Comment by tylero | Hacker News Reader

Comment by tylero | Hacker News Reader

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Can you explain why?

Specifically, I'm curious why wouldn't you want your representative (your publisher) to have the power to achieve the best possible outcome for you, the author. Disregarding the specifics of this case, why would you trust Amazon to set your books' prices, seeing as how they're trying to subsidize a platform, and they're in the volume business?

Thought experiment: As a developer, would you support a decision from Apple to set a price ceiling of $0.99 for applications in the App Store?

I haven't really seen a convincing argument from Amazon's supporters why they feel Amazon should be able to set prices to goods they don't produce. That is, apart from the fact that these folks would like cheaper books--and that misses the point of what's at stake here. Even if you agree with Amazon on their current pricing model, it seems like an arbitrary and likely momentary alignment of opinion.

If MacMillan's ebook price system doesn't benefit them and their authors, they'll almost certainly adjust it. They're a profit-seeking entity.

As a side note, this whole episode reminds me of Walmart squeezing down the price of pickles by sheer monopsonistic purchasing power.

If Apple were to buy my software for $9.99 and then sell it to consumers for $0.99 I'd be very happy.

Of course the publisher should be free to set the wholesale price to whatever level they want, but Amazon should in turn be free to set the retail price based on the margin they want to make (even if it's negative, like right now). Having the publishing industry fix the retail prices is going to be a total disaster for the ebook market, since there's a good chance just going to use that pricing power to protect their existing dead tree business.

Lower prices don't affect my bottom line, they affect the publisher's bottom line. If it means more volume, I make more money. (You could argue that allowing the publisher less profit means there will be fewer books of lower quality, but that is already the case for programming books. There is already no money to be made.)

Your initial claims here don't follow: Lower prices certainly do have an affect on author's income. Authors receive a royalty based on a wholesale price, which is (normally) directly related to the price you pay as a consumer.

Publishers' and authors' interests are fundamentally aligned. Volume and pricing affect everyone in this equation. It seems like they should be the ones discovering and ultimately setting the right price/volume ratio, not Amazon.

(I have no idea what you're driving at in your last two sentences.)

Author royalties are usually based on Suggested Retail Price, not the actual retail price.

My impression is that Amazon is primarily fighting over the right to set actual retail price, like bookstores all across the country have done for ages. The publishers don't want that to happen because they believe Amazon will set them low enough to affect hardback sales.

But actual retail price has no effect on the money most authors make. A discounted book still pays the author a royalty based on full SRP.

At least that's how I understand this whole thing.

Yes, you're quite right that there is an important distinction to make there.

To clarify one point: Authors typically make their royalties on the wholesale price--that is, the actual cash publishers receive from booksellers like B&N and Amazon. For a printed book, that might be 50-60% of the list price ('sticker price').

The actual retail price, wholesale price, and list price are all related. A higher list price does result in a higher wholesale price, which in turn affects the royalty payment.

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