Amazon Removes Buy Buttons
This past January John Sargent, CEO of the publisher Macmillan, met with Amazon executives in hopes that he might regain control over the pricing of Macmillanâ€™s books. If anyone could sway Amazon, it was Macmillan, a huge bookmaker with imprints such as Farrar, Straus, and Giroux; Henry Holt; Picador; and Times Books. Sargent flew to Seattle and laid out his terms. By the time he stepped off the plane in New York, Amazon had removed the buy button from every Macmillan book on the Web site.
This was Amazon’s way of throwing a fit because Macmillan didn’t bend over and accept Amazon’s demand of steep discounts, which are “52â€“55 percent, with some as high as 60 percent. In contrast, bookstores—even the chains—get discounts that usually top out around 50 percent.”
Rates this high are putting the squeeze on publishers who are clearing from between 5% and 8% of a book’s cover price, after deductions for printing, marketing, electricity, salaries, authors’ royalties, etc. That’s the on-average rate, naturally, which means some books bring in more, some less. But it’s the best sellers that bring in less, and the small sellers that bring in more per book. Only the small sellers don’t bring much in, so the discounts hurt most here.
Thus, some publishers are balking at Amazon’s not-so-polite requests to up the discounts. Amazon retaliates by removing the “Buy” buttons from these publishers’ books. Roychoudhuri doesn’t say, but the natural question is why don’t publisher accede to the steeper discounts while simultaneously increasing the cover price of the books? Probably because they fear a decrease in sales at physical book stores. But these stores are dwindling in number.
And then there are e-books, the prices of which are mostly set by Amazon without consultation with publishers. That price is about ten bucks, less than half the cost of a physical hardback book. Many readers complain that this rate is too high because they figure that most of cost of a physical book is in its printing, transportation, and moving. It isn’t, though. Which means that when an e-book is sold, somebody is taking a loss. Roychoudhuri says that Amazon is absorbing the costs, for now. Publishers are worried that customers will become fixated on the low price and refuse to shell out more once Amazon stops eating the loss.
Excuse me. I meant to say above “when an e-book is licensed.” Readers don’t buy, they lease. That being so, why haven’t publishers and sellers capitalized on this idea more fully and advertised e-books for lease? “Rent John Grisham’s Latest for $5 for a week!” The drawback is obvious: too many people would opt for the rental fee and not buy, which means Amazon, publishers, and authors would realize even less per book.
Perhaps the rental fee would work for back-list books. I noticed a copy of Jim Herriot’s Everything Living Thing on Amazon’s e-book list, set at the full price. This title is clearly over-priced since you can buy paper copies for a penny (plus S&H).
Something has to be done for e-books that restore the idea of used books and sane pricing of old titles.
SUNY Albany Drops Classics
If you haven’t seen this already, read Gregory A Petsko’s open letter to George M Philip, President of the State University of New York At Albany, entitled “A Faustian bargain.”
On a late Friday afternoon back in October, Philip hastily convened a “Town Hall” at Albany and announced that he was whacking several departments.
He said, “It remains critically important for the University to rethink and rebalance its core academic and research mission given its reduced revenue base, and reallocate resources accordingly.” By which he meant that he “issued a directive today to suspend all new admissions to five program areas – Classics, French, Italian, Russian, and Theatre.” He offers no explanation other than that student enrollment in these areas is low.
It’s low because, as everybody knows, classes in these areas are no longer required. Offered the chance, students on the whole opt for easier material. Like enrolling in “business” or some other program which they believe will make them attractive to future employers.
Colleges now are viewed by most as jobs training programs. Their essential and original purpose has become a dim memory.
But I write in haste. Read instead Petsko’s well considered response.