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The Secret Behind Amazon and Macmillan’s Fight: Google?

Many may know about the fight between Amazon and Macmillan publishing. Yes it is about e-books and pricing, and the death of an industry, the death of print, and heck throw in Death in Venice if you like. But the real move may have been to highlight something else Amazon is quite worried about: Google and the Book Settlement.

Would Amazon really refuse to carry all books from one of the largest publishers in the Untied States? As my friend John Scalzi pointed out (He was one of the first to notice the move, because his publisher is part of Macmillan, and his fans asked him why his books were not available almost immediately after Amazon’s move.), Amazon waited until late Friday to remove the Macmillan books. John thought that the timing was probably designed to mitigate any negative responses that might go Amazon’s way. I think John was correct, but I think this statement reveals a perhaps bigger reason for the bluff:

“We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles,” Amazon said. “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.”

Just to repeat it: “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.” Where else does monopoly and books arise? Ah yes, when Amazon (and others) opposes the Google Book Settlement.

I think this move provides an interesting, concrete example that will be offered to argue that the GBS will provide Google with power equal to or greater than Macmillan’s. The question is, if it is a monopoly as Amazon claims, why aren’t folks attacking all major publishers? Amazon may argue that Google will have a unique position in the e-book market, but those claims require more details if one is to sort them properly.

1 thought on “The Secret Behind Amazon and Macmillan’s Fight: Google?”

  1. How much revenue would Amazon lose, if it dropped Macmillan? From Amazon’s most recent SEC filings, “electronics and general merchandise” accounts for more than half of the company’s north american revenue, and revenue from that segment grew by 43% last year, vs only 11% growth for “media”, including books. Macmillan’s titles are only a fraction of north american media sales, and all north american media was only about a quarter of total world-wide revenue in 2009.

    Projecting current segment growth rates forward a few years, we may see the day when Amazon could drop a publisher permanently and not see much harm from it. But what would happen to the publisher?

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