A Question of Price in the Amazon-Hachette Dispute

Last Friday Michael Tamblyn, president and COO of ereading platform Kobo, took to Twitter with a 32-tweet manifesto on the Amazon-Hachette dispute. Tamblyn's tweets were meant to sway self-published authors from so heartily supporting Amazon, as many have throughout Hachette's negotiations. (Here's a link to the first in the series, but you can trace the whole monologue on Twitter starting on the morning of October 17th.)

Just because the ecommerce giant is the primary source of many self-published authors' income, Tamblyn observes, that will not prevent Amazon from eventually demanding that these authors-not just Big Five publishers-lower ebook prices and relinquish a greater part of their profits. And indie authors, he adds, don't have the leverage that Hachette or Simon & Schuster has to negotiate with the online retailer and will likely be forced to accept whatever terms Amazon decides on. It's indie authors, says Tamblyn, that face the greatest risk of being crushed under Amazon's demands.

Some tweets worth pointing out are Tamblyn's assertion that the Amazon-Hachette dispute is not about ebook pricing at all, but about Amazon taking greater shares of book profits.

19. But that assumes that the AMZN battle is about price. It’s not. It’s about profit. And _any_ supplier can be made more profitable.

— Michael Tamblyn (@mtamblyn) October 17, 2014

Additionally he points out that indie authors' small size will not exempt them from Amazon's attentions, considering 20% of Amazon's sales are through self-publishers.

20. If indie authors are 20% of AMZN’s total sales, then it’s hard to imagine that indie authors aren’t on that list to be improved.

— Michael Tamblyn (@mtamblyn) October 17, 2014

If you have time to check out Tamblyn's Twitter feed to read all 32 tweets, it is well worth it. It's a strong argument for why self-publishers and traditional publishers alike should work to minimize Amazon's control of the book market by finding new and innovative ways to reach their customers.

What I don't think Tamblyn's Twitter discussion touched on is the reader -- a player who is just as important as the others this dispute. How will the current wrangling over ebook prices affect her? How should publishers take into account reader consumption habits as they negotiate with Amazon?

Perhaps publishers are still adjusting to the idea that they are slowly, though inevitably, becoming consumer-facing brands -- so thinking about what is best for the reader may not be front-of-mind. Right now, and judging from the tone of Tamblyn's argument, publishers seem most concerned with self-preservation in the face of an increasingly powerful force in the industry. That is a valid concern, but ultimately readers have the final say on a publisher's success.

I agree with Tamblyn that Amazon doesn't really care about price as much as it does about profit, but that does not mean that publishers should not take price into consideration for the reader's sake. At what price will non-readers pick up a book? What type of sales and marketing strategies will encourage occasional readers to read more? Is it a question of access -- perhaps abolishing DRM to make ebooks easily transferable across a reader's devices? Or of price -- is a $10 ebook enticing to consumers?

If Hachette emerges from this dispute with pricing control and a favorable profit share, the publishing industry will rejoice. But if that victory leads Hachette to isolate readers who prefer to spend $7.99 a month on Netflix instead of an ebook, then who has really won?

For answers to these questions, Simon & Schuster may be the publisher to watch, given its surprisingly amicable resolution with Amazon on Tuesday. Now that the publisher has the final word on pricing, how will it use that power to attract more readers? I don't have the answer, but I firmly believe that publishers can only thrive in an industry where readers' access to books is top priority.