The Problem with Escaping from Stalag $7
Over on his blog, Rick Chapman lays out an argument in which he proves that Amazon, much to everyone’s surprise, is acting in its own best interest in setting the pricing policies in the Kindle Store.
The fact that he thinks that point should need to be proven, or that Amazon is wrong to do so, is just the tip of the iceberg of what is wrong with the post. The post is based on multiple questionable assumptions and makes at least one incorrect statement, and I’d like to comment on a number of the issues I see.
To start with, he has made several errant assumptions about what indie authors should write about on their blogs and their obligations toward him:
During the Hachette vs. Amazon struggle, I started to visit some of AAAG’s (Aggregated Amazon Ankle Grabbers) most prominent websites and ask some hard questions. As I pointed out in my series on the book channels, independents had no stake in the outcome either way, but AAAG’s intense interest in the business practices of the publishers inspired me to spend time investigating Amazon’s pricing and operations model as it applied to indies. This was an issue in which I had a stake.
But after all the fireworks and fun, the one thing I never ever received from AAAG were coherent answers to my questions, particularly the most important one of all. And that is: Why has Amazon placed indies in a $7 dollar pricing box? Why does it grab 65% of your revenue (not counting its transmission fees, which it charges on every transfer and which vary based on book size) if you price under $2.99 and the same if you charge over $9.99? This is an issue of critical importance to indies because it is not financially feasible to hand over that level of margin to a reseller for a download service.
I can see that there are three flawed assumptions here:
- one, that people in publishing should not discuss the topic du jour, namely a contract fight which could have had an impact on the entire industry. This fight was robbed of its impact by the subsequent Amazon-S&S deal, but the Amazon-Hachette conflict was the key event for many months.
- two, that indie authors had any obligation to explain Amazon’s policies, and
- three, that the sites Rick Chapman visited had any obligation to educate Rick Chapman.
Chapman says that he has been banned from a number of sites, including Hugh Howey’s blog, David Gaughran’s blog, and The Passive Voice (actually, he says his comments are blocked, which is largely the same thing).
I was shocked to learn of this, given that Hugh Howey and David Gaughran have each proven to be very helpful to all authors. Howey was even nice to me after I wrote a post claiming he had Amazon Infatuation Syndrome (not one of my brightest ideas, I’ll admit).
What’s more, The Passive Voice is a debate society more than a blog, and the commenters there have on several occasions shown themselves to be very helpful and answered my questions and explained points I didn’t understand.
I don’t understand where things went wrong, but that is between Chapman and them, so let’s move on.
Next, Chapman claims that this point has never been mentioned on any of the AAAG sites:
… indies had benefited from the fight as Apple’s and the publishers' introduction of the proposed 70%/30% agency split had forced Amazon to compete and offer indies the same deal for books in their pricing box. Prior to that, Amazon charged indies 65 points to use their download service regardless of the book’s price.
Since he includes me in the AAAG group, it’s only fair that I should point out that I have made a similar point. I didn’t quite frame it in the same way, but earlier this year I did say that:
All of this is true, but the 70% payment option also acts to fragment the publishing industry. …
Amazon launched the 70% payment option on 20 January 2010. This was about a week before the iPad was unveiled, which means that Amazon might have launched it as a response to the blackmail pressure exerted by the 5 publishers who conspired with Apple. I think that view is a tad Machiavellian, but let’s skip it and consider the effect.
The possibility of earning more money inspired new authors to jump in, and it inspired existing authors to ask for their rights back so they can take existing titles and go indie. This is a huge financial incentive to not deal with a legacy publisher or distributor but to instead go it alone.
I am not making quite the same argument as Chapman, but he and I do agree that Amazon changed the policy in response to the industry and did so for their own best interest.
But where we differ is that I never expected Amazon to behave any other way than in their own best interest, and that is why I was confused by the rest of his post where he proves the argument that Amazon acts in its own best interest.
I don’t see why this point would need to be argued; it is simply a truism that, as Chapman put it, Amazon "doesn’t really care about you, indie".
Many companies don’t really care about me, so I don’t understand why Chapman got so angry about Amazon not caring about indie authors.
In conclusion, there’s very little I can agree with in this post.
Have you read it? What did you think?