If you mean to murder me, then bloody well get on with it. You took my sword, my horse, and my gold, so take my life and be done with it...but spare me this pious bleating.
Sandor Clegan - The Storm of Swords by George R.R. Martin
Amazon has come forth and told unto us it is waging holy war against Hachette for lo! The children. For only lower book prices can save the children—and indeed publishers and authors, too—and those greedy publishers are too stupid to understand.
Plus, Amazon has some numbers to back it up.
Save me, Amazon Superhero!
Man, Amazon is good at this stuff. A whole host of media outlets spread Amazon's good word faithfully and truly. Who cares if it's a bunch of crap?
I do, and I'm happy to talk about the things that Amazon conveniently left out.
Firstly, the blog post is posted in full at the end of this piece (page 4). Allow me to summarize:
- Amazon's blog post was ostensibly explaining exactly what it and Hachette are fighting over.
- Amazon said that it is happy taking just 30% for its ebook cut—this is contrary to some reports that said Amazon wanted a higher percentage. It's unclear if this has always been the case, or if that is only Amazon's recent stance.
- Amazon wants ebooks to top out at US$9.99 per book.
- The company said its data shows that ebooks are highly price-elastic, meaning that books that cost less sell in higher volume. Amazon specifies that its data shows a, "$14.99 [ebook] would sell 1.74 copies if priced at $9.99," and it used units of 100,000 per title to make its point (even though few books sell in such quantities).
- As part of its argument, Amazon noted that the lower costs associated with ebook distribution are a strong argument for lower prices. (Even though Amazon knows that "the elimination of manufacturing and distribution costs are being offset by retail price reductions and the three additional costs" of ebook production, as explained by former publisher Michael Hyatt [link corrected].)
- Amazon says this is a huge winwin because selling 174,000 books at $9.99 represents 16 percent more revenue than selling 100,000 books at $14.99.
- Amazon also made another play at pitting authors against publishers by saying Amazon feels like authors should get 35 percent instead of the 25 percent they currently get for ebooks (to its credit, Amazon didn't mention the even lower percentage authors get for physical book sales).
It all sounds so good, right? Amazon is just trying to help those old fuddy-duddy publishers make more money, but those publishers are too stupid to let them. Right?
No, that's not right.
Image made with help from Shutterstock.
Next: Digging into the Numbers