Amazon/Macmillan update (last one, with any luck).

[Jon Loomis]

So it looks like Amazon has now completely restored the Macmillan stuff: books back up, Kindle up, good to go.  I hate them a little less right now--but only a little.

[I. J. Parker]

That should be a relief to them.

[Jon Loomis]

Damn straight.

[Eric Christopherson]

There's a report now that Random House is going to stick to the old wholesale arrangement with Amazon: http://www.geardiary.com/2010/02/07/random-house-stands-alone-with-...

If true that would seem to give their imprints one whale of a pricing advantage over MacMillan's and Hachette's and HC's.

[Jon Loomis]

Random House is going to have some splainin' to do when its authors--and their readers--can't find their stuff on iBooks. I actually think their CEO's being a bit disingenuous, and mostly looking at the short-term profit picture: publishers make more money, and Amazon makes less, under the "wholesale" model vs the "agency" model. So she's going for the short-term pricing and margin advantage vs the long-term health of the ebook industry--which, you'd think, would require power-sharing and competition at the retail level. They may capture a point or two of market share between now and the release of the iPad, but they'll pretty much have to reverse course once iBooks gets revved up, which will be pretty embarrassing.

What I don't get are all the people out there in Blogistan who are cheerleading for Amazon vs. the publishers--is it just about paying $5 less for bestsellers on their Kindles, or is there actually some principle involved?

[Eric Christopherson]

So Amazon currently owns 80-90% of the ebook market, and Random House is the largest publisher, and if RH is selling books on Amazon at $5 less than the other publishers on that site and on iBooks too then how is it that RH--and not the other publishers--will need to reverse course?

It's in Apple's interest to sell RH books too, and if Apple insists on the agency model for them then what's to prevent RH from simply pricing there at whatever they're charging over on Amazon? Well, only Apple, and if Apple insists on a higher floor on prices (above $9.99) then all that will do is drive consumers to make their RH purchases at Amazon instead, where the book's are considerably cheaper. (Steve Jobs has I believe said the prices will be the same at iBooks and at Amazon.)

What I don't get are all the people out there in Blogistan who are cheerleading for Amazon vs. the publishers--is it just about paying $5 less for bestsellers on their Kindles, or is there actually some principle involved?

I've read some discussions on the Kindle forums, and for some I don't think there's any real principle involved other than what you suggest: a desire for lower prices. Others truly believe that the pricing should be much lower than for DTBs given the costs to producers are much lower (or so they believe).

[John McFetridge]

I know I should just shut up about it, but I haven't heard this much discussion about "cost of production" since the classes I took on Marxism years ago.

The internet used to be full of free-market cheerleaders, let the market decide and all that, where have they gone?

[Jon Loomis]

So Amazon currently owns 80-90% of the ebook market, and Random House is the largest publisher, and if RH is selling books on Amazon at $5 less than the other publishers on that site and on iBooks too then how is it that RH--and not the other publishers--will need to reverse course?

I believe the operative word here is "currently." RH is betting against Apple moving aggressively into the ebooks market and gobbling up a major chunk of market share. That's not a bet I'd make--I'd hedge a bit on the assumption that iBooks will become a strong competitor in the ebooks universe, and might even represent an opportunity to expand the market for ebooks considerably beyond where it is now. Now, there's not a lot of downside in RH's current strategy--they get to compete on price at Amazon and there's no real penalty for being late to the party at iBooks until the iPad's sold millions of units--and a lot of those buyers won't use the iPad primarily as an ereader, so it's a relatively slowly evolving scenario in that sense. So, short term they pick up some market share and they can always get on board with Apple when they feel the timing's right. Of course, they could stick to their guns and end up like Sony, too.

if Apple insists on a higher floor on prices (above $9.99) then all that will do is drive consumers to make their RH purchases at Amazon instead, where the book's are considerably cheaper.

Except that Kindle books won't play on your iPad. So consumers who are loyal to the device will buy the content that's available for that device. Again, see Apple vs. Sony.

(Steve Jobs has I believe said the prices will be the same at iBooks and at Amazon.)

Initially this will be true of everything but new releases and best-sellers. In the future, I'm guessing that Jobs anticipates a slight change in Amazon's pricing structure. There's an element of tit-for-tat here, too, which is interesting: Amazon's online music sales have been eating into iTunes market share, and now Jobs is making a move to blow the Kindle out of the water. Viewed side-by-side, who the hell would choose the Kindle over the iPad? But I'm an Apple fanboy, as John Dishon would say.

[Eric Christopherson]

I believe Kindle books will be available for the iPad just as they are now for the iPhone via a Kindle app.

http://www.amazon.com/gp/feature.html?ie=UTF8&docId=1000301301

[John McFetridge]

And it may be like computers and price will play a big part. I like Macs, I just can't afford one. The iPad is twice as much as a kindle. Of course, it does more. On the movie discussion sites people are referring to the iPad as a movie-viewer and don't care about the e-reader aspect at all. So maybe that will make up for the price.

Anyway there will be lots of e-readers for years to come.

[Jon Loomis]

Yep, and they'll presumably keep getting better. My view of the iPad is that basically it'll be great for a couple of things: first, for travel: If you now carry a netbook, an iPod and an ereader when you fly, the iPad will perform all of those functions very nicely and with a much more eye-friendly screen than an iTouch. The iPad will also be great as a nightstand device: you want to read or watch a movie or check email or watch your eBay auction while the spouse snoozes, you're all set. Again, you can do all of that with an iTouch, but the small screen can get tiresome.

[Jon Loomis]

Right you are, Eric--my bad. In fact, I've got my own books on my iTouch right now, using the Kindle app. But--and this is no small thing--the iPad ereader app looks much nicer than than the current Kindle app. Much more like a virtual book.

[I. J. Parker]

It's always about paying less. Let's be realistic here. Nobody goes shopping to support a principle.