Simon & Schuster: Sowing the seeds of revolt

In a startling and possibly revolutionary development, one of New York’s giant conglomerate publishers has finally taken a stand against Amazon.com: Simon & Schuster will announce today that it has struck a deal to sell its ebooks on Scribd.The giant publisher will make some 5,000 titles available starting today and including such authors as Stephen King, Dan Brown, Mary Higgins Clark, and former President Jimmy Carter. And, as a Wall Street Journal report by Jeffrey Trachtenberg and Geoffrey Fowler details, the S&S ebooks sold on Scribd will be available as Adobe Acrobat files that can be read but not printed out on computers and iPhones and Sony Readers — “but not on Amazon’s Kindle.”

Further, “Several thousand Simon & Schuster titles that haven’t yet been published as e-books will be available for preview on Scribd via a search-and-browsing option. Readers will be able to buy the print edition of those books from Simon & Schuster directly or from various online retailers” — in other words, the early stages of an attempt to break Amazon’s overwhelming dominance of online retail by helping to develop alternatives, including directing customers back to the publisher.

For publishers, beset by rising worries that they simply can’t make books for the discounted pricing demanded by Amazon — and yet can’t do without what has become for many their leading retailer — the Scribd deal is attractive in other ways, too. As Brad Stone reports in a New York Times story, “Unlike Amazon, which sets the retail price for its e-books and sells them in its own proprietary Kindle format, Scribd is offering publishers considerably more control over how their digital titles are sold. Simon & Schuster will sell its books on Scribd for 20 percent off the list price of the most recent print edition. Amazon sets a price of $9.99 for many popular e-books, meaning titles there might be less expensive. But Scribd will allow publishers to see what is selling and change their prices accordingly. Scribd also gives publishers 80 percent of revenue. Amazon reportedly gives publishers about half of the list price of books sold for the Kindle, but also discounts many titles and in some cases chooses to make no revenue itself from those sales.”

This last point describes a situation that has been the talk of the industry for months, and is smartly discussed in this Time magazine report by Lev Grossman. Most publishers feel Amazon has set an arbitrary and impossibly low price for ebooks — even without the cost of printing, the cost of making books (including paying authors and editors and proofers and designers and covering promotion and marketing and overhead) is still too high to meet such drastically low pricing. Publishers also know that, given Amazon’s history as a brutish demander of discounts in many ways already in excess of anti-trust laws, it wasn’t going to allow publishers to avoid greater discounts for ebooks once it had established $9.99 as a standard price for them. Thus, the Simon & Schuster move could be seen as a preemptory move against an anticipated impossible demand.

The fear of which would explain why Scribd’s CEO Trip Adler says Simon & Schuster is not the only major American publisher they’re talking to. “This is the first public endorsement by a major force in publishing that the social Web will play a major role in the future of book sales,” he said in a statement.

What he didn’t say is that Amazon’s treatment of publishers and writers — and, in the long run, American readers — only hastened that endorsement.