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Amazon Confirms Hachette Spat Is To "Get a Better Deal"

samzenpus posted about 4 months ago | from the no-book-for-you dept.

Books 211

tlhIngan (30335) writes "Last week we heard that Amazon was withdrawing Hachette books from its virtual shelves including allowing preorders of the new JK Rowling book. Amazon has responded to these allegations, and confirms that yes, they are purposefully preventing pre-orders and lowering stock in order to get a better deal from Hachette. Amazon recommends that in the meantime, customers either buy a used or new copy from their zShops or buy from a competitor. Amazon admits there is nothing wrong with Hachette's business dealings and that they are a generally good supplier." Here's Hachette's response to the Amazon statement.

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Books aren't special (5, Insightful)

Enigma2175 (179646) | about 4 months ago | (#47115317)

FTFA:

Amazon indicates that it considers books to be like any other consumer good. They are not.

My rebuttal: Yes they are.

Re:Books aren't special (0)

Anonymous Coward | about 4 months ago | (#47115351)

Care to elaborate on such a well thought out comment?

Re:Books aren't special (5, Insightful)

Anonymous Coward | about 4 months ago | (#47115581)

Hachette's response was no more elaborate. Why do you hold him to a higher standard then the publisher? That indicates you aren't interested in the answer, but are just trolling.

Re:Books aren't special (1)

Berkyjay (1225604) | about 4 months ago | (#47116615)

And here I am without any mod points to give you. +5e10

Re:Books aren't special (3, Interesting)

Charliemopps (1157495) | about 4 months ago | (#47115371)

FTFA:

Amazon indicates that it considers books to be like any other consumer good. They are not.

My rebuttal: Yes they are.

The entire reason we have a first sale doctrine is because a publisher was trying to artificially inflate the price of a book.

Re:Books aren't special (1)

Idarubicin (579475) | about 4 months ago | (#47115543)

FTFA:

Amazon indicates that it considers books to be like any other consumer good. They are not.

My rebuttal: Yes they are.

Absolutely correct.

I presume that you won't mind getting a copy of Meyer's Twilight instead of Stoker's Dracula. I mean, they're both vampire novels, so they're completely fungible, right?

Re:Books aren't special (3, Interesting)

LocalH (28506) | about 4 months ago | (#47115623)

But things that are considered consumer goods, like many technologies, are not completely fungible by that standard. Sure, you have devices that can serve the same purpose, but in most cases they're not really interchangeable without some major changes in what you're doing. You can't really replace a Wii U with an Xbox One and consider them "completely fungible".

Re:Books aren't special (1)

Idarubicin (579475) | about 4 months ago | (#47115705)

But things that are considered consumer goods, like many technologies, are not completely fungible by that standard.

This is true. So...?

Re:Books aren't special (4, Insightful)

Anonymous Coward | about 4 months ago | (#47115847)

Your argument is that books aren't like other consumer goods because they're not fungible. Your debate partner pointed out that other items which are generally considered consumer goods are also not fungible. This implies that whether or not an item is fungible isn't sufficient for defining whether or not an item is a consumer good. Generally, this is the point were you would offer up another criteria to distinguish between non-fungible consumer goods and books.

Re:Books aren't special (1)

Your.Master (1088569) | about 4 months ago | (#47115849)

"So...?" is I think what we're asking you.

Your comment seemed to suggest that books aren't like any other consumer good because different books aren't completely fungible for different types of books (I would absolutely say that one copy of Meyer's Twilight is pretty much like another, with minor exceptions like a signed copy or whatever).

The reply is that virtually no consumer good is completely fungible, so that argument implies that there is no such thing as a consumer good, which is ridiculous.

Re:Books aren't special (2)

lgw (121541) | about 4 months ago | (#47115653)

A Hyundai and a Ferrari are both cars, like any other consumer good, but few would consider them fungible.

Nothing wrong with Amazon playing hardball in negotiations. They're still far from a monopoly.

Re:Books aren't special (0, Insightful)

Anonymous Coward | about 4 months ago | (#47115959)

WTF are you talking about? Amazon has like 90% market share in the ebook market. Not to mention that they have their own arm that handles physical books for pretty much the entire process from editing, to publishing to distribution and sales.

Re:Books aren't special (1)

Anonymous Coward | about 4 months ago | (#47116081)

Cars generally don't get eaten by fungus, they tend to corrode. Unless you mean interchangeable, but there's already a commonly-used word for that so I can't imagine that you do.

Re:Books aren't special (1)

lgw (121541) | about 4 months ago | (#47116133)

So then you agree that few would consider them fungible. :p

Re: Books aren't special (1)

matunos (1587263) | about 4 months ago | (#47116201)

That word is "fungible". Look it up,

Re:Books aren't special (-1)

Anonymous Coward | about 4 months ago | (#47115879)

So any consumer good can be substituted at any time and if anyone objects that means it's not a consumer good? Right. The people at CocaCola and Pepsi will be glad to hear that. Or how about Pizza Hut vs Dominos? Maybe we should make a big stink the next time we book on Delta but get pushed onto a US Airways flight?
 
In short; no one cares what you think. You're not making a clear and valid point. Go fuck yourself.

Re:Books aren't special (1)

mysidia (191772) | about 4 months ago | (#47115939)

I presume that you won't mind getting a copy of Meyer's Twilight instead of Stoker's Dracula. I mean, they're both vampire novels, so they're completely fungible, right?

I'm sure you won't mind getting the Dell ultrabook, instead of the Macbook air you asked for. I mean, they're both computers, so completely fungible, right?

Re:Books aren't special (1)

viperidaenz (2515578) | about 4 months ago | (#47116059)

So you don't mind if I deliver you any old red car if you've paid for a Ferrari? They're both red cars.
It doesn't matter if you get a cheap no-name Android tablet instead of your Galaxy Tab?

Re:Books aren't special (1)

Opportunist (166417) | about 4 months ago | (#47116157)

In a world of patents and copyright, "completely fungible" is a myth of the past. How many products can you actually name that are "completely fungible" that didn't come into existence in the past 20 years? Personally, I can only think of items that have been around for at least half a century (e.g. washing machines or fridges), but anything else? Cars were pretty much fungible a while ago, today no longer. Whatever accessories you bought will almost certainly not fit your next car, not even from the same manufacturer. TVs lost their "fungible" trait a while ago with various little and not so little tidbits, from DLNA (which seems to be as much a "standard" to TV manufacturers as HTML is to various browser makers) to the possible connections you can find on them. And we better not even start with anything that goes beyond that in technological sophistication. Ever tried replacing a mainboard in a computer? Better reinstall the OS.

"Completely fungible" doesn't really apply anymore. As much as manufacturers claim to want "standards", all they want is THEIR (patented) technology to BE the standard.

Consumer not Commodity (0)

Anonymous Coward | about 4 months ago | (#47116467)

I presume that you won't mind getting a copy of Meyer's Twilight instead of Stoker's Dracula. I mean, they're both vampire novels, so they're completely fungible, right?

This argument would fit better if the publisher said commodity good.

http://www.investopedia.com/terms/c/consumer-goods.asp

Definition of 'Consumer Goods'

Products that are purchased for consumption by the average consumer. Alternatively called final goods, consumer goods are the end result of production and manufacturing and are what a consumer will see on the store shelf. Clothing, food, automobiles and jewelry are all examples of consumer goods. Basic materials such as copper are not considered consumer goods because they must be transformed into usable products.

Re:Books aren't special (4, Insightful)

fuzzyfuzzyfungus (1223518) | about 4 months ago | (#47115677)

Arguably they aren't like any other consumer good: they share a pretty easily identified, and salient, set of characteristics with certain other 'culture products', music, movies, and similar: marginal cost of production is essentially zero, different ones are partial substitutes for one another; but rather weakly compared to other consumer goods, 'brand' affinity follows individual producers (or nominal producers, as in the case of certain heavily-managed tween-pop-to-order acts) rather than companies, and so forth.

Books aren't some Unique And Sacred Category Unto Themselves; but the characteristics listed above are pretty significantly unlike those of, say, consumer appliances(where marginal cost of production is comparatively high, different ones are nearly perfect substitutes, brand affinity, if any, follows companies while individual designers are unknown, etc.)

What isn't clear to me (any authors in the house?) is whether the traditional big publishers are, by reason of a certain gentlemanly ossification, allies to the otherwise scattered and helotized writers, or whether this is basically a spat between two would-be-exploiters of authors over who gets the profits.

Amazon sure as hell isn't in this out of the goodness of their hearts; but they are also not going to waste a penny more than necessary on quaint traditional supply chains, 'remaindered' or 'stripped' books, and anything of the like; but they also aren't going to let any mere customs hold them back when it comes to contractual matters.

The incumbent publishers are definitely more tradition-bound; but I don't know how much this just makes them inefficient, and how much it makes them act more nicely than good old sociopathic 'homo economicus' would.

Re:Books aren't special (0)

Anonymous Coward | about 4 months ago | (#47115793)

This is basically a spat between two would-be-exploiters of authors over who gets the profits.

Pretty much this. You are seeing some big names come out in favor of Hatchett, the smaller guys not so much because from what I've seen they get marginally better deals than small time music artist. Hopefully we will see a move to a more "bandcamp" like model with self published stuff with no DRM and no vendor lock in. The challenge with books is that it requires significant investment to figure out is its good and the signal to noise ratio is higher and the difference in taste are even more pronounced than they are with music. The infrastructure just doesn't exist today to replace the cannon provided by the publishers with algorithms. A future where authors are negotiating with Amazon directly is not necessarily better than it is with big 6 publishing. On the one hand it stands to reason that fewer middle men should increase the author's cut, on the other having some nominal competition between groups with enough economic power to negotiate effectively may not be a bad thing.

Re:Books aren't special (4, Insightful)

phantomfive (622387) | about 4 months ago | (#47116397)

Amazon sure as hell isn't in this out of the goodness of their hearts;

And lets be honest, neither are publishers. And if we really dig deep, we might find that authors sometimes write mainly for profit as well.

Re:Books aren't special (1)

fuzzyfuzzyfungus (1223518) | about 4 months ago | (#47116521)

Oh, they certainly aren't. I just don't know how much their more reactionary cultures restrain them. I assume that they know a thing or two about shafting writers; but Amazon's...zeal...for cost-cutting is downright legendary, so I don't know if they are in the same league, or if they are held back by some mixture of codified traditional contract terms and sheer inferiority in cold-blooded calculation.

It is more subtle than thatRe:Books aren't special (2)

Camembert (2891457) | about 4 months ago | (#47116495)

There was a good article in The New Yorker a few months ago about the Amazon business practices.
Their very tough negotiation position typically forces the publisher to give big discounts, and even extra money to be listed high enough in the sales results.
Amazon books are usually cheaper than in many other stores so from a consumer level, this seems like a win for the capitalist philosophy.
However, it turns out that these huge discounts have a snowball effect towards the authors: they now typically get lower royalties per book, sometimes much lower. I had this confirmed by a few authors I know.
The danger for the general culture is that authors would write far less as they (except the most popular ones) will have to do more other work to have a normal standard of living. Most of the midlist authors, and those are in my opinion often the most interesting ones, already had to combine writing with other professional activities. In essence there is nothing wrong with that, but when at one point they have little time left to write, books will come much slower.
In some European countries there are fixed price laws regarding books, these are exactly there to ensure that writers can focus enough on their craft, it is seen as a matter of national culture that should be stimulated, not necessarily mercantilised.
I do agree that a purely capitalist attitude in this matter can be detrimental to culture over the longer term.
Discuss.

Time to become a better shopper (3, Interesting)

careysb (566113) | about 4 months ago | (#47115347)

Guess I'll be broadening my shopping horizons.

Re:Time to become a better shopper (2)

TWX (665546) | about 4 months ago | (#47115363)

See, I'm not necessarily upset at Amazon for doing this, as they're being seemingly open and honest about it.

This is also one of the few things that I don't get upset at Walmart for. Their intentionally under-pricing their goods at a loss to force competitors in small markets to go under before raising their prices is what upsets me.

Re:Time to become a better shopper (1)

NicBenjamin (2124018) | about 4 months ago | (#47115541)

Don't speak too soon.

I suspect what they're actually fighting for is the right to send dividends to Wall St. Their current prices are at break-even level, and they don't want to increase prices, so they'll cut their costs.

In other words we could be in stage 1 of Amazon's version of the WalMart plan: low prices keep everyone else out of the market.

Re:Time to become a better shopper (4, Interesting)

lgw (121541) | about 4 months ago | (#47115693)

Except Wal-Mart's prices are damn low over time. They can sustain lower prices than just about anyone else because they have the best logistics chain in the world - really amazing tech there. Also partly because they sell low-quality versions of familiar products, of course, but apparently consumers are just fine with that.

Face it: hatred for Wal-Mart is a tribal identification thing, not a rational economic argument.

The interesting fight is yet to come. Eventually, Wal-Mart and Amazon will be in direct competition. Bring popcorn.

Re:Time to become a better shopper (5, Funny)

I'm New Around Here (1154723) | about 4 months ago | (#47115851)

The interesting fight is yet to come. Eventually, Wal-Mart and Amazon will be in direct competition. Bring popcorn.

Like we'll be able to afford popcorn when the only two suppliers of it are WalMart and Amazon.

Re:Time to become a better shopper (1)

lgw (121541) | about 4 months ago | (#47116151)

Maybe you've never been poor enough the need to shop at Wal-Mart, but here's a hint: people shop there because it's so cheap. It's also already the nations biggest grocery store chain (arguably, it's now a grocery store that also sells some other stuff, since groceries are the majority of its revenue), Prices can only go down from competition, though I don't think Amazon's direct-delivery model for groceries will play in the same market as Wal-Mart, they do compete in other areas.

Re:Time to become a better shopper (1)

immaterial (1520413) | about 4 months ago | (#47116019)

Face it: hatred for Wal-Mart is a tribal identification thing, not a rational economic argument.

What an idiotic statement. Was hatred of Standard Oil irrational? Allowing a monopoly to control a market has the potential to be efficient (at least in the short term) but ultimately consumers lose when choice and competition disappear.

Re:Time to become a better shopper (1)

alen (225700) | about 4 months ago | (#47116045)

wal mart is not a monopoly. not in any market they operate and other stores have similar prices

wal mart is only a monopoly on the cheapest made stuff that is specially made for their stores to be the cheapest possible.

Re:Time to become a better shopper (4, Insightful)

Accordion Noir (1256202) | about 4 months ago | (#47116445)

I'd say that WalMart is getting close to a monopoly in towns I've visited where a few years before there were hardware stores, grocery stores, fabric stores etc, and a somewhat functional downtown, and now there is ... Walmart. It's not the only place you can buy things in the country, but it has pretty much driven some whole towns out of business.

There's anecdotal evidence for you.

Re:Time to become a better shopper (5, Insightful)

danheskett (178529) | about 4 months ago | (#47116067)

Face it: hatred for Wal-Mart is a tribal identification thing, not a rational economic argument.

I almost agree with, the only real problem with Wal-Mart, from an economics stand-point, is that they externalize costs to the broader economy that they should be induced to bear. Three examples:

1. In many areas, Wal-Mart pays a wage that qualifies workers for government subsidy, in the form of reduced cost medical care, food stamps, general assistance, etc. This is not directly Wal-Mart's fault because the policy options permit this, but it is still an economic problem which they are responsible for. The lack of labor demand is a huge contributing factor which is mostly out of Wal-Mart's responsibility. Nonetheless, every Wal-Mart store receives an effective government subsidy for each hour worked, and this is both an unfair competitive advantage and a drain on the larger economy. In effect, competitors who pay a higher wage are subsiding their competition, via taxes they pay. Fundamentally unfair. The economic alternative is for other companies to race to the bottom to compete, or to pay above market rate wages, both of which are overall unhealthy to the broader economy.

2. Wal-mart, through it's market power, pushes costs that the retailer would traditionally bear, onto suppliers. This isn't fundamentally bad, but it can have many bad side effects economically. For one, small suppliers take excess risk, and when the risk goes against them, they fail, and the broader economy has to absorb the failed business. This is a repetitive pattern, with suppliers who try to operate to close to margin make bad decisions or even a single bad decision. Wal-mart can leverage it's substantial volume to get margins that leave their suppliers very close to insolvency. Inevitably some of these suppliers will fail, and those failures induce costs across the broader economy.

3. In 2011, Wal-Mart committed to only supplying fish that were responsibly harvested. This was in response to data that showed that it's suppliers were doing ecologically unsustainable harm in industrial fish farming. This is a great step, but it's just one of the thousands of product lines that Wal-Mart has. By doing business with many suppliers who have no long-term footprint, and operate in regulatory environments where the full economic impacts of unsustainable practices are not known, Wal-Mart induces suppliers to take risks and use businesses practices which would be illegal or unsupportable in the United States and it's other primary retail markets. In the fish example, suppliers were overfishing and wiping out the feed fish in order to produce economically profitable industrially farmed fish for sale in the US. When the feed fish species were wiped out, they moved onto other species and then finally onto other areas. In the long-term of course that is unsustainable. What other products and suppliers operate in this same way, in various countries who are willing to trade long-term damage for short-term jobs and economic activity? Wal-mart is working on this, but their entire supply chain needs to be examined and steps taken to make sure that the suppliers they use, and the down-level suppliers, are operating in an ethical manner. Somewhere at sometime, the costs of ecological damage have to be paid by the broader world economy, and they should be reflected in the prices of goods sold on the shelves at Wal-Mart, as they are for most (but not all) of their competition.

All three of these issues are not the "fault" of Wal-Mart, in that as a country we allow Wal-Mart to go down these roads. But it's still an ethical problem with shopping at Wal-Mart, and those problems should weigh, in my opinion, on the minds of those who routinely shop there. As the shopping destination of choice for a huge swath of America, Wal-Mart is positioned to make small changes to their business that will inevitably reduce their bottom line and drive up costs, but will level out the damage done, especially to overseas suppliers and their workers.

Re:Time to become a better shopper (-1, Troll)

lgw (121541) | about 4 months ago | (#47116231)

1. Wal-Mart employees and shoppers are mostly from the bottom third, income wise. Under the current system, those workers are subsidized by taxes, mostly paid by the top third. If Wal-Mart raised wages and benefits, that cost would translate directly to higher prices, shifting the burden of the subsidy from the top third to the bottom third, income-wise. Hey, I like the way you think!

2. Risk is why capital gets a share of profits. CEO is also a hard job. Good thing it pays well, or no one would do it.

3. Fuck the environment - what are you some kind of hippie? Hipster? And yet you didn't mention how it's Wal-Mart's fault the ice caps are melting. I'm confused by your position.
 

Re:Time to become a better shopper (1)

immaterial (1520413) | about 4 months ago | (#47116587)

If Wal-Mart raised wages and benefits, that cost would translate directly to higher prices, shifting the burden of the subsidy from the top third to the bottom third, income-wise.

That cost would come out in the wash. You conservatives and libertarians love to claim any rise in the minimum wage will translate to an equivalent rise in prices - as if a 25% wage increase would mean a 25% increase in prices. Anyone with half a brain knows this is bullshit FUD, because wages are only a fraction of a product's price. Raising Walmart employees' wages to $12.50/hr would result in price increases of 1.1% [businessinsider.com] (or $12 per year for the average shopper). I'm pretty damn sure the bottom third would love to trade 1.1% higher pieces for a >1.1% wage increase.

Re:Time to become a better shopper (1)

Jiro (131519) | about 4 months ago | (#47116265)

I think that item #2 not only isn't the fauly of Wal-Mart, it's not a problem at all. It's true that someone who pushes costs onto suppliers may end up with suppliers going out of business. But all they're doing is pushing costs around. This moves around the identity of exactly who goes out of business, but it doesn't really increase the quantity.

In other words, if Wal-Mart were replaced by other stores that couldn't push costs onto suppliers, the stores would bear the costs instead of the suppliers. In the long run, this would increase the chance of the stores going out of business by exactly as much as the reduced chance of the suppliers going out of business.

Re:Time to become a better shopper (2)

danheskett (178529) | about 4 months ago | (#47116599)

Yeah, #2 is a tricky situation. This is theoretical economics, and it's not always operating the way you might want. A manufacturer should bear the risk that their product is not priced right, is not what a customer wants, is not of the quality (either high or low) that a customer willing to pay for, not available when the customer wants it, is not available in the area that the customer wants, etc. Those are all valid things that a manufacturer/supplier should be subject to. And, for everything Wal-Mart sells, this is the case. All those factors happen.

Typically, though, a manufacturer/supplier should not bear the risk that the retailer would bear - things like demand spikes, locality, transportation, inventory, returns* (this is complex, returns for defects or satisfaction, but general returns that are not because of satisfaction issues are traditionally a retail issue). Those are things that a retailer are expected to shoulder. In the pre-Walmart era, if a retailer thinks that product A is going to sell like gangbusters, they "stock-up", bring up their inventory, distribute the product through-out the network, negotiate a better price, and seek to maximize profits.

What Wal-Mart has done, though, is to push those costs - the things that would affect their margin - to the supplier. This is why you have suppliers situating warehouses next to Wal-Mart distribution centers - so that they can respond to a quick order for more product. And to minimize transportation costs. In that case, the manufacturer is supplying the goods from their inventory. The risk that the manufacturer/supplier is absorbing most of the transportation cost and all that risk, plus all the inventory cost and all that risk. This is common now, but is really a Wal-Mart innovation. And, since many of the items Wal-Mart sells are essentially low-quality versions of what people are used to buying, the exact brand is fairly fungible. They have recently tried to work with bigger brands selling lower cost/quality versions of their flagship lines, but this strategy has been uneven.

You are right that this isn't ALWAYS a problem. A supplier who can match Wal-Marts needs will do fine, and they do fine. But where it's a problem is when Wal-Mart has superior price and market information, and that information is not available to the supplier. The supplier - either through an error, through a strategy, or through just plain bad luck, can mis-read the signals that Wal-Mart provides them, and end up with too much or too little inventory or transportation cost, and either go out of business or lose the contract for performance.

Economically, retail is where the risk should be absorbed and paid for with these types of issues. In one way, you want it because you want the economic ramifications to be situated where the behavior is located. When a plant shuts down in some small town, it is not because the small town didn't buy enough tires or didn't buy enough pillow cases, it's because a large swath of economic factors came together to cause the plant to become nonviable. However, if a retail store, even a large one like Wal-Mart shutdown in a local area, because of sales, or margin, or things like transportation cost or distribution or logistics problems from suppliers, the economic hardship is localized to the geographic area where the problematic circumstances arose.

In the sense of the broader economy, manufacturing is a far larger capital investment than retail, and the economic and opportunity cost to generate $1 of manufacturing activity far exceeds that to generate $1 of retail activity. When a manufacturer goes out of business, the capital and wealth destruction, not to mention the labor destruction, that happens is massive compared to that of a retail outlet. And that's why economically, it is worse for those risks to be externalized to suppliers than to be borne, as they traditionally have been, by the retailer.

At the level that Wal-mart is operating at, it is unpredictable what would happen if the costs were rebalanced. The economics of it have never been tried on this scale. The profit that Wal-mart extracts from the supply chain comes almost entirely from suppliers, which because of international factors have already been under unprecedented stress.

Re:Time to become a better shopper (2)

Bill, Shooter of Bul (629286) | about 4 months ago | (#47116189)

Wait, what? Lowering the quality of goods is just as bad as raising the prices to me.

Take product A It costs $10 and lasts five years.
Walmart modifies product A to create Product B, which costs $7 and lasts two years.

To me that is worse than a $2 rise in product A.

How is that not an economic argument?

Re:Time to become a better shopper (4, Interesting)

ArmoredDragon (3450605) | about 4 months ago | (#47116465)

This is quite false, and in many respects is a red herring.

The first problem with this argument is that there is no set time period for how much something will last. The second is that at the same time, marginal reductions in production cost don't necessarily equate to reduced durability. Generally when they refer to lower quality, at least in the case of Wal-Mart, they're referring to a substitute for a cheaper material in all or part of the product, which generally results in lower aesthetics and has nothing to do with durability.

Take for example, substituting leather for vinyl. Vinyl actually carries a few advantages over leather (for example, it is far more tolerant of getting wet, more tolerant of direct sunlight exposure, and less likely to crack or fade.) It also carries a few disadvantages in that it generally feels somehow rubbery/artificial and not as "soft," in addition to being more likely to cause you to sweat if it sits against your skin. The cheaper "quality" product will be made with vinyl rather than leather, but as for which one expires sooner depends on how the product ends up being used. In a more wet environment, the vinyl product is guaranteed to last longer.

Indeed, the defining characteristics of modern manufacturing are for cheaper products while having fewer defects. This is called Lean Principles. Arguably by cutting out some of the more expensive manufacturing processes, you also reduce the chances for error, simultaneously reducing cost as well as increasing quality. Historically (over the last 60 years) this argument has proven to be accurate. Yes there are some products that are so horribly built that they have poor endurance, however that has more to do with poor manufacturing techniques than cost of production. I've seen plenty of expensive products have the same characteristic, take for example the mac mini's which are often built from notoriously bad parts (meanwhile Apple fans tend to praise them anyways.)

Re: Time to become a better shopper (2)

matunos (1587263) | about 4 months ago | (#47116207)

Amazon stock doesn't pay dividends.

Re:Time to become a better shopper (2)

Aighearach (97333) | about 4 months ago | (#47116335)

Their current prices are at break-even level, and they don't want to increase prices, so they'll cut their costs.

The dispute is about ebook pricing. You should probably find a link, any link, to information comparing ebook and printed book profit margins.

You might find that whatever assumptions you were making were totally off-base, and that the margins involved are epic compared to other products amazon sells.

Much analysis has amazon actually wanting the margins to be narrower, because their focus is volume and low retail prices.

Once you see the ebook publisher margins and the retail prices, it becomes obvious that amazon isn't trying to keep anybody out.

Re:Time to become a better shopper (4, Insightful)

Frosty Piss (770223) | about 4 months ago | (#47115551)

See, I'm not necessarily upset at Amazon for doing this, as they're being seemingly open and honest about it.

Sure they are. But that doesn't make it right.

Cheap books now, but in the long run, fewer choices.

Re:Time to become a better shopper (1)

Aighearach (97333) | about 4 months ago | (#47116349)

See, I'm not necessarily upset at Amazon for doing this, as they're being seemingly open and honest about it.

Sure they are. But that doesn't make it right.

Cheap books now, but in the long run, fewer choices.

1. Cheap books now
2. ...
3. Fewer choices!

Where have I seen this pattern before...

Re:Time to become a better shopper (5, Informative)

Charliemopps (1157495) | about 4 months ago | (#47115511)

Guess I'll be broadening my shopping horizons.

This is how all major contact negotiations work. I'm involved with them all the time and this is almost assuredly the publishers fault.

The rule is, you have the contract done and signed before the previous one expires. If you don't, it puts you in a precarious situation... like this. If the previous contract was still in place, Amazon couldn't do what they're doing. All of the pricing, etc... is set in the contract. It's very very precise language. Once the contract runs out, if they haven't come to an agreement yet, it's standard for the one or both of the companies involved to flex their muscle, just like amazon did here. The message is clear "You have no leverage over us. We can just stop selling your product, we still keep making money, oh look at your stock price..." etc... If Hachett doesn't like it, they can stop doing business with amazon, or agree to the terms.

And before you get all sad for Hatchett, you should know they're a $2 billion company, that contain parts of the publishing of CBS, Disney and Time Warner. They are not the friendly do-good book publisher you think they are.

Re:Time to become a better shopper (2)

c (8461) | about 4 months ago | (#47115603)

The rule is, you have the contract done and signed before the previous one expires.

I expect that there's also a very applicable rule about how any contract negotiation after getting caught in anti-trust collusion against one of the largest retailers of your goods will probably involve you making more concessions that you might like.

Re:Time to become a better shopper (1)

Aighearach (97333) | about 4 months ago | (#47116367)

Especially when the anti-trust issue involved inflating the price of ebooks, and the contract dispute is over the publisher insisting on those higher prices, instead of reverting to the pre-anti-trust prices.

Re:Time to become a better shopper (0)

Anonymous Coward | about 4 months ago | (#47115997)

That's like saying it's ok to get prison raped by the brothers because it's not as bad as being prison raped by the arial brotherhood.

Source: I was a prison bitch.

Re:Time to become a better shopper (0)

Anonymous Coward | about 4 months ago | (#47116423)

The Arial brotherhood? Just watch out for the Helvetica brotherhood! Or even worse - the Comic Sans brotherhood!

Fight for consumers (2, Insightful)

Koby77 (992785) | about 4 months ago | (#47115379)

It's good to see a big company actually fight for better prices for customers. I wish my cable company was like that. And before anyone gets me started, remember that monopolies are only abusive if they use their power to screw over the consumers; there is no antitrust protection for businesses to profit.

Re:Fight for consumers (2)

just_another_sean (919159) | about 4 months ago | (#47115445)

Than how is OK for Novel to go after Microsoft? Wasn't that solely about anti-competitive behavior as opposed to Apple going after Sony over patents?

And my suspicion is that Amazon could care less about consumers other than their impact to their bottom line. I don't believe for a minute that once they have most/all of the publishing industry under their thumb they won't slowly but surely raise prices. Their not doing this for you or me, just themselves. We might benefit in the short term but I doubt that it will last if they succeed.

Re:Fight for consumers (0)

Anonymous Coward | about 4 months ago | (#47115629)

So you want a multi-billion dollar company that cares? I'm fine with my mega-corporations making a profit, I can look out for myself.

Re:Fight for consumers (0)

neonv (803374) | about 4 months ago | (#47115795)

And my suspicion is that Amazon could care less about consumers other than their impact to their bottom line.

Amazon's profit margin is almost non-existent [ycharts.com] . They've never had much profit. They pass the savings to the consumer and take almost nothing. I don't see any indication that it will change.

Companies are not evil just because they exist.

Re:Fight for consumers (1)

Anonymous Coward | about 4 months ago | (#47115973)

Not really, most of the money that would have been profit gets spent growing the company and expanding into other areas. The reason why their prices are generally so low has more to do with the way they manage their inventory and their massive economy of scale.

Re:Fight for consumers (0)

TheGratefulNet (143330) | about 4 months ago | (#47116309)

Companies are not evil just because they exist.

under the new american rules, yes, they are! to exist as a business is to be evil, without any ethics or morals or care about society or individuals.

this is one huge thing that's wrong with the US right now. we 'pray' to business almost like its a god.

and so, as a business grows, it DOES become evil. in the US, its a requirement, pretty much.

Re:Fight for consumers (0)

Anonymous Coward | about 4 months ago | (#47116323)

I buy widget for 50 cents, sell widget for $1, operating cost of 2 cents going into widget, spend 47 cents on capital investment, and finally claim 1 penny profit. Very low margin indeed.

Re:Fight for consumers (0)

Anonymous Coward | about 4 months ago | (#47116183)

As a former Amazon employee, Amazon cares a great deal about their customers and they are relentless about driving costs down and passing those savings on. As for your worries about monopolies, that seems unfounded to me.

Re:Fight for consumers (1)

Aighearach (97333) | about 4 months ago | (#47116385)

Amazon is trying to lower prices to a level that still leaves ebook margins higher than for printed books. There is no anti-competitive argument to be made there. Other retailers can match their price and still make a profit. And customers are only protected from increased prices, not from decreased prices.

Re:Fight for consumers (2)

mozumder (178398) | about 4 months ago | (#47115545)

How is reducing profit to authors a "fight for consumers"?

You do realize that when writers don't get paid, they don't write?

Publishers have to take risks on authors, because only a few authors actually profit a publisher. And when Amazon cuts their margins, they take less risks and do things like eliminate advances and reduce royalties to where they're insignificant. Or they might cut marketing for that author.

And when that happens, that writers you liked starts working at Starbucks instead of writing.

So how does NOT having your book help consumers?

Re:Fight for consumers (0)

Anonymous Coward | about 4 months ago | (#47115883)

Nice try, Charlie Stross. But there is by any measure an overabundance of books, and plenty of writers who keep spitting out work despite a meager income. Maybe you're right. But first, give us a list of a-level writers who quit writing and went to work at Starbucks or some similar type daily grind, despite selling a large number of books, because of poor royalties.

Re:Fight for consumers (1)

NicBenjamin (2124018) | about 4 months ago | (#47115573)

And what makes you think they'll cut prices? Their prices are already lower then everyone else. Bezos is not running a charity.

Basically the long-term result of this for consumers is less published books, because the author's cut comes from the publisher's cut. If you pay less for something (ie: royalties to authors) you get less of it.

If you think self-publishing will actually work you probably don;t mind because self-published stuff will fill the gap.

Re: Fight for consumers (0)

Anonymous Coward | about 4 months ago | (#47115841)

Ok, prices are so low, buy this ebook.
http://www.amazon.com/gp/aw/d/B00D8GA5G2/ref=mp_s_a_1_1?qid=1401327629&sr=1-1

Re:Fight for consumers (3, Insightful)

Frosty Piss (770223) | about 4 months ago | (#47115589)

It's good to see a big company actually fight for better prices for customers.

No, that's not the Amazon plan. In fact, they are trying to drive publishers out of business and force authors to deal directly with them, as the only choice. As the de facto monopoly, they can dictate to the authors what they will pay, and it ain't going to be pretty.

Re:Fight for consumers (2)

xigxag (167441) | about 4 months ago | (#47116015)

Even if they drove all the publishers out of business, they still wouldn't be a monopoly because there are plenty of other bookstores, both online and off. If writers who are not represented by publishers don't like the terms Amazon offers, they can contract with another storefront and get better terms. Say Amazon wants to sell your book for $5, but bn.com is willing to sell it for $10. Why bother with Amazon? You're going to go to bn.com exclusively, as would any other writer. Amazon would then be forced to raise prices to compete with Barnes & Noble (or other retailer). That is, unless you wind up staying with Amazon because your gross income from Amazon is higher despite lower royalties, because of their much greater market share. If that's the case, and you're making more money from Amazon, then what's your complaint about their terms?

Or perhaps people don't want to buy your book for $10 at bn.com because Amazon has conditioned people into thinking that the proper price for a book is about $5. If that's the case, if people are willing to give up so easily on one author to buy from less expensive authors, then all that stuff about books being "non-fungible" isn't quite true, after all.

Finally, I simply don't believe that the author will make less money if the publishers are out of business. Getting rid of publishers will remove a whole class of people sucking the author's teats. With no publisher to pay off, Amazon could easily lower the price and still give a higher royalty to the writer.

Re:Fight for consumers (2)

Frosty Piss (770223) | about 4 months ago | (#47116271)

Even if they drove all the publishers out of business, they still wouldn't be a monopoly because there are plenty of other bookstores, both online and off.

Even if Microsoft drove all the software companies out of business, they still wouldn't be a monopoly because there is plenty of free software...

Re:Fight for consumers (0)

Anonymous Coward | about 4 months ago | (#47116539)

So we cheer for musicians bypassing record companies but suddenly we are all like "don't touch the publishers"? WTF?

Re:Fight for consumers (1)

alen (225700) | about 4 months ago | (#47115611)

when cable companies fight for you and there is a blackout the consumers usually rant how the evil cable company is not paying enough

Re:Fight for consumers (0)

Anonymous Coward | about 4 months ago | (#47115725)

Correct me if I'm wrong, but haven't they essentially been dumping product in order to put the competition out of business so later on they can raise prices?

Re:Fight for consumers (1)

alen (225700) | about 4 months ago | (#47115781)

they are using books as a loss leader to bring in customers for other products. but now they want lower wholesale prices as well

Re:Fight for consumers (0)

Anonymous Coward | about 4 months ago | (#47116065)

Read this as:
Its good to see a big company push down someone else's income...... so long as they don't touch mine.

Re:Fight for consumers (1)

TheGratefulNet (143330) | about 4 months ago | (#47116145)

its interesting that amazon is very consumer friendly and if they happen to be busines-hostile, that's a DOUBLE BONUS in my book.

I'm ready to be as hostile to business as possible. business is the holy cow of the modern age in america. no one wants to 'harm' business; but realize that there are more consumers in the world than business people or owners! who should we care more about? I know who I care more about.

amazon has treated me extremely well as a consumer. I like that! business has too many advantages these days; we need to level the playing field so that consumers don't get run over by the 'business steamroller'.

if amazon plays hardball with companies, I'm OK WITH THAT!

Re:Fight for consumers (0)

Anonymous Coward | about 4 months ago | (#47116413)

I can't tell if you're facetiously pretending to be an idiot or if you really are a fucking moron. Hopefully my sarcasm detector is just broken, but if it's not I find it disconcerting that you may in fact be an individual who has some sort of responsibility in life, such as kids or a job. Please take an introductory economics class at your local community college.

Antitrust investigation? (3, Insightful)

manu0601 (2221348) | about 4 months ago | (#47115419)

Shouldn't this fuel an antitrust investigation? The mere fact they can pressure a publisher by not listing their books means free market failed.

Re:Antitrust investigation? (5, Insightful)

Anonymous Coward | about 4 months ago | (#47115517)

no, being able to put preassure on someone by deciding to buy from someone else is not showing that the free market failed, it is the free market in operation.

Re:Antitrust investigation? (-1)

Anonymous Coward | about 4 months ago | (#47115617)

Not what is happening here, moron.

Re:Antitrust investigation? (0)

Anonymous Coward | about 4 months ago | (#47115735)

yes it is Moron. Amazon want a better deal in order to stock their books. buyers are still free to go elsewhere and Hachette is free to not sell to Amazon at a reduced price just as Amazon is free to not stock or seel their books.

Re:Antitrust investigation? (3, Insightful)

Arker (91948) | about 4 months ago | (#47115837)

"it is the free market in operation"

Except the only free market in books tolerated is in reprints of books originally published in prior millenia. This is not a free market on either end or in any way.

Re:Antitrust investigation? (0)

Anonymous Coward | about 4 months ago | (#47115531)

You have no idea what antitrust means.

Re:Antitrust investigation? (1)

alen (225700) | about 4 months ago | (#47115619)

just buy it from another store. how hard is that? it's not like amazon is the only seller of books

Re:Antitrust investigation? (1)

bloodhawk (813939) | about 4 months ago | (#47115695)

Shouldn't this fuel an antitrust investigation? The mere fact they can pressure a publisher by not listing their books means free market failed.

Actually this appears to be the exact opposite and is a demonstration of a free market working not failing. The inability to put pressure on a publisher would be free market failure.

Re:Antitrust investigation? (1)

twistofsin (718250) | about 4 months ago | (#47115741)

But they do list them, every 3rd party merchant in their network can list the book for sale. Amazon will assist in the transaction in the same manner they have for any other purchases made from those merchants, including showing the books in the search results.

Re:Antitrust investigation? (0)

Anonymous Coward | about 4 months ago | (#47115823)

And while they are at it they can go after Walmart, Costco, ect. Because they all do the same thing "We want your product at $x.xx and we are going to sell it at $x.xx and if you don't like it then we just won't sell your product". Its not like amazon is the only place to buy books online.

Re:Antitrust investigation? (1)

viperidaenz (2515578) | about 4 months ago | (#47116109)

How is a market free if a distributor has no freedom about what it can sell?

If Amazon want to make a specific margin and they don't believe their customers will pay cost + margin, their only choice is to A) Don't sell it or B) Demand a lower cost.

You can't force Amazon to sell your product.

Better for me to stay out of the fight. (1)

NemoinSpace (1118137) | about 4 months ago | (#47115431)

I do use Amazon a lot more than others but I don't need to. I admit I don't even know who the other Mega publisher is.
Seems like I can safely ignore both of them till they get their bitch fight over with.

What? Companies negotiate over wholesale prices? (0)

Anonymous Coward | about 4 months ago | (#47115439)

This isn't news for nerds. This is news for ... no-one - or at least not anyone who has any idea about how capitalism works. Of course when you deal in volume like Amazon, you're in a good negotiating position. To remain in a good negotiating position, you have to make clear that you won't take just any deal, and that you're ready to freeze out even a prominent publisher who refuses to give you a substantial wholesale discount. Yes, it's kind of a declaration of war and both sides will receive injuries, but it sends a message to other presses that if you don't give Amazon a good discount, you won't have your books sold by Amazon.

Re:What? Companies negotiate over wholesale prices (2)

meerling (1487879) | about 4 months ago | (#47115571)

Of course it's not news for nerds, everyone knows nerds are illiterate and so don't read anything. All those books they have on their shelves, kindles, and talk about were given to them by friends and family as decorations, and they heard a synopsis of it on a podcast, youtube, or downloaded the movie.

Now that the sarcasm-spasm is over, we don't have enough information about what the heck the real fight is over, we just have their P.R. statements.
So far it could be Amazon trying to squeeze out extra profit or special favors, or it could be Hachette trying to raise it's book prices or trying to get special favors.
All we really know is they are having a dispute, and both of them are trying to sway the public with sugar coated press releases.

Here (5, Interesting)

Charliemopps (1157495) | about 4 months ago | (#47115521)

I'll just leave this here...

http://booksprung.com/dear-hac... [booksprung.com]

Thanks Amazon ;-)

The real answer is above (0)

Anonymous Coward | about 4 months ago | (#47116195)

That really is the right perspective. Hatchett is doing a hatchett job on the authors and customers, for very little value to either. Amazon is a much better publisher for e-books, as they're willing to give the author 70% v.s. 5 to 15% after "expenses".

I recommend... (4, Interesting)

Frosty Piss (770223) | about 4 months ago | (#47115533)

...that consumers dump Amazon in favor of Powell's Books [powells.com] .

Re:I recommend... (0)

Anonymous Coward | about 4 months ago | (#47115747)

Took a look. They're website is garbage and I cant figure out how to buy ebooks. I'll pass. If you're going to recommend them, tell them to fix their crap.

Re:I recommend... (0)

Anonymous Coward | about 4 months ago | (#47115861)

I think Powell's is more of a brick-and-mortar kind of joint.

Re:I recommend... (2)

Frosty Piss (770223) | about 4 months ago | (#47116017)

No. Although they do have a huge retail place and a separate Technical Books store, they actually do most of their business on-line.

Re:I recommend... (1)

Anonymous Coward | about 4 months ago | (#47116077)

Took a look. They're website is garbage and I cant figure out how to buy ebooks

Clearly you are a moron. I'm sure you'll be happy with Amazon.

Look across the lake... (1)

Anonymous Coward | about 4 months ago | (#47115601)

Probably all of the cross-pollination with people from Microsoft.

Punish Apple! (3, Insightful)

SuperKendall (25149) | about 4 months ago | (#47115951)

Amazon behaving badly in a market where they have a monopoly? Time to get out the Apple Beatin' Stick again! Got to keep down those competitors with government sanctioned punishments for even trying.

even a gorilla must somedayshit or get off the pot (1)

epine (68316) | about 4 months ago | (#47116175)

The Amazon share price demonstrates that investors anticipate profit from the Amazon business model at some point, which they will point very loudly when it begins to appear that growth has reached a plateau. (It's only mildly conceivable that this whole thing is a Ponzi scheme held afloat by successive ranks of the greater fool.)

By some weird co-incidence I breezed through The Everything Store by Brad Stone yesterday afternoon (and following up, just an hour ago, MacKenzie Bezos's misguided one-star review).

I wanted to get a better sense of the author, so I also watched Discussion: Author Brad Stone on The Everything Store [youtube.com] , hosted by Daniel Siciliano, professor at the Stanford Law school, who turns out to be sharp, engaged, articulate, and charismatic. Brad largely stays on script with his own book.

Brad did take certain liberties with his book (small ones) of the kind an author is pretty much forced to take if he wishes to have a readership. Mr Bezos would not be so principled as to fact check his profit into oblivion. MacKenzie needs to get a grip on her entitlement double standard.

Brad regards his critical chapter as the one entitled Expedient Convictions. His recap was the best bit in the entire Q/A: "Amazon [aka Jeff] rationalise their customer focus to excuse a lot of things. This paper-thin rationalization is actually naked self-interest."

No shit Sherlock. He then goes on talk about how Amazon engineered their operation to pay no sales tax at the state level by claiming not to operate in any of those states, which is only true in the narrowest legal sense. Amazon runs huge operations in those states structured as legally independent subsidiaries (which are nevertheless totally under Amazon's thumb).

In the book Jeff is quoted as saying they don't use any services provided by those states, so why should they pay a sales tax? Their subsidiaries are using plenty of government provided infrastructure in those states to make those products and services possible. The whole story is just an accounting shell game. Their products come from somewhere, somehow. I don't think you find out at the center of the nested Russian dolls that the Amazon fulfillment center is a Xen machine instance on EC2. In mathematics, Mr Bezos, this analysis is known as the pigeonhole principle, which in layman's terms says you can't ethically pay tax nofuckingwhere on $74b dollars in revenue. But you know that already, don't you? And MacKenzie knows that you know that, doesn't she? Right, I though as much. Pity Brad got the influence of Remains of the Day on your regret minimization framework misplaced in time by about a year in his origin story. How will we ever trust another word this man says?

Which of those two errors concerns a million dollars or more? Bzzzt. Looks like Jeff wins the milliravi award for speaking with forked cheek.

Anyway, this story today is nothing new, and hardly the worst. Anyone interested can check out how Amazon sat on Lovefilm in the UK/EU. It was brutal.

Stone makes Amazon's internal culture sound like The Passion of the Christ which I think was dramatised by Stone somewhat, but hardly given the full Oliver (the answer to my fey verbal riddle is Natural Born Killers if anyone cares).

As I recall it from an early chapter, among the fringe whingers MacKenzie complains are insignificant and overrepresented was one Shel Kaphan whom Bezos himself described as "the most important person ever in the history of Amazon.com" as part of his great and commendable summing up of a valued resource so totally no longer needed.

Quick, someone hand me a gold pen, I want to stick it down my throat.

Re:even a gorilla must somedayshit or get off the (1)

epine (68316) | about 4 months ago | (#47116237)

I notice re-reading my own post that I have an "out" missed and an "out" added. Must be how it passed through casting nines.

To Summarize (3, Interesting)

matunos (1587263) | about 4 months ago | (#47116227)

Both parties admit they're in contract renegotiations. So the current public spat appears to be about whether a retailer should be obliged to continue to stock the goods under negotiation for resale without a contract, because... authors?

Re:To Summarize (1)

Arker (91948) | about 4 months ago | (#47116415)

"Both parties admit they're in contract renegotiations. So the current public spat appears to be about whether a retailer should be obliged to continue to stock the goods under negotiation for resale without a contract, because... authors?"

How about customers?

Amazon customers, specifically, may be inconvenienced for this. Which seems a little strange in the context that they appear to have been the ones who decided to take this particular action as a way of slapping around Hachette.

So, Amazon screams 'customers' while appearing to disregard them specifically here, Hachette is screaming 'authors' but all they actually care about are their own profits, of course. (Easily rationalized - how could they pay the authors if they dont make a profit?!? They could not, of course, but someone else would.)

End of the day it's still two big corrupt corporations arguing amongst themselves and probably the best readers and authors can hope for is they fatally damage each other before making up.
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