issues about DRM are being overstated, though — for example, your Kindle doesn’t need to talk to Amazon to let you open it once delivered.
Falconsword, this is a story about the fight between the Apple model and the Amazon model; a list of the other readers wouldn’t have added anything. Thanks for mentioning them though.
With the new technologies publish a book costs a few dollars. Online storage marketing and delivery a book $20 or so a year for unlimited copies. All of the expense is now in the writing of the the book. Like the record companies the publishers are going to fight to keep authors from self-publiching because the publishers provide so little value added.
Ammizon should start by putting all public domain books on line for little.
The thing no one seems to realize is that with an iPad, you get not just “an” e-book reader, but you get an Apple reader, a Kindle reader, a Nook reader, and so on. Because there’s a (free) Kindle app for the iPad that will work just like a Kindle; and a B&N app that will buy ebooks from B&N. I suspect that Sony is working on an app, if there isn’t one out there already. You get a better screen than with the Kindle – backlit, for starters – and the book reading experience is incredible, at least in the demos. I have an iPod Touch, and the screen is simply too small for me to enjoy reading, plus the battery life is too short. The iPad fixes those problems. I agree that the lack of Flash support is an issue, b/c a lot of people will want to watch video via the Internet; but you can always buy a video from iTunes for a small price and watch it over and over, or upload one you own. The iPad may not have everything people want, but for those willing to wait 6 mo. to a year, I believe it will eventually have Flash.
I don’t consider the $499 price (it isn’t $530, unless that commenter is paying tax) all that high; the Kindle is $300 but you get just an e-book reader that doesn’t do much else – certainly not well – and it’s a mono screen. With the iPad you can store not only books but also music, video, and games, and it can even double as a GPS. The GPS apps cost less than a GPS unit, and the screen is huge compared with that on a GPS unit – a big advantage. Plus you can get e-mail, surf the Internet the way you always do … so yeah, you’re going to pay more for that. Books will now be able to incorporate links to research material so readers will get a more in-depth experience. The iPad has the potential to deepen readers’ immersion into their books as well as their connection with books. Time will tell whether that happens, but the potential is there. As a long-time book lover and an owner of several hundred physical books, I am looking forward to having a system that will provide non-bookcase storage for my books while preserving, as much as possible, the physical experience of reading a book. The iPad is the first system to even suggest that possibility.
Dave II:
Many good points. E-books by themselves have other serious limitations. I don’t think I would want to read an e-book in the bathtub, by the pool or even with a drink in my hand. I can’t shove an e-book into an already overstuffed suitcase or backpack. I can’t wrap an e-book and put it under a Christmas tree. I can’t buy a used e-book. I can’t put an e-book in my coat pocket. Home bookshelves are autobiographies; A quick glance at my Kindle won’t tell you my hobbies and interests.
I think a better business model might end up similar to what we are now seeing with movies. For some movies, especially Blu-Ray, purchasing the disk also gives you a digital copy that can be downloaded to another device.
I buy maybe one book a month – but I read about two a day.
Vast resources are availlable on the web for the wonderful price of FREE – and not just from places like Amazon/Kindle ( Where they don’t take their sticky fingers off of the goods *frown*)
I don’t touch anything that I can’t download and KEEP on my own hard drive – and eventually back up into my ‘Library’ drive. After five years – it’s a huge library! One I can loan or transfer at will, unto the end of time, also for the wonderful price of FREE!.
I don’t begrudge paying writers but if the publisher doesn’t add $20 worth of value? What claim do they have on my pocket?
23. Charlie Martin:
Oh, I think it will be a long time before physical books disappear — if ever.
I hope you are correct …a hard drive will not have the same impression in my library book case.
MacMillan is acting like IBM did when the PC emerged. In order to defend their mainframe and mini-computers businesses, IBM downplayed the PC. It was a big mistake. IBM woke up 10 years later to learn that they missed the PC boom and their legacy businesses was toast.
Like IBM refusing to embrace the PC, MacMillan is refusing to embrace the e-book model. Big mistake. Their legacy business is toast.
Newspapers and magazines made the mistake of thinking they were in the printing business, to their peril. The results of that error are quite clear at this point. Will book “publishers” make the same mistake?
As an author who has several books available in book stores and on Amazon, the value that publishers bring is distribution. If I could somehow get my books sold through the same channels as they are now (Amazon is do-able, the brick and mortars is not so easy, the educational and trade channels are probably impossible), I’d do it in a second. Like many authors, I’m making something like $2 on a $40 cover price title for each copy sold. A lot of the difference covers the publisher’s physical production and distribution cost. A whole lot of the difference covers books on which the publisher never even sold enough to cover the cost of the author’s advance (not a problem with my titles
). The fact that the publishers are selling Amazon the right to a Kindle version at the same discount price that they’re selling the physical book seems odd. The publishers are making significantly more profit on that deal than on that for physical books.
However, piracy and digital distribution is certainly a concern. My own books, niche though they are, are frequently found on book-sharing sites in pristine .PDF format, which was probably sourced from the Chinese plant where they actually manufacture the books.
The real trick here is the advance model of paying writers. I personally opt for a higher royalty structure in lieu of advances, but many many do not. As long as publishers pay advances to hungry authors, they’re going to be taking a bath on a large percentage of their investment, and that’s going to limit the absolute lower limit of cost on book production, even with digital distribution. And honestly, you can get good condition used copies of almost any book you like for a fraction of this cost. All you have to be willing to do is wait a couple of weeks after release, and you can hit Amazon Marketplace to pick up physical books for $3.95 and less. Something’s going on here, but I think it has more to do with absolute bottoms on cost, and a real confusion as to how to price this stuff with no real precedent, than it is a clear defense of their old model.
I think the changing business model argument is clearly true. But to argue the end of books is to go quite overboard.
For some purposes ebooks should dominate. But there is already a basis for understanding what will happen in general. Currently, true books are published as hardcovers and paperbacks. I believe it is the paperback segment that will be most directly in competition with ebooks. Paperbacks exist for convenience, as a cheaper more portable and disposable format.
The segment of the market that pays the premium now for the hardcover does so for non economic reasons and should continue to do so in the future.
Almost every argument for books has a counterargument. For instance:
“Many good points. E-books by themselves have other serious limitations. I don’t think I would want to read an e-book in the bathtub, by the pool or even with a drink in my hand.”
This would hardly be a problem with a cheap water resistant reader, and it won’t be long before that is possible. Stop thinking in terms of a $300 Kindle or $500 iPad and think “pocket calculator” prices instead. At some point these devices will be disposable.
“I can’t shove an e-book into an already overstuffed suitcase or backpack.”
Um… readers take less space than books, that’s one of the advantages. And when they’re cheap you won’t worry about them being stolen.
“I can’t wrap an e-book and put it under a Christmas tree.”
You can in the form of a gift card.
“I can’t buy a used e-book.”
No, but the books you used to have to buy used will always be available, and you won’t have to order using an out-of-print service or trawl used bookstores to find it.
“I can’t put an e-book in my coat pocket.”
Sure you can. They won’t be big, about the size of a mass market paperback now, only thinner.
“Home bookshelves are autobiographies; A quick glance at my Kindle won’t tell you my hobbies and interests.”
No worries, you can become a used book collector and that will add an even cooler dimension to your autobiographical bookshelves. Or just let them browse to your Facebook (or whatever) page that lists your favorite books you created from your purchase list.
“I think a better business model might end up similar to what we are now seeing with movies. For some movies, especially Blu-Ray, purchasing the disk also gives you a digital copy that can be downloaded to another device.”
Not a bad idea as a tweener technology, because mass markets sold at big box stores are going to be with us for quite some time and I think people would like your idea. I think the days of giant Barnes & Noble type stores are limited, though. Eventually they will probably become more boutique shop than mass market.
(I’m not trying to pick on Dave’s comment, I just grabbed his to show the counterarguments.)
For technical books, which usually have a limited lifespan, I already tend to read them online via Safari or the like. There are a lot fewer outdated bricks on my bookshelves than there used to be.
However, ten dollars is more than I pay for an average book these days. (I have a tendency to buy used or in paperback. Authors hate the likes of me.) There goes one advantage. And it would cost very serious money to replace my thousands of books with e-books, even for the books I have where there’s an electronic edition available. There goes another; it seems I’m doomed to go on lugging boxes of books whenever I move.
Disadvantages? I can’t resell an e-book the way I can a physical book. I can’t (generally speaking) loan it to a friend either. My possession of an e-book feels tentative – the seller can remove it at any time. “This software is licensed on the condition that…”
I used to dream about the day when I could have all my books on a hard drive/CDs/memory sticks/etc. I’m not opposed in any way to the idea of electronic books replacing paper. I’m not particularly nostalgic about the format of paper books. But this model for e-books is not going to do it, at least not for me.
The end of physical books will be a disaster for speed-readers like me. We simply cannot read an e-book like we do hard-copies. We do not read at constant rates and often flip back a bit, or a lot, to go over some point and, when we do, we skim at enormous rates. Here’s an example of one speed-reading judge in my court from his first major trial. He had read all the depositions in a major personal injury case the day before trial.
One of the attorneys then inadvertently misrepresented a witness’s testimony during a conference in chambers, and the other attorney agreed with him. Judge Johnson told them that’s not what the witness said, picked one volume of transcript from a stack of deposition volumes, flipped through it with his thumb at absolutely eye-blurring speed, stopped on one page and read the pertinent testimony to the two attorneys showing that he was right and they were wrong. They were very deferential for the rest of the trial.
And the judge forgot the depositions when the trial was over.
That really is how we speed-readers do it. We read at varying speeds depending on what we are reading, and that varies within the same document or book. We read some parts of a novel as fast as we can turn the pages without blurring the text (i.e., not quite flipping them with our thumbs – this is about 10,000 words per minute), others fairly slow (sometimes under 1000 words per minute), and we often backtrack to some parts previously read, with the latter requiring skimming in excess of 20,000 – 25,000 words per minute.
Overall speeds for a given book are often 2000 – 2500 wpm, and I’ve done simple novels at 8000 wpm. I read Noah’s Flood: The New Scientific Discoveries About The Event That Changed History, by William Ryan and Walter Pitman, in 35 minutes.
These practices are simply impossible with e-book readers, and screen refresh rates are only part of it. We locate text by context when skimmming backwards, and it is not quite subliminal.
Kindle has no monthly fee. The iPad will cost $30.00 per month!
Charlie Martin says that it is a fight between Amazon and Apple over who controls the ebook business. But commenter #29 I think has it most right: the real issue is whether publishers (Macmillan), or sellers (Apple, Amazon, etc), or authors will control the distribution of books.
I wouldn’t bet on authors. Love ‘em but no business sense, most of them, so they’ll take it in the shorts every time.
It should be publishers, but Macmillan is demonstrating that they don’t get it. They should be in the front of the ebook business. Whether they’d band together to come out with their own ebook reader, or come up with a common ebook format/DRM that they could license, they should be in the lead in figuring it out. They aren’t and it’s going to bite them hard.
So the sellers are left. The traditional brick and mortar sellers traditionally have had only modest control; the big chains could push for certain things which the publishers would yield on, and the mom-and-pop sellers got whether they could get which isn’t much. But Amazon and Apple both have long histories of getting what they want, the savvy to understand markets, and a business model that — for now — works in reaching consumers. So it’s the big on-line sellers who will win this fight.
Now then, Apple or Amazon? I’m betting that Steve Jobs’ multi-purpose tool (iPad) beats Jeff Bezos’ dedicated reader (Kindle). So just due to the hardware/software combination, Apple wins this round, and Amazon may be in the position of marketing books through an iPad app. The future? I wouldn’t count Amazon out.
I’ve had a Kindle for a year and have found it is very nice for reading light material like novels and for reading in bed or on an airplane. It is a problem with serious non-fiction where I may want to flip back and forth or to look at illustrations or maps which do not do well on Kindle. I still buy lots of books although not so many new ones. I have bought two hardcover versions of Kindle editions that were annoying to try to read in the e-format.
It’s simple: Apple’s site only sells books, while Amazon is more of a “department store” or “grocery store” where you can buy nearly everything. In the former, you have to make a profit on your only item or you die. In the latter, loss-leaders are part of customer acquisition costs, and have been for centuries.
Ben Bova, call your office!
http://www.amazon.com/Cyberbooks-Ben-Bova/dp/B001QHSTZ4/ref=sr_1_2?ie=UTF8&s=books&qid=1265142562&sr=8-2
The irony of that link should not be lost on anyone.
I hope you’re wrong about the physical book being dead. We now have so many examples of early writing — on papyrus, stone, etc. — but if today’s writers start publishing only electronically, then when the power goes out (and in every civilization it does, sooner or later), their words will vanish forever. It will be as though it never existed.
That’s really chilling.
May both Bezos and Jobs win a little bit on this one, for all our sakes.
You can’t compare online music sales to e-book sales.
Utilizing a digital download vs. a CD is the exact same experience for the listener. A physical book is totally different than an e-book.
I, and many like me, would never ever use an e-reader. Whether it’s the massive price tag for the rearder, or the fact that I own a physical book but do not own an e-book (I have just licensed it, and Amazon, Apple or whomever can and will just delete it), or simply the fact that a physical book is much more desirable to read than and LCD screen, many will never hop on this bandwagon.
Physical books will survive and thrive, whereas CD sales are rightly going the way of the dinosaurs. E-books will have a place, but it will not be a dominant one.
Tom Holsinger, I’m a speedreader and I have to disagree with you somewhat about not being able to speedread ebooks efficiently. I have ebooks on my iTouch and it’s almost irritating because by the time I start at the top I’ve already completed reading all the way to the bottom of the page before turning to the next page. Some e-readers work better than others because of flexibility in choosing page layout. I like Skim better than Adobe Reader because the zooming works logically with legible text. I’ve never had a Kindle, so I can’t judge as to that ability.
Uh, yeah…..the readers are not made for speed readers. SO the 6 of you out there will have to find something else. Personally, I like to enjoy reading. I’ve had my Kindle for about a year. Before I got it, I would buy the hard cover books from the discounted shelf for about $5 a book, or wait for the softcover and pay about $9 for it. Since I got it I make use of the preview feature and have purchased for $9.95 books I would never have bought.
I hope books won’t go out of print. I have a limited budget but read a couple books a week, all from the library.
If Macmillan is able to dictate the price of an e-book through Amazon, Apple, Sony, etc. when does that cross the line from MSRP to price-fixing? I am thinking of writing my Congressman and asking him what he thinks.
But I do agree that ultimately Macmillan and the other publishers are in the same place as the record companies. In the future when disintermediation is in full effect, their is a very narrow space between the author and the reader. There won’t be enough room for a publisher and a retailer. And since the relationship now is between the retailer and the reader, it will likely be the publisher that ends up on the outside.
The iPad will cost either nothing a month, $14.95 a month, or $29.95 a month (if memory serves).
While the free Amazon network connection is free, it also isn’t exactly the same thing as the iPad’s connection, which will also be used to surf the web, use email, view video, purchase music, purchase and use applications, shuttle files, and pretty much whatever you want.
And while I think Charlie is a smart guy, I also think he’s off base in saying that saying that Apple is fighting to save any certain business model is misplaced in this context. Apple is only fighting to make sure that they don’t lose money on something that is neither their core business nor their reason for being. Apple doesn’t need a loss leader to move the thing that makes them money (the hardware) in this case. I doubt that they will much care if you buy books from any of the book sellers that will be on the iPad. All they care about is making sure that they make a decent amount of money off of those items that people do buy.
Whether you think that Amazon’s business model will sell more books or not is one thing, but that will likely have little effect on the success of the iPad. For that matter, if Apple’s book store is more successful than the Kindle’s–which, as noted above, there is also a free version for the iPad–it will still have little effect on the success or failure of the iPad.
The iPad is a multi-use tablet that people will buy for overall entertainment and utility. The fact that you can read books on it is just a bonus. I’ll likely buy one for those many things that it can do and then be happy that I don’t have to buy a separate reader for the digital books that I want to read. Who I buy those digital books from is an entirely different question.
As to the economics of publishing a book and then paying off that initial investment, I’ll defer to Tobias Buckell who has some (lengthy) thoughts on the subject:
http://www.tobiasbuckell.com/2010/01/31/why-my-books-are-no-longer-for-sale-via-amazon/
I think we have a way to go before it makes sense to count on digital books to cover the production cost of the things that we read.
Charlie, are you planning to come to the “Rocky Mountain Blogger Fest?”
http://billllsidlemind.blogspot.com/2010/01/rocky-mountain-blogger-fest_16.html
What Apple and MacMillan and the others are doing is trying to preserve their existing business model by forcing the price of e-books to be high enough to not cut too badly into the physical book market
No, what Apple’s doing is trying to get a slice of the book-selling money.
What MacMillan is doing is trying to preserve their existing business model.
That Apple is helping them do so is not a sign that Apple is trying to preserve that business model – Apple doesn’t give a rat’s for it. Apple is, as they were when they sold DRM’d music through the iTunes store, willing to accept that as part of the cost of doing business, until they can leverage it away (if possible).
Apple, like all companies, cares about its own bottom line, not that of the other players involved.
AnnieB: What claim do they have on your money? That they have a contract with the writer saying that they have the exclusive right to publish his words (for a time and in a place, at least).
Don’t like the price? Don’t buy it. Problem solved.
You can’t just take it for “FREE” just because you don’t like the price. Well, not and have any moral claim to it, or any pretense of respecting property rights. (Including those of the author, since “for the price of FREE” you’re not paying them.)
It sure didn’t sound like your giant library of “FREE” works was all public domain or freely given, especially when combined with the rant about publishers and paying the author, but maybe that was just a matter of expression…
The idea that one has some right to a creative (or any other!) product at whatever price one wishes to pay (including “FREE”) is the surest way to ensure that nobody creates, except those who have some independent means of support, because they sure as hell won’t be making a living off of it.
It’s called disintermediation — or, in the vernacular, cutting out the middleman. The Web is moving all marketing from one-to-mass to one-to-one. It’s inexorable. It’s inevitable. And get used to it. In fact, you’ll love it — as creator or as consumer.
On the topic of e-books themselves – I’ve been reading novels in electronic format for nigh on a decade now (Baen books, science fiction), and only pay $15 for books not yet published. Typical e-book pricing from the publisher is comparable to (or slightly lower than) paperback in most cases ($6 currently). No DRM, no PDF – the publisher (Jim Baen, RIP) loathed the idea that the customer couldn’t decide how they wanted to see the text.
Baen has kept up quite well with the modern formats, and something like 50% of the price goes to the author – which means when I buy an advanced reader’s copy for $15, the athor gets more than the paperback price.
I read on my PC, or on my Palm (and now my IPod Touch). When my wife and I renew our cell-phone contracts, e-readers are high on our musts lists.
Eric Flint, one of the Baen writers, has some excellent writing on the topic of copyright law – well worth the read.
“The trouble with e-books is DRM”
So stick to ebooks that don’t have it.
That’s what I do, with very few exceptions.
“The iPad will cost $30.00 per month!”
Or $15.00. Or $0.00
Depends on your connectivity choice.
Note: *Your* choice.
Amazon may not know it yet but they have lost and Apple has won.
Amazon is looking backwards, Apple is looking forwards. Plain vanilla books are practically commodities. The future is multimedia. Books of the future will go way beyond just text to include images, video, interactivity, hot links etc. and will be much more immersive experiences. Novels of the future may include gaming aspects as well. It will start with text books and fringe genre novels but will spread to include all manner of fiction and non-fiction. Apple’s iPad combined with their iTunes ecosystem is perfectly placed to advance the industry. The publishing dinosaurs will either get it and evolve or die.
As for authors, i would recommend that they learn the technology. Most assuredly, the medium will be the message.
DD
Lola, the first two sentences of your post are confusing.
Kindle owner here. Most of my comments are more about e-readers vs books in general, not one specific brand over another.
It’s a mixed bag, to be sure. On one hand your library is in one nice tidy place. On the other, there is an irrational pleasure in scanning over a full bookshelf to decide what to re-read.
Pool/travel, etc — again, on one hand it’s nice to have a slim device that has lots of options available (instead of agonizing for awhile before leaving over “which 3 do I take” decisions), but on the other hand I CAN DROP A BOOK WITHOUT BREAKING IT. I had my Kindle backstage at a theatre that I work in, and I set it on a table for a moment in order to move something else. I accidentally brushed against it and knocked it off the table (~3 ft drop) — busted screen. Fortunately, I got the good Customer Service guy on a good day at Amazon and they replaced it for free even though it was my fault (and I told them that). A paper book would’ve gotten MAYBE a wrinkled or torn page/cover from that fall. Most likely it thuds without harm. As a result, I am now paranoid about my Kindle and still opt to grab a cheap paperback in many cases when I can’t control my surroundings — completely defeats the purpose of the e-reader; they need to be more robust because even people who aren’t clumsy have their ungraceful moments.
DRM issues are definitely annoying philosophically, but it hasn’t bitten me yet. However, I am not pleased with the possibility at all. Books are yours once you buy them, electronic versions that can be clawed back are not YOURS. I have not investigated the possibility of bouncing books over to the computer but I will be.
The argument about publishers/distributors being able to add or delete content is specious — they can do that just as easily with paper.
Libraries are caught in a horrible tug-of-war in all this. Don’t forget that a lot of readers don’t buy their books — they get them from the library. Right now the Kindle is losing in this, and it’s again due to a self-imposed restriction on the format. I would love to be able to check out a book electronically for free and wouldn’t mind if it self-erases in 2 weeks or whatever, similar to the return time for a paper book. As it is, I still have to take a chance on buying the book which I might not want (at least Amazon give Chapter 1 free, but that’s not necessarily an accurate indicator).
This one doesn’t bother me, but a friend of mine sold her Kindle because she missed the feel of sitting with a book and turning the pages; she said she felt disconnected emotionally (no, I’m not making a boy-girl thing here) from what she was reading. There is also an emotional ramp as you proceed through the book, seeing instantly that you’re about halfway, etc. These are completely irrational and subjective issues, but they are nonetheless important to some people.
Regarding brands, I would like to have a color screen. Some books have beautiful illustrations (Dark Tower, for example) that can certainly be seen on the Kindle, but they lose punch without the color. This doesn’t always apply, but unless there is a technical barrier, this is something that puzzles me as to why Kindles are b/w.
I don’t care about browsers, GPS, etc. with an e-reader. There are plenty of other devices to provide those services, and I don’t mind that my e-reader basically does books and not much else.
Finally, I got my Kindle as a gift. I don’t know that I would’ve gotten one for myself, at least not at this stage — I probably would have waited until the VHS/Beta wars were done and there was a clear standard with either a Go-to brand or at least a format that was generally agreed upon. I’m glad I have it, but it makes sense to me that someone would decide that they can deal with paper books for a little longer.
Business model for paper books dead? Nope. The Kindle/iPad/Nook, etc are marketed to a minority: the hipsters and techie types. The vast majority of people who buy books are still buying paper, just like the vast majority of people buying music are still buying CDs. There will be a greater demand for the item in your hand (couplet!) in the near future in the eyes of the consumer, especially until the brand/format/business is more settled.
Charlie Martin is right. This is a war of business models, no a war of technologies. The Kindle may be a dead end, but I can buy a Kindle book from Amazon and read it on my iPhone while waiting for my dentist, on my PC in the office, and on my Kindle on a 13 hour flight. I will, no doubt, be able to read it on my future iPad. I can do all of that, and Amazon will keep the last page read on any of these devices and automatically sync them.
I wish that Amazon and the publishers got together on an slightly different model: I’ll pay $29 for a hardcover of a favorite author if they will sell me the DRM rights for an additional $5. This way I can add the hardcopy to my library while conveniently reading it on a much lighter version.
I know the sheer joy of holding a beloved book is a dying pleasure, but there are enough of us for now that I think enough money can be made for a while.
I have been using an E-reader since 2007 (and laptops before then). Mosy of my books have been from Baen, who were one of the first publishing companies to jump into the new technologies (of course they focus on Sci-Fi, so that’s not unsuprising) they have a better pricing structure than either of the ones in this article; $6 for a book that has been released, $15 for a pre release copy, and a good Free library selection. As far as I can tell it has not hurt their profits (I buy books from authers I would never have tried without it, rebought a lot of hard copy books in an electronic format, and I still get some hard copys), yet their model never seem to be mentioned in articles like this.
I travel (deploy) a LOT, love to read, and E-books are one of the best things I’ve ever seen. 500+ books in a single reader
Ebooks do not have to mean the death of print. The two can co-exist and there is a market for them both. Ebooks can be purchased without DRM (manybooks.net, feedbooks.com, http://www.Smashwords.com and EVEN Amazon. Authors uploading their backlists that are out of print can choose DRM or not. Small publisher and Indie authors can choose DRM or not.)
I don’t even have a Kindle–but I use the Kindle for PC and it works great. Why did I bother? Cheap books!!! If I pay 99 cents to 4 bucks for a book, I don’t care if it goes away or I can’t lend it or it has DRM.
Maria
#35 Tom Holsinger — not just for spped readers. For observant Jews, printed books are a necessity. Our religion does not permit us to operate kindles, ipads or other electronic devices on our sabbaths or holy days — peak times for us to learn religious texts.
Although Freddy Hill’s model at #56 sounds great — sell me the hard copy (for use on holy days) AND throw in the e-copy for a small fee for portability during the week.
Charlie, I don’t have the time to read through all the comments, so my apology if it was mentioned: Amazon could well end up as the publisher. I wonder if McMillan has considered this. As ebooks become the standard, why shouldn’t Amazon publish own their own?
I travel. I like my kindle.
I disagree that Apple is in any way promoting higher prices with its model. Instead it’s pushing the choice of price back onto the publisher. Sure bigger publishers will initially be charging $14.99 for a book out in hardcover… but how long before writers start producing for Apple directly? I have an eBook I’ve written, I plan to move it into the Apple eBook store. Why should I bother with a publisher at all if I have the technical ability to write, edit and convert to ePub a book on my own?
The story Tom Holsinger gives is a powerful example of the benefits of an eBook reader. He mentioned a judge had speed-read a whole document and was able to flip back. But with an eBook you don’t have to rely on one guy with stellar memory and the ability to scan to the right page – you just search for the witnesses name and see what he said before you even start arguing the matter!
As for DRM, remember that once music was DRM’ed as well but that fell away when people realized how silly it is. So too I think will go books. Movies will be the last bastion of DRM to fall, if ever..
How very, very sad. I thought–I hoped!–there would be more book lovers out there.
Buzz No. 44: There are a lot more of us than you think, because speed-reading effectively (the real thing, not the misconception) involves a particular type of visual memory. And that type of visual memory is often found coupled with a hereditary quasi-eidetic memory. Science-fiction writer John Barnes told me the latter is generally gender-related, but not always confined to a male line. The latter is true of my family – at least one male per generation and generally more. My father, and his father, were natural speed-readers too. I had training. My youngest nephew has the quasi-eidetic memory but I haven’t heard yet about him being a speed-reader. I’m sure he could given a Reading Dynamics course.
OTOH, you are generally correct about true speed-readers not being a significant enough market to merit special attention, even if we do tend to go through 100+ books a year. My Amazon bill is staggering.
Freddy Hill No. 56 & ahad No. 59: Baen Science-Fiction sells both the hard copy and DRM rights – there are CD’s in its books with e-book versions of many of its novels.
P.S. to Buzz – I forgot to mention that these hereditary memory traits being gender-based somehow is confirmed by their almost always cropping up at puberty, among females according to John Barnes, as well as males. OTOH, such hereditary memory traits are far more commmon among males.
Just one more thought. Amazon has never disclosed how many ebooks, or how many Kindles, it has sold. So we have no data to go by. The publishers, on the other hand, do. They know whether they are making money, or losing it, and where the losses are (whether ebooks or physical books). It’s hard to imagine losing money on an ebook, but it also isn’t cost free to make the ebook appear on the screen exactly like the physical book. There are costs involved there, too, as well as in debugging any errors, etc.
I think it less likely that Apple is the bad guy, and more likely that publishers simply are no longer willing to sell ebooks at $9.99, for a variety of reasons. It is possible that they may be using ebooks – or hoping to use ebooks – to cover losses on physical books. We already know, after all, that publishers by and large are not making a lot of money. While Apple has given them an opening for negotiating higher prices, the truth is, costs continue to spiral upward, and publishers cannot continue to sell books at the same price year after year after year.
@ 62. Craig S. Maxwell
I love books, but not for the sake of being a “book”. I love books for the information they contain, or the stories to enthrall me and spark my imagination. The physical shape of the book is less important.
In the same way I might love Beethovan, without worrying about the format (CD, live, MP3 etc). I’m still a music lover, even if I listen to a MP3 player.
The content is what is important rather than the physical shell.
emanom “This one doesn’t bother me, but a friend of mine sold her Kindle because she missed the feel of sitting with a book and turning the pages; she said she felt disconnected emotionally (no, I’m not making a boy-girl thing here) from what she was reading. There is also an emotional ramp as you proceed through the book, seeing instantly that you’re about halfway, etc. These are completely irrational and subjective issues, but they are nonetheless important to some people.”
Yep… that is exactly how I feel. I love the look of my books on a shelf. I love the way it feels to hold a book and turn the pages and see my progress and flip a few pages back if I need to reread something important. I love the cover art. I love the way the paper feels to turn the pages. I just love the aesthetic experience of reading a physical book. I spend so many hours in front of a screen as it is. When I read a book I want the traditional book reading experience, not to hold another cold, technological gadget. And I just love to see my bookcases full of my books that I loved. I will never read e-books, and I hope the books I love to read continue to be published in print in my lifetime. But if not, I will just find out of print books to read – I will never go to e-books because it kills the reading experience for me.
#15 – Charlie Martin
“#2 Aqua: Huh? What does this MEAN?
:MacMIllan can sell their books to who they damn please.”
Glad you said it! Damn right they can!!!
#15. Charlie Martin
“#2 Aqua: Huh? What does this MEAN?”
“:MacMIllan can sell their books to who they damn please.”
Glad you said it! Damn right they can — and should !!!
I got a Kindle in November, and it has ABSOLUTELY revolutionized reading for me.
KIDS-I carry it everywhere in my coat pocket. When I find myself waiting somewhere with the kids, almost daily, they beg me to read from it, and they can choose from a great number of kids’ books, for all ages. My 5-yr-old girl likes the Barsoom series by Edgar Rice Burroughs, and an 1870 kids’ magazine. My 3-yr-old girl likes Wizard of Oz and Alice in Wonderland. My 7-yr-old boy likes Daniel Boone. All in Dad’s coat pocket, and more!
TRAVEL-No more decisions over what book to bring, or whether to save weight by bringing no book. My Kindle has a veritable library on it.
BED-The Kindle is light and easy to hold in odd positions while reading in bed, etc. It is easy to read one-handed. And no more losing the page when it drops!
MULTI-BOOK READING-This is the biggest change by far, and what I love the most. With a few clicks you can change between books, and it goes to where you left off. The change is profound, and I now sometimes switch books every few minutes, and routinely have 15-20 on the go, reading from maybe 10 different books in any typical evening. All on my tiny nightstand!
OLD STUFF-Being cheap, I have only bought 3 E-books, and have downloaded about 125 free from Project Gutenberg, where “one book” might be a whole collection like Shakespeare or the Wizard of Oz series. Of course, it is all old stuff. My joy is rediscovering great books we have largely forgotten, especially adventures for kids. Nobody writes this kind of stuff now. My 7-year-old son is enthralled by tales of the American Frontier that would be almost taboo now; we talk about the clear moral lessons these old books offer and about some things that are no longer “acceptable”.
Thanks Amazon, for challenging the dominant paradigm!
Robert
You miss one of the biggest issues in the fight. Amazon is pursuing a DRM (Digital Rights Management) policy that makes them the sole distributor. Apple wisely, and very much out of character considering that they set the standard for DRM with iTunes went with the open source .epub format. MacMillans fight is less about preserving a dying industry than it is about ensuring that the future of epublishing is open and competitive- something Amazon does not want. I should know, I run an Academic library with 15 Kindles we check out to students and have an agreement with Apple to roll with the iPad immediately. I blog about this stuff all the time- you are only half right Charlie. MacMillan is fighting, whether consciously or not, for free markets and competition. Amazon wants to lock up the market before it ever gets off the ground.
“(I have just licensed it, and Amazon, Apple or whomever can and will just delete it)”
You know, I’ve seen this argument many times, but it’s only true of some ebook purchasers. Mostly Kindle owners. Those of us who buy our ebooks from places like Fictionwise, Powells, or Books on Board never have to worry about this happening to us. And yes, there are other places besides Amazon where you can buy ebooks.
None of the ebooks I’ve purchased are merely “licensed” to me. I buy them, downloaded them to my computer, and made backup copies before I ever load them onto my Reader. No company can ever reach out and delete them from my computer, flash drive, etc. They can’t even remove them from my Reader.
Only careless people “license” their ebooks. I prefer to own mine.
No doubt ebooks will become more prominent over the years. They could even become the dominant literary conveyance. But bound books will never disappear. There may be a kind of novelty to them someday, a sort of romance, like candlelight. We still burn candles for pleasure, if not necessity. We will still turn pages in the same vein.
Man, am I going to be making out at the used book sales [and freecycle]
Buying, that is.
As it is, at the annual local library book sale, I usually buy a couple hundred books for around fifty dollars. Half of those book are children’s books.
So.
Is there going to be a kid-friendly version? Would you hand a 4-year-old an e-reader? [easy answer: no. Not the current ones.] Even if someone came up with a sturdy e-reader appropriate for little kids who like to chew on stuff [and spill juice, and...], I think specialty books, such as board books and pop-up books, will remain.
Wow, I spend a day on the day job and the comments just pile up.
I’m going to miss some people who deserve replies, sorry.
#41 zombyboy: I actually agree. I don’t think Apple alone would be working to preserve the printed-brick system. What they wanted was a model that would screw Amazon and get the publishers on their side.
I’ve read a bunch of folks from the SF world complaining about this; they seem uniformly not to have gotten the facts first. Consider: author royalties are computed based on list price; for a hardback that’s commonly around 10 percent. Amazon pays wholesale against list price, so a Kindle book pays the author of our $29.95 book $3. Under the MacMillan model, the list price would be between $12.99 and $15.99; for ease of computation (I’ve only had one cup of coffee so far) let’s say the book would be $14.99. Then the author’s royalty would be $1.50.
So these authors are apparently arguing for the model that would change readers more while paying the authors less.
#50 Guido: Jim Baen was both forward-looking and a gentleman. Neither property is common in publishing.
#62 Craig: You’d have trouble finding anyone who loves books a lot more than I do, but the numbers just don’t work. Electronic publishing and print on demand is going to be the way things come out. A number of people have said “but what will I put on my bookshelves?” and I’ve got to say that strikes me as an advantage. I’ve got probably a hundred running feet of shelves — ie, the sum of the lengths of each shelf — and probably 30 boxes of books in the garage. Being able to cut that back would be a godsend.
There is room for both, if the economics work in terms of production cost. I suspect that for many of us who ultimately like to hold the books in our hands we will be fine with E-pubs that permit us to freely move, read, print, and back-up those books on any reader medium. For example, I subscribe to magazines only in E-form, and decide then whether to read a particular issue in printed-out hard copy form or on-screen. With novels, you can certainly read on-screen and enjoy many flexibility and logistics benefits, but you don’t read to your very young kids that way.
My basic position on this though, is driven by a bad DRM experience. I bought an e-book of a scholarly non-fiction title from Amazon, published by Encounter. I found that wanted to print out the bibliography and end-notes because there was so much in the footnotes, but the file would not permit printing of anything, and both Amazon and the publisher told me “tough luck”, so the book became worthless (try to read efficiently while jumping back and forth between text and end notes).
Then I got a new laptop as I do every couple of years, and my $12.99 book would not open on the new computer. I went to Amazon Marketplace and bought the hard copy; I also decided that I would never buy anything from Encounter, and most other publishers as well, again, until they implemented DRM policies that were compatible with their customers’ needs rather than purely serving their control concerns. In addition, my daughter often needs to copy one section of a few pages of a particular book for reserve reading, clearly permitted under fair use copyright law for college classes, and these blasted e-books RM schemes don’t permit such extraction either.
The new model will emerge that accounts for all of these issues, and it will in the end drive both Amazon and Apple, both of whom are trying to push their own business interests for their own reasons while pretending they are doing it for the public. Bosh. My experience says that Amazon’s history of conforming to the market rather than trying to chisel it into their own unique shape (e.g., a player full of bare mp3 files rather than Apple’s podcast software shells that control your usable content) means that they will eventually provide a broader platform which may or may not be Kindle-compatible. I expect Apple to continue to play to its in-house “Apple OS forever” niche.
I don’t know if someone else said this; I only got through about 40 comments. The trouble is that the loss-leader model only works if people will buy paper books. The Apple model assumes that ebooks are an end to themselves and are the stable end-game. Apple literally can’t sell at a loss because they don’t sell paper books. Macmillan may be worried about cannibalizing paper book sales, but they make higher margins on ebook sales (at least right now) and, if they already offer ebooks, they don’t really have anything to lose on greater ebook adoption; they would just scrap their huge capital equipment (which brings cash and hides it in large losses) and down-size the typesetters and printers (which cuts expenses).
It looks to me like they are protecting Amazon sales from cannibalizing Apple sales in preparation for the loss of the paper book markets.
It’s already happening: I don’t own a kindle, and never will due to DRM, but I’ve been reading e-books exclusively for over two years now, first on my Win Mobile 6 smart-phone, and now on my Android 2.1 Moto Droid smart-phone. I purchase DRM-free books directly from the publisher at Baen Books, and also on Fictionwise and other sites, as well as downloading public-domain titles. I also don’t mind admitting that in digital media in general, particularly when prices are at parity with physical media, IF I can strip the DRM, then I will buy and strip the DRM so that I don’t lose my purchase as soon as my current system dies, my OS gets upgraded, I switch OSes, my media-player software preference changes, and so on, ad infinitum. The perfect example is my switch from the old WinMob smartphone to my Android-based Droid. I want full control of my purchase for life, and not see thousands of dollars over the course of just a few years evaporate with each of the above-mentioned changes.
Yes, in consequence, the dead-tree publishers will go the way of the carriage, buggy-whip, whale-oil, corset, top-hat, and main-frame manufacturers, to one degree or another. Their death-spasms and rigor-mortis phases will be ‘interesting’.
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