From Business Standard:

It took Jeff Bezos, Amazon Inc’s 50-year-old founder & chief executive, only one day to respond to Flipkart’s $1-billion fundraising announcement. A day after its Indian e-commerce rival disclosed it had raised $1 billion to further its business, Amazon issued a statement on Wednesday to say it would invest an additional $2 billion in the country.

Amazon’s India investment will not only be double the amount Flipkart has raised in the latest round but is more than the $1.76 billion total funding it has got since its launch in 2007. Besides, this is going to be the largest investment so far by an e-commerce company in India. It is the first time since it entered India in June last year that the Seattle-headquartered internet major has gone public to disclose its financial numbers specifically for this market.

“We see a huge potential in the Indian economy and for the growth of e-commerce in the country. With this additional investment of $2 billion, our team can continue to think big, innovate, and raise the bar for customers in India,” Bezos said in the statement. “At the current scale and growth rates, India is on track to be our fastest country ever to a billion dollars in gross sales.”

. . . .

Amazon currently has over 17 million products across several categories. 

Link to the rest at Business Standard

It appears that Jeff isn’t spending all his time obsessing over the Hachette negotiations.

From The New Yorker:

In May, the publishing company Hachette revealed that the online retailer Amazon had been delaying shipment of physical books published by Hachette while the companies argued over how e-books should be sold on Amazon. Since then, the public-relations war between the companies has resembled an altercation between siblings who accuse each other of bad behavior while tacitly agreeing not to reveal what started all the hair-grabbing in the first place. But on Tuesday, Amazon broke the code of silence that both companies, despite their disagreements, had adhered to for nearly three months.

In a short Web post, Amazon named its objective (to lower most e-book prices to $9.99 apiece), disclosed what it was willing to offer to Hachette (Amazon would keep a thirty-per-cent share of the revenue from e-book sales, which is lower than it typically takes), and offered some arithmetic to support its position (by one calculation, cheaper e-books sell so many more copies that publishers—and, by extension, authors—can expect higher revenue). “This is good for all the parties involved,” Amazon’s representatives wrote.

. . . .

The facts, as presented in Amazon’s letter, seem persuasive at first glance. Many e-books are priced at $14.99; some reach $19.99. These prices are “unjustifiably high,” Amazon’s letter argues, because e-books don’t come with the expenses—printing, warehousing, transportation—that are required to get physical books into readers’ hands. Moreover, the company claims, e-books are “highly price-elastic”—that is, if the price of an e-book goes up, fewer people are willing to buy it.

. . . .

The upshot is a revenue increase of sixteen per cent for this hypothetical e-book—more money for the retailer, the publisher, and the author. Even authors who care less about money than about audience should be happy, because the number of books sold rises by seventy-four per cent.

Along with its proposal to take a thirty-per-cent cut of e-book sales—a lower percentage than people had believed it was seeking—Amazon suggested that Hachette give authors a thirty-five-per-cent share and keep thirty-five per cent for itself. This, too, looks good for authors: their share of e-book sales varies depending on several factors, but they traditionally get no more than twenty-five per cent of the amount left after the retailer has taken its share.

Given all this, it might seem surprising that authors have been generally unimpressed by Amazon’s announcement. On Wednesday, I called Brian DeFiore, a literary agent who has criticized publishers for giving authors relatively little money for each e-book sold; I thought he might find something to like in Amazon’s proposal. But he was not persuaded, and he explained why.

For one thing, he said, Amazon doesn’t actually get to decide what share of revenue publishers pay authors, a fact that the company is aware of. Its call for a thirty-five-per-cent share sounds nice, DeFiore said, but it means little.

. . . .

DeFiore also pointed out that Amazon doesn’t quantify what lower e-book prices would mean for sales of physical copies of the same books. Authors who work with traditional publishers like Hachette tend to make more, per copy, from hardcover sales than from e-books. If cheaper e-books draw people away from hardcovers, that could hurt these authors financially.

. . . .

Jeff Bezos, the C.E.O. and founder of Amazon, used to work at a hedge fund, and he has a mind for numbers.

. . . .

Amazon’s effort to win over authors might be doomed. But if Bezos and company want to try, they might do better to emphasize the idea that lowering prices will increase the audience for books—a minor point in Tuesday’s post. “The assumption from Amazon seems to be that authors are primarily motivated financially, but that’s crazy,” Preston told me. “No one becomes an author to make money—not even James Patterson became an author to make money, and I certainly didn’t.” While Preston was wary of Amazon’s financial argument, he was guardedly compelled by the notion that lower e-book prices could bring his books to a wider audience.

Link to the rest at The New Yorker and thanks to Bill for the tip.

When you’re in business (say as an author) and select business associates, PG suggests choosing associates who understand numbers.

The thesis of the article - that Amazon’s proposal to double royalties paid to authors for ebook sales has been rejected by authors because the New Yorker writer doesn’t know any authors who like the proposal – reminded PG of a famous statement made by New York Times film critic Pauline Kael many years ago following the 1972 Presidential election in which Richard Nixon won one of the most lopsided victories in US history:

I live in a rather special world. I only know one person who voted for Nixon. Where they are I don’t know. They’re outside my ken. But sometimes when I’m in a theater I can feel them.

Manhattan can be just as provincial as any other place. In PG’s experience Manhattanites tend to be less aware of this possibility than people who live elsewhere (excluding Paris).

From Andrew Knighton Writes:

I used to work in business improvement, trying to help employees save themselves time and effort, trying to help clients get a better experience. I was constantly faced with people who would prevaricate or refuse to act on evidence clearly showing that changes would benefit everyone. They didn’t want to take the risk of changing, and it drove me insane.

That’s how it must look from the other side of the indie/traditional dispute – that of innovators like Amazon or hybrid author Hugh Howie. Their lives and identities are built around the value of moving forwards, trying new things. They find this incredibly exciting. They can see the benefits it will bring. They have the evidence. They have the logic. And yet still people dig in their heels against them.

. . . .

So what does this mean in the end? Right now it means that no-one’s going to ‘win’ this debate. Publishing will change, and in the long run I believe the innovators will win out, not through better arguments but by providing better access to books in the way that readers want. The Amazon/Hachette dispute – which despite all this rhetoric is really just a contract negotiation – will be decided by power and profits, not who’s right about the future of publishing.

Link to the rest at Andrew Knighton Writes and thanks to Russell for the tip.

Here’s a link to Andrew Knighton’s books

From a Words with Jam interview with David Gaughran:

WWJ: This is not the first time a distributor and publisher have clashed. Why is Amazon v. Hachette attracting more interest than, for example, Barnes & Noble v. Simon & Schuster?

DG: Because it’s Amazon! It doesn’t matter that Barnes & Noble and Simon & Schuster had a similar dispute last year (without people losing their minds) because the currency of the internet is attention and a story on Amazon will guarantee more clicks than anything else. The spat between Amazon and Hachette is essentially a business dispute between a large corporation and a very large corporation, but the “industry” is attempting to depict it as a battle for the future of writing as a viable profession.

This allows them to tap into the fear that many writers have about the paradigm shift that’s underway. Hachette can’t come right out and say that it wants higher book prices (which is the result if they prevail in negotiations and take back control of pricing and/or restrict Amazon’s ability to discount), so instead we get a narrative of a rapacious corporation versus a plucky guardian of our literary heritage. Authors should adopt a little more scepticism towards what is a concerted PR campaign from a series of vested interests.

. . . .

WWJ: Accusations and emotions are running high, with commentators invoking everything from commercial suicide to predicting the death of literature. What’s your outlook?

DG: Fear is the most powerful tool if you want to manipulate public opinion. Emotions are running high because the publishing industry is being radically reshaped by the same disruptive forces that have transformed all sorts of industries from travel and insurance to newspapers and music. Change is scary, and the publishing industry is changing at light-speed. If you want a parallel with music, I think it’s akin to going from vinyl straight to MP3.

Publishers like Hachette have been doing everything possible to slow down the changeover from print to digital. It knows that self-publishers and small publishers are grabbing huge market share because large publishers don’t have a lock on digital distribution like they do with print. Once a reader goes from shopping in Waterstones to buying e-books from Amazon, that reader starts buying way more books that aren’t published by the biggest players. The response of large publishers to the digital revolution was to drag their feet on the digitization of backlist books, institute windowing for e-books (so they weren’t released at the same time as hardbacks), and engage in an illegal conspiracy to fix the price of e-books to keep prices artificially high – all of which is designed to slow down the switch to digital.

Hachette’s aim in these negotiations is to regain control of retail pricing and/or restrict Amazon’s ability to discount books. The net effect will be higher prices for readers, which in turn will slow down the transition to e-books. This buys Hachette time as it figures out this weird thing called the internet and how to talk to those strange people called readers – something they didn’t really have to do in a print world where its customers were booksellers.

I absolutely reject the notion that if Hachette fails to regain control of retail pricing and/or restrict Amazon’s ability to discount books that this will lead to some kind of disaster. I think that’s a regressive, zero-sum view of the marketplace which fails to grasp that books are in competition with all sorts of other forms of entertainment. I think lower prices are something that we should strive for as that grows the market – which benefits all writers (and readers).

. . . .

WWJ: Amazon’s hold on the market is described as a monopsony. If the UK had retained the Net Book Agreement [fixed price book agreement such as exist in France and Germany], would we now be playing on a fairer field?

DG: It’s quite revealing how traditional publishers cast envious eyes at the price-fixing/discount-restricting laws in places like France and Germany. It makes a mockery of any claim that they weren’t intending to fix e-book prices in America. The nostalgia with which the Net Book Agreement is viewed is equally illuminating. Such price-maintenance agreements are always presented in the media as a positive thing for the future of literature, but they are really about control. Publishers want to maintain e-book prices at a higher level so they can slow the changeover to digital as much as possible. Let’s be very clear about this: anyone campaigning for these kinds of laws or agreements is campaigning for higher book prices – something I absolutely oppose and something I think would be an incredibly regressive step.

With regard to the UK in particular, the problem, in my view, wasn’t getting rid of the Net Book Agreement, but the practice of publishers offering sweetheart deals to chains and supermarkets, making it next-to-impossible for independent bookstores to compete.

Link to the rest at Words with Jam

From Forbes blogs:

We’re now several months into the seemingly intractable Amazon-Hachette publishing battle. We don’t have the benefit of historical context and distance that Barbara Tuchman brought to World War I in The Guns of August (yes I fully get the irony of the link here to Amazon), but you get the feeling that someday we’ll be reading the publishing industry’s version of Tuchman’s masterwork. That is, the story of a series of moves that in retrospect will look like a foolish, mutually-destructive war over the last gasp of a crumbling aristocratic oligarchy.

. . . .

As always in these mega-media-melees, it’s not that there aren’t significant issues at stake. Amazon now counts for over 50 percent of the entire book business in the U.S. – not just in eBooks but in physical ones, where not only independent bookstores but retail giants like Borders have suffered massively.

. . . .

While every industry has its battles among suppliers and retailers, and labor and capital for that matter, those in the media business tend to become magnified and share some similar characteristics. You’ve got a public inordinately interested in the business and passionate about its products and businesses quite facile in using the levers of the media (and its sex appeal) to make their cases in unusually public ways. It’s hard to imagine the equivalent of the promotion (and virtual coronation) of Hachette author Eden Lepucki’s California on “The Colbert Report” in a battle over prices of auto parts supplied to GM. The problem when the battle profile is raised so high is when the combatants go beyond the perfectly legitimate and rational business issues at stake and play it as if the future of civilization depends upon their victory.

. . . .

From the outside, this is what both sides seem to have lost sight of in Amazon-Hachette – how much they need each other. The value chain for successful media endeavors demands attractive content, a platform for them to consume it (whether that’s for a moment in time or forever), an alchemy otherwise known as branding and marketing, and willing consumers that see the value in what is provided. This is why these we call these things “ecosystems”, not “ecocompanies.”

Link to the rest at Forbes blogs

From The Digital Reader:

Last night Amazon posted their third official statement in the ongoing contract dispute with Hachette, and like their first statement the open letter posted last night is proving to be an effective tactical PR maneuver.

The letter, which you can read over here, said that Amazon only wanted a 30% commission from sales of Hachette ebooks, and that Amazon was fighting with Hachette over whether the ebooks would be expensive or cheap. The statement goes on to lay out the math to justify lower ebook prices, and then it concludes with the idea that authors should get 35% of the sale price of an ebook.

. . . .

I want to point out that Howey’s beliefs could be a sign of a newly identified condition called “Amazon Infatuation Syndrome”. This term was coined earlier today by Nicole Cushing, and Hugh Howey is the first known case.

Like Amazon Derangement Syndrome, AIS sufferers have an irrational emotion towards Amazon which overrides conscious thought. In the case of AIS, that emotion is love for a soul-less corporation.

. . . .

Amazon is in this for their own interest, and not anyone else’s, and that is why it is important to remember that we cannot accept yesterday’s statement as fact. It is a PR statement, and as such it was not written to convey facts. Amazon’s goal was to convince you to believe an idea: that Amazon only wants a fair share (30%) and lower ebook prices.

The thing is, we do not know as outsiders that this is Amazon’s actual position. All we know is that this is what Amazon has said is their position, and that is not the same thing. For all we know Amazon made up this statement out of whole cloth solely with the goal of swaying opinion in their favor. (And just to be clear, my disbelief also extends to everything Hachette has said or leaked.)

Link to the rest at The Digital Reader

PG is inclined to look at what organizations do rather than what they say.

Amazon pays authors royalties of 70% of the sales price of ebooks. Big publishing pays authors royalties of 17.5% of the sales price of ebooks.

Under the KDP Terms of Service, an author can pull his/her books away from Amazon at any time and do whatever the author wants to do with them. PG receives a regular stream of emails from traditionally-published authors who are being forced to remain in publishing contracts with large and small publishers when the authors have made it clear they want out.

PG could continue, but you get the idea. The simple fact is that Amazon treats authors much, much better than any of the big New York publishers do.

PG thinks that much of what Hachette, et al are saying is pretty clueless, but this group could be speaking words that were music to PG’s ears without it making any difference. What they’re doing is underpaying and abusing authors chained to them with grossly unfair contracts.

Actions speak louder than words. If Amazon flips over to the dark side, PG won’t be praising the company any longer. Speculation can create anything of tomorrow. PG recommends making business decisions based on today.

Conspiracy theories about Evil Jeff must provide some who observe the world of books a frisson they just can’t live without.

“Amazon could decide to pay authors only one cent every month!”

“What if Amazon requires every author to cut off a finger and send it to Seattle for Bezos to put into a big jar he keeps in his mansion?”

If you’re looking at the possibilities of a dystopian future, PG sees a lot more of those for authors tied to publishers slipping down into bankruptcy than he does for authors working with Amazon. He is reminded of a quote from The Sun Also Rises:

“How did you go bankrupt?” Bill asked.

“Two ways,” Mike said. “Gradually and then suddenly.”

There is no question about who treats authors better. In PG’s observation, Amazon is making it possible for lots of authors (not all) to quit their day jobs. If Big Publishing was ever much good at doing that, those days are long gone.

From The Huffington Post:

One of the best things about being an Amazon Prime member is getting free, two-day shipping.

Prime members with a little patience, however, are now getting an extra benefit: $1.

Starting Wednesday, prime members who choose “No-Rush” shipping on any order will get a $1 credit for Amazon’s Instant Video service.

. . . .

The promotion is a brilliant way for Amazon to get people more comfortable with downloading movies and TV shows from its service, or, put another way, get more people into Amazon’s “content ecosystem.” If you’ve spent a few months getting discounts on downloads, and built up an Amazon library of movies and shows, then you may be more likely to go back to Amazon for full price purchases — instead of, say, iTunes, which has similar stuff.

Link to the rest at The Huffington Post and thanks to Patricia for the tip.

From Mashable:

Morgan Entrekin is happy with the relationships he’s developed with Amazon. As the president of independent publisher Grove/Atlantic Books, he witnessed the industry change as Amazon’s introduction of the Kindle helped publishers like him embrace the digital revolution that has battered other industries.

It’s the future that he’s worried about.

“Right now [Amazon] is allowing me a perfectly fair margin, but what happens when they have total control or twice as much of the market share than they have now?” he said.

Entrekin’s sentiment isn’t unusual. Amazon’s skirmishes with various publishers had been obscure to most until May, when the ecommerce giant began to block preorders of upcoming Hachette books. Since then, the dispute has been a public one, especially by Amazon’s usually tight-lipped nature.

The relationship between Amazon and publishers started out as mutually beneficial. Amazon brought publishers into the digital age, and publishers were happy to provide the content in return for a new revenue stream.

As e-books grew and brick-and-mortar businesses like Borders struggled, the business dynamics between Amazon and publishers changed. Publishers like Hachette — after being boosted by Amazon’s investment and innovation — are now uncomfortably reliant on the ecommerce site and looking for ways to maintain a grip on an evolving industry but finding none.

. . . .

“We have to give a tremendous amount of credit to Amazon and Jeff Bezos and his team for the investment that they were willing to make in those years,” Entrekin said. “They did it in an orderly manner, in a way you could trust, and it’s helped us.”

There was a time when e-books were just a small part of the overall market, but now e-books are reaching parity with print. In 2013, some 457 million e-books were sold vs. 557 million hardcovers, according to the Association of American Publishers and the Book Industry Study Group. (Paperbacks were not included in that estimate.)

The sales growth magnifies publishers’ unease with the with the $9.99 price point that CEO Jeff Bezos had decided on — a number that had no basis in economics but rather in psychological pricing, according to Brad Stone’s defining book on Amazon, The Everything Store. Amazon recently defended that price in a blog post, claiming it is better for consumers, publishers and authors.

The $9.99 e-book introduction came after publishers had already seen the prices of books fall as chain stores like Barnes & Noble and Borders drove out independent sellers through lower pricing.

. . . .

By outsourcing the innovation to Amazon, publishers were subject to its preferences — including that $9.99 price point.

“[Amazon] put downward pressure on prices because Amazon was always trying to lower e-book prices. Publishers were always trying to prevent that from happening because it lowered the perceived value of books,” said Arun Sundararajan, a professor at New York University who specializes in digital economics.

. . . .

Whether publishers can figure out how to manage a $9.99 price point and Amazon’s market dominance may end up being a footnote in history if self-publishing continues to grow.

Authors, attracted by the prospect of keeping 70% of sales as long as they price their books at or below $9.99, have begun to sign up with Amazon, skipping publishers altogether.

. . . .

Advocates of self-publishing, like author Hugh Howey, argue that the royalty opportunities are too great to pass up, and that publishers will need to transition into a different role to remain relevant.

“I think today’s successful self-publishing groups will become tomorrow’s boutique publishing agents. The advantage of worldwide distribution through e-books and on demand is already outweighing the advantage of being in a bookstore for three to six months,” Howey said. “And the financial difference between royalties is so massive that more and more authors are discovering this, which allows for colleagues to discover it. I really think in 10 years, you’re going to see a lot more people self-publishing.”

Link to the rest at Mashable 

From Digital Book World:

Kindle Unlimited’s effect on the best-seller list has indeed grown.

Kindle Unlimited titles have been removed from the Digital Book World Ebook Best-Seller list due to an inability to sort out retail purchases from Kindle Unlimited “reads” when creating the list.

After discussing several possibilities with Amazon as to how to include titles that had robust sales but also had reads on the new ebook subscription platform counted toward Amazon Kindle sales ranking, no solution was found.

. . . .

If “reads,” where the user isn’t paying to purchase a book each time, are counted toward best-seller rankings on the Kindle list and they are unable to be separated out from regular purchases, then it would be unfair to include those titles on the list.

Had those titles been included, they would have elevated several Amazon Publishing, self-published and back-list ebooks onto the best-seller list, including Mockingjay, The Giver, Rhett by J.S. Cooper,Harry Potter and the Sorcerer’s Stone and more.

Link to the rest at Digital Book World and thanks to Richard for the tip.

From John Scalzi:

Another day, another volley in the Amazon-Hachette battle, this time from Amazon, in which it explains what it wants (all ebooks to be $9.99 or less, for starters) and lays out some math that it alleges shows that everyone wins when Amazon gets its way.

. . . .

I think Amazon’s math checks out quite well, as long as you have the ground assumption that Amazon is the only distributor of books that publishers or authors (or consumers, for that matter) should ever have to consider. If you entertain the notion that Amazon is just 30% of the market and that publishers have other retailers to consider — and that authors have other income streams than Amazon — then the math falls apart. Amazon’s assumptions don’t include, for example, that publishers and authors might have a legitimate reason for not wanting the gulf between eBook and physical hardcover pricing to be so large that brick and mortar retailers suffer, narrowing the number of venues into which books can sell. Killing off Amazon’s competitors is good for Amazon; there’s rather less of an argument that it’s good for anyone else.

. . . .

Amazon’s math of “you will sell 1.74 times as many books at $9.99 than at $14.99″ is also suspect, because it appears to come with the ground assumption that books are interchangable units of entertainment, each equally as salable as the next, and that pricing is the only thing consumers react to. They’re not, and it’s not. Someone who wants the latest John Ringo novel on the day of release will not likely find the latest Jodi Picoult book a satisfactory replacement, or vice versa; likewise, someone who wants a eBook now may be perfectly happy to pay $14.99 to get it now, in which case the publisher and author should be able to charge what the market will bear, and adjust the prices down (or up! But most likely down) as demand moves about.

Link to the rest at Whatever and thanks to Ben for the tip.

PG will quote himself in a comment he posted last night:

Does Barnes & Noble have a say in the prices it charges for books?

Amazon’s a retailer. Retailers set prices.

If Hachette wants to set prices, it should open its own store.

But, of course, Hachette experimented with price-fixing. Now it’s hooked. Let that be a lesson to all of you young people – just say no to price-fixing.