Diary of a Mad Editor

Amazon’s recent capitulation to Macmillan’s pricing demands has fuelled anti-Amazon sentiment today with reports that this move is a victory for big publishing and will start a trend that will hurt the online bookseller and help large publishers like Macmillan. I’m not sure I agree with this conclusion. For one thing, Amazon didn’t admit defeat in the matter as much as it allowed Macmillan the opportunity to learn the hard way that they’ll simply sell more e-books a $9.99 than they will at $15.99. For another thing, Amazon doesn’t necessarily lose money on the deal either way. If Macmillan can find success selling at a $15.99, then Amazon will make money. If not, Amazon can easily make that money up from sales of other books from other publishers who aren’t as obtuse as Macmillan.

But, Macmillan is the company that’s really taking a gamble. The busted logic of mainstream publishing is astounding. Macmillan is assuming a couple of things. First, that because hardcover sales still make up the biggest portion of the market, that eBook sales are less important. Somewhere, some executive at Macmillan is thinking how hurting Amazon’s Kindle sales will somehow drive hardcover sales. Unfortunately, for them, the Kindle is no longer the only game in town and increased competition has not hurt Amazon’s place in the eBook market (don’t get me wrong, I do think there are things that can and probably will damage Amazon’s place in this growing market eventually but this event is not one of them). And guess what? A reader who’s unwilling to buy an eBook for $16 is not very likely to spend $25 or $30 on a hardback. Second, Macmillan seems to be operating under the delusion that Apple’s new iPad and it’s online iBook store will blow away the Kindle. I’d be willing to bet money that it won’t. Ultimately, consumers will drive the eBook market even more than they drive the hardcover market. And there’s a limit to how much a consumer will pay for digital books. Amazon has decided that that limit is $9.99 and I’m sure that they didn’t reach in and grab that figure out of their assholes. No, I think Macmillan just scored a pyrrhic victory here — one that may burn them in the end.