Have been avoiding writing about Amazon vs Penguin because it seemed like another normal Agency Model tussle – However, the continued absence of Penguin and some other clues hint at there being more to it.
Penguin conveniently have the most iBooks books
Penguin has more books in iBooks than any other Publisher. They have also probably been (not openly) talking up how well the iPad is doing for sales with claims that 12% to 15% of sales of ebooks were from the iPad and that figure doubled or tripled after the iPad 3G came out.
Well, some Publisher has and since Penguin have the most ebooks in the Apple iBookstore and none in the Kindle store they would be the natural candidates to see a huge portion of ebook sales come from iBooks.
Combine that with the continued absence of a Penguin-Amazon deal and we are left with two possibilities -
- Amazon wants to make an example of Penguin to other Agency Model Publishers.
- Penguin wants to see how far it can push terms and then set a precedent other Agency Model Publishers can (and will) follow.
Perhaps its elements of both. The latter seems likelier because Hachette were the first ones to fight and get the Agency Model signed. Now Penguin are trying to get further concessions. Perhaps the Agency Model publishers have decided to each take turns trying to goad Amazon into more and more lopsided deals.
Amazon strikes back by selling Penguin hardcovers at $9.99
It’s remarkable that Amazon are committed enough to $9.99 to sell Penguin hardcovers at a loss. In a way they were already doing that with ebooks – taking a loss on each ebook sold. However, doing it with hardcovers is probably costing them a lot more money.
It’s amazing that people never believed that Amazon were losing money on ebooks. It shows how people are reluctant to ever believe inconvenient truths. Now, with $9.99 Penguin hardcovers will they still pretend?
It certainly shows that Amazon are aware of the importance of reasonable book prices and determined to not let Penguin pull off some irrational deal with $14.99 ebooks and terms favoring Penguin or giving it the right to let some other book store sell cheaper ebooks.
Random House are avoiding iBooks
Amazon has an ally of its own – Random House. As long as Random House are not in iBooks (and as long as iBooks has just 30,000 new books) people have a strong incentive to prefer the Kindle and Kindle for iPad.
Wonder what Random House’s motivation is.
Perhaps holding out for better terms as most people think. Perhaps a chance to become an even bigger Publisher and take over the smaller of the Big 6. There will definitely be some consolidation and by betting on Amazon Random House are setting themselves up to be the Consolidators.
Kindle owners are torn
Lots of people tired of waiting for Penguin books or having their preorders cancelled. Lots of people who don’t want Amazon to cave in.
Read all the reactions at the official Kindle forum – Amazon vs Penguin.
It’s funny to read people saying they want ebooks and not $9.99 hardcovers. Things sure have changed.
There are two overriding sentiments -
- Amazon should stick to their guns and not cave in.
- I want my books and if things don’t work out soon I might have to consider leaving.
In the end lots of people can’t delay gratification. Especially if it’s not clear why they have to delay gratification.
Not saying it’s right or wrong. It’s just a reality that Amazon and every ebook retailer should be cognizant of.
Amazon just ought to make things clear and that way there’ll be a clear demarcation – people who will stick around because Amazon really are fighting for lower prices and are pro-readers, and people who still can’t wait and perhaps losing them isn’t a big deal.
Closing Thought – Penguin are trying to put Amazon at a disadvantage
It’s pretty plain and simple.
Agency Model Publishers are going to keep pushing to try to commoditize ebook stores. They see Amazon as the biggest roadblock to that so they’re seeing if they can get restrictive terms and help out rivals.
Basically, penguin are probably trying to get Steve Jobs and Apple (or perhaps Google) a pricing advantage. An advantage other Agency Model Publishers will push for as soon as they can (perhaps next year when their deals are up or earlier).
Publishers are going to try to become moderators – even out the pros and cons of each ebook store and create a state of equilibrium where none of the ebook sellers (Amazon, B&N, Google, Apple) have enough market share to win out.
Amazon really, really need to make things clear because people tend to fill the unknown with their fears and some people tend to mistakenly attribute blame to the wrong party.
Filed under: books Tagged: | amazon vs publishers, fight for $9.99
What do you think would happen if Amazon stopped selling physical copies of Penguin published books? I am of the belief that Penguin needs Amazon more than Amazon needs Penguin. I wonder what percentage of each of their sales figures comes from each other? Doing just a quick search I only come up with 100,000ish Penguin books on Amazon while there are a total of millions.
Amazon would get a lot of negative PR. Amazon have to be very careful – they have to at all times make it clear they want to sell all books.
We aren’t far away from legal challenges and other complicated moves.
Penguin books? I would not buy anything they sell any way.
i just like good books. theres no shortage of those in the kindle store, sold by non-agency publishers. as long as that continues to remain the case, ill just keep humming along, enjoying my books, and let everything else shake out on its own.
truth is, the whole thing is sort of yawn-worthy. its like a boring remake of the music-industry-electronic-distribution show. hard to stay interested when youve already seen the ending…