Amazon Vs Publishers
By Pulkit Sharma

On Feb 1, I had reported on how the world’s leading E Book Reader Amazon’s Kindle had clashed with publishing house Macmillan which wanted to increase the eBook prices being sold for the Kindle.

Amazon first banned Macmillan from its Kindle website but soon realized that such a move would backfire.  Macmillan publishes authors like Naipaul, Jeffrey Archer and Wilbur Smith and could switch over to the new Apple iPad.  Amazon has now restarted selling Macmillan books to be read on the Kindle.

In early February, Amazon was presenting its Macmillan ban as being done in the interests of the consumers.  But it seems that in its battle for market share, Amazon is using its huge clout to increase its profits.

The Authors Guild has collated and published a number of examples where Amazon played hardball once it saw how Kindle was monopolizing the market.

“
"It's ugly with Amazon and will probably get uglier." So we said to the New York Times in June 2008 in the months after we first learned of Amazon's tactic of removing buy buttons to gain control over U.K. publishers that Amazon found unruly. Amazon's market share in the U.K. had just reached 16% and was growing fast. With its new clout, Amazon wasted no time in testing its strength against those publishers.

The fact is, we don't know of all of the instances of Amazon's use of this harsh tactic. We know that it goes unreported -- there are episodes we know of that we don't have clearance to repeat in our chronology below. Amazon often chooses to instill fear in a publisher by selectively removing only a portion of a publisher's list from its online market. It can do this silently, changing the titles that are unavailable on a regular basis, so that only the publisher notices. Both Amazon and the publisher have solid reasons to keep the unpleasantness quiet: Amazon doesn't really want to be seen as a bully, and the publisher doesn't want to betray weakness as it succumbs to the pressure.

2008 - The Battle of Britain, Part One
The first reported use of the buy button weapon was in the United Kingdom. Early in 2008, Amazon removed the buy buttons from hundreds of Bloomsbury titles. Bloomsbury is a major British publisher, publishing authors such as William Boyd, Khaled Hosseini, and J.K. Rowling. Amazon and Bloomsbury resolved their differences on undisclosed terms, and the lights went back on for all of Bloomsbury's books.

The Battle of Britain, Part Two
The second use of the buy button weapon in the U.K. that we know of came later that year, when one of the world's largest publishers, Hachette Livre UK, took the hit. The publisher's CEO, Tim Hely Hutchinson, wrote in a letter to authors, "Amazon seems each year to go from one publisher to another making increasing demands in order to achieve richer terms at our expense and sometimes at yours."

He added, "If this continued, it would not be long before Amazon got virtually all of the revenue that is presently shared between author, publisher, retailer, printer and other parties." Bestselling authors were affected, including Stephen King and James Patterson, along with hundreds of less commercially successful authors.

2009 - Battle of Britain Concludes, So Far As We Know
In April, we checked to see how things were going with Hachette UK. The lights were still out for apparently hundreds of Hachette titles at Amazon's British website. It was impossible to buy one of Hachette's wine guides at Amazon.co.uk., but there were plenty at Waterstone's website. We also looked for Chris Manby's "Seven Sunny Days." No buy button -- but there were 301 used copies available, starting at a couple pence. Chris has done nothing to offend Amazon that we know of: she's merely another casualty of Amazon's tactics.

Finally, on June 1, Hachette and Amazon come to undisclosed terms. All of Hachette's authors can again reach Amazon's customers.
“

(Techgoss had published the following on Feb 1, 2010)

Amazon: No Naipaul ban
By Pulkit Sharma

The Amazon Kindle is the number one bestseller on its popular site. This Wireless Reading Device allows you to read books and newspapers anywhere anytime. The environmentalists are happy because it saves the need to cut trees to print paper. In July, 2009 Amazon announced that this eBook reader would be sold in India as well.

While Kindle has been the most successful in its niche so far, it faces growing competition from the newly launched Apple iPad.  India’s own Infibeam launched its eBook reader named Pi. Other tech companies have launched or will be launching soon.

Amazon has always played hard ball because it had the lion’s share of the eBook reader market. American tech super blogger and businessman Robert Scoble wrote in to Techcrunch to say how the Amazon Kindle team stopped giving him products to review after a critical write up by him.

Book publishing house Macmillan has been operating in India since 1892.  Its ITES operations centre is in Bangalore.  The Macmillan authors include international stars like Ken Follett, Jackie Collins, Wilbur Smith, Colin Dexter, V S Naipaul, Jeffery Archer and many more. In India it publishes IK Gujral, Jaswant Singh, Kapil Dev, M S Swaminathan and many others.  In fact, Macmillan India has the sole copyright of Tagore for many decades.

Macmillan decided late January, 2010 that it wanted its ebooks on Kindle to sell between $12.99 to $14.99 which was a few dollars more than the previous sales price.  Macmillan has offered huge discounts in the early stages of the Kindle-Macmillan partnership, but felt that now was a good time to increase the prices. 

What was Amazon Kindle’s response?  A dummy spit.  Kindle told Macmillan that it would not be selling their ebooks.

But within 48 hours, Amazon backtracked after realizing that they would lose too much by boycotting Macmillan.  Amazon posted the following on their website explaining why they would continue their relationship with Macmillan

“
Initial post: Jan 31, 2010 2:22 PM PST
The Amazon Kindle team says:

Dear Customers:

Macmillan, one of the "big six" publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.

We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, we will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books. Amazon customers will at that point decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book. We don't believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced e-books as an alternative.

Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!

Thank you for being a customer.
“

Why did Amazon ever feel that it could still do well by boycotting authors like Naipaul, Archer and Wilbur Smith?  And why interfere with a free market economy?  If the readers don’t like the prices, Macmillan will surely reduce them. Just because you control the platform does not mean you can dictate prices in a free market economy.