Amazon is sitting pretty at the top of the pecking order of the eReader market, in part because its spot atop the online retail market gives it the freedom to set Kindle prices low. Lower, in fact, than most other eReader formats; in a world where the Kindle takes 60% of the market in ebooks and is getting perilously synonymous with an electronic device dedicated to reading print publications. This means that when the company decides it doesn’t like that its affiliates want to charge more for their books, they can simply refuse to make some perfectly compatible ebooks unavailable on the platform, with devastating results to that publisher.
“This should be a matter of concern and a cautionary tale for the smaller presses whose licenses will come up for renewal,” said Andy Ross, an agent and a former bookseller. “They are being offered a Hobson’s choice of accepting Amazon’s terms, which are unsustainable, or losing the ability to sell Kindle editions of their books, the format that constitutes about 60 percent of all e-books.”
In this case, when the Independent Publishers Group’s contract for publication on the Kindle came up for review recently, Amazon attempted to pressure organization president Mark Suchomel into lowering prices. “They decided they wanted me to change my terms,” he told the New York Times. “It wasn’t reasonable. There’s only so far we can go.” Suchomel refused to budge, and Amazon pulled every IPG book from the Kindle’s virtual shelves.
This wouldn’t be the first time that Amazon has blacklisted a publisher due to pricing disputes. Two years ago Macmillan’s virtual and physical books were pulled from sale on Amazon.com over ebook pricing. Eventually Amazon acquiesced to major publishers’ desires to set their own prices on ebooks. But as the NYT notes, IPG is not one of biggest publishers around.
Margins with physical books were traditionally low, which meant that bookstores, publishers and distributors often did no more than scrape by. When Amazon began, it sold books at deep discounts but still had to depend on the good will of publishers.
With e-books, the situation is more fluid. Readers expect them to be cheaper, which Amazon has been able to encourage because it is now a publisher as well.
Traditional publishers, however, have their own modest margins to worry about. They worry that if e-books are priced too low, the public will devalue their worth, and the publishers might wither away — something, they fear, that would suit Amazon just fine.
Indeed, Amazon knows that the ebook format allows them to deal directly with authors who, noble as that may sound, may not have the most leverage in discussions with the provider of 60% of the worlds’ ebooks when not backed by the considerable organizational and bureaucratic might of a publisher. And it seems Amazon is willing to mess with the livelihood of all of IPG’s authors in order to convince the organization to submit to its demands. The Science Fiction & Fantasy Writers of America took a certain amount of umbrage at this, and have struck back as best they could, by instituting their own ban on Amazon’s ereader format:
While Amazon has the right to decide with what company it does business, its removal of many of our authors’ books from its ordering system will have an economic impact on them. Our authors depend on people buying their books and a significant percentage of them have books distributed through IPG. Therefore, SFWA is redirecting Amazon.com links from the organization’s website to other booksellers because we would prefer to send traffic to stores where the books can actually be purchased.
To that end, our volunteers are in the process of redirecting book links to indiebound.org, Powell’s, and Barnes and Noble.
Many authors will be hit hard by this, so we encourage you to seek out new places to find their books.
Where books are only available on the Kindle, the SFWA is leaving the link intact, so that their ban on Amazon doesn’t injure authors who deal solely with the online retail giant.