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Amazonfail round-up

In my most recent posting on this topic I noted "Amazon surrender", and cited a New York Times article as saying that Amazon had agreed to re-list the Macmillan titles they'd dropped.

As of this morning, five days later, my own Tor books are still not available from Amazon. I'm hearing lots of reports from other Tor authors, too.

Amazon lied.

They lied about other things, too; in their press release they lied like a rug about Macmillan's negotiating position, mischaracterising it in the worst possible light from the point of view of onlookers. They lied by falsely positioning themselves as the defenders of cheap $9.99 ebooks and Macmillan as some kind of capitalist oppressor; the truth is that many ebooks sold via Kindle cost well over $9.99, while Macmillan were proposing to sell some titles for under $6.

Amazon lie by omission. They lie like politicians in an election campaign. And you've got to ask, if they're selling such a good product, and if they're such good-hearted folks, why do they need to lie?

I'd like to note in passing that Amazon has a long history of bullying — from union-busting among its employees, abusive treatment employees (arguably in violation of health and safety standards in the UK), to punishing authors by de-listing their books as a way of applying negotiating pressure to publishers; they did this to Hachette in May 2008, and the people who got hurt the worst were the authors and their readers. In fact, Amazon are the WalMart of the book trade.

Meanwhile, things have been moving rapidly this week:

Hachette are switching to the agency model, too — which means Amazon will be fighting a war on two fronts next week. (Are they going to de-list close to a third of all the books they sell before this is over?)

HarperCollins are also queueing up to renegotiate terms with Amazon. That's the publishing arm of NewsCorp, who I am not terribly keen on — the third of the big six publishing groups. (What does it say about a retailer that half its suppliers are really unhappy with the terms it has imposed on them separately?)

Macmillan's CEO had this to say about Amazon, in a public letter to his authors and their agents: "A word about Amazon. This has been a very difficult time. Many of you are wondering what has taken so long for Amazon and Macmillan to reach a conclusion. I want to assure you that Amazon has been working very, very hard and always in good faith to find a way forward with us. Though we do not always agree, I remain full of admiration and respect for them. Both of us look forward to being back in business as usual." (I don't think I'd have been that polite.)

There's a lot more stuff going on behind the scenes. In particular, it looks like the industry-wide shift to the agency model, catalysed by Apple, has finally cracked open the door to a renegotiation of royalty rates payable by publishers to authors for ebooks. The traditional 10% royalty rate on hardcovers didn't come out of nowhere — it reflected a 50/50 split in the profits (the other 80% of the cover price going on production, printing, and distribution). With much lower printing and distribution costs, it looks like royalty rates of 25% or 30%, on a much lower overall price, may be where things are going under the new model. (Hint: this isn't finalized yet, which is why Macmillan aren't promising readers the moon on a stick — unlike Amazon.)

Finally, let's look at the authors, because we're the small mammals who get steamrollered when the dinosaurs start stomping on each other.

Novelist Cat Valente explains lays out why she sides with her publisher: "the costs of publishing an ebook are not zero. That is, if you have any interest at all in a quality product. No one goes around suggesting that everyone should become their own autonomous cheesemakers and cheering the death of the cheese industry. Why? Because that would result in a lot of shitty cheese."

John Scalzi explains what's been going on this past week. He also explains why publishing will not go away anytime soon in most amusing fashion.

Susan Pivar, former music label exec (and author) compares and contrasts the Amazon/Macmillan dust-up to how the music industry (mis)handled things.

And finally, I commend to you this blog posting by a guy whose first novel came out from Tor the very week Amazon decided to delist all Tor's books. Talk about depressing ways to start (and quite possibly finish) a career.

The rumble is on-going, but on Monday I'm flying out to Boston and New York for about ten days. This means that your questions here are likely to go unanswered and I won't be posting for a week or so ... but I have a surprise waiting for you on Monday!

67 Comments

1:

I'm no cheerleader for any large media(ish) company, anywhere.

Centralising music = bad, centralising movies = bad, centralising books = bad, etc.

So, speaking of capitalist oppressors - what percentage of books sold go through the Macmillans and the crying tabloid trash baron and the other four? I notice that particular number has been carefully avoided.

They are also starting to sound just like the music industry of course. Are they recycling some old PR people? And even perhaps doing the same sort of deals (Apple, though proprietary paranoids, save us now?). :) Price high, sell fewer, restrict distribution vainly, etc., etc.

2:

Not to defend Amazon in the slightest, but this may not exactly be a case of Amazon "lying". The actual statement from Amazon being referenced is this one, and it comes from "The Amazon Kindle team". There hasn't been any actual official press release from Amazon as such, so it's quite likely (especially given the rather slap-dash style and stupid statements like "Macmillan has a monopoly over their own titles") that this announcement isn't an official Amazon statement at all.

3:

Why? Because that would result in a lot of shitty cheese

Not sure that is the best analogy, unless you fancy explaining to the French why their liking for farmhouse cheese is proven objectively wrong by the laws of economics, and they should eat Kraft instead...

4:

Charles:

Cool that you're once again in Boston. Any public appearances planned? Perhaps you could sign my kindle... oh... wait...

The more I read about this the less enthralled I am by owning a kindle. The advantage they kindle has is a good distribution system compared to the sony e-readers.

The iPad to me looks much more promising. I hope they keep to open e-book formats. I also hope that Amazon keeps true with their app store idea and allow an apple iBooks app on their device... That way my kindle won't be obsolete before I've read 10 books on it.

5:

Well, in the end... will I have to pay more for books? :)

6:

Blue Tyson: the big six account for about 70%. But unlike the music cartel, they don't -- can't, and probably don't want to -- freeze out the other 30%. Also, rather than being monolithic studios, they're ramshackle aggregations of formerly-independent companies who, despite now having common owners, don't necessarily march to the beat of the same drum.

Robert Ekendahl: I'm there for Boskone, where there'll be a signing. I need to ping the folks at Pandemonium Books and Games, too -- I usually at least drop by to sign stock there.

Seguleh: I really hope you won't have to pay more for books. Because I buy too goddamn many books, and more and cheaper books would be a good thing. (Just as long as I can still earn a living with which to buy ...)

7:

I belive Amazon's statement was: "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"

It isn't actually capitulating, just conceeding that they will have to capitulate. So have patience - it seems like your side is winning this.

8:

That poor Blake Charlton!

But: the substantial majority of sales still come from physical bookstores, not online catalogs. Sure, it's in the process of changing, and perhaps SF/fantasy is leading the pack -- due to the bizarre secrecy about book sales (compare movie sales data) it's very hard to tell -- but people still pick up the physical object of books, at a store.

Also: I haven't seen this writer promoted at all, and I actively look for new stuff to read. The etymology of "publisher" is related to "public" and "publicity". This can't be blamed on the nefarious policies of an online catalog.

9:

Hi Charles,

John Scalzi often has his books available at a Subterranean Press for a limited run before they hit a bigger publisher and make their way to Amazon.

I like buying them from Subterranean because I think that everyone gets a sweeter deal that way. I end up getting nicer editions of the book and I think the author gets a bit more too.

Do you do anything like that? I saw one book of yours on Subterranean but that was it.

10:

Ok, so scenario :-

Borders dies.

Publishers won't go the reasonable no DRM sell your own route (and first one to break and do it of course gets back massive goodwill and repairs some of the damage they are currently doing to themselves).

Barnes and Noble wants to be all Amazony with bookselling. Their own Kindle, ebook stores, etc.

What do they try and claw out of the publishers with increased power and share?

In this scenario might Amazon and Barnes and Noble cut a deal? e.g. sure, charge what you like, but your biggest book hopes, we just might not treat too well...? They could window books, too.

Not that this is likely, but if Amazon wanted to entertain themselves some more - they could put back Macmillan books - at 150% of the price they were being sold for before, same as the increase desired in the other format.

11:

Was there actually an Amazon statement? All I've heard about was this
http://www.amazon.com/tag/kindle/forum/ref=cm_cd_tfp_ef_tft_tp?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdThread=Tx2MEGQWTNGIMHV&displayType=tagsDetail
and that doesn't look very official to me.

12:

So you mean it was, like, a prophecy, or a message beamed back in time from Amazon of the future? So Amazon have to continue the fight even though they know they will lose, otherwise it will defy the will of the gods/cause a temporal paradox, and they'd get eaten by Furies/time-bats? Cool!

More seriously, how long after purging a set of entries from a massive database should it take to restore them all, practically speaking? I recall it seemed to take a few days for Amazon to sort it out when they did that thing with hiding all the GLBT books.

13:

It says "Amazon Official" at the top, and it hasn't been taken down or officially retracted, so presumably it counts as a statement.

14:

After seeing this most recent dustup, and cogitating on things for a bit, I think I've figured out the way to to develop the best ebook marketplace possible as soon as possible. Treat Gabe Newell, Tim O'Reilly, and Eric Flint to a hotel suite for a long weekend.

What I would expect to arise from such a gathering would be a platform similar to Steam for distribution - let's call it Vapor - which would not only handle commerce and distribution, but also community building, like book clubs and discussion groups. It would also reformat ebooks for various portable devices, much the same certain popular video distribution clients will reformat videos for portable devices and streaming settop boxes.

I would also expect an economic model similar to Safari Bookshelf, where you pay a monthly subscription fee, and you get X number of titles to borrow for a minimum of 30 days (the anti-Netflix), and after 30 days, you get to swap out the borrowed title for a new title. This will be supplemented by options to purchase books.

And as for the "D" word? Well, yes, Steam has DRM of a sort, which is the net checkin process. I would, however, expect that between the three of them, they could come up with a scheme that's less than onerous, and acceptable to large enough portion of the market to be viable.

15:

Bruce: personally, I don't want DRM. Hate it, dislike it, think it damages the market, know it doesn't actually work and can never work 100% effectively and is only enriching the snake oil software salesmen who push the idea.

I'd rather see a model based on Webscriptions, who seem to be doing okay ...

16:

I'm surprised that the royalty rates for ebooks weren't renegotiated a long time ago. Steve Jackson Games has had different percentages for print books and pdfs ever since they opened up their line of pdf titles—and the pdf royalties are substantially higher. They explain this, straightforwardly, as the benefit of having lower costs of publishing a pdf. . . .

17:

Yes, I think the cheese comment is hysterical, given all the discussion about the horrors of industrial food.

My gosh, people who actually *love* beer will start making it in small batches! That must be left to the professionals at Anheuser-Busch!

And re John's comment about shitty cover design, shall we revisit the US paperback cover of Saturn's Children?

18:

Yes, I think the cheese comment is hysterical, given all the discussion about the horrors of industrial food.

So substitute home wine-making for home beer/cheese-making. Homebrew beer's easy enough, but home-brewed wine is usually terrible.

19:

I am not sure pointing us to Ms. Pivar's article is such a good idea. I think she misses the boat by a decent amount. The music industry screwed up because they have always been giant bullies.

They bullied the market and lost (when I say lost I mean actually lost a law suit over price fixing). They bullied the independent music stores and most importantly they have always bullied their artist.

The one thing I will say about the publishing industry is they seem to try a little harder to respect the talent (although I do find it interesting that only now are they renegotiating ebook royalty rates).

I write about it all the time on my blog. The music industry signs young artists to contracts which are terrible. They then decide does this artist have blockbuster potential. If no they don't release them, they bury them. I can't tell you how many friends and people I respect have been fighting for years to be released from contracts so they can go it on their own.

I actually like what is happening now in the music industry. Independents are springing up everywhere. Local scenes are taking off again. The access to new and interesting music not provided by a label has never been better, ever. I am also not talking about file sharing. I own over 13000 legally bought downloads. Most from independent artists and labels. People making a go of it outside of an industry that has never cared about them.

20:

Even so, on the 1-10 scale of official comments it's barely a 5. It's not from a named employee, or the PR department, and it wasn't sent to the press. It hasn't been backed up by official comments, and I haven't seen any interviews with Amazon spokespeople agreeing that this is policy.

On the cheese/beer/wine thing. Yes, maybe some people are really good at producing food in artisan quantities. But most people aren't. If the only cheese you can get is that produced in your immediate neighbourhood, some people are going to have great cheese, lots of people are going to have shitty cheese, and lots of people aren't going to have any cheese at all.

21:

Charlie, you say you prefer something based on the Webscription model, but your observed preference is to be published by Tor rather than Baen. Can you explain the discrepancy?

22:

Bill Seitz @ 16: The problem with the cheese analogy is that it ends up pointing both ways at once. On the one hand, the industry in which economies of scale have so famously led to the wonders of Processed Cheese Food is... indeed not the first I'd go to, in order to point the way forward for its literary counterpart.

Not surprisingly, I haven't been the first to notice this.

But then I turn it around, and I ask all fellow Kraft-bashers to consider well their answers to these simple questions:

1) How many people do you know who daydream about becoming a real live Published Author?

Now, how many of becoming a Marketed Cheesemaker?

Assuming that at least one of these categories is not empty, then:

2) How many of the would-be authors believe that of course they can write a great book if they get their break, since they have a great idea and are literate?

Now - how many of the would-be cheesemakers believe that they must be able to produce a great cheese if they get their break, because they have a great idea and are mammalian?

If the Autoexpression School of Cheesemaking were as popular as the Autoexpression School of Writing is now... one's reaction to the predicted Death of the Dairy Giant Dinosaurs might be just a tiny scrap different!


23:

"Even so, on the 1-10 scale of official comments it's barely a 5. It's not from a named employee, or the PR department, and it wasn't sent to the press. It hasn't been backed up by official comments, and I haven't seen any interviews with Amazon spokespeople agreeing that this is policy."

This'd all be a lot more convincing if they'd made any other statements. If that's their only comment, it's on their blog and everyone's reading it as their position, you'd think they'd at least had tried to clarify if it wasn't meant to be official.

"some people are going to have great cheese, lots of people are going to have shitty cheese, and lots of people aren't going to have any cheese at all" You'd think, but that's not really a great characterisation of what happens in France.

24:

Well, I live in a small rural town, and our only new bookstore (aside from a stationery shop with about 6 books) is a Borders Express, which I see going bye-bye in a year or so (the rest are used bookstores). Due to their various policies, special-ordering from the Borders is a joke, and if you want a specific book, Amazon is pretty much it, unless you're a big fan of Powell's. Ebooks open things up to a lot more sources and cheaper prices for those of us living in the sticks. In the romance field, there are some good independent ebook suppliers who promote authors. Also, word of mouth in the romance field about good authors and series, even if not carried by the majors, is close to the SF/fantasy level (I might also add that Romantic Times reviews ebooks, which is more than you can say for Locus).

But I'm still avoiding the Kindle like the plague--I like to own books, not just rent them.

25:

Can't wait for monday, now, and I don't often say that!

Will you give us your thoughts on the DoJ statement re the Google bookdeal, at some stage? Please . . .

26:

I believe that the agency-model you are so enthusiastic about encourages DRM. Specifically, it encourages vendor lock-in, which will be done by either proprietary formats, or DRM, or both.

The goal of many sellers -- this includes you, Amazon, and Macmillan -- is to make as much money as possible. You do this by leasing the rights to your works to a publisher for the most amount of money; you are helped by this by having an agent who is given the power to negotiate prices and some terms, in exchange for a percentage of the amount earned, thus encouraging a higher price (or fewer terms, so the rights can be leased multiple times). Macmillan then takes the books, turns them into units, and then attempts to sell the maximum number at a given profit margin. (Here, we can picture the standard, pretty graphs about supply and demand, with cost vs. price, and so forth.)

Then Amazon attempts to sell those units to make as much money as it can. Since it does not have an exclusive contract with Macmillan, other sellers have the same product. Once again, the standard graphs come into play, but the most important thing is: profit = units * (price - cost). (I am, at this point, using "profit" as "the difference between what it costs someone to purchase or acquire a unit, and the amount at which it is able to sell or lease said unit.")

In order to sell a unit to a customer, this typically means that Amazon have to be able to sell it instead of someone else selling it to that same customer. Therefore, we can conclude that the best way for Amazon to make money is to attract customers.

There are multiple ways to attract customers. Price is often used for retail stores -- selling something more cheaply than a competitor. Timing is another: having the item sooner than anyone else. Service level is a fairly common way to justify higher prices; Apple uses this model, with the promise of free support at their retail stores. Convenience is another one -- the ability to buy things easily (one-click, for example), or to find more things that you want at one location. Tie-in with another product ("buy this five books together for the cost of only four!"), promotions ("buy this book today and get a free cup of coffee!")

Being forced to use an agent model -- where the vendor (Macmillan in this case) picks the price, and the total profit margin -- means that the only way Amazon can make money is to have more sales (usually through more customers). In order to do this, they'll first have to attract customers (with fancy ebook readers, or cheap ones, or both), and then the best thing for Amazon to do is to ensure that, after having made the investment in the ebook reader, they are unable to purchase books anywhere else.

Since the books will probably be priced the same at all retailers (not doing so can result in Amazon successfully suing Macmillan, after all), the customer, once having purchased a reader, will have little advantage to go to another store for books for the reader... and quite a few disadvantages, such as not being able to use the content from that other store on their initial reader.

The dynamics of this change quite a bit, mind you, if Amazon (or someone else) makes a reader that is desirable on its own, where the customer can justify having both an Amazon reader and a Barnes & Noble reader. Or from Amazon, B&N, Sony, Apple, Borders, WalMart, and Costco.

Cost of entry combined with DRM also means there will probably be fewer outlets. Which results in you, personally, being in an oligopsony position (only a few publishers exist), and then the publishers being in their own monopsony or oligopsony position (only one or a very small number of ebook sellers out there).

Temporary price control from a vendor can work, which argues against my fear: video games come out a specific price, and there doesn't seem to be much variance between retailers. (They do get to have promotions, though, where they will have multiple games, or the hot new game and some other item[s] for less than the sum of the components.) The price control here appears to drop over time, however, leading to normal retail variance in 6 months or a year.

My single biggest fear in all of this is that the result will be one or two ebook sellers, companies that don't care at all about making money from content, but only from hardware. As I said, I believe this will also strongly encourage DRM, with all the pain for end users that means.

Left as an exercise for the reader: the economies of scale, and how they relate to the costs of software, hardware, bandwidth, system administration, transaction processing and customer support when you are only allowed to make US$2-5 on each sale.

27:
This'd all be a lot more convincing if they'd made any other statements

I agree with Scalzi that one of the biggest stupidities here has been Amazon's horrible PR. They have simply not managed the situation at all, while Macmillan has at least given two press releases.

28:

Just to add company names to the discussion.

HarperCollins Publishers Company Profile
http://www.harpercollins.com/footer/companyProfile.aspx

This is a list of their companies

U.S. Publishing Imprints - General Books

Amistad
Avon
Avon A
Avon Inspire
Avon Red
Caedmon
Collins
Harper Business
Collins Design
Collins Living
Ecco
Eos
Harper Mass Market
Harper Paperbacks
Harper Perennial
HarperAudio
HarperCollins
HarperCollins e-Books
ItBooks
HarperLuxe
HarperOne
HarperStudio
Morrow Cookbooks
Rayo
William Morrow

U.S. Publishing Imprints - Children's Books

Amistad
Eos
Greenwillow Books
HarperCollins Children's Audio
HarperCollins Children's Books
HarperFestival
HarperEntertainment
HarperTeen
HarperTrophy
Joanna Cotler Books
Julie Andrews Collection
Katherine Tegen Books
Laura Geringer Books
Rayo

Publishing Groups Worldwide

HarperCollins General Books Group - U.S.
HarperCollins Children's Books Group - U.S.
HarperCollins U.K.
HarperCollins Canada
HarperCollins Australia
HarperCollins India
HarperCollins New Zealand
Zondervan


Hachette Book Group
http://www.hachettebookgroup.com/about_publishing-groups.aspx

Hachette Book Group is made up of the following publishing groups and imprints:

Grand Central Publishing
5-Spot
Business Plus
Forever
Springboard Press
Twelve
Vision
Wellness Central
FaithWords
Center Street
Little, Brown & Company
Back Bay Books
Bulfinch
Orbit
Little, Brown Books for Young Readers
LB Kids
Poppy
Yen Press
Hachette Book Group Digital Media
Hachette Audio

29:

Wil @21: yes, I can explain the discrepancy. One word: "money".

To be precise, my agent held auctions for my work, and Ace and Tor won, and the contracts I'm on have rolling forward options (so that even if I had a suitable novel tomorrow and Jim Minz was on board, I couldn't simply jump ship).

Having a relationship with a publisher is a lot like having a relationship -- in a small village. If you make a habit of ditching your partner whenever a new looker makes big eyes at you, eventually you get a reputation. As publishers aim to build multi-book career tracks (single novels are seldom profitable), that kind of reputation eventually hurts you.

(Also: Baen has a rep -- deserved or otherwise -- for specialising in right-wing military SF, with a sideline in elfpunk (or is it elfporn?). Not My Scene.)


30:

Blake Charlton book looks interesting. I had a look, feeling sorry for the poor guy. I'm not a big fantasy reader nowadays although I read a lot of the same authors he did when I was growing up.

So I might give him ago. The hard fantasy/"what it means to be human" angle is intriguing.

I've never quite got how advertising works for fantasy/sci-fi books. Is he missing a big push from his publisher? When I was an avid reader I would pick up random stuff from the small town book store/get recommendations from friends or start reading things in the library and then purchase things later. How things got to be popular enough to be in the book store or library is something of a mystery to me, I was never part of fandom.

31:

Their policy seems to be to say nothing on the subject. If they were going to release an official statement, it would be much more prominent, and written very differently. That post reads like someone on a helpdesk.

that's not really a great characterisation of what happens in France.

The French are 'the few people who get really great cheese'. Most people don't live in France. (But even in France - most city-dwellers do not get their cheese from small artisanal producers, do they?

32:

A footnote to Bruce's proposal: Flint (of Baen) has been publishing without DRM for years, and I believe O'Reilly has recently abandoned it. I wouldn't be certain that a group of three guys which includes those two would settle on DRM as a component of a common platform. (Watermarking, perhaps...)

33:

Is there a publically-accessible reason for including NY in the trip? If you're driving between the two, feel free to stop for the night :-). Heck, we even have good beer up here..

..actually, the craft beer scene is another example of small producers being able to get great products to market. A great relief when I moved from the UK ten years back that not everyone over here drank Bud Light. I don't see a novelist being able create a 'premium gourmet novel' market, though, unlike even other artforms.

34:

Ewan: I'm getting the train from Boston to NY (I do not drive in the USA -- poor eyesight and I'm left-handed with reflexes carefully-tuned for driving on the left and I don't like automatic transmissions). I'm in NYC for meetings with my agent and publishers. Hopefully a contract for a fourth Laundry novel will be the result ...

35:

I have to disagree with the way you differentitated the big publishers from the big music companies. Just to clarify something about the music 'cartel'... indie labels were always about that same share of the market, about thirty percent, and the problem wasn't the big companies or even the distributors (no one ever had a problem getting picked up by one, even if it was owned by Warner, in fact, Warner's distribution subsidiary reached out to indies) the problem was retail consolidation - the same problem the book business is dealing with now. The only real monopolistic action taken by the big record companies was when they tried to fight back against Best Buy - who was selling the product at a big loss, as a loss leader. Sort of like discount ebooks at Amazon.

In some cases they are the exact same conglomerates, and the collection of imprints is actually structured pretty much the same as the collection of labels was through most of the 90's - real integration came later. They have the same hypersensitivity and vulnerability to market conditions, to the power of retailers, and to consumers choosing the 'free' option. The 'evil music cartel' meme is the same as the 'evil greedy publisher' meme. And seems to enjoy the same appeal.

36:

This is the last straw for me. Amazon has a long history of doing, not the right thing, but what they can get away with, starting with the infamous "one-click" patent, through spamming their customers, treating the help like crap, and finally this. They've landed on my "never-buy-from" list alongside Sony and Exxon. Plenty of alternatives exist which don't stink of brimstone.

37:

One reason that, as a "freetard", I'm annoyed with the current conversation is that people are in my mind being inconsistent -- within the subculture I'm a part of it's far more acceptable to fling the middle finger at the entire music industry (the "big labels") and tell them to go die in a fire because they're money-grubbing corporate scumbags, whereas the publishing industry, especially the SF/F publishing industry, is treated as an entirely different kettle of fish.

They're not really different kettles. They may be different quantitatively -- book publishing being a lower-margin business than the recording industry, publishers having far less cash and clout in the "real world" of consolidated media conglomerates than their movie-studio counterparts -- but the concept is the same.

The reason record labels or movie studios exist -- to provide the management, coordination, secondary services and whatnot that allow primary content producers to polish up their product and get it into the mindspace of potential consumers -- is the same reason publishers exist. The result of "taking down" the RIAA or MPAA -- the deconstruction of the institutions that provide these services, the prospect of a sudden decline in quality of the CDs, DVDs or novels you buy at the store, the increased burden of risk being shouldered by the author/filmmaker/band -- would be pretty much the same as "taking down" the publishers.

I don't really see an argument that "stealing" MP3s is any different from "stealing" ebooks; I don't see any reason I should be markedly more sympathetic to Macmillan than I am to, say, Sony. (Sony's actions were more heinous from a consumer perspective, perhaps, but they had a lot more money to lose, and in the long run they are doing the same thing Macmillan is, from their own perspective -- playing hardball to try to protect their profit margins so they can go on providing what they believe is a service essential to the survival of the artistic community as a viable business model.)

So, I mean, if you're generally anti-piracy and you think everyone who "steals" any copyrighted material is a bad person, good for you -- you're consistent, even if I disagree with you.

What *I* am trying to figure out, in my "freetard" way (and keeping in mind that ideologues like me remain a minority among the vast majority of people who "steal" things sometimes and don't other times based mainly on cultural norms they don't really think through), my fellow geeks frequently speak with indifference or approval to the prospect of downloading MP3s for free but are nearly unanimously reacting with fierce indignation at the idea of pirated ebooks.

To the extent that they seem to think the music industry operates *fundamentally differently* from the publishing industry, I think they're factually wrong; to the extent that they seem to think publishing is fundamentally more noble and worthy of respect than what a record label's A&R guy (in publishing, acquisitions editor), studio guys (in publishing, editors, copyeditors) and marketing/advertising guys (in publishing... marketing/advertising guys) do, I think they're being unfair and hypocritical.

38:

"I write about it all the time on my blog. The music industry signs young artists to contracts which are terrible. They then decide does this artist have blockbuster potential. If no they don't release them, they bury them. I can't tell you how many friends and people I respect have been fighting for years to be released from contracts so they can go it on their own.

I actually like what is happening now in the music industry. Independents are springing up everywhere. Local scenes are taking off again. The access to new and interesting music not provided by a label has never been better, ever. I am also not talking about file sharing. I own over 13000 legally bought downloads. Most from independent artists and labels. People making a go of it outside of an industry that has never cared about them."

I actually had a relative of a close friend whom I had a chance to talk to who worked for the RIAA. It was interesting -- especially for someone who held and holds a radical position on the subject -- to be forcefully reminded that a group that's been demonized almost as badly as the tobacco industry are, from their own perspective, just trying to do the right thing and make a living too.

The phenomenon you're describing is a result of the centralization and bottom-line-centric nature of the industry, which is itself a result of rapidly the rapidly increasing speed and rapidly decreasing cost of transport and communication. It's the same thing that's the root cause of the "collapse of the midlist" in the publishing industry, as maximizing the volume of bestsellers becomes more and more of a priority as the traditional, localized distribution structure of paperbacks (individual local drivers being able to slowly nurture a collection of midlist popular genre writers, consumers paying a premium on such works in order to finance the production of "riskier" or more "artistic" hardcovers) has collapsed in favor of rapid shipping and rapid point-of-sales data collection that forces booksellers to target the specific big bestsellers that will get them the most sales volume this week or be outcompeted by someone who does.

The people doing this aren't cackling monsters who want to destroy Western culture. An RIAA employee will tell you honestly that she is doing what she has to do to keep people employed, to appease corporate overlords who themselves have to appease boards of stockholders, that the current business environment is the result of the conditions on the ground that determine where consumers are willing to spend their money and that these changing conditions are a result of technological and physical circumstances you can't get around.

And I think she's *right*; I just don't think that's the end of the story. I think that, as much as it sucks that the midlist is collapsing in publishing and in music and in many other media, it's kind of an inevitable result of the way technology is changing the way people make decisions about what to buy while still constraining how and where and when they can buy it -- a result of technological changes that have *nothing to do*, btw, with ebooks or MP3s or "piracy".

I see the whole piracy issue as, yes, something that accelerates this phenomenon but also something that serves as an escape from it -- as the current distribution model gets squeezed harder and harder and has less and less room in it for artists who can't sell the way it needs them to to keep solvent, artists go looking for other forms of access. This is not a utopian reality by any means -- artists fight so hard to get a label contract in the music industry because *you get a lot of things from a label* that are very hard to do yourself, just like the reason writers want a publisher. But artists are striking out on their own anyway and finding different models for contracting out the services record labels used to provide, largely because, as you point out in your post, *they have to* -- and it'd be a huge mistake to blame the reason they have to on those file-stealing kids with their iPods and claim that cracking down on pirates will save the industry, resurrect an expansive and healthy midlist and make everyone happy.

39:

@ 19
Sound horribly like the BREWING situation here between 1974 and present.
Then, there were only 4 homebrew pubs in GB. Now ......
Ditto small independant brewers, though we've lost a few - I still weep for Darley's and Kimberley Breweries, for instance.
As for cheese, don't start - have you ever heard of the Lanark blue cheese scandal?

40:

The main difference between the music and publishing business is the product. It could be the audience remains attached to the interface they are used to - whereas with music the interface doesn't matter so much, because by and large people do other things while they listen and it's a less intimate experience, the interface for books may prove to be integral to the experience that most people want. Also, unlike CD's which are the 'security hole' for music, the existing book product is analog and pretty secure, due to the effort required to copy it, while it's the newer product (the ebooks) which can be easily copied.

However big the ebook business gets, in my opinion the 'access model' that Google tried to foist on the world as a foregone conclusion would mean less income for everyone involved and the ghettoization of the whole business. Authors would have less leverage unless they were really star attractions, you could bet on a reduction in author's rights, and an increased role for packagers paying authors on a work for hire basis. Exactly how the economics and rights issues might play out will be seen in the music business as it's being remade.

41:

[The music industry & the publishing industry]'re not really different kettles. They may be different quantitatively...

There is some qualitative difference in the product: Most people I know who like music aren't happy with what the record companies are selling them. Most people I know who like books _are_ happy with what the publishing industry provides. I think the difference here is a result of differences in the cultures of the industries, which is in part of a product of the way the two businesses are structured.

I'm in no hurry to see the publishing industry become more like the record industry, which is what Amazon seems to be aiming for.

42:

"Also, unlike CD's which are the 'security hole' for music, the existing book product is analog and pretty secure, due to the effort required to copy it, while it's the newer product (the ebooks) which can be easily copied."

Surprisingly, no. I started scanning public-domain books to share back in the early 2000s before the big institutional efforts started. It is certainly more work than copying a CD, but not very daunting once you have some experience. I'm not going to link to the pirate sites, but pirate ebooks of fiction seem to usually start out as home-produced scans or camera-snaps of pages. Even uncorrected OCR is usually adequate to convey a work of fiction.

Acquiring page images is enough work that people are unlikely to do it just to give to one friend, but that doesn't stop pirates who want a wide audience. After a digital copy is released into the wild, it lives practically forever.

43:

Many TOR books seem to be back on Amazon as of 6:30 PM EST. (Merchant Princes 2, 3, and 4; various Wheel of Time books, Brust's _Iorich_, looks like many others.) So I guess they turned the machines back on.

Still, I think I'll be using B&N for my large-scale buying. They seem to always carry most everything in print...and Amazon can't be counted on for that anymore.


44:

6

Ok, thanks for the number.

I believe that it is likely they can't freeze out the others, electronically anyway.

I don't believe, however that the Rupert Murdochs etc. don't want to. Any head of any given imprint may be happy to do their 42 books a year or whatever, but the parents in cases like Murdoch's are rather more power hungry.

Also in HarperCollins case - New Space Opera 2 is georestricted at Fictionwise.

So is Wireless - but the UK version is available at Amazon.

I mean, if worldwide exclusive or worldwide non-exclusive has the poor poms crying and peeing - how hard is rest of world non-exclusive? Not rocket science, as they say.

Obviously publishing and other media are still out to gouge Australians for as much as they can (although likely less effectively all the time). This is hardly going to work on non-English speaking countries where they don't sell the paper books in English, ever.

They can manage to negotiate secret copyright treaties and agency models, but can't negotiate anything that remotely resembles a plan for increasing book sales? Or a commission deal for cross-region bookselling? If it is too hard for them, maybe they need some outsiders to come in as senior management to give it a shot.

Bezos may be a media baron of the same not nice at all school of all the others, but his operations appear to be actually aimed at increasing readership and sales of books, unlike the planless and idea-bereft current antagonists, who claim to have long-term industry interests at heart.

If one of these planless weak sisters falls because of this - as some pro publishing analysts believe is likely - (or is eaten), I am pretty sure there will be plenty of authorial complaining about getting cut or not paid, after.

Not so long about there was also a bout of complaining about actual dead tree chains not carrying people's books, either, and one of them deliberately carrying a lot less variety, etc., etc.

Setting out to deliberately weaken a competitor with a different product that could keep a Barnes and Noble or UK equivalent in check a little could come back to take a seriously toothy chunk out of a lot of author posteriors I would think. Last chain standing will mean the end of a large pile of careers, I believe. The deliberate retardation of the growth of a digital option by those they are currently defending might mean they are SOL when this happens.

Not sure if Amazon is vindictive, but it is certainly a possibility that harsh critics who are now dead tree toast in this scenario will be declined if they want to try Amazon's DTP, for example?

45:

I thought I posted this in an earlier post here, but it turns out to be on Andy's blog:

John Hawkinson posted on Making Light that the answer he got from Amazon's customer service pointed him to that Kindle post as the official answer.

46:

The buy buttons are back. Hermann Hesse with Picador, The lost Books of the Odyssey with Farrar, Straus and Giroux, the F. Paul Wilson with Tor.

Why do I not feel better.

47:

Maybe publishers could threaten to do what the movie studios do -- enforce a staggered release.

What if there was a 6 month delay between HB release and ebook release?

That's basically what the movie studios do -- theater first, then DVD & digital a few months later. And recently they're moving to restrict it even more -- some studios are putting an extra waiting period before allowing rentals of their titles. Companies like Netflix, or the $1 a night Redbox are eating into DVD sales. (Totally justified -- I just rented Zombieland for $1 on the day of it's release.)

48:

Acquiring page images is enough work that people are unlikely to do it just to give to one friend, but that doesn't stop pirates who want a wide audience. After a digital copy is released into the wild, it lives practically forever.

There are reasons to want to distribute to a group larger than "one friend" that don't necessarily mean wanting to be a stereotypical "pirate" who does it solely out of wanting the glory of taking credit for making it available to thousands of unwashed masses.

In the world of tabletop RPGs, for instance, PDF scans of RPG books are very common, and they mostly seem to come into existence because getting a separate copy of a hardcover book that can run anywhere from $20-50 for *every member of your RPG group* is pretty hard. Sharing a single physical copy is doable, but gets really really annoying, especially if you're the kind of RPG group that doesn't all live on campus together but instead is a bunch of working adults who only ever see each other in the flesh on RPG night.

Mostly people muddle along sharing copies because scanning PDFs is a bitch, but if you're a long-term GM who's had people rotate in and out of your group a lot and who has to deal with this problem *all the time*, scanning your copy and distributing it electronically to players becomes a far more viable organizational solution than passing an increasingly battered book around.

As far as I can tell it really did mostly start with GMs doing this to facilitate their own personal gaming groups -- with scanners being an increasingly ubiquitous technology the advantages to doing so become irresistible after a certain point -- and, of course, once a digital copy exists it exists and eventually someone somewhere will get it on a torrent or Rapidshare or whatnot even if that wasn't the original scanner's intention.

This is an example of what I mean by the technological landscape making it impossible to really stop "piracy", as such, without directly crippling something that is arguably a legitimate use that makes people's lives a lot easier by people who are your paying customers -- the only way to stop this from happening is to stop selling paper books or to sell incomplete paper books that rely on an electronic rules widget to actually function (I won't tell you how to calculate stats, I'll put it in a black box you have to use) and then DRM the wazoo out of the electronic widget you sell.

Various companies have tried variations on this with highly limited success. It's not a genie that it's easy to put back in the bottle -- although along the same lines I'd argue it affects the actual sales of hardback RPG books less than they think -- it has always been the case that it's the hardcore players who buy the books and the casual players who share copies and look over shoulders and generally enable a gameplay environment without buying in directly, and torrented PDFs are, right now, just an extension of that. (As with everything else the better technology becomes and the easier it is to get a high-quality scan and to read it without losing the functionality of paper the less this may become true in the future. But it's still not an all-or-nothing dichotomy of We Must Put A Stop To This vs. Oh Well, Let's Close Up Shop and Never Try to Profit From This Industry Again.)

49:

Maybe publishers could threaten to do what the movie studios do -- enforce a staggered release.

What if there was a 6 month delay between HB release and ebook release?

That was what Macmillan was threatening to do if Amazon wouldn't back down on their fixed ebook price point. The fact that Amazon's retaliation was the nuclear delisting of all Macmillan stock tells you what they thought of that plan.

50:

I'm not going to link to the pirate sites, but pirate ebooks of fiction seem to usually start out as home-produced scans or camera-snaps of pages.

The most famous case of this was, of course, when someone successfully leaked the entire text of a leaked copy of the final Harry Potter book in digital-photo form just before it was officially released, it having seemingly taken him less than a day to do.

Honestly, I think the real reason piracy hasn't taken off for books the way it has for music is that it isn't *necessary* to the same degree for books -- there are many more ways for me to legally read a book for free than there are for me to listen to music for free. People don't refrain from "stealing" books because they're moral people, they do so because if they want to read a book for free they can do so legally without the hassle by going to a library or sharing the book with a friend.

There are some exceptions to this rule, like when the overwhelming demand isn't so much for a copy of the book so much as it is to *know what happens at the end of the story as soon as humanly possible before we all die from the anxiety*, which is why specific cases of piracy of books, like the piracy of Deathly Hallows, take off and become incredibly popular.

But yes, I'm a realist about these things. People download music because getting music for free illegally is pretty easy and getting music for free legally is damn hard. People don't download books mainly because the free legal options are pretty convenient. If this ever changes -- if, for instance, e-books become the norm and the concept of the lending library fades into nonexistence (because in the electronic world you *can't have* a "lending library" that doesn't instantly turn into "piracy") -- then you'll start to see your "piracy" numbers skyrocket.

51:

Wow. That's like anti-PR.

52:

Art @49: that Amazon felt it necessary to go nuclear over the mere threat of delaying ebook releases should tell you something about their negotiating approach.

NB: I am informed -- this should be taken as hearsay -- that you can make it into the top 10 chart of Kindle books on less than 1600 sales in a month. The ebook market is currently tiny, but incredibly vocal. What the publishers are afraid of is that the ebook market is a growing iceberg: for-money sales above the water, but many times as many pirate downloads below the water, and the latter growing while the former fails to rise.

I think it's bollocks, actually. Whereas unauthorized music downloads may actually correlate with use, books take many hours to consume, and they're frequently bundled by the dozen or the thousand in large files on bittorrent (Bt has real problems dealing with files under 1Mb -- I know this from experience, I distributed "Accelerando" that way: the trouble is, the downloads finish so fast that nobody stays online to keep it seeded). I think the headline figures for downloads of ebooks vastly exceed the number of people actually reading unauthorized copies -- most go unread -- and even then, most of those readers don't constitute "lost sales" in any meaningful sense (they were never potential sales in the first place, much as library patrons aren't likely to go forth and buy a hardcover of a book they can't find in the library).

53:

A couple of points:

The problem with webscriptions is that it's a bundle. I don't subscribe to it, simply because the proportion of Baen books which I actually like is rather low. It may be part of the solution, but I doubt that it's going to be the primary model.

Lots of people have described the *kind* of work that publishers do, but as someone who doesn't work in the industry, I don't have a feel for how much actual work goes into each. It would be interesting if someone posted a rough estimate of how many hours are spent on writing a book, slush pile reading (per published book), editing a book, etc.

54:

Webscriptions works on two modes. You can subscribe to a month but you can also buy individual books.

As to work done by publishers, I wonder how much of it could be crowd-sourced. In fact I wonder so much I'm working on an empirical test of it. Nothing ready, the thing is being coded at the moment, but if I manage to get something functional I'll probably comment on it at some point. (I estimate it would take me at least a couple of months to set it all) up.)

55:

The Buy buttons on Macmillan books seem to be back. No word on whether they have restored pre-orders, shopping cart contents, and such. Our Year's Best Fantasy 9 is back on Amazon with Buy buttons on both the book and Kindle editions, but these pages don't seem to know about each other. The Other Editions info box is missing from those pages.

56:

Alex: Here is an article I found via Making Light and various side-excursions which gives some practical numbers on book publishing: P&Ls and how books make (or don't) money: part the first . I cannot recall finding the second part (presumably another P&L scenario), but your mileage may vary.

As for time/effort spent in writing books, shirley surely our Host has hinted at described in detail his labor costs for several projects on this very blog.

57:

For me this is pretty simple. I own a Kindle and have owned it since near the very start of their production. Using it I can and DO read many many more books - and even a magazine (Analog) than I would otherwise do. I simply ran out of room for all of my books (8++ years of Analog is real PITA to store BTW) and this allows me to take quite a few of them with me on the road. $9.99 or less is a viable price for me. When I see a new book I want in COSTCO or some other B&M store I check Amazon. Often it will be $15 even in Kindle form if it's just come out but if I wait a week it's down to $9.99 and I buy it. I will not and do not EVER pay more. It's simply not worth it to me for a book that I cannot easily lend and do not have a physical copy of. I have convinced many friends to buy Kindles as well and all of us have been pretty happy. My most recent convert bought it only when he saw that the Wheel of Time series was available and he's been reading like mad. You can imagine his anger right about now.

While many don't realize it it IS possible to strip the DRM from a Kindle book and place it in standard MOBI format. I do this for my books in order to retain a backup copy that Amazon cannot screw with. I have shared with specific friends a book or two and they have done the same for me - I am now reading a series of books as a result of that and they too have begun to read new series as well. Gee, much like normal books! Oh I also have all of the Potter series on my Kindle - I bought the hardcovers so I feel no shame at that. You can bet I didn't retype them...

So now Amazon says book prices will go up under this new plan. It's also claimed that authors will get less. Happy I am NOT. This blog entry seems to say that this is not true, time will tell. Mark my words though, if this goes the way that the music industry went with crap prices and DRM then books WILL become more heavily pirated. I already know where I can download them nearly as soon as they're released but I don't do it because the price has been fair and the means convenient - much like current MP3 downloads. Mind you I still recall when paying $5 for a book was a shocker.

It should be no surprise my stance on music was much the same and could perhaps serve as a lesson. I had hundreds of CDs, so did my friends. Together our music collection of MP3 became quite large! But these days thanks to Amazon, no not iTunes, my new music is ALL bought and paid for. I get what I want as a consumer, in a format I prefer, at a reasonable price (I never pay more than 99cents) with no DRM other than a serial number I wipe immediately. If music became DRM encumbered again or the prices jumped I'd go right back to my roots - finding it for download isn't hard and their lawsuits simply piss me off.

To sum it up - if this "deal" results in higher prices I will simply stop purchasing. Blame Amazon, blame the publishers, blame the Moon, I as a consumer could care less who's to blame. I am comfortable with prices where they are for the most part (lower would be nice too) but if this results in higher prices I'll go elsewhere and pay nothing. So will many others. Rowling could have had more money from me, she refused - there's a lesson there.

While it's true digital distribution doesn't relieve ALL the costs of publishing it DOES relieve MANY of them and if I as a consumer see no benefit then you'll not see any of my money - I'm not going to pay cover price for an electronic copy.

I truly hope that your apparent assertion that this is a good thing is correct and that my points are moot. Rightly or wrongly I'm at the end of the tail here and simply see end cost. I'm not willing to tolerate it jumping for no apparent benefit to me no matter the reasons and hand waving...

P.S. The iPad holds no interest for me - at least for books. It may or may not shake up the eBook industry but I'm happy with my digital paper with it's week+ battery life. IMO Apple has not done anyone a favor here, I hope I'm proven wrong.

58:

Christopher Hawley @56: the link you provided is not to the original article by Anna Genoese in her LiveJournal, but to the wholesale copy of it (with attribution) which someone posted to a different forum. Anna later took the P&L posts off her LJ and turned them into low-cost ebooks available from her website, which is why you haven't found Part 2. Yes, it was another P&L scenario using different starting conditions. (Anna's "demystifying publishing" posts on her LJ include a lot of information about what a publisher actually does for an author behind the scenes, and are well worth reading.)

59:

Jason Block @40:Too busy (procrastinating) cleaning up my room now to hunt up a link, but I've heard various sources lately say that the vast majority of pirated books are scanned paper books, not DRM-stripped e-books.

It takes a lot less effort than you might imagine to scan a book, provided you either have a bandsaw and a sheet-feeding scanner, or one of these.

Funny thing is that most Kindle titles seem to be converted by dropping them into a converter program and then not bothering to spot-check them afterward. So there are a lot of transcription problems and errors in Kindle e-books.

On the other hand, pirates who do one book at a time will usually take the time to clear up at least the most egregious scanning errors. So by pirating, you actually end up getting a better product.

60:

Amazon "lied like a rug." And they laid like a sex worker. Except that being screwed by a sex worker is an act of consent, and at least one party gets pleasure.

I had biographical and bibliographical data on 25,000+ books on my static web domain that began 15 years ago. I'm now SO glad that I didn't make kilobucks selling them via Amazon.

I'd rather be trusted and middle class than conspiring against authors and rich.

61:

@59"I've heard various sources lately say that the vast majority of pirated books are scanned paper books, not DRM-stripped e-books"

People have been copying books with scanners since OCR first became available to consumers, so I'd say that's true for no other reason than it's been going on a long time and mass marketing of ebooks has been a slow build. At the same time, ebooks are so far unpopular so the momentum behind piracy just isn't there. That could change if ebooks get big, at least in certain genres, and just like in music you'd have some users who just stop buying altoghether and get everything they want from BT, and some who never start buying. I don't know if I'd call those 'lost sales' really, lost customers maybe, I think the lost sales thing is mostly for PR and accounting purposes.

62:

Amazon has been hell on small publishers for years. They demand huge discounts and unfavorable terms, for example insisting the publisher pay return shipping if the books that Amazon orders don't sell. Now it appears they are feeling their oats, and taking on the big publishers. It is very nice to see Amazon's bad corporate behavior made public by some high profile authors--thank you Charles and many others!

Our niche engineering textbooks (pub. by www.sae.org) have, at various times been listed on Amazon as "out of print", which was completely untrue. A prospective customer alerted me to this when they emailed me in desperation pleading with me to sell them a copy that I might still have laying around! Some people have the mistaken idea that if Amazon doesn't have it, it must be unavailable? Of course the answer was easy, sae.org has all our books in stock and will ship next day.

Another word to the wise, Amazon often sells expensive books (ie, textbooks) at an inflated price. Our books have been listed at 10% above list price at various times in the past.

63:
Baen has a rep -- deserved or otherwise -- for specialising in right-wing military SF, with a sideline in elfpunk
It's not underserved. If you head out to their schedule page, and start counting over a year (sep 2010 to sep 2009), you end up with 72 books total which include 34 "mil-fi" books, close to 50% of their yearly output.


(the elfpunk might be underserved, they might have one or two books a year in the "contemporary fantasy" category)

64:

Ok, I'm starting to think that it's time to use my tiny, pathetic bit of commercial muscle (viz, buying several thousand pounds worth of books per year). My reaction to the Kindle/1984 flap was "right, I'm never going to buy an e-book reader which the vendor can exercise that kind of control over". Now I'm interested in recomendations for a different Internet bookstore that operates in the UK.

65:

The book depository is UK-based (though they ship worldwide), they were recommended in previous threads.

66:

Charlie, I understand you're annoyed with Amazon's negotiating tactics, but can you clarify whether you're in favour of the new agency model? In particular, it seems that Macmillan is not likely to be giving authors more money per book when Macmillan's revenue per book goes down.

Unless the reporting about the figures has been wrong, with the move to the agency model the e-book Macmillan used to wholesale to Amazon for $12 will now net them $10.46, and the retail price increase from $9.99 to $14.95 will very likely result in lower sales. Amazon seems to be the only one coming out ahead here, at least in the short run, making $4.48 on the book instead of losing $2.01.

67:

Baen has a rep -- deserved or otherwise -- for specialising in right-wing military SF

I find Eric Flint's writing to be so far left of centre that I have a very hard time reading it. (e.g. radicaly pro-union, anti-gun) As such, the above, which I'd never heard before, is very amusing.

I always thought Baen had a reputation for publishing quality SF, compitently edited, with decidedly sub-par cover art.

If faced with a random colection of SF books by unkown authors, I'd grab the one with Baen on the spine. It may or may not be to my taste, but I would expect it to be competently executed.

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This page contains a single entry by Charlie Stross published on February 5, 2010 11:04 AM.

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