A brewery brawl
The horrible, useless and harmful trade war between Amazon ed Hachette Book Group ended with a good deal. A deal that could be closed on first day of negotiation. You see that, at times, you can't help but argue fiercely. It can also be useful, but in this specific case the dispute had taken place dark tones from Gothan City; tones that were harming all of market, especially the young and still fragile ebook sector. A sector that, not surprisingly, was stopped rather abruptly maintenance of the 2013. It was precisely on ebooks that there was a brutal fight over the two different strategies, That of Amazon determined to make this market immediately dominant and that ofpublishers they wanted to delay his as much as possible affirmation.
It was imprudence that had unleashed this confusion judgment sought after by Eric Holder, the ex-head of the Obama administration's justice department, who had delivered ad Amazon alethal Weapon declaring illegal il distribution model hitherto dominant which he handed over to the publishers il price control of ebooks. This unforeseen ruling placed them in one position of weakness, a state that the cynical e-commerce giant has not let slip. Basically Amazon told the editors: the ebook They do not have to to cost more than dollars 9,99, otherwise you are out. In essence Amazon had ragione (mostly the data proved him right), but the way to implement this purpose was unacceptable to the sane.
I nerd di Amazon, worshipers of the algorithm, thought that the Putin's method of reprisals, boycotts, blackmail and retaliation could work and go unnoticed in a country with an advanced democracy and a Protestant culture. And here they are served: horribly negative press for Amazon, celebrity authors who bought entire pages of the NYTimes to screw up the starving monopolist, Paul Krugman to invoke antitrust, the scope summer campus by Amazon defectedfrom writers and many other beautiful things that have not done good not only for Amazon, but also for the cause it embodies, that of ebooks.
On the other side were the manager of the book publishing houses which are more than desperate. All major publishing houses are part of media conglomerates that are dividing la printed paper give them business, as you eradicate a fissure. These activities are sold or conferred on company ah hoc with modest capitalization and a lot of debt. Until now books have been saved from this bitter fate which befell newspapers and periodicals. But how long will it last, if i manager of publishing houses they don't bring soon positive results to their shareholders? Amazon's proposal on the price of ebooks tended to potentially reduce their margins, introduced a risk component and forced them into an acceleration for which they were not yet prepared.
The margin agreement
And it is precisely the publisher's margin the pivot of the agreement between Amazon and Hachette. It is a reasonable agreement which, like any self-respecting agreement, contains some important elements of reciprocity. We don't know all the details about him yet, but we do know that will be thepublisher to determine the price of the ebook with Amazon who, by accepting it with a reasonable discount fluctuation, will be able to reward in terms of margin prerogative of the publisher if the price will be kept low. In this way the publishers will be able to decide the price and possibly rrecover part of the margin which, in their opinion, would go lost price of the desired ebook from Amazon. The type and nature of these incentives to keep the price low were not disclosed.
David Naggar, an Amazon executive, expressed the group's satisfaction with the deal, saying it provides specific financial incentives for Hachette to lower prices. An agreement that we believe is a great success for the readers and also for the authors. The NYTimes reports that the deal with Hachette follows the pattern of the one with Simon & Schuster of October 2014.
This happened: one was found synthesis between model agency (wanted by the publishers, but condemned by the antitrust) and thewholesale model operated by Amazon steamroller. A hybrid model which is, at present, the furthest point achievable in the given situation.
What's going to happen?
It will help the market of ebook a develop? Not in the way Amazon would have liked, because the dot goes back in thefield of publishers and in the end they will be the only ones to say which ebooks to push and which not. There price differentiation si will sharpen. We have an example right away.
Take the new best-seller from Walter Isaacson (former biographer of Steve Jobs), The Innovators, published by Simon & Schuster. The version hardcover on Amazon.com it costs $21, is that Kindle $18,98 (10% less). More than $9,99! All the Light We Cannot See: A Novel the latest book of Anthony Doer, whose previous novel spent 20 weeks on the New York Times Best Seller list, also by Simon & Schuster is sold on Amazon at $16,20 in the hardcover version, a$13,54 in that paperback ea $9,83 for the version Kindle. These are the prices Amazon wants. Is there a logic in this price differentiation? They are two first class authors with books of the same size. Perhaps because one is non-fiction and the other is fiction, with the former having less commercial potential. Meh! We should ask Carolyn Reidy, the CEO of Simon & Schuster. This goes beyond the understanding of the consumer who will perhaps be perplexed by this situation. What will await us? I don't know!
