Here are my first impressions of iPad as a Kindle and iPhone owner.

I set up my Apple iPad on Saturday and imported all my iPhone apps, and the Kindle app updated into a nice high-res Kindle for iPad that in some ways trumps the free iBooks application from Apple. And when you include the e-bookstores offered by Apple and Amazon, I think I’ll stick to Amazon for the flexibility (subject to publishers’ pricing manipulation, of course).

Kindle for iPad - Archive View

This review will be brief. More after the jump…

Book Reader Apps

The iBooks app and the Kindle app are very similar, both free from the iPad store; iBooks comes with a free copy of Winnie the Pooh which includes color illustrations. Both display purchases in a bookshelf format with full-color book covers.

If you already have Kindle books, the Kindle app will let you retrieve them from the archives at any time; I grabbed a couple of the books I have on my Kindle 2 to compare.

Screen quality is sharper than Kindle and much higher resolution. But both Kindle and iBooks apps benefit from this. Their interfaces are similar, controls in different places, and my already-purchased copy of Free, by Chris Anderson, had sharp grayscale graphics. So too did the copy of Cook’s Illustrated.

iBooks for iPad

Kindle for iPad

But – with Kindle for iPad, I really doubt I’ll be buying anything from Apple’s store unless it’s a color book (and I’d probably just buy the dead tree version of a keepsake anyway). With the Kindle app, I can read the same book on Kindle 2, iPhone, iPad, or my PC, and sync my bookmarks. That’s a lot more choices than with iBooks.

For readability, the iPad is completely useless in the Florida sun. I do a lot of reading by the pool, and my iPad will be staying inside. Only e-ink is readable in bright sunlight.

iPad and Kindle readability in the sun

The iPad’s backlit screen is fine for reading at night, but I think I’ll stick with e-ink and a soft lamp over the shoulder to reduce eyestrain – and because the Kindle 2 is lighter.

Other Impressions

I tested out some other iPad apps – ABC’s ABC Player streamed episodes of Lost and Private Practice flawlessly over my home wi-fi. Adobe Ideas is a free sketchpad app for drawing with a finger. The iPad, unlike the iPhone, doesn’t come with a weather app – but free WeatherBug will fix you up (or AccuWeather, but I prefer WeatherBug’s user-interface).

Tweetdeck has already been updated for iPad, though the iPad version must be downloaded separately. Planets, a planetarium app for iPhone, is much more usable on iPad – providing a virtual planetarium the size of the screen that can be manipulated with touch gestures, Of my pre-existing iPhone apps, only Kindle and Planets had free “dual platform” upgrades.

The iPad has a glossy screen that will act as a mirror in ambient lighting – I found it a bit distracting when the TV shows I was watching showed my face, chair, and bookshelf in the glass. The device, at 1.5 pounds, is not light… spend an hour holding up the iPad to watch a TV show or read a novel and you’ll build some muscles.

The iPad has a lot of potential – I can’t wait to see the app marketplace grow. But for book reading, I don’t think it could be my only e-book reader. I much prefer the readability of e-ink.

Book Pricing

Now here’s where the FTC gets involved? Or book publishers simply screw up their own revenue streams.

Douglas Preston’s “The Cabinet of Curiosities” on Kindle cost me $6.39 from Amazon.com in June 2009 – both Apple and Amazon’s e-book price is now $22.99 (price apparently set by Hachette Book Group). That’s nuts! You can get a brand new paperback copy of this book – published in 2002 – for $7.99 at Amazon.com. Why would anyone want to pay 3x that price for an e-book of a paperback?

Clive Cussler’s “Corsair” just came out in paperback ($9.99 cover price). I just finished reading it… bought it for under $6 at Costco. Amazon.com sells the e-book for $7.99; the Apple Bookstore has it priced at $8.99. That’s a bit more reasonable. However, Cussler’s “The Wrecker” is still in hardcover. I purchased it for $9.99 in December 2009. Today the e-book is $14.99 at both Amazon and Apple, $3.45 below Amazon’s hardcover price.

Publishers want readers to pay more – but the alternative is the library or a used bookstore. Or independent authors…

David Derrico’s sci-fi novels Right Ascenscion and Declination are both $0.99 in e-book format from Amazon or Apple. I’ve read the first and I’m working on the second novel. Both are excellent alternatives to expensive e-books. There are many self-published authors in various genres, both fiction and non-fiction, with affordable and highly readable e-books. I think established publishers are sinking their own ships (and their authors as well) with their pricing strategies.

Smart readers on a budget should shop around and be selective.

Summary

I didn’t buy the iPad to read books on – I expected the display and weight issues. I was pleasantly surprised to see I can read any of my Kindle books on iPad, if I choose to. But I’m disappointed at what’s happened to e-book prices in the wake of iPad, and while the iPad’s display is sharp, it’s a bit too shiny.

One way to make user comments a bit more effective and relevant is to use thumbs up or down voting buttons, either rating the commenter or the comment. This is user-driven moderation, and while it sounds good in principle, sometimes it is seen as a device for voting down opposing viewpoints, which doesn’t necessarily improve a discussion.

Here on True/Slant, member comments are curated by contributors and editors. Good, relevant comments are typically the ones that get called out; comments that don’t contribute to the conversation are not. Comment threads are by default filtered by this rating, but users can switch to an all-comments view.

So how does this comment curation work, technically?

Generally, we expose a control to only the contributors; when they click on the control, an AJAX request is sent, the database is updated, and the response causes the current comment’s class to change. CSS does the rest. Here’s the code…

We decided to use the field “comment_karma” to track curated comments. It’s already there in the comments table, ready for us to use (provided, of course, we’re not using another plugin that’s using that field in a different way).

To curate a comment, we just set comment_karma to 1:

[php]
function curate_comment( $comment_id ) {
// set this comment to curated
global $wpdb;
$comment_id = intval( $comment_id );
if (wpdb->update( ‘comments’, array( ‘comment_karma’ => ‘1′ ), array( ‘comment_ID’ => $comment_id ), array( ‘%s’ ), array( ‘%d’ ) )) {
do_action( ‘curate_comment’, $comment_id );
return true;
} else {
return false;
}
}
[/php]

That modular code can be accessed by our AJAX function:

[php]
function ajax_commentcallout () {
if ( ! current_user_can( ‘moderate_comments’ ) ) die(‘-1′);
$commentid = intval( $_POST['commentid'] );
if ( $commentid ) {
if ( curate_comment( $commentid ) ) {
die(‘1′);
}
}
}
add_action( ‘wp_ajax_comment_callout’, ‘ajax_commentcallout’ );
[/php]

This code only works if the current user is a comment moderator.

The add_action hooks our function into the WP AJAX handler. Our action name is the text following wp_ajax_, eg: comment_callout.

To trigger the AJAX, we need a bit of JavaScript – we’ll use jQuery:

[javascript]
jQuery( document ).ready( function() {
jQuery( ‘.callouton’ ).click( function() {
callout_on( this );
return false;
} );

function callout_on(sel) {
var commentid = getClassId( sel, ‘callout-’ );
jQuery.post( ajaxurl,
{ action: "comment_callout",
commentid: commentid
}, function(data) {
if (data == ‘1′) {
jQuery( ‘#comment-’+commentid ).addClass( ‘curated’ );
}
});
};

function getClassId( selector, cssclass ) {
var found = 0;
jQuery(selector).filter( function () {
var classes = jQuery( this ).attr( "className" ).split(" ");
for (var i = 0; i > classes.length; i++) {
if ( classes[i].substr( 0, cssclass.length ) == cssclass ) {
found = classes[i].substr( cssclass.length );
break;
}
}
});
return found;
}
[/javascript]

How does this work? When you click on the element with class callouton, the function is called, it pulls the comment id out of another class in the same element, posts to the ajax handler with our action and the comment id, and then if it gets a 1 back, adds the curated class to the comment div. More details on AJAX in the WordPress Codex.

You just need to add this to each comment:
[php]
<span class="callouton callout-12345">Call Out</span>
[/php]

With this code:
[php]
function ppi_curate_comment_link() {
if ( current_user_can( ‘moderate_comments’ ) ) {
global $comment;
?>
<span title="Call out this comment" class="callouton callout-<?php echo $comment->comment_ID; ?>">Call Out</span>
<?php
}
}
[/php]

Depending on your theme, you may need to add this to an existing custom Walker class, or create a new one.

How do we show a curated comment? We’ll leave that to you; this CSS will simply change the background color:

[css]
.curated {
background-color: #E0FFE0;
}
[/css]

Now, this will be fine until the page reloads. To add the curated class to comments that have a comment_karma of 1, we need to filter the comment classes:

[php]
function filter_comment_class( $classes, $class = ”, $comment_id, $post_id = null ) {
if ( is_curated( $comment_id ) ) {
$classes[] = "curated";
}
return $classes;
}
add_filter( ‘comment_class’, ‘filter_comment_class’, 90, 4 );
[/php]

Oh, what’s is_curated() ? It’s a utility function, so we keep our logic – whether we’re using comment_karma – in just a few places, curate_comment(), and is_curated(). If we need to change how we track comments, we only need to change those two functions.

[php]
function is_curated( $comment_id ) {
// return true if comment has been "Curated"
$comment =& get_comment( $comment_id );
if ( $comment && ( $comment->comment_karma > 0 ) ) {
return true;
}
return false;
}
[/php]

That’s the simple implementation – a more advanced system would want to have an “off” button as well as expose the same functionality on the Admin comment manager interface.

Now, if you’ve ever had a comment called out here on True/Slant, you may have received an email notification. By adding the hook to the curate_comment() function, we can trigger other changes on the site whenever a comment is called out – such as sending an email to a member, adding the curated comment to the contributor’s activity feed, increasing a count of curated comments for the post, etc. All without needing to change our curation code.

This code is already in the curate_comment() function:
[php]
do_action( ‘curate_comment’, $comment_id );
[/php]

To do something when the comment is called out:
[php]
function curate_notify( $comment_id ) {
// do something using $comment_id
}
add_action( ‘curate_comment’, ‘curate_notify’, 20, 1 );
[/php]

Image by Getty Images via Daylife

Rather than focusing on the sport, some media outlets this morning chose to create or flame a controversy apparently started by reporters – including an AP reporter who took photos to the IOC.

The Canadian women’s hockey team wins an Olympic gold medal – but instead some of the headlines say:

Beery gold-medal celebration could get Canada’s women’s team in trouble (Los Angeles Times)

A Toast to Hockey Gold, but at What Cost? (New York Times)

Boozing Olympic Hockey Team in Hot Water (ABC News)

The fact that the players are all adults, the festivities took place in an empty arena after the public had left, and the only others apparently present were family, cleaners, and reporters begging for photos, is being glossed over in the frenzy.

One newspaper even posted a gallery of the players with cans of beer and cigars. Since when was that stuff illegal? Maybe Nascar drivers ought to keep their champagne away from the track – after all, it’s the same thing, right?

One reporter took the time to research the ages of the players and pointed out that a player with a beer can in hand was 1 month under the legal drinking age in Vancouver, which is 19. The player hails from Quebec, where the drinking age is 18. Whoopee!

So what’s the big deal? Why do some media have to play up what seems to have been a private team celebration that spilled out of the locker room?

What do you think? Is this a real story, overreaction, or something in between?

I also had the privilege of speaking, on “Technology of the New News Workflow”. I went over several of the WordPress MU customizations that we’ve done to keep the news flowing smoothly here on True/Slant. My slides are on SlideShare and I promise we’ll get into details of the features I presented on, in future posts right here at Inside T/S Tech.

There were three tracks, 200 attendees, several sponsors, and we were fortunate to be at the University of Miami School of Communication. Their facilities were great! And I’m not just saying that because I’m a ‘Cane. The organizers did a terrific job, and it seemed like every person there was learning something they could use on a project or on their blog.

Pete Bernardo gave an excellent roundup – and demo – of handy plugins for designers, developers, and bloggers. Jane Wells, a WordPress core team member, outlined what’s coming in WordPress 3.0 (nitty gritty details of the development effort on wpdevel.wordpress.com) and how people can contribute to this great open source project. Syed Balkh talked about security and WordPress; very useful tips for everyone – is your blog as secure as it could be? Lead WordPress developer Mark Jaquith presented some WordPress tricks for plugin and theme developers, and answered techie questions. Designer Tammy Hart spoke on working with clients – to a packed room. Shayne Sanderson summarized the features of  WordPress e-commerce plugins. I had no idea there were so many, now I want to sell stuff!

Those were just the presentations I was able to attend out of the three tracks; unfortunately nobody could get to all of them, but there was something for everyone. Most of the presentations are online, and are listed on the WordCamp Miami website or in a SlideShare search.

The other great thing about attending WordCamp is – you get to meet all these other WordPress geeks, bloggers, journalists, designers, developers, and generally bright friendly people. I think that was the highlight of my experience, meeting some of the folks who create or use WordPress, finding out what interests other developers and designers.

Here are highlights of the WordCamp reviews and news coverage. Check out the WordCamp Miami website for a more up to date list.

Go Live Miami has video interviews with Wordpress developers; Jane Wells even shares an as-yet-unannounced plugin for BuddyPress.

Other news coverage: the Miami Herald sums up Miami’s tech week, Miami New Times previews the geek events for the week. Is it a coincidence that the weekend’s weather got warmer?

The Flickr group “WordCamp Miami” has several photos from attendees and speakers, showing the people, sessions and facilities.

Speaker Angie Moncada, who presented “Writing for a Professional Blog”, wrote not just about WordCamp but on social media interactions. Thanks Angie, your post convinced this skeptic to get on Twitter. Angie said:

The good thing about social media is that it helps us have conversations we’d never have otherwise and collaborate with people we’d never know well enough to without it.

Speaking of Twitter, the Twitter hashtag for WordCamp Miami is #wcmia. Even if you don’t tweet, you can find out what other folks have been saying about WordCamp Miami on this Twitter search page.

Mallory Colliflower has an excellent rundown of the sessions she attended, titled “WordCamp Miami Lights a Fire!”. Mallory wrote:

The event lit a fire under my ass. For the generously cheap $30 attendance fee, I was able to accumulate a list full of things I can’t wait to tinker and play with. The brain cogs are turning with full speed and the inspiration is flowing rapidly through my veins.

Ileana Ortiz (Country Cuban) has “Reflections of WordCamp Miami”, with notes for each session she attended. Chelsea Duran has her impressions of her first ever WordCamp.  Jane Wells’ comments during a Q&A sparked a few lighting bolts for Lori Todd.

And UM communications senior Jess Jurick, who helped plan the event with organizers David Bisset, John James Jacoby, and John Carcutt, had some things to say about organizing an event for 200 geeks. Jess also had time to present “Find your blogging voice”!

Thanks to all the organizers, volunteers, speakers, sponsors and attendees for making my first WordCamp a great one; I’m sure there’ll be many more. I’m looking forward to next year’s WordCamp Miami, and to meeting more WordPress folks.

Finally, speaker and designer Tammy Hart, who flew down from Alabama with her husband and made the weekend a mini-vacation (in addition to presenting a great talk on how to work with clients), summarized her impressions of Miami.

Want to go to a WordCamp? You don’t need to wait; no need to travel to sunny South Florida in the winter – unless you want to. WordCamps are happening all the time, all across the globe; check out WordCamp Central for the schedule. There just might be one closer than you think.

Image via CrunchBase

The hosted blogging and website services of WordPress.com are suffering some kind of outage this hour. Twitter reports indicate people are getting blank pages or pages are not loading; TechCrunch.com may also be part of the outage. In addition to free blog accounts on WordPress.com, many domains are hosted by WordPress.com, and these are likely to be affected as well.

Self-hosted sites based on the WordPress.org software, such as True/Slant, are not affected.

30 years ago the Crazy Canucks became Canada’s skiing heroes. I remember watching the Lake Placid Winter Olympic Games in 1980 as Steve Podborski took bronze in the men’s downhill (and Ken Read, another of the Crazy Canucks, unfortunately crashed). Forget hockey – flying down a frozen hill at hundreds of miles an hour is what takes guts – you need to be a little crazy. The Canadians came up during a time when European skiers dominated the sport of skiing. Watching fellow Canadians do that – and win medals – was, and still is, inspiring.

Here’s a clip of Steve Podborksi talking about the challenges in 1980, and introducing the course for the 2010 Olympic men’s downhill at Whistler.

Now Alexandre Bilodeau continues the tradition with a gold medal in men’s freestyle moguls, crashing down those bumps like they were just pillows. I’ve skied a few of those – one at a time – and the camera angles don’t show how high the bumps really are.

Bilodeau is on his way to becoming another sports ambassador for Canada, and an inspiration to Canada’s next generations. Asked by NBC’s Today show this morning how he planned to celebrate, he said he’s going to cheer on his teammates who are competing in the next few days.

From Stanley Park with huge conifers and a miles-long seawall and beaches, to the quaint Granville Island, to trendy Robson Street, the high rises of the West End, and bustling Chinatown and Gastown,  the city has an amazing variety of parks and neighborhoods. And the people are so friendly, with an interweaving of diverse cultures not just of the Pacific Rim, but of the world.

And where else can you go downhill skiing in the morning, enjoy sailing or a picnic at the beach in the afternoon, and have a pint of local draft ale at a waterfront pub in the evening?

One short visit in 1984 was all I needed; even though it was drizzling and chilly the entire time, I fell in love with the city and the Canadian west coast laid back attitude. It didn’t hurt that Vancouver’s climate is milder than eastern Canada, where I grew up, but it wasn’t just about the weather; the city has its own vibe. I moved to Beach Avenue in Vancouver’s West End the next year.

I lived in Vancouver for 10 years, and still wonder why my wife and I left to move to Florida. At the time, a job and the weather were the draws. But there’s so much of Vancouver, and British Columbia, that is hard to find in the rest of the world. Maybe that’s why the city gets the highest ratings every year as one of the world’s best cities to live in. Even with the drizzle.

Image via CrunchBase

I’m also looking forward to the many sessions, and to meeting other WordPress developers. If you’re in South Florida, I hope to see you there. Get your tickets via EventBrite. Other speakers include Jane Wells, and WordPress core developer Mark Jaquith.

The one day conference is being held on the campus of the University of Miami.

Image via Wikipedia

It appears Random House is not eager to go to an agency model or to delay e-book releases.

A poster on the MobileRead forums reported on comments at the American Bookseller Association meeting on Friday:

The only bright spot for Amazon, and Kindle owners, came from Madeline McIntosh, the President of Sales, Operations, and Digital for Random House. She pointed out that publishers “have no real experience at setting retail prices.” She also revealed that one of the reasons Random House had not been party to the iBook Store at launch was because of the pricing issues.

In regards to delayed releasing of ebooks, McIntosh said, “Our current policy is we release e-books at the same time as physical books,” followed by “I haven’t been convinced that it’s good for the author or consumer to delay the release. My fear is that the consumer who has fully embraced the technology will buy another e-book that is available or lose interest altogether. What if I train the consumer that the best scenario is to get it free?”

via MobileRead Forums

Image by oskay via Flickr

The recent e-book dispute between Amazon and Macmillan is far from over.

Macmillan books, both e-book and traditional paper, are still unavailable at time of this writing on Amazon.com, except through Amazon’s third-party sellers. And Macmillan e-books, and the iPad, are not yet available for sale from Apple, Inc.

Who will prevail? Will e-book prices go up? Will book pricing be controlled by a few publishers? Will consumers buy fewer e-books? Will this help authors? Is this even legal?

First, some e-books background

I’ve been watching the media coverage, blog postings, and comments over the past week, and it seems there’s a lot of noise and confusion among the facts of this issue. Even before the problem blew up and Amazon pulled Macmillan books from its inventory, authors and readers were weighing in on the question of fairness with recent e-book pricing and availability.

Author Douglas Preston, who has written several books, even went so far as to comment in response to a one-star review of his latest book, Impact, published by a Macmillan imprint, weeks before the latest controversy:

I’m just trying to write good books, earn a living and support my family like everyone else in this crazy world. Please give me a break.

Preston later posted a mocking take on the “shrill, angry posts by Kindle users here and elsewhere”:

I am the American consumer. I am entitled. I want it now. I want it at the cheapest possible price. And if I don’t get it I’m going to lash out in protest and I don’t care who I hurt just as long as those greedy publishers and authors take notice!

Perhaps some were shrill, but most seemed quite polite, while making their point:

Mr Preston,
I feel you are missing the point here. You are losing many more sales of your book because of your publishers decision to delay the Kindle version release date than because of a negative customer review on amazon.com.

These complaints and negative reviews and discussions stemmed from several publishers’ decisions late in 2009 to delay the release of the e-book by one or more months, as the Guardian reported:

HarperCollins is not the only publisher delaying release of its ebooks. Last year, leading publishers Simon & Schuster and Hachette Book Group both told the Wall Street Journal that they would delay ebook editions – which are generally priced significantly lower than the hardback – by up to four months for some titles in 2010. “We believe some people will be disappointed. But with new [electronic] readers coming and sales booming, we need to do this now, before the installed base of ebook reading devices gets to a size where doing it would be impossible,” Simon & Schuster chief executive Carolyn Reidy told the WSJ.

Amazon.com pointed out at the time that “authors get the most publicity at launch and need to strike while the iron is hot. If readers can’t get their preferred format at that moment, they may buy a different book or just not buy a book at all.”

Impact’s Kindle version was delayed by 4 months. While paperback readers are used to waiting for a smaller, economical version of the hard cover book, for the past 2 years most e-book releases have been simultaneous with the hardcover version. And many e-books have been priced by Amazon at $9.99, while discounted hardcovers sell for about $15 at Amazon, Costco, and Walmart. In December, several new hardcover releases were even sold for $9.00. So Kindle owners have been used to being able to read their favorite author’s new book at release time for under $10. Many refuse to pay more, and say that their alternative is the library or a used bookstore. When e-books are priced close to the price of a paper book, they can’t comprehend the logic:

The $9.99 price point made it so – for the first time EVER – I bought new releases with some regularity. I won’t spend more than that on ANY book, let alone one that I can’t re-sell/trade/donate for secondary benefit.

Neither can the Wall Street Journal:

Raising the e-book price to $13 or $15, as reportedly contemplated in Apple’s discussions with publishers, isn’t the way to embrace the digital future. A price of $15, for instance, is close to the hardcover book price charged by discounters like Costco.

Publishers not happy

It seems the publishers have not been happy with this. In 2009, the “publisher’s list price” or “cover price” of e-books generally rose to match that of the hardcover, squeezing Amazon’s profit margins on e-books. Some speculate that Amazon is losing money on some e-book sales. But in retail, loss leaders are a competitive strategy, and price adjustments help move inventory and generate profits. Under a traditional contract, publishers still receive an average of 50% of the cover price. So increased sales should be a boon to publishers.

But publishers seem to be concerned with a loss of “apparent value” in their product. And they seem to have convinced authors that retail discounting will be the beginning of the end. Some have resorted to accusing Amazon of bullying:

This isn’t good for those who care about books. Without a healthy ecosystem in publishing, one in which authors and publishers are fairly compensated for their work, the quality and variety of books available to readers will inevitably suffer.
[...]
Amazon, it appears, overreached. Macmillan was a bit too big a foe, and Amazon’s bullying tactics were a bit too blatant.

True – but what is “healthy”? And who bullied who?

Some authors claim that publishers are not the good guys. They state that authors receive a small fraction of the selling price of a new book, publishers need to change their business practices, and that book authors should remember that the publisher is only trying to maximize their own profits, and not those of authors. Author J.A Konrath weighs in in an aptly titled blog post, Selling Paper:

I’ll earn almost as much on a $2.99 download than I earn on a $24.95 hardcover.

Konrath has the e-book rights to some of his back-list titles, and sells them directly, without a publisher.

Writer Carolyn Jewel puts the pricing logic in further perspective:

There are several things wrong with this. The first is the assumption that but for the availability of the Kindle version, book buyers would buy the hardback. This appears to be an egregiously wrong assumption. There is, to my knowledge, no evidence that a Kindle owner would be a hardback buyer if she didn’t own a Kindle.

I think it’s much more likely that a Kindle owner, if she didn’t have the device, would wait for the MMP rather than buy the hardback. The MMP would be priced at $7-8. But the Kindle owner, instead of waiting for the MMP, pays a bit more for the book right now. Instead of waiting. By the time the MMP comes out, she’s not going to want to pay $9.99. So what’s actually happening is the Kindle buyers represent BRAND NEW customers with respect to this release. MORE people buy this brand new book because there are two formats. And the cheaper one comes with some well known and much hated limitations.

Twisted facts

But for every Joe Konrath, there seem to be dozens of authors with a contrasting viewpoint. Fast Company, a magazine I subscribe to and generally love, surprised me with this blog post by writer/author Kit Eaton titled Amazon Revealed: It Hates You, and It Hates Publishers that sticks up for authors and publishers while revealing scant business sense:

Amazon, of course, operates something like a supermarket giant does in the food industry–leveraging its huge size to force suppliers to sell to it at wholesale prices. This tactic has caused issues in the food market, and now its doing the same in the books market: Amazon refused, and without warning pulled all Macmillan books from its store.

Mr Eaton must have stayed with the J-school curriculum and missed the econ 101 class where kids learn that retailers indeed do buy stuff from wholesalers at wholesale prices, and then set their own retail prices. He confirms it with this gem:

Firstly it refused to see eye to eye with a key publisher–one of its major suppliers–and preferred to stick to its bullying tactic that eats into the revenue of the publisher, and subsequently authors themselves, by basically insisting that it decide how much to pay them for their product. (emphasis mine)

Wow! Such blatant disregard for basic business sense in a business magazine. Reading both Macmillan and Amazon’s public statements, Amazon never “insisted that it decide how much to pay” publishers. What seems to have happened was, Macmillan told Amazon, a retailer with a huge investment in online and warehouse infrastructure, customer base, and staff to keep it running, that it should act as a cashier, and leave the pricing to Macmillan.

Macmillan statement:

I gave them our proposal for new terms of sale for e books under the agency model which will become effective in early March. In addition, I told them they could stay with their old terms of sale, but that this would involve extensive and deep windowing of titles.
[...]
Under the agency model, we will sell the digital editions of our books to consumers through our retailers. Our retailers will act as our agents and will take a 30% commission (the standard split today for many digtal media businesses). The price will be set for each book individually. Our plan is to price the digital edition of most adult trade books in a price range from $14.99 to $5.99. At first release, concurrent with a hardcover, most titles will be priced between $14.99 and $12.99. E books will almost always appear day on date with the physical edition. Pricing will be dynamic over time.

Agency means retailers simply sell the products as an agent of the publisher, with no say on pricing, discounts, etc.

Amazon’s eventual response (emphasis mine):

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

We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books.

Eaton, at Fast Company, continues:

Perhaps worst of all, Amazon clearly doesn’t care what its customers think (despite thanking them in the blog post) because it acted to axe Macmillan’s texts without explaining why or giving any warning. And though it tries to portray itself as championing customer rights, what its actually doing is trying to manipulate an entire industry to working how it wants everything to work, squeezing everybody from authors to other booksellers.

And the final, most fascinating twist of all this, is that there’s likely to be one main beneficiary of Amazon’s shenanigans, and it’s one Amazon will deeply resent over the next year or so: Apple, with its new iPad.

I’m glad he mentioned Apple, because I was about to. But first, what DO Amazon’s customers think? Fortunately, Amazon’s discussion threads shed some light, with thousands of posts in the past few days:

J.P. = Reader: To me the issue is the Publishers price controlling across the board at the expense of the consumer. I will also vote with my dollars in protest of their tactics. Sadly, I have to believe the other Publishers probably aren’t far behind.

nabrum: So let’s say the list price of the print edition is $26. Under the old model Amazon paid the publisher $13 and sold the ebook for $9.99. Amazon takes a loss of $3.01. Under the new model the publisher sets the price of the ebook at $15 and gives Amazon a 30% commission. 30% of $15 is $4.50. So the publisher gets $10.50 and Amazon gets $4.50. Under the old model the publisher/author et. al. get $13 to split between them. Under the new model they get $10.50, or $2.50 less. How does the new model allow the publisher and author to profit more from their work than the old model did?

What got this started?

Interestingly, the mention of Apple and the $12.99 to $14.99 prices remind me of Apple’s iPad launch, where Apple announced iBooks would sell for – you got it – $12.99 to $14.99. And that was just a few days before all this kerfuffle.

Some speculate that there’s no coincidence here. And a telling video exchange between Apple CEO Steven P. Jobs and Wall Street Journal columnist Walt Mossberger suggests Jobs knew something about this before it happened.

Here’s All Things D. writer Kara Swisher’s video, and Business Insider’s transcript of what was said on January 27:

Walt asks Steve, “Why should she buy a book for $14.99 on your device when she can buy one for $9.99 from Amazon or Barnes & Noble?”

Steve responds somewhat knowingly, “That won’t be the case.”

Walt says, “You won’t be $14.99 or they won’t be $9.99?”

Steve says knowingly, “The prices will be the same.”

Then the video cuts, then Steve says, “Publishers are actually withholding their books from Amazon because they’re not happy.”

How can Steve Jobs know something that’s happening between Amazon and publishers?

Apparently the agency concept was developed in discussions that Apple had with a number of publishers in January. And Macmillan seems to like it so much, they are asking Amazon to follow suit.

But if publishers control the retail price of e-books, is it legal? Under US laws, such as the Sherman Antitrust Act, some forms of retail price fixing, or collusion to fix or control prices, is illegal. This issue hasn’t been raised in reporting, but perhaps it should be explored.*

*Edit: this morning, in an online exchange, Washington Post business reporter Steven Pearlstein had this to say:

In fact, what the FTC should be looking into is the potential collusion among all the publishers to “set” the price of e-books at $15. They didn’t get in a room and collude but they colluded through their new “agent”, Apple, with one following the lead of the other. It’s an old story that we’ve seen many times over the years in many industries. But at the least the FTC should put these folks on notice that any attempt to fix the retail price (as opposed to setting a standard agency percentage fee) would be suspect if it appeared they were acting in concert.

So who loses?

On the Guardian’s website, a commenter suggests who the winners may be – and it doesn’t seem to look good for authors or readers:

Between them, it looks like Apple and the big publishers are keen to screw as much money out of the reading public as they can, even while they’re driving their own costs down by switching to electronic rather than paper books.

I’d bet that little, if any, of their increased profit will be going to authors; I know from one friend that he gets 5% extra royalties on an eBook that costs 20% more than the paperback.

And finally (although this isn’t anywhere near over yet) an apt prediction from the Washington Post:

My guess is that in the not-so-distant future, best-selling authors such as John Grisham and Malcolm Gladwell — along with unknown authors peddling their first books — will publish their own works, contracting with independent editors and marketers and selling directly to consumers as much as possible. Other authors will turn to smaller, more specialized publishing houses that will offer smaller advances but bigger royalties and will be built, as they once were, around great editors.

In the short term, though, it looks like consumers are being asked to pay more, and Macmillan’s authors are seeing their sales plummet. It will be interesting to see how this falls out.