Few writers are unaware that there is a debate raging about the price of e-books. Some would say that a retailer may sell any item (that it has negotiated the right to sell) for any price it pleases...
... as long as it pays the copyright holder (or copyright owner) the price it agreed to pay the copyright holder (or copyright owner) for the privilege of acting as middleman.
The crux of Amazon's rant about fighting for lower, "more affordale" e-book prices cannot be about the price it charges to readers. It must be about the price it PAYS to copyright owners and copyright holders.
Also (and I will get to this later), Hachette ought to be giving Amazon the same price per ebook that it gives to a lending library, because when a copyright owner "sells" one ebook to Amazon, Amazon then assumes the right to lend additional copies.
Under copyright law, Hachette and any other copyright holder has an absolute right to set whatever price makes sense to Hachette for any given work it holds.
It is for Hachette to calculate the cost of acquiring, editing, proofing, publishing, distributing, and marketing any title in a bundle of formats. Hachette has no duty to sell at a loss or to subsidize another publisher (Amazon) or manufacturer of devices (Amazon) or retailer (Amazon) or for-profit subscription service (Amazon) or marketplace for used products (Amazon).
Nor does Hachette or any other copyright holder or copyright owner have to give away any rights granted under the law.
BITLAW on the Distribution part of copyright protections for copyright holders. (Mostly with regard to physical products, rather than ebooks. As noted, First Sale Doctrine does not apply to digital content.... which is what ebooks are.)
The wording about "rental", "lease" and "lending" is of interest, given KU and Lending Enabled. Copyright owner have the exclusive rights to agree or not to agree to renting, leasing and lending and subscription models.
When Amazon talks about the price of ebooks, commentators should not overlook the fact that for many ebooks, when Amazon facilitates a "sale" (really a license to read), it often also acquires the right to make multiple additional copies available for LENDING by the reader who paid Amazon, also for backup, also for account sharing as noted in the Engelin revelations
"it was revealed that up to six Kindles could share one account. The Kindles did not need to be in the same household or owned by the same person. Thus, according to Amazon’s interpretation of the Kindle terms of service, up to six Kindles can share one account and the digital copies attached to that one account."
Also http://www.amazon.com/forum/kindle?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdThread=Tx3CY8UVEMY3HUU "The problem comes with the number of devices a book can be on at one time. Most books you can put on 6 devices at a time, if you have more than 6 people in the club with Kindles then you will have a problem."
Also this http://kindleworld.blogspot.com/2010/01/sharing-kindle-books-on-one-account.html.
My point is, when Hachette negotiates a deal with Amazon, it's more like licensing an ebook to a lending library than selling one product at a discount or wholesale price for the retailer to sell on once.
Nowhere in Amazon's rant is this acknowledged. Amazon ought in my opinion to be paying Hachette at least $14.99 for the right to distribute six or more copies for every one "sold" to a Kindle reader.
Possibly the existence of lending and account sharing may also throw off the rationale for pricing in Amazon's "Dear KDP author" letter.
CORNELL is also worth quoting.
Exclusive rights for copyright holders
- to produce copies or reproductions of the work and to sell those copies (including, typically, electronic copies)
- to import or export the work
- to create derivative works (works that adapt the original work)
- to perform or display the work publicly
- to sell or cede these rights to others
- to transmit or display by radio or video.
My apologies that the above was somewhat repetitive, but one has to quote multiple sources.
Now, an interesting comment revealed the sense of entitlement that readers who own Kindles feel, and perhaps this is because Amazon sold them Kindles based on a promise of cheap reading?
What George Orwell really said
"Customers have a lot invested in devices and internet connections..." quoth one correspondent to explain why publishers and authors should accept less for ebooks.
Is it Hachette's fault (or the responsibility of any other copyright holder or copyrigh owner) that Amazon might have made a promise like that in order to market its own proprietary devices? Is it Hachette's duty to make good on a promise Amazon may have made?
Rowena Cherry (aliendjinnromances)
PS. Most of the Amazon letter (there was no copyright notice on it.)
Dear KDP Author, Just ahead of World War II, there was a radical invention that shook the foundations of book publishing. It was the paperback book. This was a time when movie tickets cost 10 or 20 cents, and books cost $2.50. The new paperback cost 25 cents – it was ten times cheaper. Readers loved the paperback and millions of copies were sold in just the first year. With it being so inexpensive and with so many more people able to afford to buy and read books, you would think the literary establishment of the day would have celebrated the invention of the paperback, yes? Nope. Instead, they dug in and circled the wagons. They believed low cost paperbacks would destroy literary culture and harm the industry (not to mention their own bank accounts). Many bookstores refused to stock them, and the early paperback publishers had to use unconventional methods of distribution – places like newsstands and drugstores. The famous author George Orwell came out publicly and said about the new paperback format, if “publishers had any sense, they would combine against them and suppress them.” Yes, George Orwell was suggesting collusion. Well… history doesn’t repeat itself, but it does rhyme. Fast forward to today, and it’s the e-book’s turn to be opposed by the literary establishment. Amazon and Hachette – a big US publisher and part of a $10 billion media conglomerate – are in the middle of a business dispute about e-books. We want lower e-book prices. Hachette does not. Many e-books are being released at $14.99 and even $19.99. That is unjustifiably high for an e-book. With an e-book, there’s no printing, no over-printing, no need to forecast, no returns, no lost sales due to out of stock, no warehousing costs, no transportation costs, and there is no secondary market – e-books cannot be resold as used books. E-books can and should be less expensive. Perhaps channeling Orwell’s decades old suggestion, Hachette has already been caught illegally colluding with its competitors to raise e-book prices. So far those parties have paid $166 million in penalties and restitution. Colluding with its competitors to raise prices wasn’t only illegal, it was also highly disrespectful to Hachette’s readers. The fact is many established incumbents in the industry have taken the position that lower e-book prices will “devalue books” and hurt “Arts and Letters.” They’re wrong. Just as paperbacks did not destroy book culture despite being ten times cheaper, neither will e-books. On the contrary, paperbacks ended up rejuvenating the book industry and making it stronger. The same will happen with e-books. Many inside the echo-chamber of the industry often draw the box too small. They think books only compete against books. But in reality, books compete against mobile games, television, movies, Facebook, blogs, free news sites and more. If we want a healthy reading culture, we have to work hard to be sure books actually are competitive against these other media types, and a big part of that is working hard to make books less expensive. Moreover, e-books are highly price elastic. This means that when the price goes down, customers buy much more. We've quantified the price elasticity of e-books from repeated measurements across many titles. For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000. The important thing to note here is that the lower price is good for all parties involved: the customer is paying 33% less and the author is getting a royalty check 16% larger and being read by an audience that’s 74% larger. The pie is simply bigger. But when a thing has been done a certain way for a long time, resisting change can be a reflexive instinct, and the powerful interests of the status quo are hard to move. It was never in George Orwell’s interest to suppress paperback books – he was wrong about that. And despite what some would have you believe, authors are not united on this issue. When the Authors Guild recently wrote on this, they titled their post: “Amazon-Hachette Debate Yields Diverse Opinions Among Authors” (the comments to this post are worth a read). A petition started by another group of authors and aimed at Hachette, titled “Stop Fighting Low Prices and Fair Wages,” garnered over 7,600 signatures. And there are myriad articles and posts, by authors and readers alike, supporting us in our effort to keep prices low and build a healthy reading culture. Author David Gaughran’s recent interview is another piece worth reading. We recognize that writers reasonably want to be left out of a dispute between large companies. Some have suggested that we “just talk.” We tried that. Hachette spent three months stonewalling and only grudgingly began to even acknowledge our concerns when we took action to reduce sales of their titles in our store. Since then Amazon has made three separate offers to Hachette to take authors out of the middle. We first suggested that we (Amazon and Hachette) jointly make author royalties whole during the term of the dispute. Then we suggested that authors receive 100% of all sales of their titles until this dispute is resolved. Then we suggested that we would return to normal business operations if Amazon and Hachette’s normal share of revenue went to a literacy charity. But Hachette, and their parent company Lagardere, have quickly and repeatedly dismissed these offers even though e-books represent 1% of their revenues and they could easily agree to do so. They believe they get leverage from keeping their authors in the middle. We will never give up our fight for reasonable e-book prices. We know making books more affordable is good for book culture. We’d like your help. Please email Hachette and copy us. ..................... Please consider including these points: - We have noted your illegal collusion. Please stop working so hard to overcharge for ebooks. They can and should be less expensive. - Lowering e-book prices will help – not hurt – the reading culture, just like paperbacks did. - Stop using your authors as leverage and accept one of Amazon’s offers to take them out of the middle. - Especially if you’re an author yourself: Remind them that authors are not united on this issue. Thanks for your support. The Amazon Books Team P.S. You can also find this letter at www.readersunited.com