Amazon and Macmillan go to war: readers and writers are the civilian casualties

When I woke this morning at 5AM UK time, I discovered an in-box full of emails from people asking if I knew what was going on with Amazon. My books — and all books from Macmillan and its many divisions, including Tor, my publisher — had disappeared from the Amazon webstore in both physical and electronic editions.

The New York Times quotes an industry insider as saying that Amazon pulled these books in retaliation for a demand from Macmillan to raise the price of Kindle books from $10 to $15. Presumably, Amazon perceives the $10 price-tag as a way of encouraging people to buy its Kindle platform, which itself is a kind of roach-motel for books: the license terms and DRM on the books in the Kindle store prohibit you from reading your Kindle books on competing devices. So books check in, but they don't check out.

(I believe that Amazon's terms, patents and trade-secrets also prohibit its rivals from making software that converts or renders Kindle books for that purpose. I have asked Amazon whether this was true on more than ten occasions over the past several years, in my capacity as a writer, publisher, and columnist for the Guardian and Publishers Weekly, but they refuse to answer.)

If the NYT's report is true, then this is a case of two corporate giants illustrating neatly exactly why market concentration is bad for the arts:

* If true, Macmillan demanding a $15 pricetag for its ebooks is just plain farcical. Although there are sunk costs in book production, including the considerable cost of talented editors, copy-editors, typesetters, PR people, marketers, and designers, the incremental cost of selling an ebook is zero. And audiences have noticed this. $15 is comparable to the discounted price for a new hardcover in a chain bookstore, and it costs more than zero to sell that book. Demanding parity pricing suggests that paper, logistics, warehousing, printing, returns and inventory control cost nothing. This is untrue on its face, and readers are aware of this fact.

Update: not to say that all ebooks should cost the same. But they should be cheaper than print editions.

* If true, Amazon draping itself in the consumer-rights flag in demanding a fair price is even more farcical. Though Amazon's physical-goods sales business is the best in the world when it comes to giving buyers a fair shake, this is materially untrue when it comes to electronic book sales, a sector that it dominates. As mentioned above, Amazon's DRM and license terms on its Kindle (as well as on its Audible audiobooks division, which controls the major share of the world's audiobook sales) are markedly unfair to readers. Amazon's ebooks are locked (by contract and by DRM) to the Kindle (this is even true of the "DRM-free" Kindle books, which still have license terms that prohibit moving the books). This is not due to rightsholder-demands, either: as I discovered when I approached Amazon about selling my books without DRM and without a bad license agreement for Kindle and Audible, they will not allow copyright owners to modify their terms, nor to include text in the body of the work releasing readers from those terms.

Concentration in media is nothing new — as far back as the eighties, activists have been sounding the alarm about mergers and acquisitions in publishing and bookselling (and, of course, in film we have the antitrust decisions of the 1940s). In the eighties, we worried that mergers would create corporate giants that would dictate unfair terms in distribution, sales, contracts with writers, pricing, and so on.

But today, we have a deeper worry. For no matter that a giant distributor or a massively agglomerated publisher could distort the market to the detriment of readers and writers — we could bounce back, through competition and new technology and innovative marketing and sales (and we did, by and large).

But today, we have a much more permanent, and graver risk: contracts and DRM have the power to lock readers and writers into legally unbreakable shackles. There's no such thing as a proprietary book. There's no such thing as a license agreement necessary to read a book. Books are governed by a social contract that is older than publishing, older even than printing. The recent innovation of copyright in books recognizes the ancient compact between readers and writers, and protects your rights to own your books, to loan them, to give them away, to resell them, to read them in any nation, in any circumstance. A publisher or bookseller can't force you to buy Ikea sofas to sit upon while you read your books.

But Amazon can force you to buy Kindles (and Amazon-approved devices) to read your Kindle books on and listen to your Audible audiobooks on.


And if one of the five titans that control almost all of publishing gets into a scrap with one of the four or five titans that control almost all ebook publishing, or the one company that rules the audiobook market, the collateral damage is that you will have to choose to eschew a gigantic slice of all the literature ever made in order to hang on to your library, or abandon your library in order to get access to that publisher's work. Or fill your shoulderbag with a half-dozen tablets and readers, one for each permutation of which corporate elephant is trying to crush another.

There's an easy fix for this. Amazon (and its competitors) could allow copyright owners to choose whether they want DRM-by-contract on their books. In a world where readers are allowed to take their books to the platform that offers them the best terms, everybody wins: Macmillan can license to a competitor of Amazon's at a higher price and pull their books from Amazon, and if readers boycott those ebooks, Macmillan will see the light and come down in price — all without either party having to dictate terms to the other. In a world where there is a competitive market for books and reading devices, Amazon can draw readers who start off as Apple iPad customers into the Kindle store, without having to convince them to switch devices or abandon their collections.

If Macmillan wants to flex its muscle on an issue of substance and moment, an issue that will make it the hero of readers and writers and booksellers everywhere, it can demand that Amazon, Apple, B&N, and all the other ebook readers allow for interoperability and remove contracts that undo centuries' worth of book-ownership norms.

And if Amazon wants to throw its toys out of the pram over a consumer rights issue, let it announce that it will offer a fair deal for any book that publishers and writers will allow a fair deal — no DRM, no abusive EULA, just "This book is governed by 17USC, the United States Copyright Law. Do not violate that law." Let Amazon label the books that are a bad deal for readers with warnings: "At the publisher's request, this book is licensed under terms that prohibit reading it on other devices, selling it used, or giving it to your children." And let them put a gleaming seal of approval on the books that offer fair terms and a fair shake.

And trust readers to make up their minds.

(Thanks to Jim and everyone who suggested the NYT story)

Update: Amazon "capitulates."