Home » Amazon, Big Publishing, Mike Shatzkin » If Amazon pricing of ebooks is the problem, is agency actually the right solution?

If Amazon pricing of ebooks is the problem, is agency actually the right solution?

26 February 2016

From veteran publishing consultant Mike Shatzkin:

In the past week, I’ve had conversations with leading executives at two of Amazon’s competitors in the ebook space. They had strikingly different takes on whether the agency pricing regime, which is now in place by contract with all five of the biggest trade publishers, helps keep competitive balance in the ebook marketplace or prevents it.

Agency pricing was promulgated by Apple for the opening of the iBookstore in 2010. What it meant was that publishers would set a price that was “enforced” across the retail network. Apple liked this because it meant both that they didn’t have to price-compete with Amazon and because they didn’t have to think about pricing hundreds of thousands of items on a daily basis. (And it fit the model Apple used to sell other media.) Publishers liked it because they feared the erosion of print sales that cheap ebooks might lead to and because it seemed that level prices might reduce what was then Amazon’s stranglehold on the ebook market.

. . . .

Now the big publishers have replaced the original agency agreements with new ones that appear satisfactory to the court because they were obviously separately negotiated. And the new ones seem to allow at least some of them more flexibility to set and enforce higher prices than the numbers in the original Apple-promulgated deals. And all of that has led to a reconfigured marketplace.

The good news for the publishers is that print sales erosion — at least for the moment — seems to have been stopped. (Print sales started to grow even before “new Agency”; when higher prices hit the ebook market, print was immediately assisted.) A variety of industry and company sales statistics seem persuasive on that point. The percentage of revenues coming from ebooks for big publishers has declined and the sales of print have risen. And there is even some anecdotal evidence suggesting that bookstore retail shelf space is increasing again. Even if that is true, it is an open question whether it is sustainable, or whether it is a delayed and temporary marketplace response to the shuttering of 400 giant Borders stores, which occurred in 2011. Bookstores might also be helped by the diminishing book shelf space at mass merchants, a venue where print continues to lose ground.

But there is also some good news for Amazon in how all this has worked out. Their market share on the ebook side is rising. Their margins on the ebook side must have gone up even more, since they’re being “forced” to keep the margin they earn on Big Five ebook sales. (Wouldn’t it be ironic if Amazon’s internal calculations are that they can afford more losses on their Kindle Unlimited subscription program because of the margin they’re earning on the Big Five single-title sales? We can only guess…) And certainly Amazon benefits from the increased sales of print.

In fact, they could be partly responsible for it. All the searches on Amazon for Big Five books show an agency-priced ebook with a highly-discounted print book, often cheaper than the ebook, alongside of it. How much of the print book sales increase is due to the reaction of consumers being presented with that choice?

. . . .

Only Barnes & Noble can even attempt to meaningfully compete with Amazon in this environment. The price-sensitive book consumer needs to see both the ebook and the print book to make a wise purchasing decision. They won’t see that at Kobo, Google, or Apple’s iBookstore.

So competing with Amazon on price is confined to B&N on print and confined to non-agency titles — which means only a sliver of the bestseller list — for everybody else. So, is everybody happy? Publishers are selling more print, which they wanted. There’s growth in the indie store base, which publishers also wanted. But Amazon continues to grow market share in relation to Barnes & Noble and now threatens to open bookstores to compete with B&N and the indies. And that is most definitely not what publishers wanted.

. . . .

What this executive believes is that price-cutting as a way to recruit customers is a fool’s errand. The customers who come aboard for a cheap deal will abandon you just as fast for somebody else’s cheap deal. They don’t stick. On the other hand, offering pricing advantages based on customer loyalty is a better bet. This player thinks that having agency in the market makes it easier to hold onto customers once a platform has acquired them. As evidence, that person pointed to the loss of market share by Nook that occurred once the DoJ restored discounting under agency.

Link to the rest at The Shatzkin Files

Mike has some very good observations in this column.

On the other hand, PG wonders if anyone in Big Publishing understands a single thing about disruptive technological innovations and their impact on legacy products and legacy producers.

Trying to manipulate pricing and customers to preserve printed book sales is a fool’s errand. The future of books is digital just like the future of letters became digital when email was introduced and the future of news became digital when the web and streaming video entered the scene.

Stories are special. Printed books are not. Big Publishing is trying to preserve its landline business in a cellular world. The future of paper is in napkins and toilet tissue, not as a medium for communicating ideas.

Amazon, Big Publishing, Mike Shatzkin

56 Comments to “If Amazon pricing of ebooks is the problem, is agency actually the right solution?”

  1. “In fact, they could be partly responsible for it. All the searches on Amazon for Big Five books show an agency-priced ebook with a highly-discounted print book, often cheaper than the ebook, alongside of it. How much of the print book sales increase is due to the reaction of consumers being presented with that choice?”

    I’ve been wondering this myself. If it actually is a fact, then the agency pricing scheme is likely hurting B&N. Not what they intended I’m willing to bet.

    • I don’t know much about business, but I wonder how wise it is to try to diminish sales of the cheapest format for publisher’s to deliver, while discounting the format that is the most expensive for publishers to produce, distribute, and sell.

      • In this particular case, there are accounting and corporate masters to consider.

        The major publishers had all upgraded their warehousing facilities with robotics in the past 15 years. Then ebooks happened. The amortization of these warehouses will take 20-30 years.

        Publishers, even the largest ones, are small potatoes inside of large media conglomerates. They have to justify the costs to keep their jobs. Slowing down the adoption of ebooks in order to keep print sales steady makes the ledger look more in balance.

      • If the publishers don’t have paper fiction in bookstores, what is their competitive advantage?

        If all fiction suddenly flipped to eBooks, what would be the publishers’ competitive advantage?

        If the indirect promotion eBook fiction gets from paper promotion went away, what would be the publishers’ competitive advantage in eBooks?

        Without paper fiction, there is no future for publishers’ fiction.

      • The publisher is not making the decision to discount the printed book; it is the retailer who is selling the book for less than the list price. The publisher is still getting the same amount they contracted for unless they paid for a price promotion for a short period.

  2. Title be a question, answer be ‘no’ …

    Agency was all about control, and now that they’re stuck with it they’re still trying to blame others for their screw-ups …

  3. What bestseller list is Shatzkin talking about here “competing with Amazon on price is confined to B&N on print and confined to non-agency titles — which means only a sliver of the bestseller list — for everybody else”? Per the latest AE* report:

    4 of Amazon’s overall Top 10 Best Selling ebooks were self-published indie titles
    10 of Amazon’s overall Top 20 Best Selling ebooks were self-published indie titles
    56 of Amazon’s overall Top 100 Best Selling ebooks — more than half — were self-published indie titles

    Those numbers, 40%, 50% and 56%, seem like way more than a “sliver”. And that doesn’t even include traditionally published books that are not agency priced (most non-Big5 publishers I believe).

    AE didn’t provide the counts for print books in this format but even there indie books printed thru Createspace or books published by non-Big5 publishers (which means they are likely non-Agency) is obviously more than a “sliver”.

    *I know AE is controversial but I am only talking about # of items on the list not their analysis of what that means. Hopefully that part of their report isn’t controversial.

    • I’m guessing Mr. Shatzkin is only looking at the NYT Bestseller List, and maybe the USA Today list. I don’t pay attention to those (nor even the Amazon lists, TBH), but it’s possible the indies are only a sliver of those lists, at least most of the time.


      • As we know, the NYT bases its best-seller list according to what it can see being sold from their windows on 620 Eighth Ave. Which means far fewer indies will make their list than Amazon’s.

      • I was thinking that originally but then I found an article by Shatzkin saying that (at the time) the two top books on the NYT list were indies. And just this week, there were 2 on the top 15 that are indie and not agency priced. Sure it is only 15% but still, more than a “sliver”. And that is using the combined print/ebook list, not just the ebook list.

        In thinking about this, my point is that even though he has good points in his article and even though he acknowledges that indies are becoming a big deal (here and in the link below) he still seems to be underestimating them or belittling them even though they are now a constant presence on even the NYT lists.


      • I remember when every week I checked the NYT bestsellers. And I’d check the CBA list monthly.

        I cannot remember the last time I looked at either list on any regular basis. Even when I was still randomly visiting bookstores in 2010 or 2011, I didn’t go to the top sellers racks, except a glance in passing. I just went to “my” sections.

        I pretty much only buy books on Amazon, so I only care about browsing the finer subcategories of the genres/subgenres I read. (Bookstores didn’t do that. They just had the all in there SF section. What if I just want to browse Urban Fantasy or Colonization sci-fi or female sleuth mysteries or Latina poetry?) I want even more sub-sub-sub-sub-subcategories from Amazon. For instance, more refining of “urban fantasy” versus the erotic/paranormal versions of urban fantasy. I really don’t like browsing through the more erotica type stuff to find the more Dresden Files or Charles de Lint type stuff.

        I looooooove pinpointed lists.

        If bookstores had been that precise in shelving, I might have visited longer than I did.

    • Of course, indie ebooks are sold through a kind of agency pricing. The author sets the retail price and Amazon takes a pre-determined share. Although, unlike with the big publishers, Amazon also still reserves the right to discount, which they typically only do when matching a lower price elsewhere.

  4. Price of the individual item (regardless of whether that item is a book or a jar of pesto) isn’t the only consideration to a consumer.

    There’s the issue of whether that item is available where the consumer shops and the difficulty/cost of traveling to another place.

    The nearest large bookstore to me is in Toledo. Even with the cheaper fuel prices, that’s a minimum of two hours out of my day just driving to the place. I’ve got a business to run, a spouse, a teenage son, and elderly in-laws to deal with. I don’t have a nanny or housekeeper or a personal assistant like so many of these Manhattanites do. I can’t afford two hours out of my day to browse book shelves. *smh*

    The executive on their little island fortress do not get that the rest of the country doesn’t live like they do.

    • Suzan,

      Price of the individual item (regardless of whether that item is a book or a jar of pesto) isn’t the only consideration to a consumer.

      For the love of all that is holy, don’t buy pesto. Make it at home.

      • Ah, Antares, it goes back to that limited quantity–time. 😆

        Not to mention my family does not have your fine palate and does not give a flying rat’s a** when I make pesto cream sauce for fettucine. Nor do I live near my friend Jody any longer who supplied me with fresh basil and tomatoes from her garden. There’s a brand called Candoni imported from Italy that’s a passable basil pesto and not too garlic-y. Which goes back to the original problem of Amazon being the only place I can get it in West Bumf*** Ohio. 😀

        However, I have bookmarked your page and will try again at making my own once the boy leaves home and the in-laws are…*sigh* let’s not go there.

      • Please don’t bring up sausage gravy in front of my husband. I’ll be forced to make it again. 🙂

        • esp if you have to hunt elk first to make the sausage. Very time consuming. I’m with you Suzan. Time: first to our humans, animals, work and health. Whatever is left –well, usually not enough sleep, right? Hang in there.

  5. As I wrote over there:

    It should be noted here that Amazon sold Kindle ebooks at well below cost in the days before they had competition, as a carrot to get customers to buy Kindle e-readers, which were originally priced at $400.

    It should also be noted that Amazon executives testified under oath that Amazon sold only a fraction of titles below cost, whereas most of them were at or above cost, and Amazon’s e-book operation was “consistently profitable” as a whole. The Department of Justice actually did investigate Amazon for this during the run-up to the agency pricing trial, and found the same thing.

    If Amazon were permitted to return to loss leader pricing, I remain skeptical that it would do so in such a way as to open itself to successful prosecution for predatory pricing.

    • Just to add what Chris said, according to the complaint filed by the DOJ, para 30- When Amazon launched its Kindle device, it offered newly released and bestselling e-books to consumers for $9.99. At that time, Publisher Defendants routinely wholesaled those e-books for about that same price, which typically was less than the wholesale price of the hardcover versions of the same titles, reflecting publisher cost savings associated with the electronic format. From the time of its launch, Amazon’s e-book distribution business has been consistently profitable, even when substantially discounting some newly released and bestselling titles.

      As a digital only reader, I no longer care about agency pricing. I have a personal maximum that I’ll pay for fiction and if the the price is higher than that limit, I move on. Likely to never return. I received a survey from HC the other day and the price points they listed were way outside the realm of what I would pay before looking at something else. I might feel differently if I had difficulty finding good reading material at a lower price point but I’ve had no problem so far.

      • The beauty of Trad published books is I can get them for free in the library. Indie published books- not so much. So I pay for Indies but not trad pub.

  6. “Stories are special. Printed books are not.”

    Quote of the day!

  7. Price fixing favors entrenched players.
    (That is why price fixing cartels form, to keep new players out.)

    And price competition can take many creative forms which Agency takes off the table, simplifying the competitive landscape for the entrenched players (most notably Amazon, because of their first mover advantage). Anybody with a background in US consumer retail understands this.

    Fictionwise had a fantastic micropayments rebate program, which Agency killed. New entrants couldn’t do bundles. (Still can’t.) No discount coupons. No lightning sales. No countdown timers… No BOGO. All the clever retailer tricks we see everyday all over, forbidden. Just stock it and charge full price.

    In competition law terms: Agency raises the barrier to entrance. Which is why there have been no new players in ebook sales since Apple bulldozed in on the back of the conspiracy. There is no entry point for newcomers to wedge through.

    With all the wreckage of the conspiracy in full view, the BPHs doubled down on their existing agreement and reinstated it the first chance they got. Now we get to see the next set of victims get squeezed out.

    Wouldn’t surprise me if Kobo followed Nook out the irrelevancy door. (The news coming from Rakuten over the past year or so are not encouraging.)

    As to the headline, the answer is a double no:

    No, Amazon pricing never was a problem and no, Agency was exactly the wrong answer to the non-existent product.

    (BTW, notice how Shatzkin lays the blame for higher Agency prices on Apple? Funny that, huh? The reports I remember from the time were that Penguin and MacMillan wanted even higher prices and Apple forced them back to $12.99.)

    • Apple also insisted that ebooks could never be more expensive than hard backs. Which is something that legitimately angers customers.

    • Ah, but the publishers were not found guilty, they settled. Shatzkin has phrased it this way before. To him, publishers settled only to avoid a protracted and costly legal battle.

    • the thing is, Price Fixing only works when you can prevent others from selling their goods at a lower price.

      Raising your price to double your competitor’s price isn’t “Price Fixing”, it’s “suicide”

  8. Is there a Shatzkin blocker I can install on my TPV feed?

    • But then how would you tell the sane without seeing those touched with the crazy? 😉

    • No, then you would miss stuff that explains everything. For example, this:

      [Amazon] threatens to open bookstores to compete with B&N and the indies. And that is most definitely not what publishers wanted.

      Emphasis in the original

      Ask yourself why he wrote that. Better yet, ask yourself why that rumor exists. As Nate Hoffelder says, Bezos may look like a Bond villain, but he’s not the type to be caught monologuing and giving out his secret plans. So, whence the rumor? Was it a deliberate leak? What would Amazon gain by leaking the rumor? It hurts, rather than helps if they were planning on doing that in the short term.

      But what if that was just sending a message to the BPH? What would it mean? The key to understanding the BPH attitude is that Carolyn Reidy note to self that came out in the antitrust case. “Higher price slows Ebks/casual purchaser/keeps retailers/stops authors leaving”

      It is that last bit that terrifies them. They aren’t worried about all authors, just the handful of sure-fire “every book is a bestseller” authors. If Amazon had 400 bookstores, who would need a BPH? That rumor makes a lot more sense if it is a shot across the bow to remind the BPH that they continue to exist, if and only if, Amazon refrains from crushing them.

      • Amazon doesn’t want to crush publishers. Amazon wants to sell a lot of their books, make a lot of customers happy, and make lots of money.

        What Amazon would love is for publishers to pull their heads out of their butts and be reasonable business partners. Embrace POD, ebooks, flexible pricing, etc.

        • At what point will Amazon have to take steps in order to NOT become a monopoly? GM and others have had to do so in the past to avoid it. I realize this may be looking far down the road but it leads me to this question; if Amazon were to become a monopoly* simply due to the incompetence of its competitors, is it still subject to Sherman?

          *in the Trade Pub/Whale Math definition.

          “Stops Authors Leaving”, indeed. Our friend JP is running a contest to find another ghostwriter, he calls it something else of course. The “prize” is crap and the TOS are even worse, not to mention the entry fee. If JP is loosing his ghosts I imagine the other houses are as well. Gotta hand it to him though, he’ll get thousands of ideas AND make money off of each of them while he’s doing it. Its right out of the A.S. playbook. Got to keep the factory running somehow.

          • It’s not illegal to be a Monopoly, it’s only illegal to USE the fact that you are a Monopoly to hurt consumers (blocking rivals by selling at a temporary loss, jacking up prices, using your monopoly in one field to force your customers to buy something in another field from you, etc).

            If you are doing things that would be illegal for a Monopoly to do, you want to avoid becoming one. If you think you will get more scrutiny after your become a monopoly and want to avoid the cost involved, you may try to avoid becoming one.

            But if you are already being investigated regularly, and not doing or planning to abuse your power to hurt consumers, why worry about it?

          • Of all people, Justice Antonin Scalia wrote an opinion explaining that it’s all right to be a monopoly if you got there legally—and it’s perfectly legal for such monopolies not to let other people play with all of their toys, because they’re the ones who put in the time and effort to build them.

            From that perspective, it’s kind of disappointing we’ll never know what he would have said in the Apple case, were it to gain certiorari.

        • I have no doubt you are correct. Amazon would prefer to help the BPH (to use Lee Child’s term) get better at their own business. Amazon also knows the BPH haven’t responded logically to Amazon’s overtures in the past. When organizations are driven by fear, the smart business move is to instill a little fear.

  9. Can someone explain what he means by “customer loyalty”? Loyalty to whom? I follow authors – though I wait or eventually buy paper second hand if the ebook price is too high – but I really don’t givea damn about the publisher and I have no idea how they could earn my loyalty.

    There was a time, long ago, when I bought almost everything that came out from some publishers (DAW for SF when it first launched in the UK for example) but this was because the gatekeepers were drastically constraining supply and those times are long gone (for me they ended when I found second hand American SF on sale – all those Ace doubles and the like).

  10. Shatzkin on moving back to wholesale pricing: “One is that it would unleash Google and Apple — both of which have plenty of cash — to discount aggressively to compete with Amazon.”

    Oh, goodness, talk about getting ready to fight the last war. The wholesale ship has sailed. Apple and Google want nothing to do with it. And Amazon will only go back to it if they beg and plead.

    It didn’t take a rocket scientist (or publishing industry consultant) to figure out that the Big 5 would quickly regret forcing Amazon into agency. But I’m a little surprised they are (whispering) their second thoughts so fast.

    And what’s their new plan? That somehow Apple (or Google) is going to rush in and buy up tons of stuff wholesale (so the publishers make money) and discount heavily (so Apple and Google lose money) to fight the dragon of Amazon for them?

    Right now, Apple and Google are looking at KU and going… hmm… book subscriptions. That looks mighty nice. The last thing they are thinking about is getting into a price war with Amazon by discounting big publisher ebooks sold to them wholesale.

    The whole reason Apple got mixed up in the DOJ lawsuit is Apple had no interest in taking loses to prop up traditional publishers. If Apple does anything, it’s going to make an aggressive play to the indy market by offering better terms and a subscription model to compete with KU (possibly a subscription model without the requirement of exclusivity). I can almost bet Google is already working on some kind of subscription model.

    And subscriptions will pretty much be the end of traditional publishing. It plays complete havoc with their tiered pricing model and hurries the demise of print.

    • It’s weird how everyone hates when Amazon discounts, but their last hope is that Google and Apple might discount MORE.

      Which lays bare the bizarre motivation behind all BPH’s posturing: How can we hurt Amazon? We don’t care if we hurt ourselves, hurt our readers, hurt our authors, or hurt literature. Just tell us how we can harm this company. That’s it. That’s all we want.

      Explains why they hate the idea of more Amazon bookstores. All the weird hypocrisy stems from their ADS. It’s unreal.

      • Their hopes will go unfulfilled: their expectation is that books (and their books, especially) are so important to Apple and Google they will do anything to take marketshare from Amazon.

        Books barely register on the bottom line of either company and wouldn’t even if they forced Amazon out of books altogether.

        Google is an advertising company. 90% of their money comes from ads. Less than 10% from apps, hardware, android, cloud services, and their wannabe products.

        Apple is iPhone. iPad, Mac, and services are in the high single figures at best. 80-90% of their money is from hardware. The rest is media, apps, and services. Books? Just a checklist feature for iPads, really. (Which makes their role in the conspiracy even more of a head shaker. It’s dumpster diving, comparatively speaking. Should’ve been beneath them.)

        The BPHs will find no Amazon-slaying white knight in either camp.

      • This also makes no sense, since as suggested in the recent AuthorEarnings report, it may be Amazon that is mostly responsible for the recent increases in print sales. When the ebook price is higher than the paper book, then most people (including myself) will just click on the paper book or buy used. If they succeed at hurting Amazon, who do they think is going to pick up the slack in print sales? B&N? Let’s tear down the biggest retailer of our product and hope someone nicer takes their place?

        If this is all a strategy to protect their oligopoly on paper sales so that big name authors still believe they need a publisher, what happens when those authors realize that most of their paper sales are also coming from Amazon? Maybe they just hope that nobody notices and they can keep the illusion going that it still matters if you are on the shelves of brick and mortar stores, which is probably still true for the really big authors, but maybe not so much anymore for the slightly less big authors. And definitely not for mid-list authors.

        It seems that publishers are facing two forms of disruption to their business model. One is the shift to digital forms of media. But the other is the shift to online shopping. What happens to their vaunted superiority in marketing paper books if Barnes and Noble goes away? It will mean nothing since just like ebooks, every paper book on Amazon also has the same amount of shelf space as every other paper book, whether published by one of the big-5 or one of the little-2,000,000.

        • Well, they refused to commit $46M or so to keep Borders and its 25% shelf space out of liquidation thinking the shoppers would all go to B&N. Instead, whatever portion of Borders business migrated to other B&M channels merely offset their losses to online and the net migration was the equivalent of all of it going to Amazon.

          As is, there is no reason why Amazon can’t put B&N out of business (legally) with no fear of (fair) antitrust action; there would still be thousands of newstands and airport book racks around to carry Lee Child books.

        • And yes, you are correct.
          Traditional publishing *is* facing two discrete disruptions.

          The first, and earlier one, dates from 1995. Online bookselling of both “fresh produce” and backlist. And used books. (It wasn’t that long when Amazon’s biggest crime against the establishment was listing used books side by side with the new copies.) That disruption enabled long tail careers and dramatically raised the value of a title’s copyright. In the process it devalued the B&M launch window services traditional publishing offers in return for ~100 years of copyright control.

          Tradpub’s reaction to the first disruption was rights grabbing and the predatory contracts the AG is now belatedly railing about.

          The second disruption is, of course, the mainstreaming of Indie titles through ebook tech which is further devaluing their B&M stranglehold on print. No need to elaborate there, right? 😉

    • I doubt that others are looking at starting subscription models. You’ve seen Oyster close and Scribd had to lower their offerings. It’s not a viable business model and Amazon is doing it because they can afford to absorb the losses on it for the time being. If a person reads more than two traditional priced books in a month, the service loses money. Of course you can hope that people join it like a gym membership and don’t use it and forget about the small charge each month and make your money that way. KU is going to end up primarily being all indie books since there is very little way to put traditionally published books into the program and pay the authors the full royalty that they would be owed under existing contracts.

  11. Google Books + Oyster talent = not whale math

  12. At first, I thought PG linked to Shatzkin because he had a few good ideas.

    Now I just think PG is f****** with us.

    • PG links to things he disagrees with all the time.

      And adds snarky comments at the bottom for our enjoyment.

  13. PG wonders if anyone in Big Publishing understands a single thing about disruptive technological innovations and their impact on legacy products and legacy producers.

    What measurable actions could a fiction publisher take that would lead us to conclude he does understand the disruptive technological innovations and their impact on fiction?

    I ask because I don’t know a strategy that would enable a publisher to maintain ongoing market share and profit in a fiction market that appears to be moving toward eBook dominance.

    • Dunno.
      The benchmark seems to be BAEN:
      – genre specialist
      – apolitical
      – strong brand
      – strong online reader community site
      – embraced ebooks as promotional tools last century
      – practices direct sales of single titles, bundles, eArcs, collections, etc
      – direct sales are multiformat, DRM-free, don’t require credit card
      – sub-paperback ebook pricing initially, tweaked to sub-print edition prices after expanding ebook sales to general bookstores
      – (reportedly) better ebook royalties for authors
      – they even sell ebooks from other publishers willing to follow their policies
      – lots and lots of reader goodwill

      That may or not keep them in business indefinitely (no guarantees in times of turmoil) but so far it seems to be working.

      Key point in their favor is they saw ebooks as a useful technology from the beginning, way back in the PDA era, and they came up with very logical adaptations. They knew their market enough to know what readers would accept. They never fought it, never sought to gouge consumers, and kept an eye on the techies, adopting new ebook formats as they became available. To this day they still support rocketbook format. Plus plain rtf and html. Even online reading. Free sample chapters. They *want* people to read their books.

      One more thing: they don’t fight futile wars. They have never angsted over DRM, fought TTS, or publicly complained about competitors, much less distributors.

      Their notable failures have been few and usually just ahead of their time; BAEN’S UNIVERSE, most regrettably.

      Outliers obviously.
      If nothing else, because they actually *know* their market. And they know (enough about) tech.

      Of note: TOR, for a very short time, sold ebooks through BAEN until their corporate overlords put an end to it. Since then they’ve tried to mimic them as much as the corporate types let them so we know that in this genre at least the self-defeating policies come from the Manhattan Glass towers and beyond.

      The Manhattan Mafia is plenty dysfunctional on its own but at least some of their issues are the result of forcibly trying to import policies and strategies that run counter to standard American consumer expectations. What French and German consumers tolerate is not always acceptable by Americans, with a half-century plus history of consumer activism.

      • > They have never angsted over DRM, fought TTS

        it’s more than that. They have been actively against DRM and restrictions.

        They introduced the Baen Free Library, giving away books for free.

        for several years they included CDs in hardcovers that included non DRM versions of entire series, and accept the existence of a website that hosts these CD images to this day (they did ask them to take down the links to individual files in the fear that Amazon/B&N/Apple would view them as $0 sales and price-match)

        They not only don’t fight against loaning of e-books to other readers, they encourage it.

        • The promo CDs are pretty much done for.
          The need for them is gone. eBooks are no longer a promotional tool but a product line in their own right.

          But it speaks volumes that they graciously allow the existing CD replicas to remain available. (Understanding that taking them down would only drive their availability to the murkier side of the internet and cost them the good will that makes them one of the least pirated publishers around–and not for lack of interest in their books. As I said: they don’t fight futile wars.)

  14. I’m just a middle aged book reader. I love good books and have for all my life. As I think back on my reading over the years it occurs to me that there is one major difference now than before. Just in the last decade or even more recently I did not care in the slightest how a book was published or who did the publishing. Then, came the Apple pricing scandal followed by the Amazon pricing “boycott”? agency pricing contract renegotiation. This caught my eye as a reader as both were a direct attack on my wallet. Now, I notice who publishes the authors I read. I notice it first in the price and it makes me grit my teeth. I also notice it when I research the book and scroll down to see who publishes it. In the past I never would have even looked! Now I do and when I see a big name publisher I grit my teeth and weigh heavily if I want to click on “buy”. Sometimes I don’t. Some of the authors I have read for two and three decades do not get purchased by me anymore. This is ridiculous when you think of it as their stories are just as good as always.

    Who’s to blame? Me as a hard headed stubborn reader? The author? Or the publisher who has twice elected to screw me in exchange for profit? Time will tell but I do know that the genie is out of the bottle. The traditional publisher has made me, their customer, notice them. They had existed in the past as a mostly invisible part of the process. No more.

    I used to follow my favorite authors and when their new book was out I’d fork over $20-$30 for their hardcover book. Today, I cringe at the thought of spending even $10 for a new book. Right or wrong, things have changed. In the midst if a paradigm shift in pricing and the industry the traditional publisher has been caught paddling the canoe towards the falls rather then away. Some of us readers noticed.

    • You’re not alone.
      I haven’t bought anything from the price fix six, print or digital, since 2010 when agency went into effect. Haven’t missed a beat.

      Likewise, all the signatories to the AU letters have gone on my blacklist. Easier because only a couple of authors I bought were on it.

      My attitude is that if somebody tries to mug me once, I’m not going to give them a chance to rip me off another way.

      One strike you’re out policy.

  15. A request: Back when I used to be a reporter for the Associated Press, we were warned against alphabet soup. That meant articles with so many initials that the reader couldn’t find the meat of the story.

    Of course, most people know what some initials stand for (AP, for instance), and on second reference, initials are fine. But please spell things out on first reference when possible so the rest of us don’t drown in the alphabet soup.

    Other than that, I’m enjoying the discussion.

    • Any abbreviations in particular need expanding?
      (Just last week a friend of mine told me the same thing so I’m trying to mend my ways. 🙂 )

  16. Comments here and elsewhere moved me to do a little in-depth analysis on this column myself. Surprisingly enough, it drew a comment from Shatzkin himself, who told me I was so completely wrong that he wasn’t even going to try to argue with me, but hopefully people with more open minds would read his original column from it.

    That tends to be the sort of response I get when I post lengthy comments over there, too. Well, I expect time will tell how it will all come out.

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