I was ready to come to Amazon’s defense (and I will, eventually). In their long letter to the writing community, they made some excellent points. They inflamed our passions, gave us historical context for our discontent, and then quoted none other than George Orwell on the disruptive nature of paperbacks and the need for evil publishers to crack down on upstart, low-priced alternatives.
“Amazon believes the value exchange between publishers and authors is fundamentally broken,” said Scott Jacobson, who worked on the Kindle team at Amazon and is now at the Madrona Venture Group. “In a world where authors can hire their own editors, market their books through the web and social media, and get production and distribution through Amazon or other services, publishers will play a lesser role and their share of the economics will be diminished.”
So writers should get more and publishers less, an assertion with which few writers would disagree. But Amazon also believes that books should be cheap. This makes the pie smaller for everyone; Amazon argues that the publishers will make up on volume what they lose on each sale.