Publishing's Weekend War: 48 Hours That Changed an Industry

The facedown lasted from Friday evening to Sunday afternoon but when it was over the landscape of the book business was permanently altered. On Friday, in reaction to Macmillan's refusal to play the Kindle pricing game by Amazon's rules, the retailer punished Macmillan by extinguishing the publisher's Buy buttons on the Amazon website.

Obviously, Amazon hoped this tactic would bring Macmillan to its knees. Instead it triggered another wave of customer outrage as Kindle owners reacted just as they had in 2009 when Amazon reached into their Kindles and recaptured files without notice or explanation. Though the response of the author community was mixed, many authors were angered at becoming victims of a war they scarcely understood but they too blamed Amazon.

Amazon also underestimated the possibility that other major publishers might support Macmillan. This turned out to be a well founded concern. In the past few weeks all of the big houses except Random House conducted discussions, and in all likelihood negotiations, with Apple to forge a new retailing model that would return control of e-book pricing to the publishers, who had become alarmed that Amazon's insistence on a $9.99 price cap would force them to accept lower wholesale terms. Conditions were ripe for mutiny, and on Friday the test of wills began. By Sunday, as Amazon realized that this was a fight it could not win, it capitulated.

I stated that this might well be a turning point for the book industry - both e-book and print - and I stand by that statement.

I also made a prediction that publishers will no longer be able to hold the line on the current 20-25% royalty rate offered to authors. In fact I guaranteed that they won't be able to, and I stand by that guarantee as well. Authors, and more importantly their powerful literary agents, have viewed the new landscape and found it rich with the potential for profit. They perceive the current royalty level as arbitrary and without basis in the economies of e-book production and distribution. The current rates cannot and will not hold. Just as Amazon blinked in its stare-down with Macmillan, Macmillan and its Big Six companions will also blink in the inevitable confrontation with authors.

You heard it here first.

Richard Curtis