Simon & Schuster and Amazon have reached a multi-year contract covering both print and digital books, reports Jeffrey Trachtenberg of the Wall Street Journal (subscription required).
This is the first deal Amazon has struck with any of the five publishers who settled with the government after having been charged with e-book price-fixing in 2012. Notably, Simon & Schuster has negotiated an agreement that “preserves the basic construct and terms of agency [pricing],” according to a source who spoke to Publishers Lunch (subscription required). This will allow the publisher to set the prices of its e-books in most cases, as Amazon’s right to discount will be confined to specific situations, according to an Amazon source quoted in the same report.
Simon & Schuster CEO Carolyn Reidy said in a letter to authors that, although deals like this are not usually announced, “the high level of public speculation over the status of these talks made it important to let you know about this positive development.” She refers, of course, to the ongoing Amazon-Hachette dispute, in which Hachette authors have found themselves held hostage by the e-tailer.
It has been a lively week in the book world. Many of our members have been asking what we’re doing and how we feel about the ongoing dispute between Amazon and Hachette, in which Amazon has played a tough game of hardball, slowing or blocking the delivery of thousands of titles.
This weekend a group of some 900 authors published a two-page ad in the New York Times criticizing these tactics. The organizer, Douglas Preston, is a member of our board, and several of his fellow Council members, along with many members of the Authors Guild, signed the letter, which you can read here. It said: “As writers—most of us not published by Hachette—we feel strongly that no bookseller should block the sale of books or otherwise prevent or discourage customers from ordering or receiving the books they want. It is not right for Amazon to single out a group of authors, who are not involved in the dispute, for selective retaliation.” That’s something we all agree with. And it’s not right for Amazon to claim that they were forced to do this: no one made them do this.
Earlier this week vigilant browsers of Amazon.com were treated to a preview of its new e-book subscription service, Kindle Unlimited. The page, which was quickly taken down, announced that the service would offer “unlimited access to over 600,000 titles . . . for just $9.99 a month.”
Now it’s official. An Amazon press release confirms the numbers above, and announces some high profile offerings in its catalogue.
Subscription services, which allow readers to pay a monthly fee for unlimited access to all the e-books in the service’s catalogue, have been on the rise in recent months. The two leading firms in the subscription market—for now—are Oyster and Scribd, who both released statements welcoming the competition, according to a report by Digital Book World.
As of March 4, MacAdam/Cage is out of business. After undergoing bankruptcy proceedings, the former publisher closed down shop and, by mid-March, officially reverted all print and subsidiary rights to its authors. However, under a 2009 license affecting 180 titles, the U.K.-based publisher MP Publishing is still exploiting MacAdam/Cage e-books through e-tailers in the U.S. and abroad. The legal status of this license agreement is questionable; many affected authors assert that MacAdam Cage was never granted electronic rights. The list of titles can be found here.
The Authors Guild will assist any MacAdam/Cage author who wants to challenge MP’s claim to his or her titles. To discuss the matter with our legal team, send an e-mail to email@example.com, attaching a copy of your MacAdam/Cage agreement. Now that MacAdam/Cage is defunct, we will hold MP and its owner Mark Pearce directly accountable for e-book titles that have been exploited without authorization or compensation.
For details of the MacAdam/Cage bankruptcy, please see the following report from the Guild’s legal department.
We were struck by the appearance in today’s New York Times of two prominently placed stories about media in transition. Both are well worth reading.
Dave Streitfeld explores the enduring appeal of the traditional book in the digital era.
“Even as the universe of printed matter continues to shrivel, the book — or at least some of its best-known features — is showing remarkable staying power online. The idea is apparently embedded so deeply in the collective unconsciousness that no one can bear to leave it behind.”
Writing that “efforts to reimagine the core experience of the book have stumbled,” Streitfeld notes that a number of tech startups that have tried to incorporate social networking or multimedia into books have either gone out of business or been forced to change their business model.
Amazon today unveiled a plan that lets indie booksellers turn their customers into Amazon customers.
Under the program, Amazon Source, independent booksellers buy Kindle devices at 6% below retail price for resale in their stores. The stores then get a 10% cut of Kindle ebook sales to customers on those devices for the next two years.
“We believe that retailers, online or offline, small or large, should be striving to offer customers what they want—and many customers want to read both digital and print books,” said Russ Grandinetti, Vice President, Amazon Kindle. “For many years, bookstores have successfully sold print books on Amazon—now Amazon Source extends this opportunity to digital. With Amazon Source, customers don’t have to choose between e-books and their favorite neighborhood bookstore—they can have both.”
Many independent booksellers are already selling ebooks, through an agreement made by the American Booksellers Associate and Kobo in the summer of 2012.
Selling Kindles in retail bookstores is not a new idea. In the UK, the Waterstones chain, which is restructuring in an attempt to stem losses at its 300 stores, is giving it a shot.
Amazon’s press release quotes enthusiastic booksellers involved in the Amazon Source pilot program.
“JJ Books is excited to expand our selection to now include Kindle devices for our customers. We are selling Kindle e-readers, tablets, and accessories in our store to expand our customer base and build toward the future bookstore model. We feel that Amazon is the leader for e-readers. Teaming up with Amazon to bridge the move to electronic books will help us find a means of long-term viability for our independent bookstore. Kindle will help us bridge the evolution of the bookstore into the Internet age,” said Jason Bailey, Co-Owner of JJ Books, Bothell, WA.
Bill Petrocelli, co-owner of Book Passage in Corte Madera, CA., has a different take:
“There’s a huge problem for any bookstore that might be tempted to do this: the store would be handing over to Amazon.com all of the information about its customer database,” Petrocelli said. “It reminds me of the situation that happened about a decade ago when Borders contracted with Amazon to handle its on-line business. Amazon ended up with the customers, and Borders went bankrupt.”
Barnes & Noble today released its new $119 Nook black-and-white e-reader to positive reviews, but also to skepticism about the device’s ability to challenge the Kindle Paperwhite, given Amazon’s dominance of the ebook market and B&N’s own problems developing a solid digital business.
James McQuivey, an analyst at Forrester Research, told the New York Times that the new Nook was “spectacular,” but added:
“If you were just engineering a device that you wanted people to fall in love with, then yes, it’s a great device. But the bigger problem is, will people perceive that Barnes & Noble as a company will be around to fulfill the promises that that device makes? It’s a shadow that hangs over the entire Nook enterprise right now.”
When Scott Turow stopped by CBS This Morning last week to promote his new book, Identical, co-anchor Charlie Rose turned the discussion to Turow’s “beef with Amazon,” while Norah O’Donnell brought up his April New York Times piece on “The Slow Death of the American Author.”
Turow said Amazon’s below-cost ebook pricing, “destroys physical bookstores and drives the reading public into the ebook, which of course Amazon dominates. They’re a great competitor and I don’t mind fair operation of the market. I don’t like unfair tactics.”
Book Industry Stimulus? 23 Million Customers Poised to Automatically Receive Book Buying Credit from Publishers’ Settlements with DOJ
More than 23 million “consumer accounts” are eligible to receive refunds from the $166 million pool of money put up by the defendant publishers who settled with the DOJ in the Apple e-book price-fixing case, Publishers Weekly reports.
Those refunds may add up to a mini-stimulus package for the book industry, since only 48,124 of those eligible for refunds opted to get a check instead of a credit to their account. That will leave well over 23 million customers with credits they can use to buy print or digital books.
Citing as a source Rust Consulting, the firm retained to administer the settlement fund, PW reports that, “23,073,840 customers of Amazon, Apple, Barnes & Noble, Kobo, Google, and Sony have been directly notified via e-mail or by postcard that they are eligible to participate in the settlement.”
A second round of refunds will depend on the outcome of a trial to determine monetary damages Apple must pay, which is scheduled for May 2014.
On Friday, Judge Denise Cote will consider whether to grant the Justice Department’s request that Apple be forced to accept long-term monitoring and sweeping changes to how it operates or impose the much more limited consequences Apple wants.
In a proposed remedy submitted to the court, The DOJ contends that Apple must be compelled to take steps to “ameliorate the harm its conspiracy caused to competition and consumers.” Among the remedies proposed is a five-year restriction on engaging in agency pricing agreements for any content. That means Apple would be required to throw out its contracts with the five publisher defendants in the price-fixing case, agreements that were set as part of the publishers’ settlements with the DOJ.
In its reply, the company calls the proposal “a draconian and punitive intrusion into Apple’s business.” It asks for “reasonable limitations on Apple’s ability to share information,” similar to what is contained in the publisher’s settlement agreements, a prohibition on retail price MFNs that also echo the publishers’ settlements, and “reasonable antitrust training obligations.”
Apple points out that the publishers’ settlement agreements already prohibit publishers from entering into agency agreements without discounting for a two-year period, which the court has endorsed as long enough to “restore retail price competition to the market for trade e-books, to return prices to their competitive level.”
In addition, Apple argues that any injunction should only apply to the publishers involved in the conspiracy, not the thousands of independent publishers who also sell books through Apple.
Objecting to the proposal to dictate terms for non-book content such as music, movies and apps, the company contends, “There is no justification for this invasion into Apple’s businesses that were not directly at issue in this lawsuit, for which no conspiracy allegations were made.”
The DOJ also wants Apple to operate under the oversight of an outside compliance officer for 10 years, necessary, says the DOJ, since the conspiracy was orchestrated by people at the highest levels of the company. Apple responds that, “This unduly burdensome remedy is plainly punitive, not to mention out of proportion to the circumstances of this case.”