A friend asked me the other day my opinion on the Amazon vs Hachette controversy, and I responded that I hadn’t given it much thought. However, that spurred me to do a little thinking on the topic, and it let me to a conclusion that I think both sides are wrong.
Apparently the argument between Amazon and Hachette is that Amazon wants to fix the price of e-books at $9.99, and Hachette is resisting. I think Amazon is wrong in getting involved in any pricing of vendor products – but its interesting to think about their motivation. Hachette is clearly worried about e-books being significantly cheaper than print books – because one has to wonder – is there a purpose for a middleman publisher in the e-book space? What value does Hachette bring to the author for an e-book? It seems to me Hachette needs to keep print books a significant market share in order to attract authors to use print publishers. Therefor, they have incentive to sacrifice e-book sales by keeping the price higher to push people to print books.
So is Amazon seeing thru this by saying – OK fine – you can’t sell any books through our channel – making it harder to sell print books and thus making authors less interested in partnering with a publisher.
Even if Amazon loses this and relents, I think the publishers will lose in the long run. Lets say the de-facto standard for a Hachette e-book is $16.99, Amazon takes their 30% cut, and Hachette takes their 30%(?) cut, that leaves the author with $7 a sale. Wouldn’t an established author just not renew his contract with Hachette, and sell the e-book for $16.99, and pocket $11 a sale. And then for people that want printed copies of the book the author can use Print on Demand. (Amazon has already set up a company to do this – https://www.createspace.com/).
So to sum it up – I think this argument is flawed on two sides – Amazon thinking that Hachette raising the price of e-books will slow the growth of e-books, and Hachette thinking demanding a premium for e-books will keep established authors in their camp.