Follow-up to New Yorker article on price wars - The Live Chat

This is a follow-up to the earlier blog entry about The New Yorker piece by Ken Auletta on the grand e-book pricing battles involving the Big 5 publishers,Apple, and Amazon and their strategies.
 In his The New Yorker Q&A, Auletta let us know he did not realize, when writing the article, that Apple is also bypassing publishers to work with some authors directly.

ASK THE AUTHOR
Ken Auletta had the scheduled “Ask the Author” live chat with The New Yorker readers on April 19, and the Q&A transcript gives some context indicating a bit of his own perspective on all this as well.

IS AMAZON, ALONE, GOING AFTER SELF-PUBLISHING AUTHORS?
One thing I’d forgotten to include earlier was one interesting piece of sleuthing from the March 18 New York Times article by Motoko Rich (lead) and Brad Stone, which I've quoted from quite a bit, noting the article's word choices when reporting information straight from publisher reps who were in the middle of negotations and conveying to The New York Times their unhappiness with what they called Amazon’s “threats” to them.

  It was brought back to mind when I read Auletta’s interesting live-chat responses, one indicating he may not have seen that NYT article when he replied that

' I don’t believe that Apple is offering self-publishing services aside from people submitting apps. '

That's actually fairly important, as the thrust of the last part of The New Yorker article is how Amazon is offering authors a high royalty which "one irate publisher said,"

' was meant “to pit authors against publishers.” '

I went back to Rich’s article, remembering what she wrote about a job position that Apple had posted, noting that

' Apple is not likely to give up on smaller publishers.  A new job posting on its Web site is for an “independent publisher account manager, iBookstore.”
  The posting says the person would be “responsible for building and growing relationships with small- and medium-size book publishers, self-published authors and other content providers for the iBookstore.” '

The mention of “self-published authors” in the job posting was of course interesting, I'd thought at the time.  They were entering that arena too.  Neither Bezos nor Jobs is shy about expansion, to say the least.  Also, Barnes and Noble publishes its own hard-copy books.

PUBLISHERS DON'T MIND IF APPLE IS ALSO GOING AFTER AUTHORS?
  Notice that the publishers are not complaining, in this article, about Steve Jobs' interest in going straight to authors.  The quotes from publishers and "Apple insiders" about Amazon sound almost frenetic.

  For one thing I'd been surprised to see Auletta (whose historical detail is very thorough) focus on the anger toward only Amazon -- "a close associate of Bezos" was reported to have "put it more starkly," Auletta tells us.

' "What Amazon really wanted to do was make the price of e-books so low that people would no longer buy hardcover books.  Then the next shoe to drop would be to cut publishers out and go right to authors.” '

MORE BLACKHAT STUFF
  Publisher Tim O'Reilly characterized Amazon alone of the battling groups as "ruthless" saying that

'publishers have good reason to be anxious. “Amazon is a particularly farsighted, powerful, and ruthless competitor” he says. I don’t think we’ve seen a business this competitive in the tech space since Microsoft.” '

  The one dastardly corporate entity in the publishing arena!

THE MAN IN WHITE, OR AT LEAST A WHITE HAT
  Apple's Steve Jobs, who had never sold a book, comes into the biz and tells all the large publishers he'd like to give them the higher pricing he recommended they charge (sourced in earlier stories here) but that if they wanted to publish with him, they must use his Agency model's structure and pricing for all the other bookstores, getting rid of the decades-old bookseller-wholesaler pricing that allowed bookstores to sell books lower than the publisher-set List Price if it helped drive sales in a competitive business.

  In effect, as others have noted, Jobs was successful in immediately killing the long-time bookstore model as applied to online e-books, especially Amazon's, that made lower prices on most new books possible for e-book-buying consumers, a selling point for the Kindle.  Barnes and Noble e-book pricing, with brick and mortar stores an emphasis, was not as competitive.

WHY THE WHITE HAT?
  However, as is mentioned often in the news, Steve Jobs and the iPad together are being touted as "savior" to the publishing industry that also prints our news or information.  So we won't be reading such adjectives for Jobs from Auletta's quoted publishers, or from "several literary agents, the latter reporting to Auletta that "a senior Amazon executive asked for suggestions about whom Amazon might hire as an acquisitions editor."

ENLARGING THE FIELD OF VISION
  Publishers and literary agents, watch your back.  You're overfocused on just one book-selling party's interest in going direct to authors.

  Auletta balances publisher anxiety (if not their blackhatting) with matter-of-fact reality from Amazon's Russ Grandinetti, but that isn't likely to soothe publisher nerves.  I don't think reason or history has much to do with it at this point.

  Publishers have TWO strong book- (and hardware) sellers interested in offering authors (primarily those who'd never get a look from large publishing houses) deals for rights to their work.  Of course, if already successful authors are free from contracts or have back-lists of books they own the rights to, Amazon and Apple are just doing what comes naturally in this digital age.

  I don't think, though, that Amazon ever required that all publishers listing books with Amazon use only Amazon's own traditional wholesaler arrangement (which publishers admit gives them more revenue, on the lower-priced e-books, to share with their authors), nor would they have been interested in keeping selling-prices higher and the same at all bookstores.

THE NEW WORLD OF DIGITAL MEDIA
  The new digital world brings added possibilities, and the large publishing executives need to find ways to maximize their business, including taking advantage of the intense interest in e-book reading.
  They have literally millions of customers wanting to pay them for new e-books, with that audience growing at an exponential rate, but they treat this new market as a negative force only because of fears that e-book sales, if encouraged at lower prices than normally heavily discounted bestselling hardcover books, could "cannibalize" hard-cover sales.  They try to ignore that people who buy expensive e-readers in order to gain portability and convenience, while easing the need for physical storage space, are not going to be rushing out to buy hardcover books.  They'll have plenty of material from which to choose when wanting to read (and even more entertainment to choose from with an iPad or other e-reader-included tablet, the latter market also exploding in the next couple of months).

  They ignore that e-book buyers remember (with the help of licenses that come with digital books) that they are not allowed by the publishers to re-sell or give away the e-books they buy (although with the Nook some publishers will allow one and only one person to borrow a purchased e-book, ever, in the life of that e-book).  Macmillan's John Sargent does not allow Macmillan's e-books to be included in public libraries.

  Hardcover books will just share more selling space with e-books.  Publishers should print as many hardcovers as actually wanted by the market and lower the costs in doing that with a realistic look at the changing audiences.

 They should offer e-books with the book text only and add value-added "enhanced" editions with multimedia features, with background, context, and author interviews, in video or with informational links.

MAGAZINES AND NEWSPAPERS
There's no question that Apple's iPad is a much better match for magazines, so there is essentially no competition there vs a device focused mainly on text accompanied by infrequent black and white photos.

AGGRESSIVE COMPANIES WITH LOWER PRICING POLICIES
  Going back to the topic of aggressive companies (this is not new).   Apple apparently did not want to compete with Amazon's lamented lower pricing so they encouraged the raising of e-book prices nationwide, knowing that the publishers would of course appreciate this and feel supported by Apple, who would give them leverage with Amazon who does want to continue lower pricing, which publishers say "devalues" their books.  Of course, publishers do also fear a "too-powerful" Amazon who they feel might be able to dictate terms as publishers and Apple are doing.  There will always be competition, as we've seen.

E-BOOK PRICING MODES
 I've already explained how, on a $26 dollar book, under the old wholesaler method, the publishers would have received approximately $13 on a $10-book while the new Agency method gives the publishers only $7.

The NY Times's Rich also wrote in the March 18 column:

' ...Apple, which has effectively said that any publisher that wishes to sell its books on the iPad must offer the same terms to all booksellers.
  In other words, to do business with Apple, publishers must export Apple’s business model to all retailers.  Amazon, by contrast, has not promised to adopt the agency approach for any but the largest publishers. ”

OH, YES, BACK TO THE Q&A :-)
Some interesting responses by Auletta.

' [Yes] Authors would get a higher percentage of royalties by signing directly with Amazon to publish their books. The question is: Would Amazon be able to provide the editing and marketing support that publishers provide? '

Publishers provide this for a tiny percentage of hopeful authors.

  Auletta responds to another questioner:

' What I think midlist or unknown authors would miss if bookstores, particularly independent bookstores, keep shrinking is the word of mouth spread by bookstore salespeople customers know and whose taste they trust.

Yes, though most today read the reviews readily available from several periodicals and they also read the customer reviews on several book sites, from interested readers like themselves.

To a thought from a questioner that "the publishing industry just doens't get it yet" - Auletta replies:

' They’re getting it—probably too slowly. '

(I didn't see indications, in the article, of their getting it.)

To the question "Do you believe that e-books will become popular and accessible enough to make independent bookstores obsolete? If so, what would you estimate the time frame for this?"

'That is my fear, and the fear of many publishers. Independent bookstores are shrinking fast.  As e-book sales continue to grow exponentially, without being able to offer e-books in stores, or if they do offer them to be able to match the lower prices of Amazon or Apple, independent bookstores are menaced. How soon? Too soon.'

So, he does share with the publishers the fear of the success of e-books and its anticipated impact on independent bookstores.

  They are reacting to what they experience as a Volcano of E-books threatening (for some) to cover all with ashes.
  The solution: Preparation, keeping in mind that could actually be, instead, a mountain of opportunities for mining.

 Barnes and Noble is wisely encouraging visits to their store with the Nook's bonus store-features and encouraging discovery of its e-reader by non-store regulars at Best Buy stores.

I liked the advice he gave to a questioner.

'You’d have to be a fool not to worry.  The challenge, however, is not to be immobilized by fears, to think of the digital world as a challenging opportunity. '

I couldn't agree more.

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See the ongoing Guide to finding Free or Low-Cost Kindle books and Sources
  Check often: Latest free non-classics, shortcut http://bit.ly/latestfreenonclassics.)

Kindle Chronicles Interview with Nicholson Baker

Update to my blog article on The New Yorker essay by Nicholson Baker on what he felt were unattractive qualities of a reading device "not ready" for the market.  My response was a longish one to what was a long article AND to the Q&A session that followed the publishing of the report -- which caused an acolyte to dub the Kindle an "inadequate device" based on the power of words alone.

  Baker's review serves as a sincere anti-ad that counterbalances Amazon's ad campaign, which Baker clearly resents and asks be slowed down despite Kindle-user excitement that he notes.  The power of a strong dismissal from a formidable platform like The New Yorker has had large, somewhat destructive effect in the past, as the interview linked to in the next paragraph reminds us.

  But a good product should be able to take it, even if the criticism left out important context.  Balance is something we can't really expect from an opinion piece, from any side of the issue.

Len Edgerly of the weekly The Kindle Chronicle podcast has done a 47-minute interview with writer Baker, and the tape was uploaded today to TKC 55 Nicholson Baker and can be streamed or downloaded (the latter is best for sound quality).  Len is always a good listener, so Mr. Baker has good time to expand on his thoughts on things Kindle and iPod in response to Edgerly's excellent questions and observations which are never confrontational but which lead to useful conversation (rare in this world?) and it's a good interview.

That Lovingly-Negative Baker Piece

Nicholson Baker's piece last week, which I read on my Kindle version of The New Yorker, was one of many that are either positive or negative or lukewarm but which don't touch on the Kindle's many features.

In this case, Baker reports on his dismal encounter with a drab, slow, and apparently huge device known as the Kindle 2.  This is followed by having to use the even larger Kindle DX.
  He's most dismayed by the gray screen while not minding the Sony Reader's gray screen and complains about the "grim and Calvinist" font, which is the same one used for The New Yorker, which brings us, via that dour font, Nicholson Baker's story.
  Some impressions I had while reading:

1. It seemed to me, in the long opening, that Baker was extremely annoyed at the ubiquitous Kindle ads that Amazon places on their own site and the excitement the Kindle has caused (with the result that many competing e-book readers are being released) and that this feeling somewhat influenced his review which he calls more correctly an 'essay.' In his Q&A later, he responded,

" Amazon is pushing it too hard, and the press got all excited and thought it was a millennial development. "

Well, I guess he's taking care of that.

Of no small import, probably, with respect to his intense response to the Kindle, is the subtitle of his article, "Can the Kindle really improve on the book?"
  This refers to his memory of Bezos once telling Newseek that "It’s so ambitious to take something as highly evolved as the book and improve on it.”

Fighting words! Bezos couldn't possibly have meant that an always active inline dictionary and searches possible for any word in a book or books might be considered an improvement by some. Baker refers to this in that Q&A:

"QUESTION FROM ANDREW M.: Mr. Baker, do you think e-book readers in general are problematic, or just the Kindle?

[Note that he doesn't answer the actual question.]

NICHOLSON BAKER: First, if you love the Kindle and it works for you, it isn’t problematic, and you should ignore all my criticisms and read the way you want to read.

I’m suspicious of full-replacement programs—that is, pronouncements that one way of doing something will entirely supplant another,

[ Was that said in the Bezos quote Baker gave above? ]

and that in fact we have to hurry the replacement along. It’s better if you let things evolve, and see what is in fact an improvement and what isn’t. "

2. Then, in a seeming attempt to not just slow the Kindle's movement but to imagine a complete stop -- he cleverly equates the Kindle with several spectacular product failures.

"True, the name of the product wasn't so great. Kindle? It was cute and sinister at the same time -- worse than Edsel, or Probe, or Microsoft's Bob."

For the record, Amazon's first screen saver had definitions for the word "kindle" in connection with acquiring knowledge through reading:
"...my parents kindled my lifelong love for reading" and
"1. Catch fire 2. To stir up; arouse 3. Start a fire; ignite; inspire; arouse."

I did like that screensaver's text, which another reviewer found "cloying." It could be that the Kindle is just not for sophisticates.

3. About the "greenish, sickly gray," I wonder if he has a defective Kindle 2? I've written about batches that had screen defects with low contrast, which Amazon replaces with another Kindle upon a call to 866-321-8851. Linked further below are some photos which show a Kindle 2 (mine) in less dire straits.

4. Baker on the basic font:

"Monotype Caecilia was grim and Calvinist; it had a way of reducing everything to arbitrary heaps of words."

In his Q&A about this, Baker added that the same font is used for The New Yorker, but it worked for him to say this about only the Kindle in his report. He explained to a questioner:

" It's just that the default font, Caecilia, is not a good reading font. The basic decision to use it was a mistake, I think. But some people really like that everything is made equal -- George Eliot, The New Yorker, the Times, the latest bestseller, are all in this same font. I just wish it looked better."

5. In his zest to find books not Kindle-ized yet, he did not review the Kindle's popular features. What else does the Kindle, as one of the now many gray-screened e-Readers available, offer? Could one guess from this review?

Maybe he didn't have or make time to work with the highlighting and note-adding tools but he did briefly mention searching a text string though not what the results were like with the search-a-book or search-the-Kindle feature which brings up, quickly, chronologically listed results, and maybe it wasn't worthwhile to bring up the inline-dictionary that gives a summary definition on the status line for each word the cursor is on. To be fair, he probably never has to look up a word.

Instead he spent a lot of time hunting down books that were not converted to Kindle format yet by the publishers and making much ado about that. At the right is a Kindle screen-capture of search-results for a character's name because I couldn't remember who he was in the book, "Columbine" by Dave Cullen, which I'm reading along with several unfinished books.

An owner of a Kindle can still buy the physical book if it's not put into Kindle form yet. So what was all that about? But it must have been fun to keep finding books not converted by the Publishers yet.
Next, he turns around to complain about publishers possibly converting books to Kindle format eventually.

6. His very next is a reassurance and yet a lament that

"...the title count will grow. It will grow because not so subtle forces will be exerted on publishers and writers."

So, if they do get publishers to add Kindle versions then it's some kind of nefarious move on Amazon's part - with "not so subtle forces" exerted. Is there a pattern in this assigned report?

7. The Sony's screen is not really "slightly less gray." It depends on which Sony and which Kindle. The e-ink screens differ in darkness possibly due to variance in batches. As for its typeface being "better," that is a personal call. This is what I saw at Target with the two readers side by side. The relative lightness of screens will depend on the light falling on them and the angle at which you're viewing them, as you can see in that photo and in the one prior to it

As for the typeface and the screen contrast, see the Kindle 2 text and the Sony PRS-505 text.

8. Next grievance reported by Baker:

" You can't read a Kindle book on a Sony machine, or on the Ectaco jetBook, the BeBook, the iRex iLiad, the Cybook, the Hanlin V2, or the Foxit eSlick. Kindle books aren't transferrable."

And you can't read a Sony book on a Kindle! Nor will you be able to read a Plastic Logic book on a Kindle. Furthermore, the Barnes & Noble eReader cannot be read on either the Sony or the Kindle. Does Baker know this?

Why is this kind of cavil one-way for him? His many complaints and disappointments would be with e-readers and the e-Ink screen.

9. Then he wonders at the Sony getting 500,000 Google books that were published before 1923 but being ignored by the e-book reading public. Amazon does have a mere 7,000+ free books for download, but customers can buy or download, often for free, books from many online sites, often direct to the Kindle.

Well, with the Sony PRS-505 there is 1) no free 24/7 cellular wireless access to the entire Net nor 2) even a slow web browser that you can use, with Amazon's encouragement (many pre-set sites bookmarked for you) to access Google and Wikipedia (always options on the status command bar) and 3) no highlighting, no note-adding features nor an inline-dictionary and no search of the current book being read or of the entire device.

The Sony PRS-700, which has a touchscreen and side-lighting, did not sell well (and is discontinued) because reviews were very hard on the loss of contrast due to a 2nd layer over the e-Ink screen and the uneven lighting of the side-lighting. Many Sony users love this model, nevertheless, but there just aren't as many who bought it and kept it (some traded down to the PRS-505).

10. Maybe all Baker wants from an e-reader is the ability to read a book - that's fair. Others, though, really appreciate the study tools and also being able to -slowly- browse the Net, for free at any time, almost anywhere (not Montana or Alaska or deeply wooded rural areas). But in wondering why another e-book reader, with so many helpful features missing is "ignored," I think he might have done more research, as his review will be very influential. People are easily affected by people who speak with authority and with the clout of a magazine like this one. In the Q&A session, a commenter actually wrote:

"...I understand that you have made a number of severe criticisms, the upshot of which is that I will not consider reading books on this inadequate device."

11. Baker then generously grants that "they got the screen to display sixteen shades of gray, not four, a refinement that helped somewhat with photographs."

Somewhat? See the differences between the capabilities for image display with 4 shades (the Kindle 1 and many newly released cheaper e-readers this month) and with 16 shades (Kindle 2 and Kindle DX). The Sony readers discussed here both have 8 shades of gray.

12. Baker rightly mentions the fading issue occurring in apparently bad batches. This defect happens with Sony's e-Ink screens too, when the unit is defective. Sony forums have notes saying that (unlike Amazon's customers), the Sony owners won't get replacements because it is "supposed" to fade like that. E-Ink and Amazon market the unit as being just as easy to read in direct sunlight and therefore Amazon replaces Kindles, usually within a day or two, with this problem.

A Kindleboards poll (unscientific, sure, but of interest) showed this result for the question, "Have you had any sun fade issues with your K2?" -- 24 users reported Yes and 76 users reported No. That is a bad percentage, of those responding to the polls at least. People without problems and those who just lurk forums won't tend to respond and that forum has at least 4,000 members.

The problem will be somewhere in the e-Ink and display mechanisms put together by E-Ink and the company that just bought them, PVI, and will show up in e-ink readers using them. The upside is that Amazon does replace those units, unlike Sony, from what I've read. But it HAS been a problem for too many, with an article about it on this blog. Recent Kindle 2's are said to have better screen contrast and customers are reporting, in forums, fewer problems with the screenfading problem now.

13. Newspaper articles that are purely text but possibly not included in the Kindle versions somehow, have been reported before and I personally don't like the publishers withholding any text articles from subscriptions. In the Amazon customer reviews, some customers have reported, though, finding some missing articles in the next day's edition.

The pure-text format of Amazon subscriptions with only a lead photo (free RSS feeds usually don't include the images) is not for those who need to see newspaper editions in the paper-layout we've known and enjoyed for most of our lives.

For me, an e-reader screen is like a window to the mind of someone I hope is interesting; there is no beautiful layout or colorful surroundings and no smell. If that's important, don't go near the subscriptions :-).

I'm trying out the Kindle edition of my local paper, the SF Chronicle, which has amazingly good photo reproductions with excellent contrast and range of tones and also good sharpness while other newspapers' photos have less contrast and lower resolution. Kindle owners might try a 14-day free trial for a few days to see what that is like. I'm not recommending a subscription, but the SF Chronicle Kindle-photo editor should teach classes on that.

14. Last, Baker mentions the smaller devices (iPod/iPhone) being his preference and filling his night-reading needs. But he reports falling asleep while reading on them. Maybe they tire his eyes? :-) I'm just teasing there. At least he decides he should finish his awful task and read the end of a book on his unattractive Kindle, and does get through it!

OTHER THOUGHTS ON THIS
After writing about that chirpily dark review, I'll add a link to a favorite customer forum thread that discusses the unusual ways that customers use their Kindles. Most of these involve using features that other e-readers don't have and which Baker didn't mention.

After all that, my final thought on this is that the Kindle or any e-reader is just an alternative way of reading; why some feel we can have only one or the other eludes me.  I enjoy both, but I prefer carrying many books at once in one small package and I know that some books will never be good on an e-reader, so I still buy and enjoy DTBs ("Dead tree books" as they're sometimes called in e-reader forums).

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I enjoyed Nicholson Baker's The Mezzanine.   This is not available in Kindle format.

Student eyes may not be as keen as Baker's for reading entire books on the iPhone.

Photo: Photo-illustration: Everett Bogue; Photos: WikiCommons, Courtesy of manufacturers (downsized)