Price Wars and Book Industry Illegal Activities

This has been a huge issue lately. To better understand it, let me describe a couple of different pricing models or customs which are at the heart of this controversy.

Wholesale Model: The publisher establishes a book’s recommended price and sells it to the booksellers for a percentage off that price. The bookseller can then sell the book for whatever price (sometimes higher) that he wants to.

Agency Model: The publisher sets a price for the book and then discounts it 30% to the reseller, who must agree to sell the book at the price the publisher establishes and cannot discount. The result has been for the publishers to push up the prices of their books because they can.

Impact on E-books: This has pushed up the price of E-books and has resulted in a major conflict between some of the major publishers and Amazon, who wants to keep the prices low for their Kindle market. In their efforts to control the situation in their favor, the major publishers began allegedly sneaking around in a variety of price-fixing activities. Ooops, they got caught at those and the following cover-up attempts. This brought the Federal Department of Justice into the fray with an anti-trust suit against five publishers and Apple. In the meanwhile, E-book distributor Mark Coker of SmashWords has come on record that he prefers the Agency Model because it allows the authors and the publishers to control the prices. This levels the playing field for smaller book retailers and preventing large retailers from loss-leadering their small competitors to death.

All these recent activities are pushing down E-book prices and tying the hands of the major publishers, which may hasten their demise.

Bottom Line: The forces of greed and control battles point to the obvious solution of self-publishing. Once a pariah in the book industry, self-publishing is becoming acceptable, as long as the author does a professional job of publishing his books. The legal fight has an indirect impact on self-publishers in terms of common price ranges. It all points to a much different business model.

 

 

This is a cross-posting from Bob Spear‘s Book Trends blog.

Writing As a Way To Express Your Feelings

Writing is like telling a story. There are a lot of reasons why peoplw write. They write to share their ideas, learnings and experiences. As for me, I write because I simply love to write. When you are mad or angry, you can take your anger off your head by writing it down and release what is inside you especially if you still do not have the courage to say it directly to the person. As well as love. It is very romantic for a couple especially for a girl to receive a letter from an admirer or from his loved one. And if you or your loved ones are far away from you, when you receive a letter from them, it puts a smile on your face. Writing is also a way of coummunication. Writing that comes from the heart has a great impact to a person. And whatever you are feeling, it reflects to the content of your writing.

About the Author:

A writer from California. I write because I love to write. It is a way for me to express love, hate, happiness, sorow and share my ideas. I am interested in politics and law. I write topics about the importance of a California car accident attorney and current news about politics. I also travel a lot and write about the place I recently visited.

Benefits of Reading

 Some people are fond of reading books. They say that reading makes them relax, which is really true.



In fact, reading has 8 major benefits. The first one is that it enhances your knowledge. Through reading, you learn more valuable information and it can make you smarter. It has also been proven to reduced stress. Reading can easily distract you and can make your mind feel at ease. Also, it could provide you with greater tranquility, help improved yout analytical thinking, increased your vocabulary, improved your memory, improved your writing skills and helps you to prioritize your goal. Reading can make you realize what you really want with your life.

 

ABOUT THE AUTHOR:

I am a writer and blogger. I usually write articles that discusses about issues in the society, music, latest star gossips, history and movie reviews. I am also an avid fan of sports. I love to watch football games. I also love to collect books. My current read is all about medical malpractice lawyer.

How Do You Survive Criticism?

This post, by Andrew E. Kaufman, originally appeared on the Crime Fiction Collective blog on 4/18/12 and is reprinted here in its entirety with that site’s permission.

Being a writer means being vulnerable. I’m talking, rip your shirt open, aim your chest toward the heavens, and let the vultures have at it. I learned long ago that if I wanted to be an author, I’d have to accept this fact. And while, for the most part, people are wonderful, there will always be haters; they’re everywhere. And yes, they do suck.

 
Of course, accepting this philosophy is one thing. Surviving it is another. We, as authors, are human. We’re a sensitive lot. We pour our hearts and souls  onto the pages, and taking criticism, regardless of how much truth there is to it, isn’t easy. But we all have to endure it, whether it’s a nasty review, email, or passing remark. Friends, both readers and writers, often ask how I cope with that. Luckily, it doesn’t happen often, but when it does, I deal with it. I have no choice. I’ve developed a coping strategy. Sometimes it even works:

 

  1.  Accept that this is the nature of the beast. Simply put, if you can’t handle criticism, you’ve chosen the wrong business. This is not brain surgery; this is the arts, and being as such, not only must you accept criticism, you should expect it. 
     
  2. Take what you can use, throw away the rest. Constructive criticism is always welcome. I know I’ll never stop growing as a writer, and growing means listening. Besides, who better to give feedback than the readers? I consider them experts and their input important. If something resonates with me, I take it to heart. If it doesn’t, I respectfully consider it a difference of opinion and move on. I’ve learned a lot from my readers and I hope I never stop. 
     
  3. The exact moment someone gets nasty is the exact moment I realize it’s not about the book. It’s about them. When somebody becomes belligerent or starts calling names, I know there’s something else at work, that their motivation is more than likely coming from a bad place. Constructive criticism is thoughtful. Hate requires none. 
     
  4.  Not everyone is going to like my couch, and that’s okay. I look at it this way: tastes vary widely from person to person. If I bought a new couch—one I found particularly cool and awesome—and showed it to fifty different people, it’s a sure bet I’d get fifty different opinions. Some would love it, some would feel indifferent about it, and yes, some might even hate it. Does that make it a bad couch? Nope (of course, if everyone hated it, then I’d have to do some rethinking about my couch, just as I would with my book). But someone is bound to hate it. Everyone’s entitled to their opinion. That’s called life. 
     
  5. Take pride. Anyone who has written a novel knows what a ridiculously difficult job it can be, but it’s also a huge accomplishment. I am by no means perfect, nor would I ever delude myself into thinking I produce perfect work. But I do take great pride in it. I trust my instincts. Even more important, I live for the process, and nobody can take that away from me. Whether I have one reader or thousands, whether people love my books or hate them, I will always write,  always love writing, and will always, every step of the way, enjoy the journey. 

What about you? How do you cope with criticism?

 

After The DoJ Action, Where Do We Stand?

This post, by Mike Shatzkin, originally appeared on his Shatzkin Files blog on 4/14/12.

This post went up around midnight last night (Saturday, 4/14) in London, or between 6 and 7 NY time. I had been concerned about a part of it that has been edited below. If you read it before 5 pm today (Sunday, 4/15), you’ll not have seen this correction. And you’ll see some comments that obviously pre-date the update.

Well, we certainly have a confused book business on our hands following the announcement of the Department of Justice intervention last week.

According to my (admittedly tentative) understanding:

1. We have three Big Six publishers (Hachette, HarperCollins, and Simon & Schuster) that have agreed to a settlement with Justice that obliges them to modify their agency arrangements over the next 60 days in ways that will eliminate their ability to control discounting in the supply chain for the next two years.

2. We have two Big Six publishers (Macmillan and Penguin) that will contest the DoJ position that they acted illegally (in collusion). They can apparently continue to manage their business with agency pricing the way they have, at least until a court rules. And, as we know, that can take a while.

3. We have one Big Six publisher, the biggest of all (Random House), which can continue to sell under agency terms without restriction and without a lawsuit to defend. Why? Because they didn’t take simultaneous action with the other five and were, therefore, not implicated in the alleged collusion.

4. Agency terms, including even most favored nation clauses (which never really affected the Big Six anyway), have not been ruled illegal. (Cader said in his post on Friday, blocked by paywalls I think, that, as a result of this set of legal actions “agency itself is demonstrably considered legal.” If that is accurate, and he almost always is, that is certainly an unintended consequence.)

5. The DoJ delivered some convincing evidence, surfaced on the Melville House blog, that despite my conjecture to the contrary, big publishers did discuss agency among each other before they implemented it. That certainly doesn’t look good. But whether or not it was implemented legally does not affect my opinion about the value of agency or the damage from losing it.

Added later. But, aha!!! This is not convincing evidence of a conspiracy. It is most likely that this discussion, assuming the email quotes are all legitimate to begin with, was about Bookish, the book retailing initiative funded by Hachette, Simon & Schuster, and Penguin. If that’s true, it would suggest that HarperCollins was an early participant in the conversations about starting it. That makes sense. HarperCollins is a partner with Penguin in the financing of Anobii, an ebook retailing site in the UK. 

And hats off to my great friend and favorite consulting competitor, Lorraine Shanley of Market Partners, who made the penny drop for me in a conversation at the Digital Minds Conference today in London! I was only comforted when I spoke to one of the smartest guys in trans-Atlantic digital publishing who said, “of course” to this when I told him, just as I did when Lorraine told me. Like me, he didn’t get this right off the bat!

 

Read the rest of the post on The Shatzkin Files.

Write to Express Yourself!

Portrait to painting

Writing is my passion. I considered it as my own way of keeping a Diary. Everything I feel, I see and I hear, I write it with no limit. When I write it gives me the satisfacion I want. It is as if I am sharing to the world everything that I learned through life, everything that I’ve been through. Whenever someone ask me why I always love to write, I can’t help but smile and tell them, "it’s my own way of expressing myself". If there is something I want to share, I write something about it, posted it and let everyone to see and read more about it. Writing is more than a passion to me. It helps me to grow and know the real person out of me. It’s a way of life, something that I can always put on and gives out my best in it!

About the Author:

Writing is considered a real passion if you want to express yourself. That’s exactly the reason why I love to write. I write from the heart. I know this is what I want to become. I write about things that interest me like Arts, specifically about Portrait to painting which I love to collect. I also write about travel, best destination and current events.

 

 

Help For DIY Cover Designers, From Author Brian Jackson

Indie author Brian Jackson is all about the DIY, and all about helping out his fellow indies by sharing what he’s learned. In his Creating Book Covers Workshop series of blog posts, he walks readers through installing the free graphics program GIMP, creating a simple book cover, working with layers, and working with fonts and text effects. 

Here are the relevant links:

Creating Book Covers Workshop: 1 Installing and Running the GIMP

Creating Book Covers Workshop: 2 Creating a Simple Book Cover

Creating Book Covers Workshop: 3 Working with Layers and Selections

Creating Book Covers Workshop: 4 Loading Fonts and Using Text Effects

Also see Brian’s related post, Create a Professional Looking Book Cover on Windows 7 for $18.50

Tor/Forge to Go DRM-Free By July: Immediate Thoughts

This post, by John Scalzi, originally appeared on his Whatever blog on 4/24/12.

This is pretty big publishing news: Tom Doherty Associates, an imprint of Macmillan and the publisher of most of my science fiction work, has announced they plan to ditch DRM (Digital Rights Management, i.e., the stuff that keeps you from moving or copying your eBooks) entirely. Here’s the release that’s going out about it.

 

Tom Doherty Associates, publishers of Tor, Forge, Orb, Starscape, and Tor Teen, today announced that by early July 2012, their entire list of e-books will be available DRM-free.

“Our authors and readers have been asking for this for a long time,” said president and publisher Tom Doherty. “They’re a technically sophisticated bunch, and DRM is a constant annoyance to them. It prevents them from using legitimately-purchased e-books in perfectly legal ways, like moving them from one kind of e-reader to another.”

DRM-free titles from Tom Doherty Associates will be available from the same range of retailers that currently sell their e-books. In addition, the company expects to begin selling titles through retailers that sell only DRM-free books.

About Tor and Forge Books

Tor Books, an imprint of Tom Doherty Associates, LLC, is a New York-based publisher of hardcover and softcover books, founded in 1980 and committed (although not limited) to arguably the largest and most diverse line of science fiction and fantasy ever produced by a single English-language publisher. Tom Doherty Associates, LLC, is also the home of award-winning Forge Books, founded in 1993 and committed (although not limited) to thrillers, mysteries, historical fiction and general fiction. Together, the imprints garnered 30 New York Times bestsellers in 2011.

I called Patrick Nielsen Hayden, Senior Editor of Tor Books, to ask what going DRM-free will mean for the publisher’s efforts regarding online misappropriation of author copyrights, because I know that this is a very real concern for many writers. This was his response to me, which he allowed me to post here:

Just in case anyone is worried: I can tell you with complete confidence that Macmillan and Tor/Forge have no intention of scaling back our anti-piracy efforts in the e-book realm. We expect to continue working to minimize this problem with all the tools at our disposal.

As you know, we already have a legal team in place that pursues major infringers. We don’t expect that to change at all, and we hope we continue to get the kind of cooperation from infringed-upon authors that’s been such a big help in the past.

Now, thoughts. Please understand this is me speaking personally, for myself, and only for myself.

 

Read the rest of the post, which includes links to two updates, on Whatever.

“Why I Break DRM On E-Books”: A Publishing Exec Speaks Out

This post, by Laura Hazard Owen, originally appeared on PaidContent.org on 4/24/12.

Calls for big-six publishers to drop DRM have increased in recent weeks, coinciding with the DOJ price-fixing lawsuit. Many observers fear that the lawsuit will actually reduce competition in the e-book marketplace by cementing Amazon’s role as the dominant player — and they wonder whether DRM is simply another weapon in Amazon’s arsenal, keeping customers locked to the Kindle Store.

Here at paidContent, independent e-bookstore Emily Books‘ Emily Gould and Ruth Curry have argued that DRM is crushing indie booksellers online. And Hachette VP, digital Maja Thomas recently described DRM as “a speedbump” that “doesn’t stop anyone from pirating.”

Still, it may be a long way from this discussion to the first big-six publisher’s actual removal of DRM from its e-books. For now, many readers know they can download free tools to let them read a Barnes & Noble Nook book on a Kindle, or an Apple iBookstore book on a Nook, or a Google book on a Kobo. I’ve used these tools. I recently bought a Google e-book from an independent bookstore, broke the DRM and converted it to read on my Kindle.

Recently, I began chatting with a publishing industry executive about this. This person — who I’ll call Exec — was interested in learning how to break DRM on e-books. About a month later, Exec is a convert and was ready to talk about the experience, albeit anonymously. I don’t think Exec is the only person in the publishing industry breaking DRM on e-books they buy…and those who aren’t doing so already might want to give it a try, if only to see what readers go through. Here is Exec’s story.

I was coming to the conclusion that I wanted to start breaking DRM on e-books I bought so that I could read them on any e-reader, but what pushed me over the top was a terrific post from science-fiction author Charlie Stross, “Cutting their own throats.” He argues that DRM is a way for the Amazons of the world to create lock-in to their platforms.

 

Read the rest of the post on PaidContent.org.

Why Trailblazing Amazon Should Take On The Publishing Establishment

This editorial, by author Barry Eisler, originally appeared on the Guardian UK site on 4/24/12.

Scaremongers who warn of a potential Amazon monopoly conveniently forget that one already exists in shape of legacy publishers

As the author of nine novels (the most recent, The Detachment, published by Amazon) and four self-published works, I’ve long been curious about why so many people are frightened of a potential future Amazon monopoly while simultaneously so sanguine about the real existing monopoly run by New York’s so-called Big Six.  

And it’s been interesting for me to see people try to explain away the evidence of collusion between the CEOs of the major publishers as set forth in the US Justice Department’s suit against these publishers and in the equivalent suit brought by 16 states.  Have a look yourself, if you haven’t already, and imagine the reaction if these sorts of meetings and discussions were happening instead among, say, Jeff Bezos, Tim Cook, and Larry Page, or among the heads of Bank of America, CitiGroup, and Morgan Stanley.

Of course, we shouldn’t rely on Justice Department allegations alone to form the opinion that legacy publishing is a cartel (after all, this is the same Justice Department that hasn’t prosecuted a single high-level US official for torture or a single banking executive for fraud, and that argues President Obama has the power to execute American citizens  without recognisable due process).  

We can also look to the results of the legacy model:  high book prices, most recently enforced via the so-called "agency" model; "windowing", whereby consumers who want cheaper paperback or digital versions are forced to wait until long after the release of the high-margin hardback; digital rights management regimes that annoy consumers and do little to inhibit piracy; increasingly draconian rights lock-ups in publishing contracts; lockstep digital royalties of only 17.5% for authors.

If you ask legacy publishing’s defenders, "Which is the monopoly:  the entity that charges high prices and pays low royalties, or the entity that charges low prices and pays high royalties?", you’ll be told by those defenders (tortured logic to follow) that of course it’s the latter.

 

Read the rest of the editorial on the Guardian UK.

Publishing Strategies for Savvy Self-Publishers

In the May/June issue of Writer’s Digest, you’ll find my feature article on “Publishing Strategies for Savvy Self-Publishers.”

Here’s a brief excerpt where I talk about getting specific with your approach to publishing:

Understanding your own goals and expectations is the most important thing you can do for yourself. You can’t set off on a journey if you don’t know your destination, it just doesn’t work very well.

One way to think about this is to identify three things: 

  1. Who is your ideal reader?
  2. What kind of books does she buy?
  3. Where are most of those books sold?

If you can answer this ultra-simple set of questions, you’re well on your way to figuring out the end goal of your book publishing, and your answers to these questions will come into play later on [in this article].

The article discusses:

  • Four strategies to consider,
    1. Evaluate your options
    2. Putting together your publishing team
    3. Seek support and assistance from the self-publishing community
    4. Turn yourself into a marketing machine
  • Links and resources for each strategy
  • Writers who blog about their own publishing
  • Should you do everything yourself?
  • What kind of book should you publish?

You can get the magazine printed on real paper at major newsstands. Writer’s Digest also has an online store where you can purchase a PDF of the article.

savvy self-publishing

Some of the inspiration for the article was drawn from the work I did putting together the presentation I talked about here:

Self-Publishing Strategies in 18 Slides

I’ve often said the most urgent need in the indie community is for author education. There’s nothing else that can save you countless hours of research, frustration, and the pain of making the wrong choice for your book. That’s one of the reasons I was glad to have the opportunity to write for a magazine with exactly those readers.

But I’m curious. Do you read magazines aimed at writers?

 

 

This is a reprint from Joel Friedlander‘s The Book Designer.

London Book Fair From An Author’s Perspective

I’ve just finished several marvelous days at the London Book Fair and wanted to share my perspective on this brilliant event.

It was definitely a publishing trade event but there were plenty of fantastic opportunities for authors to learn at workshops, through networking and finding out what’s going on in the industry. For independent authors who are entrepreneurially minded, there was also the potential for new markets, tools and relationships.

 


In the video below, I include some pictures from the event, interviews with authors and share my own perspective. You can also watch on YouTube here. There is a text post below the video if you prefer to read.

 

 My Overall Impression

When I walked into Earls Court, I was immediately intimidated by the huge stands of the ‘Big 6′ publishers that were packed with billboard sized posters of authors and books. Of course, we would all like to be up there, but that’s not the reality for most authors these days.

Those stalls were also full of people having meetings and no appointment meant no chat. I did feel a sense of the scale of the large publishing houses. How many authors, how many books and how many people are involved. It’s no wonder an individual author can feel insignificant.

The ‘altar’ to JK Rowling [is shown at right].

There were more interesting stands around the edges and towards the back, where smaller and more agile publishers had stalls. There was also a Digital space with a fantastic networking area where many of us had back to back meetings.

I heard a fantastic talk from Kobo’s Michael Tamblyn about the data behind the hype, and the Amazon KDP & Createspace stand was permanently busy.

Amazon publishing, including thriller imprint Thomas & Mercer, had a booth at the very back of the event. That physical placement seemed to be a deliberate act by the ‘powers that be’ as there was also a lot of anti-Amazon talk (from publishers) at the Fair. I went to talk to them about my own thrillers and had a great chat with the team there. More on that another time…

Amazon Publishing including Thomas & Mercer thriller imprint

There was a focus on China but I didn’t attend any of those events. I did talk to people about Portuguese translation for Brazil and also about other European markets, something I am definitely interested in pursuing. I enjoyed the seminars I went to and generally felt there was a good atmosphere. A lot of people are positive about the future of publishing, even with the tectonic changes currently happening (but then perhaps I only hear the glass-half-full side because that’s how I feel).

Here are some points from the sessions I attended, primarily the CEO Keynote. I tried to keep notes of verbatim speech but I acknowledge any errors are my own.

  • The whole point of publishing is how creativity gets to readers and winning the hearts and minds of the consumer
  • Ceiling at the China pavilion

    The book industry is sustainable, just not in its current form. Twice as many people read now as they did in the 1930s which is fantastic. But a quarter of books printed are destroyed, 1 book in 5 doesn’t earn back its advance. “The karma in publishing is bad.” But the interest in stories and ideas is very much alive.

  • Publishers want to embrace all things digital, but there is hesitancy because of the difficulty of predicting the future [Authors do this too!]
  • Publishing used to be based on alco-rhythms (booze and instinct) and is now based on algorithms – Richard Charkin, Bloomsbury
  • Print books are handled 24 times on average from manufacture to purchase. Planes take books to Australia and come back with the returns. Tescos buys 10,000 books and returns 9000. There is no business model that can sustain this. Things have to change.
  • All that really matters is the author and the reader. Everyone else is in the middle. Authors must realize that publishers can’t do everything for them. Neil Gaiman shifted thousands of his audiobooks with a tweet. We’re looking for more of that. Authors directly engaging with readers.
  • Publishers serve authors through editorial standard. They turn something into something better. [Agreed. Which is why serious indie authors hire professional editors, many of whom work for publishing firms already.]
  • “The advance is hush money” John Mitchinson, Unbound
  • Any kind of artist has to do everything. There is no such thing as sitting around dreaming. Performance is important.

Rights Workshop

This was a separate half day event that focused on what rights are, how they can be sold and the legalities behind it all. It was aimed at publishing professionals but I think all authors need an education in this. It could save you thousands or even hundreds of thousands of dollars. Seriously. Intellectual property rights are critical for us to understand so we know what we are selling and the possibilities that there are for us.

I learned how the author’s work is “exploited”, how different books work in different markets, the attention to detail needed in contractuals and tracking rights, about translations and the excitement of the Brazilian market. Highly recommended if you’re around next year.

Digital Minds Conference

This was at the same time as the Rights workshop above, but I attended virtually via the Twitter back-channel which was great. You can read a fantastic round-up of everything that went on at Publishing Talk’s Live Blog Roundup. Well worth a read.

Opportunities For Independent Authors

There were a lot of self-publishing companies around the Fair, as well as a large area for Digital and also Apps, which is where independent authors mostly hung out. The usual suspects were there, and there was a positive, happening vibe with speed networking going on.There were also a number of workshops for authors who want to look at self-publishing. They were a bit basic for you lot though, but interesting to see so many sessions at a Fair so dominated by traditional publishing.

The biggest event though was the launch of the Alliance of Independent Authors, brainchild of the terrific Orna Ross. It is definitely time for such an Alliance and there was a great camaraderie in the room. The turn-out was brilliant, considering you had to pay to get into the Fair and it is a global organization so not everyone is London based. I chaired a panel with Amazon, Blurb & Kobo (video to come on that) and then there was one with some independent authors sharing their experiences.

[This] video contains some of the reactions to the event – you can tell everyone is excited! Watch on YouTube here.

Featuring: Joanna Penn (me), Orna Ross, Joni Rodgers, Jon Reed, Linda Gillard, Ben Galley, Marion Croslydon, Lorna Fergusson, Karen Inglis, Leda Sammarco, Harriet Smart, Alison Baverstock.

In conclusion, a marvelous event and I am considering going to the Frankfurt Book Fair in October, so may see some of you there!

[Update] Radio Litopia The Naked Book: Shiny, Happy, Publishing People

As a result of the launch, Orna Ross and I were invited onto the panel of Litopia’s The Naked Book, along with a panel of publishing industry professionals. We talked about the Book Fair, Amazon, self-publishing and more. You can listen to the recording here on Radio Litopia.

Did you go to the Book Fair? or have you attended Book Fairs or publishing industry events before? What are your impressions and have you found them useful? Please do leave a comment. Thank you!

 

This is a reprint from Joanna Penn‘s The Creative Penn.

The Gang That Couldn’t Shoot Straight: How Apple and 5 Big Publishers Almost Got Away with a Massive Price-Fixing Conspiracy to Try to Turn Back the Kindle Revolution, and What It Will Mean for Readers, Authors, and Publishers Going Forward

(The following will appear in slightly different form, perhaps with the addition of a glossary, as the Introduction to a new book by Steve Windwalker.)

With most of the books that I have published about the Kindle, I am well aware that readers want to charge up their Kindle, turn it on, download some books, and start reading. The purpose of my books is usually to make the experience richer by sharing information about how to get most out of the Kindle and how to find the best books at the best prices.

But the clash of forces that have been at war, mostly behind the scenes, in the Kindle revolution has had a dramatic effect on the availability of and the prices we pay for ebooks, and those changes have just begun.

The machinations that led to the April 2012 U.S. Department of Justice anti-trust action against Apple and five of the six largest U.S. publishers will provide case study fodder both for law school and business school students for decades to come. The more you know about them, the more savvy an ebook consumer you will be. And while it is a fascinating story qua story, it is also no exaggeration to say that, if you have purchased any Kindle books at prices above $9.99 since April 1, 2010, you are likely to be a material party to the anti-trust action with a chance to benefit from a restitution fund that could grow to hundreds of millions of dollars.

So fasten your seatbelts, and here we go….

Apple. Hachette. HarperCollins. MacMillan. Penguin. Simon & Schuster.

One of the most innovative tech companies in the world, and five of the Big Six publishers,

That’s what we used to call them. Then, starting early in 2010, we all tried to come up with new names for them. Apple and the Apple Five. The Agency-Model Price-Fixing Co-Conspirators. The Greedy Dinosaur Publishers. But none of our phrase-making efforts had any special felicity.

But now the U.S. Department of Justice Anti-Trust Division, with its announcements of April 11, 2012, has made it easy on us.

Now there’s a new name for this wild bunch: The Defendants.

Many in the traditional publishing world believed that adoption of the ” agency model” was the biggest news of 2010 in the book business, and perhaps many of the same people will see the demise of the agency model as the biggest news of the next year or two.

Let’s take a look at how we got here, and where we are going. We’ll start back before April Fools Day, 2010 — the day that the agency model took effect — and continue right through to today and beyond by looking at some of the available tea leaves to see where prices, and the book business in general, are likely to go in the future.

The Defendants’ purpose in adopting the agency model was to end competitive pricing for ebooks, and to slow the growth of ebooks in general, and the growth of Amazon’s dominant market share in particular. They did this by foisting a new pricing model on all retailers — including Amazon’s Kindle Store — that had the effect of raising “new release” and many other ebook prices by 30% to 100% over the $9.99 price point that Amazon had established and maintained since the launch of the Kindle in November 2007.

That $9.99 price point involved Amazon taking a loss on some new-release bestsellers and selling others at breakeven, since most of the “copies” sold in the Kindle Store cost Amazon something in the $9 to $13 range, based on a wholesale pricing structure that involved a 50% discount on digital list pricing. Amazon’s strategic decision to lose money or only break even on such a significant part of its ebook sales was based on its belief that the overall “sweet spot” for ebook prices topped out at $9.99.

This limit on ebook prices would make them a compelling value proposition for consumers. Prices would be even lower in many cases for books from lesser known authors or books that had passed beyond new-release status. Beyond that consumer-driven approach to pricing, of course, the company was also pursuing two perfectly logical corporate goals: to achieve a dominant market share among ebook sales, and to grow the market share for the ebook format among all trade book formats.

Not surprisingly, publishers were terrified that Amazon’s loss-leader pricing for the Kindle Store would make it so dominant a player that it would be able to dictate wholesale and retail pricing terms throughout the marketplace. By the time Barnes & Noble launched the Nook in November 2009, Kindle owned a market share of well over 80% for ebook sales, and Nookstore pricing was, for the most part, roughly identical to Kindle Store pricing. Amazon had a powerful weapon that no longer existed for Barnes & Noble: its cash supply and overall marketplace power would allow it to continue taking retail losses or miniscule profits on the big publishers’ ebooks for years to come — or for however long it took Amazon, publishers feared, to be “the last man standing” in the book business.

It was this confluence of terrors — and the $9.99 price point that was at the heart of it — that drove five of the Big Six publishers (all except Random House) to enter into an obviously collusive price-fixing scheme with Apple to try, early in 2010, to block Amazon’s path to dominance. The publishers worried aloud to one another that the $9.99 ebook price point would lead to the erosion of hardcover prices, to ever-greater ebook popularity, and ultimately, perhaps, to demands by Amazon that the publishers lower their wholesale prices.

It’s worth noting here that the publishers might have taken a different, more innovative path. They could even have followed such a path collectively without fear of violating anti-trust laws. Although the agency-model publishers place the blame on Amazon for the business model disruption that the ebook revolution ignited, the fact is that Amazon’s highly successful entry into the ebook marketplace came, itself, out of its own private set of terrors. We have speculated before that back in 2003 and 2004 when Jeff Bezos, Steven Kessel, and others began dreaming up the Kindle and its associated publishing and retail platform, they were driven by fears that the rise of ebooks — with some other parties in the drivers’ seats — could, within a decade, destroy the retail print book business that was then the core of their business. It was only a matter of time.

So, it was Amazon that created the new, disruptive ebook business model, beginning ever so slowly at first in November of 2007. And publishers decided to fight back: not by reimagining the book business with new, innovative, profitable roles for themselves, but by marching in lockstep behind the late Apple CEO Steve Jobs in a baldly illegal and ultimately futile strategy to wield collusive power to save the past and block the future. They could have created their own retail outlets to offer their titles in Kindle-compatible ebook form. They could have worked with brick-and-mortar booksellers to bundle ebook and digital formats at handy little kiosks in every bookstore. They could have turned ebooks into the 21st century reincarnation of Literary Guild and the Book-of-the-Month Club, those 20th century behemoths that managed to sell millions of hardcover books for 99 cents each without creating any significant scare over the erosion of “the value of the book.” They could have tried to strip away the excess weight of unsustainable corporate costs and their reckless addiction to gamble huge advances for bestsellers, to rework their economics at new, competitive price points. They could have said, “We’re no longer going to pay for intermediaries that add no value.” They might even have pursued one of the collective strategies that they considered and rejected back in 2009, called Project Z, to create a joint venture that would establish a new ecommerce platform to sell ebooks wholesale to retailers, or retail to the ebook-buying public.

There were plenty of other publishers who wanted no part of the agency model. Venerable publishers like Houghton Mifflin Harcourt, Scholastic, Norton, Workman, Bloomsbury, and Disney’s Hyperion charted their own course, as did new and innovative companies like Open Road Media. Even Random House resisted considerable pressure from the Defendants and followed its own path — they held themselves out of the agency model for a long time and eventually used the agency model to take a more creative approach to price-setting. And then, of course, there were the most innovative new publishers on the scene — AmazonEncore, AmazonCrossing, Thomas & Mercer, Montlake, 47North and all the new imprints that have been rolled out over the past two years by Amazon Publishing. All of these companies — and I do mean all of them — have joined with independent authors and hundreds of small presses as well as millions of readers to take market share away from the Defendants and turn the book business upside down. It will never be the same again.

But none of that for Apple and the Defendants. Instead of innovating to become leaner, faster, and more profitable in the new world of publishing, they decided to try to stop time by breaking the law. “Come on,” you say, they didn’t decide “to break the law,” did they? It couldn’t have been that simple, could it?

Well, it always seemed pretty simple to us. I’m sure I was not the only observer, back in the early days of 2010, who watched the actions of Apple and their five co-conspirators and wondered, “Don’t they have corporate counsel with the guts to speak up and tell them they won’t get away with this?” But it turns out, according to the court documents, that none of the Defendants’ CEOs brought their corporate counsel along to the secret conspirators’ meetings that they held regularly at ritzy Manhattan eateries beginning in September 2008.

Sure, companies “collude” every day on a million little details, and most of the time they aren’t breaking the law. But there’s a big on-off switch that counts for a lot when anyone, including the Department of Justice or a federal court, is trying to figure out whether an instance of collusion is illegal: when companies collude or conspire to raise prices to the detriment of consumers, they are on thin ice. In this case, because of the Defendants’ collusion, consumers paid millions more than they would otherwise have had to pay for ebooks. So there it is in the most simple terms, but the more one looks into it, and the more one discovers about the law and the case history, the more it is clear that these jokers companies should have had someone protecting them from themselves. Because of what they did, they’ll not only have to stop doing it, but they will be under close regulatory scrutiny (spelled out in the court papers) for years, and they may well be required to pay tens of millions, and ultimately perhaps hundreds of millions, in restitution to consumers like you and me.

Strangely, in hindsight, one has to wonder if they thought they were invisible, or above the law. Part of their problem was their abject cowardice. Anything but fearless, they didn’t dare challenge Amazon’s pricing alone by pulling their books from the Kindle Store unless Amazon stopped its deep discounting of ebook prices. Had one of them done so, it might well have led to a different kind of legal High Noon where Amazon might have been vulnerable to regulatory scrutiny for monopolistic behavior of its own. After all, the point where the rubber hits the road for monopolies or near-monopolies is not whether they exist, but whether they use their monopolistic power to control the marketplace to the detriment of other parties. But Amazon has not — yet — had to defend itself on this terrain precisely because Apple and its co-defendants broke the law first. And with multiple smoking guns, many of them bearing Steve Jobs’ fingerprints.

Smoking guns? Here are a few choice tidbits from the court documents:

In December 2009, Apple approached each Publisher Defendant with news that it intended to sell e-books through its new iBookstore in conjunction with its forthcoming iPad device. Publisher Defendants and Apple soon recognized that they could work together to counter the Amazon-led $9.99 price. 

In its initial discussions with Publisher Defendants, Apple assumed that it would enter as an e-book retailer under the wholesale model. At the suggestion of two Publisher Defendants, however, Apple began to consider selling e-books under the “agency model,” whereby the publishers would set the prices of e-books sold and Apple would take a 30% commission as the selling agent. In January 2010, Apple sent to each Publisher Defendant substantively identical term sheets that would form the basis of the nearly identical agency agreements that each Publisher Defendant would sign with Apple (“Apple Agency Agreements”). Apple informed the publishers that it had devised these term sheets after “talking to all the publishers.” 

The volume of Publisher Defendants’ communications among themselves intensified  during the ensuing negotiation of the Apple Agency Agreements.  Through frequent in-person  meetings, phone calls, and electronic communications, Publisher Defendants, facilitated by  Apple, assured each other of their mutual intent to reach agreement with Apple.  After each  round of negotiations with Apple over the terms of their agency agreements, Publisher  Defendants’ CEOs immediately contacted each other to discuss strategy and verify where each  stood with Apple.  They also used Apple to verify their position vis-à-vis other Publisher  Defendants.  Penguin, for example, sought Apple’s assurance that it was “1 of 4 before  signing”—an assurance that Apple provided.  Two days later, Penguin and two other Publisher  Defendants signed Apple Agency Agreements.

To the extent Publisher Defendants expressed doubts during the negotiations about  whether to sign the Apple Agency Agreements, Apple persuaded the Publisher Defendants to  stay with the others and sign up.  For example, Apple CEO Steve Jobs wrote to an executive of  one Publisher Defendant’s corporate parent that the publisher had only two choices apart from  signing the Apple Agency Agreement:  (i) accept the status quo (“Keep going with Amazon at  $9.99”); or (ii) continue with the losing windowing policy (“Hold back your books from  Amazon”).  According to Jobs, the Apple deal offered the Publisher Defendants a superior  alternative path to the higher retail e-book prices they sought:  “Throw in with Apple and see if  we can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99.”

The Apple Agency Agreements contained two primary features that assured Publisher  Defendants of their ability to wrest pricing control from retailers and raise e-book retail prices  above $9.99.  First, Apple insisted on including a Most Favored Nation clause (“MFN” or “Price  MFN”) that required each publisher to guarantee that no other retailer could set prices lower than what the Publisher Defendant set for Apple, even if the Publisher Defendant did not control that  other retailer’s ultimate consumer price.  The effect of this MFN was twofold:  it not only  protected Apple from having to compete on retail price, but also dictated that to protect  themselves from the MFN’s provisions, Publisher Defendants needed to remove from all other e-  book retailers the ability to control retail price, including the ability to fund discounts or  promotions out of the retailer’s own margins.  Thus, the agreement eliminated retail price  competition across all retailers selling Publisher Defendants’ e-books.

Second, the Apple Agency Agreements contained pricing tiers (ostensibly setting  maximum prices) for e-books—virtually identical across the Publisher Defendants’  agreements—based on the list price of each e-book’s hardcover edition.  Defendants understood  that by using the price tiers, they were actually fixing the de facto prices for e-books.  In fact,  once the Apple Agency Agreements took effect, Publisher Defendants almost uniformly set e-  book prices to maximum price levels allowed by each tier.  Apple and Publisher Defendants  were well aware that the impact of their agreement was to force other retailers off the wholesale  model, eliminate retail price competition for e-books, allow publishers to raise e-book prices, and  permanently to change the terms and pricing on which the e-book industry operated.

The negotiations between Apple and Publisher Defendants culminated in all five  Publisher Defendants signing the Apple Agency Agreements within a three-day span, with the  last Publisher Defendant signing on January 26, 2010.  The next day, Apple announced the iPad  at a launch event.  At that event, then-Apple CEO Steve Jobs, responding to a reporter’s question  about why customers should pay $14.99 for an iPad e-book when they could purchase that e-  book for $9.99 from Amazon or Barnes & Noble, replied that “that won’t be the case. . . .     The prices will be the same.”  Jobs later confirmed his understanding that the Apple Agency  Agreements fulfilled the publishers’ desire to increase prices for consumers.  He explained that,  under the agreements, Apple would “go to [an] agency model, where [publishers] set the price,  and we get our 30%, and yes, the customer pays a little more, but that’s what [publishers] want  anyway.”

Those, friends, are smoking guns.

Meanwhile, Amazon played its hand in masterful fashion. And thanks to existing assets as well as smart moves that it had been making all along, it had a great hand to play. While the company certainly has its detractors among competitors, some publishers, some authors, and progressives who decry the company’s labor practices, it is nonetheless an enormously popular company. So progressives like me might wring our hands over the conditions faced by Amazon’s warehouse workers, but at the end of the day Amazon has more progressive titles and more progressive customers than any other bookstore. And publishers and authors might lament this, that, or the other thing about Amazon, but we all know they were not checking their sales rankings every hour on Barnes and Noble.

When it launched the Kindle, Amazon began with an unbeatable combination of the 4 Cs — customer base (more online customers than any bookstore in the world), catalogue (more online titles than any bookstore in the world), connectivity (easy, seamless, free wi-fi and 3G allowing customers to download any of its Kindle titles in seconds from almost anywhere), and convenience (the bookstore environment that it began building in the mid-’90s appeared in the Kindle Store on Day One, so that every customer knew how to use it from the get-go, and it only got better).

But of course those 4 Cs weren’t the only factors in establishing Kindle dominance. Amazon’s corporate wealth and power enabled it to take the notion of loss-leaders to a new level under the terms of the wholesale pricing model that had existed in the book trades for decades. From the DOJ court documents:

Under this wholesale model,  publishers typically sold copies of each title to retailers for a discount (usually around 50%) off  the price printed on the physical edition of the book (the “list price”).  Retailers, as owners of the  books, were then free to determine the prices at which the books would be sold to consumers.  Thus, while publishers might recommend prices, retailers could and frequently did compete for  sales at prices significantly below list prices, to the benefit of consumers.

By selling nearly every new release issued by a mainstream publisher at breakeven or a loss, Amazon made the Kindle a compelling money-saving gadget for avid readers. Although ebooks had existed as a futuristic dream with antecedents in the Palm Pilot, Project Gutenberg, and Doug Adams’ 1979 novel The Hitchhiker’s Guide to the Galaxy, it wasn’t until the Kindle’s launch late in 2007 that the ebook revolution began in earnest. Amazon sold out of its first Kindle units in under six hours and continued to dominate the small but growing ebook space throughout 2008. Oprah Winfrey ignited a new wave of Kindle love when she devoted a show to the little eInk gadget in late October 2008, and Amazon further cemented its dominant role with new Kindle models in early 2009 and mid-2010 and free apps that allow readers to “buy once, read anywhere” on any computer, smartphone or handheld device.

Although the Defendants’ launch of the agency model left Amazon with no short-term choice but to go along, the company understood the value of a symbolic fight in making it clear to its very loyal Kindle  customers that it opposed the new higher prices:

Starting the day after the iPad launch, Publisher Defendants, beginning with Macmillan,  quickly acted to complete their scheme by imposing agency agreements on all of their other  retailers.  Initially, Amazon attempted to resist Macmillan’s efforts to force it to accept either the  agency model or windowing of its e-books by refusing to sell Macmillan’s titles.  Other  Publisher Defendants, continuing their practice of communicating with each other, offered  Macmillan’s CEO messages of encouragement and assurances of solidarity.  For example, one  Settling Defendant’s CEO e-mailed Macmillan’s CEO to tell him, “I can ensure you that you are  not going to find your company alone in the battle.”  Quickly, Amazon came to realize that all  Publisher Defendants had committed themselves to take away any e-book retailer’s ability to  compete on price.  Just two days after it stopped selling Macmillan titles, Amazon capitulated  and publicly announced that it had no choice but to accept the agency model.

After Amazon acquiesced to the agency model, all of Publisher Defendants’ major  retailers quickly transitioned to the agency model for e-book sales.  Retail price competition on  e-books had been eliminated and the retail price of e-books had increased.

All of that worked very well for Amazon, but no strategy has paid off more handsomely in Amazon’s path to dominance than the one that, of course, would never have occurred to the big publishers: Amazon made a multi-faceted commitment to emerge as the publisher of choice for thousands of authors. These authors ranged from the self-published to previously published authors who wrested their backlist rights away from legacy publishers for the chance to handle their own marketing, control their own retail prices, and earn 70% royalties that allowed them to make as much per-unit on Kindle books priced under $5 as they had ever received from legacy publishers on print books priced five times as high. Amazon saw authors and small publishers as its customers, too, and understood that more authors meant more readers just as more readers meant more authors.

Amazon’s Kindle Digital Publishing (KDP) platform was just the beginning. Over the course of the last two years the company’s new imprints, willingness to sign new deals with a wide range of authors, and hiring of Larry Kirshbaum — the former Time Warner Book Group CEO called “the ultimate publishing industry insider” by Business Week — to run its own New York publishing operation made Amazon Publishing not only part of the conversation in publishing but a potential dominant player within the next year or two.

The hundreds of thousands of ebooks published via these new channels have made for dramatic changes in the shape — and the pricing — of the offerings in the Kindle Store. Amazon was able to ensure that nearly all of these titles were priced at $9.99 and below. And many thousands of these ebooks proved to be quality books that consumers wanted.

Many Kindle Store customers didn’t like paying 30% to 100% more for ebooks under the agency model, and Amazon’s ability to let a (few hundred) thousand flowers bloom in the Kindle Store gave those customers lots of other places to go. A phenomenal array of promotional pricing programs such as the Kindle Daily Deal, the long-awaited opening of zero-price promotions to KDP authors, the Kindle Owners’ Lending Library, and Amazon’s monthly offering of 100 Kindle Books for $3.99 or Less put the spotlight on those places and rubbed the Defendants’ noses in what they were missing to such an extent that one wouldn’t blame some of the Defendants if they had breathed a sigh of relief when the anti-trust lawyers came knocking on the door to save the Defendants from themselves.

And they went to those other places, by the millions. Or, to put it another way, the Defendants lost millions of ebook sales over the past couple of years to indie authors, small presses, and the innovative publishers we mentioned earlier, including Amazon Publishing and its imprints. They lost extremely valuable real estate on the ebook bestseller lists, and they may not get it back. In many cases they lost the readers themselves: among 2,377 respondents in the Winter 2012 recent Kindle Nation Citizen Survey, 61% said they “agree” or “agree strongly” with this statement:

Higher prices for new releases from the big publishers have driven me to try more and more indie authors, and I like what I have found

While we have observed numerous indicators over the past two years that have shown the agency model’s lethal effect on the Defendants’ market share, we also have these remarks from the single individual who probably has more access to ebook sales and pricing data than anyone else in the world, in a June 2010 Fortune interview with Amazon CEO Jeff Bezos:

Fortune: In the past, you’ve been a big proponent of lower prices for ebooks and an open opponent of the book publisher agency model, which allows the publisher to set the final retail price whether there’s an intermediary retailer or not. Now that you’ve switched to an agency model, will ebookstores like Amazon’s get hurt?

Bezos: No. First of all, there are a bunch of publishers of all sizes, and they don’t all have one opinion. There are as many opinions about what the right thing to do is as there are publishers. So you’re seeing that some of them are being very aggressive on prices, pricing their books well below $9.99.

Others are trying to do everything they can to make prices as high as possible. And what you’re going to see is a share shift from one group of publishers to this other group of publishers.

Fortune: Do you expect a significant share shift? When do you see that happening?

Bezos: It’s a significant shift and we’re seeing it already.

The point, of course, was that Fortune’s inaccurately premised question notwithstanding, Amazon did not “switch to an agency model.” Amazon acquiesced in the decision by some publishers to force the agency model on it, and then took all possible steps to expose its readers to as many non-agency titles as possible.

To put it another way, the Department of Justice statement in court documents that “retail price competition on  e-books had been eliminated and the retail price of e-books had increased” due to the agency model is not accurate. Amazon’s multi-pronged initiatives with authors, other publishers, and its own new publishing imprints meant that that there would be a different kind of price competition: price competition between the Defendants’ titles and all the other titles in the Kindle Store. And the retail price of all those other ebooks would be lower, not higher than in the past.

On April 1, 2010, the day that the agency model went into effect for its proponents, there were 480,236 ebooks in the Kindle Store, and 23% of them were priced at $10 and up. As of April 15, 2012, the total Kindle catalogue had almost tripled, to 1,356,286, and fewer than 14% of those titles were priced at $10 and up. At that same point on Sunday, April 15, only three of the top 20 bestselling titles in the Kindle Store were published by the Defendants (two by Hachette and one by MacMillan), and two of those three were priced at under $8.

With trends like these, it’s probably fair to say that the agency model would have died, eventually, even without Dept. of Justice intervention. Apple’s failed iBookstore never grew to a point where it would have provided real cover for the Defendants if Amazon had called their bluff and started picking them off one at a time. By most accounts the iBookstore accounts for no more than 10% of the ebook market, and our anecdotal impression is that the Kindle App accounts for far more reading on the iPad and other Apple devices than iBooks. The Google books initiative that was touted (however ludicrously) as the savior of indie bookstores just a couple of years ago is dead.

One of the rich ironies in all of this is that the Defendants actually lost money by switching to the agency model. Under the wholesale pricing model that had been in effect for ebooks for over two years, the suggested list price for a new release Kindle book was usually the same as the suggested list price for a hardcover. For a book listed at $20 to $25, the publisher received $10 to 12.50 from Amazon for each copy sold, and Amazon was free to set its own retail prices — usually $9.99 on Kindle and about $14-$17 for the hardcover. Under the agency model, when the publisher mandated a retail price of $12.99 to $14.99 for an ebook, it stood to receive 70% from Amazon or another retailer — or somewhere between $9 and $10.50. You’ve gotta hand it to Steve Jobs for the sales job he must have done on those helpless Defendant publishing executives!

Now, of course, the publishers stand to lose even more under the agency model. The infrastructure required to support the model was expensive, and the switch-back will also be expensive. Whether or not the publishers’ corporate counsel were earning their keep back in early 2010, there are certainly some serious legal costs now as all of the Defendants are being represented in federal court by some of the highest-billing law firms in the country.

And then there’s the coup de grace: While the federal Department of Justice was acting to secure remedies that it said will restore competition to the ebook marketplace, 16 state attorneys general were suing for another kind of remedy. It was announced on April 11, 2012 that two of the Defendants had settled with these states to create a $51 million restitution pot for ebook customers. It now appears that this fund will soon become much larger, as Jeff Roberts reported on PaidContent.org that “a HarperCollins lawyer predicted that three publishers could reach a settlement with all 50 state governments in the next two months.  Such a deal would not only expand an existing proposed settlement that would refund money to e-book buyers…. The developments came at [an April 18] status hearing in Manhattan attended by Apple, the five ‘big six’ publishers who are under investigation, the Department of Justice and  three state governments.” By the time we’re done, the cost of these restitution settlements is likely to amount to hundreds of millions of dollars.

The hand-wringing by friends of the big publishers in the mainstream media over the Department of Justice’s moves has been something to behold, but it comes as no surprise. Big publishing and big news media are closely linked as a matter of economics, ownership, and corporate culture. The story line of much of the media coverage has been very simple: the DOJ has just killed off the entire US publishing industry and named Jeff Bezos king.

The truth is that the big publishers and their chosen intermediaries (traditional-model literary agents, brick-and-mortar distribution channels, etc.) had one collective dinosaur foot in the coffin before they launched the agency model strategy, and most of the moves that they have made since the launch of the Kindle will only hasten their coming descent into total irrelevance.

Where do we go from here?

Amazon has occasionally been criticized by investors and analysts for growing its gross-revenue top line and various digital and physical delivery systems at the expensive of net profits, but the company is certainly profitable. What it is really doing with loss leaders and paper-thin margins on products and services like Amazon Prime and Kindle hardware is growing market share. As the Defendant publishers and their physical book distribution systems get smaller and less profitable, competitors like Barnes & Noble teeter on the Borders of financial failure, and Apple becomes bored with an iBookstore whose marketplace it cannot control by illegal means, Amazon’s share of the total book trades market only grows, and grows, and grows. That market share grew dramatically throughout 2011 and early 2012 even while Amazon was barred by the Defendants from competitive pricing of their ebook offerings. Now that Amazon is free to hit consumers’ sweet spots with Kindle prices for all books, the growth will only intensify. As astonishing as it may seem, Amazon could well reach a 50% market share for the entire U.S. trade book business across all formats by the end of 2013.

Along the way, we can expect to see new release bestsellers offered again at prices under $10 in the Kindle Store, with prices falling to the $4 to $8 range after books have been available for several months, and hundreds of thousands of ebooks and many future bestsellers priced at under $4, with many of these highlighted through the promotional programs noted earlier. For an advance look at what Kindle prices and the Kindle bestseller lists may look like in the future, it’s worth checking out the 140,000 “Prime-eligible” titles that currently make up the Kindle Owners’ Lending Library:

  • All of them, of course, are priced below $10.
  • Among the 100 most popular titles on the list as of April 15, 43 are priced under $3, 24 are priced between $3 and $4.99, and 33 are priced between $5 and $9.99.
  • Authors earned 70% royalties on any sale of the vast majority of these 140,000 titles.
  • Kindle owners with Prime memberships “borrowed” these titles about 275,350 times in March 2012, and although each “borrow” transaction was free for the customer, Amazon paid authors or publishers $2.179 per borrow.

Of course there will continue to be some books priced above $10, as there should be. “Boxed set” offerings such as The Hunger Games trilogy at $15 do very well with price-conscious Kindle customers, and customers show a consistent willingness to pay over $10 for certain textbooks, business, and technology titles, to name a few categories. Readers generally will pay a little more for a book that will save them money, and even more for a book that will make them money. It’s not that the books we read for pleasure are of lesser value to us, but there is a lot more competition for our attention when it comes to a good mystery, romance, biography, or literary novel.

It all sounds like a rosy future for Amazon, but the company needs to proceed with caution and pay close attention to some ticking time bombs. The likelihood that Amazon will approach a 50% market share in the trade book market place will not, in and of itself, make it the target of any serious anti-monopoly actions. But if Amazon uses its market dominance in a willful way to put others out of business or constrain their ability to conduct business, there could be trouble ahead. The 140,000+ titles in the Kindle Owners’ Lending Library are only there now because their rights holders have given Amazon the exclusive right to sell them. That exclusivity clause is a winning tactic that is probably unassailable as a way of fighting back against the anti-competitive maneuvers of Apple and the other Defendants, but once the Defendants are forced to start behaving themselves, its demand for exclusivity could well bring Amazon unwanted legal or regulatory attention.

Other predictable consequences of Amazon’s dominance not only in the ebook sphere but beyond could create problems for the company if it does not make forward-looking changes in the way it does business. The company is seen by many as a tax-avoiding bogeyman that is destroying not only publishers and wholesalers but independent bookstores in particular and Main Street in general, and while there are major economic forces at work here that would probably lead to the same conclusion without Amazon at the head of march, Amazon has to realize that it should do everything possible to avoid being seen as the online version of Walmart. And while Amazon has escaped much of the kind of negative attention that has surrounded Apple and its FoxConn manufacturing plant in China, there is an emerging campaign among labor activists and progressive journalists to focus a spotlight on poor conditions in Amazon fulfillment centers. As with all of these concerns, there are real issues at play, and Amazon’s best moves would be substantive rather than media-driven.

Interesting story, eh? But just in case it might at some point have ceased to resonate with you — say, halfway through one of my 75-word sentences — here’s a paragraph to print out and stick to the refrigerator door.

Shorter term, there’s that restitution fund that could approach half a billion dollars by the time all the Defendants pay their share for all the states, and if Amazon plays its cards right it could end up seeing much of that money invested in Kindle book purchases. For starters, the company should make it easier for its customers to download and print out a spreadsheet of all their past Kindle orders, just as we can do currently for everything else we buy from Amazon via the Download Order Reports link on our Amazon account page. I don’t think many people use that link right now, but it could become a very popular page if some tech wizard in Seattle or Mumbai were to spend 15 minutes improving the link so that we could print out a list of all the Kindle books for which we paid $10 and up since April 2010 and get paid several bucks each for them by the Defendants.

 

This is a reprint of a post from Steve Windwalker, which originally appeared on his Kindle Nation Daily site.

Fifteen Reasons Why Other Writers Aren't Showing You The Love

This post, by Jean Oram, originally appeared on the From the Write Angle blog on 4/20/12.

Ever get the feeling that another writer isn’t exactly loving you? Maybe it’s just a slight niggling feeling that somehow, somewhere along the line you’ve annoyed them. Or maybe you haven’t had that feeling, but you’ve been noticing that you’re just not getting the responses and feedback from others that you’ve been hoping for.

Maybe it’s not them. Maybe it’s you.

But what did you do? And how do you fix it?

I’ve asked ten writers what their writer pet peeves are about other writers, plus added four of my own. Read on and see if any of them feel familiar or strike a chord.

FIFTEEN Things About Writers That Annoy Other Writers and What You Can Do About It:

1. It’s All About YOU

Writers (and people in general) who make it all about themselves and their work are annoying. They leave the impression that they don’t care about others.

Is it you?: If you notice that you’re not replying to others because you aren’t that interested in their problems and story, that you’re not offering assistance when you could, you never have the time for others, don’t bother to answer questions, and always seem to leave conversations feeling pleased that you got all your information on the table, but can’t really recall what those other folks were about, then you might be focusing a bit too much on yourself. I understand that we can’t all be perfect and our time is limited. But think about the impression you are leaving.

How to fix it: it is understandable that you want to get the word out about your book, contest, blog post, latest rejection, but others also want to feel heard. Bite your tongue and try to let others talk. Listen. Retweet or tweet their news. You will be amazed at what happens.

2. It Rocks to RECEIVE

Writers who take, take, and take from others whether it is getting others to do their promotion, editing, critiquing, or research, (the list goes on) without giving back are often dumped and eventually find themselves without many good writer friends.

Is it you?: If you find you are receiving more than you are giving back (really think about it here), you might be one of these dudes. When was the last time you helped someone directly? Either shared a link, retweeted their news, liked their page, provided feedback, sent them an agent’s name who just happens to be looking for that person’s genre, etc.

How to fix it: Look up "Giver’s Gain" and the term "Karma." Apply it.

Give for the sake of giving. Offering help to others will improve you in more ways than I can ever explain. However, I’m not saying if someone gives you a query critique that you have to critique theirs back, however, if you find a great article you think they would like, send it to them. Or help one of their friends. Keep the generosity and helping spirit going. Get in the habit of helping.

 

Read the rest of the post on the From the Write Angle blog.

7 Links To Understanding (And Finding) Beta Readers

Perhaps one of the most daunting things I have yet to accomplish with my current WIP, Apprentice Cat, is finding enough beta readers. I imagine its a problem many of you have or will face, too. I’ve put together 7 links to understanding (and finding) beta readers, as well as critique partners and editors, in this post in hopes that it will be helpful to us all.

 

  1. Finally, an answer! Here’s the difference between line, copy, and content editing by Pavarti K. Tyler: Besides giving a quick idea to what beta readers and critique partners are, Pavarti shares gives us the inside scoop on what each type of editor does and why you might want one.
  2. 3 Ways to Determine if Your Writing is Crap by Jody Hedlund: In this post Jody breaks down the different levels of readers an author might use from “unskilled” beta readers (those who aren’t writers) to fellow writers to professional editors.
  3. Does my manuscript look fat in this? 7 reasons why writers need critique partners by Laura Pepper Wu: Laura explains what makes a great critique partner and why having one is so important.
  4. Ask Jami: How Do We Find Beta Readers? by Jami Gold: In this post, Jami goes into detail what a beta reader does and some ways we can find them, including offering ourselves as beta readers.
  5. The Art of Critiquing: I explain what makes a good critique and give some suggestions of what to do before handing over your manuscript to a beta reader or critique partner in this post.
  6. Critters Makes for Better Writing: In this post I give a more in-depth look at one online resource for critiques.
  7. Bad Critique Groups—8 Things That Can Push a Group Over to the Dark Side by Ruth Harris: No one wants to be in a bad critique group, so Ruth gives us 8 things from having no rules to dogmatic PC/Religious policepersons to watch out for when choosing a crit group.

Do you know of other resources for finding a beta reader?

 

This is a reprint from Virginia Ripple‘s blog.