Jay Lake gently suggests that just waving your hands and saying “Cross-subsidy” is not a complete answer to the notion of what Amazon thinks its doing, and that’s a fair point. I think Amazon’s real objectives have a lot to do with controlling the marketplace. By selling ebooks below cost they do several things at once; in particular, they make it expensive for anyone else to enter the ebook market for new bestsellers.
If they can establish the one true price for the ebook edition of a new hardback, and keep other booksellers out of the market by selling the books at a loss, they’ll soon be in a position to dictate terms to the publishers in the same way that big-box retailers dictate terms to their suppliers in other markets. (Clearly they were supposing that they were already in that position, else I don’t think the “disappearing buy button” fiasco would have happened. Fortunately, it looks like Amazon pushed too hard too early.)
I think the result of an Amazon victory would have been very similar to what we have seen in the big-box stores over the past few years: Consumers would enjoy low(ish) prices while suppliers would see ever-increasing pressures on their profits. (I’m seeing the publishers as suppliers here, although the profit pressure would pretty quickly flow on to authors as well.) Choice would decline as profit pressures forced all but the lowest-cost suppliers out of business.
So, I’m glad that seems to have been headed off, at last for the moment.
Having said all that, though, I think the cross-subsidy analysis is also correct. I think Gillette made its own razors to give away, but it wouldn’t have needed to. Nowadays it would surely outsource razor manufacture, but that wouldn’t be necessary either. It could just as easily announce that it would sell any razor that matched the specs for its blades, and then sell them for less than it paid its suppliers. (In fact, that might be a perfectly viable business model. Surely some shavers would go for a cool-looking limited-edition art razor and accept the resulting lock-in to Gillette blades, as long as the razor wasn’t too expensive.)
Toby has a good take on ebook pricing issues.
Very briefly, mainline publishing houses would prefer to go with a pricing model similar to the model for physical books, where books start at a premium price when they’re new and then are sold at gradually cheaper prices. Amazon, on the other hand, wants to sell a cheap(ish) $10 ebook edition of new hardbacks, because that’s a price point and market segment that drives sales of the kindle, but shows no sign of further lowering the price as cheaper editions of the physical book come out. (One supposes Amazon’s theory is that there are a lot of people will pay $300 for a kindle to read the latest bestsellers for $10, but many fewer who will pay that much to be able to read last year’s bestseller for $4.)
The whole issue (Amazon taking down the Buy button for most books sold by Macmillan imprints, etc.) has produced a lot of talk by non-authors about how publishers are obsolete anyway and authors should just produce and market their own ebooks. But that sort of talk just goes to show that they don’t understand that publishers are specialized venture capital firms (as opposed to specialized manufacturing companies).
My plan had been to capture the snowflakes in the air, but they’re pretty much invisible.
Piggy Bank Awaits the Spring by Philip Brewer is licensed under a Creative Commons Attribution 3.0 United States License.
I’ve always been amused by the “No Swimming” signs that are up year-round at Kaufman Lake Park. I thought this captured the absurdity perfectly.
No Swimming by Philip Brewer is licensed under a Creative Commons Attribution 3.0 United States License.
I was invited to write a guest post for Self Reliance Exchange and was pleased to give them Find Your Self-Sufficient Sweet Spot.
There’s a reason we don’t see more self-sufficiency: It’s not frugal. It almost always takes more time to make something than it takes to earn enough money to buy one—and that’s without even considering the time it takes to learn the skills (let alone the cost of tools and materials). On the other hand, frugality is a powerful enabler for self-sufficiency. So, how do you find the sweet spot?
My wife spins and weaves. I have a beautiful sweater that she hand knit from hand spun yarn. It’s wonderful—and it’s comforting to know that my household is not only self-sufficient in woolens, we produce a surplus that we can sell or trade. But the fact is you can buy a perfectly good sweater at Wal-Mart for less than the cost of the yarn to knit it.
There’s a lot of useful tips and trick for living a more self-sufficient life at the Self Reliance Exchange. Totally aside from my article there, it’s worth checking them out.
[Updated 2011-03-11: Self Reliance Exchange no longer seems to exist and its successor site no longer seems to be using my post. Rather than just let it disappear, I’ve republished it here.]
I was thinking brownies, but Jackie bakes the brownies and she was already spending as much time in the kitchen today as she really wanted. So I baked a post-holiday batch of ginger sparkles.
Ginger sparkle cookies by Philip Brewer is licensed under a Creative Commons Attribution 3.0 United States License.
The road is snow-covered such that it is impossible to see the lines of the crosswalk. Does this make it more or less important to yield to pedestrians in the crosswalk?
- More important
- Less important
- Equally as important as when the road is clear
- Shut up! Can’t you see I’m on the phone!
At brunch yesterday the topic of burial instructions came up, and I was surprised to discover that Jackie didn’t remember that I’d already documented my wishes for dealing with my remains. The gist of my instructions is that (although I’d urge her to be guided by frugality) she should do whatever she wants. However, I did add this proviso:
4. If there’s no good reason to prefer one thing over another for reasons of convenience or cost, I’d really like to have my body eaten by vultures.
Sadly, I’ve seen no move toward making sky burial socially acceptable in the United States.
My story “An Education of Scars” made the Best New Stories of 2009 at Free SF Reader, which gave it a rating of 4 out of 5. Since they didn’t give any “5 out of 5” ratings last year, that puts my story pretty close to the top of the list.