October 2, 2015
When I was in radio I worked at stations that were sold or had management changes. Each time the air staff would be called into a room for a meeting. The meetings were always the same. The management would say that they weren't planning on changing the format and that none of our jobs were in jeopardy.
We knew what that meant.
They were changing the format. We were all being let go.
They wanted us to stay until they were ready to make the change and they didn't want us to see the change coming.
If nothing else it taught me that when one shoe drops, get ready for the other shoe to drop.
I never understood why that old saying uses shoes because so often a third or fourth shoe is going to drop as well and that makes no sense.
Yesterday some folks emailed me about Amazon's two tiered payment structure for books. Actually, it's better than it was. Before Apple entered the electronic book business, Amazon owned the market. Amazon didn't start paying authors 70% until Apple did. Amazon used to pay all authors 30% for digital publishing on the Kindle.
Once Apple entered the market Amazon at least paid authors 70% for books that cost less than $10.
I also mentioned yesterday that Apple was sued by the U S Government and many states. Apple said to publishers, you charge whatever you want, we will keep 30%. Because the price of some books went up under this deal, the government said that this is not in the best interest of consumers.
I forgot to mention yesterday, Amazon reserves the right to lower the price of your book if they see fit. If they think you are selling it for less on another platform they can lower the price without your permission. Also, if you lower the price on another platform to the same price as theirs, they can and do lower the price further on their platform.
"So what," you say. "Cheaper prices, everyone wins."
When the CEO of Macmillan said they want to charge these prices on Kindle or hold the Kindle titles until seven months after the hardcover was for sale, Kindle removed the "Buy" button from Macmillan titles, "both print and Kindle—in an attempt to convince them to reconsider their position".(Vanity Fair).
A similar fight played out with publisher Hachette earlier this year.
Amazon has been charging lower prices than competitors for years. This does not mean it is good for consumers.
Borders and tons of local bookstores are now out of business.
Many will say, "good, that's the free market at work."
But now where will you go?
My local camera store is out of business because people would go in there and try out new cameras and talk to the helpful sales staff and then find it just a few dollars cheaper online.
My old boss Tim O'Reilly used to say "buy where you shop."
By using "cheaper" as a justification we've chased away value and made it impossible for our neighbors to survive in these businesses.
I've lost track of how many shoes have been dropped but yesterday Amazon announced they aren't going to sell Google or Apple's TV offerings because they compete with their own.
Probably time for the government to investigate Apple again.