Amazon should own up and pay. They have effectively stolen from this author. No, we can't guarantee that those people would have bought it for free, but if these were physical books, the law would require that they pay the author.
The agreement wasn't that they get to change the price any time they like. The agreement was that they get to match competitors. They violated that.
"If these were physical books", there would be a material loss involved: Publisher A paid to produce X books, the distributor lost part of them, and now the Publisher cannot sell them anymore, suffering a direct and quantifiable economic loss.
Here, it's more like the distributor left their books around in a library, and some people got to read them for free. The publisher can still sell them. There is no direct loss, the damage is hardly quantifiable (it might actually turn out to be a net positive in the end, given all this free publicity).
The digital world is funny like that.
EDIT: this is not to say that Amazon shouldn't be held accountable for their mistake, if there is a breach of contract involved; just that it doesn't matter whether there were 6000 downloads or 60.
Never use metaphors for online issues. They simply don't apply, the online world has far too many differences from the physical world for them to ever work. It isn't like "leaving books around a library", it is like "digital online content was accidentally priced for free when it shouldn't have been and some people downloaded them". This isn't such a complicated situation that we need metaphors to navigate the morass, not that they ever help anyhow since it inevitably causes people to get distracted by arguing over which inapplicable metaphor is more accurate instead of simply addressing the question at hand.
What really matter here is the breach of contract. The contract specified when Amazon can drop the price, that condition was not met, they dropped the price. Apologies or blaming computers are not what is called for here.
If this is true, then content piracy should also be legal. (Amazon effectively did the same thing as a pirate posting the file to a torrent tracker: they satisfied some of their potential customers with a free copy, invalidating them as real customers.)
Conversely, if piracy should be illegal, then this is false, and Amazon is in trouble.
Well, I guess this is the sort of thing you can expect from a CEO who ends each workday with: "Good night, Westley. Good work. I'll most likely fire you in the morning."
Content piracy is unauthorized distribution. Amazon here was authorized to distribute the material; they are in trouble if and only if the authorization was somehow revoked when the price reached zero.
My point that there was no real loss is tangential to the actual case.
It may be that they've violated the terms of their license to distribute. If this was an unlicensed distribution, it could put them into copyright violation territory.
They were authorized to distribute the content according to the terms of the contract. It appears they distributed the content outside of those terms. I'm sure there's language to ensure they won't get hit with damages, but they should be.
He can still seek legal advice. Just because a contract says "we can't be held responsible for anything" doesn't mean it's always going to hold up in court. It just wouldn't be fair, and lawyers would lose too much business.
What matters is the disputed amount ($13,000), whether the author wants to play hardball, and whether Amazon would rather pay him to go away or squash him like a bug (to set an example). Because even if he wins (and I've no idea if he can), it wouldn't be fun if Amazon got nasty.
I'm not a lawyer, and I haven't seen the contract in question, so I have no real idea, but it's not as clear cut as "you agreed not to sue us". It could very well be a bluff by Amazon.
The theoretical - yes, you're right. It may be that the contract isn't airtight, though given that this appears to have been a genuine mistake rather than malice or profiteering on Amazon's part my suspicion is that the damage waiver isn't that unreasonable.
The practical - $13,000 is nothing in the world of legal fees, no-one in their right mind would sue a multi-billion dollar company over such an amount, especially with a case that's not clear cut and that's the absolute maximum financial loss you can assign to it and there's a reasonable argument that the figure would be lower.
Personally I think that Amazon should come to a goodwill settlement of a few thousand dollars with him but I suspect that's why I'm the one who hands over silly amounts of money to Jeff Bezos each month rather than the other way around.
So the question then is can you disclaim copyright infringement in this way, did Amazon do it right?
They'll probably do the corporate thing and give $50k to a lawyer to check the contract rather than giving compensation for the costs they have forced on their client.
The author and Amazon agreed a contract which they both understood which stated rules (Amazon could vary the price) and consequences (essentially none for Amazon so long as what they did was an honest mistake which it seems this was).
The author had the right to not sign it or to ask for amendments (and not sign if they weren't granted) but whether or not it was a good deal for him or not he did agree to those terms and assigned certain rights to Amazon which they were asserting.
Copyright infringement doesn't involve any agreement between the two parties, it's a simple assertion by one party that they don't wish to be bound by the (legal) rights of the other.
They're not comparable situations and whatever superficial similarities exist it's nonsense to suggest they are.
>The publisher can still sell them. There is no direct loss, the damage is hardly quantifiable (it might actually turn out to be a net positive in the end, given all this free publicity). //
Legally you're wrong.
This is the reason why you can't call giving away someone else's copyright work on purpose "non-commercial". If you enter the market with the same product for free you interfere with the commercial operation of the rightful owner who is selling for a higher price. You can't generally sell a book to a person who has already been given that book for free. Moreover the effort in promoting the book has been lost without reward.
Now granted it might work out that giving away the product for free acts to increase overall sales. But it's not Amazon's place to make that call (the Bit-torrent/bootlegger defence I suppose you'd call this). Amazon infringed on the copyright of the author.
IMO the legal system should come down hard on a company that is trying to leverage copyright for their own gains whilst simultaneously denying the creator of copyright works the reward of their labours.
Consider a converse situation, that I take a product from a distributor (Disney say), duplicate it and give it away for free. How many millions of pounds do you think I'd be on the hook for?
Incidentally I'm not saying that is right, I'm saying that's how copyright law plays out.
Your point only hold up if the _only_ reason for compensation in the case of physical books would be the cost to the publisher to print them.
I'm trying to understand your point as far as intellectual property. Is it your belief that IP should not be compensated for and the only cost of the work should be whatever is necessary to the goods into consumers hands, be it physical or digital distribution?
I'm not trying to debate that particular position on intellectual property with this post, I'm just trying to establish if that is in fact the position you're taking.
I'm with you right up until the last 4 words. Analogies to real world processes and objects are crucial for most people to be able understand and reason about digital concepts. Analogies are almost always flawed in some way -- that doesn't mean they should be avoided altogether.
Is it really necessary to precisely quantify the damages? Amazon was clearly in the wrong here and essentially* violated this fellow's copyright, so it would only make sense for the damages to be set at the number of copies times the previous royalties, even if he wouldn't have sold that many otherwise.
* Weasel wording here because it seems likely to me that the distribution contract ends up giving Amazon the right to do this sort of thing with this guy's copyrighted work.
It's tricky to figure out the damage, yes, but I think an award of sales times normal royalties would be fair here. If the RIAA went for the number of whole copies distributed times normal sale price times three in their lawsuits I wouldn't find them to be a terrible organization.
>I would say it's more like some people walked out of the library with them.
No. If anything, they are walking out of the library with a perfect copy of the book, while the library still has the original. Nobody looses anything. People need to stop clinging to paid distribution of content as a business model. It's obsolete.
"People need to stop clinging to paid distribution of content as a business model."
If there's no money to be made in producing content, then nobody will produce content (aside from financially independent amateurs, in the model of the 18th century novelists). There needs to be some way to monetize the labor and time that goes into the production of art and entertainment.
IMO, anyone who claims that paid distribution needs to go away also bears the burden of proposing an alternative that makes rational business sense. Ads? Donations? Netflix-esque subscription models? Pick one or pick something else entirely, but the answer isn't "business as usual, except nobody earns a return on investment."
>If there's no money to be made in producing content, then nobody will produce content
Sigh, how often have I heard this by now? It's a lie, and you know it. The only thing that will stop existing are the big content industries.
>There needs to be some way to monetize the labor and time that goes into the production of art and entertainment.
And where did I exclude that? I merely said that paid distribution of content is no longer a viable business model. Gatekeepers are no longer needed in a modern information society. Besides, I don't care about the copyright industry's profits and it enrages me that you think I should[1].
>IMO, anyone who claims that paid distribution needs to go away also bears the burden of proposing an alternative that makes rational business sense.
Why should I need to propose an alternative? I'm stating a factual truth: the business model is obsolete, and trying to preserve it by force ultimately hurts everyone's rights and liberties. If the alternative is no alternative, then so be it.
An analogy: If somebody would invent teleportation, it would not be his or her job to come up with new business models for the industries that produce or provide other means of transportation. And no, this is not an utopian scenario. It has happened hundreds, if not thousand times in the past. A new technology came along, making an older one obsolete, and possibly putting entire industries out of business[2]. Nobody complained. Until now - when the content industry is the first that thinks it's entitled to laws and regulation to safe their business model from rightly going the way of the dinosaur.
[citation needed] What is the "truth"? That e.g. artists will be fine because they can make more from concerts? Too bad about artists who make incredibly wonderful CDs but have no stage presence. I guess they don't deserve to be artists then.
Or, wait, I know, they can buy t-shirts, stick their name on them and charge 50 times what they cost. People will buy them because they want the artist to keep producing! Do people not realize merchandise sales are just a form of charity? After all media is free, what are you going to do when people get sick of giving to this charity?
>I don't care about the copyright industry's profits
Here it sounds like you're talking about something different than I am. I don't care about the profits of obsolete middle men. I care about someone who's good at music, acting, writing, whatever being able to make a living from it. And not by depending on charity or throwing events.
> Too bad about artists who make incredibly wonderful CDs but have no stage presence. I guess they don't deserve to be artists then.
Too bad about those companies who make incredibly beautiful buggy-whips, but have no other income, I guess they don't deserve to be buggy-whip makers then!
Either we embrace the capitalism-fuelled race to productivity enhancement or we don't, but I fail to see why a minority of the population is entitled to lifetime (and even posthumous) subsidies because they refuse to show themselves in public, while the remaining 90% is not.
> I don't care about the profits of obsolete middle men. I care about someone who's good at music, acting, writing
Then how can you defend a system that was written by and for these obsolete middle-men? A system that sees the overwhelming majority of arts-related profits going to middlemen, while artists starve ? For each billion dollars in the entertainment industry, only a few millions go to a few selected, market-friendly artists, and that's obscene.
But your model isn't right either. An author has to have a way to be compensation and depending on charity (of thieves no less) just isn't valid. The book has value or it doesn't. If it has no value then it shouldn't be created.
The unpleasant implication of slowpoke's "model" (and it's really just recycled Stallman nonsense) is that they'd really do it for the love of the art, and to hell with such ephemeral things as "eating".
Where did I ever mention any model of my own? Arguing against something does not imply my stance on anything else. You're committing a fallacy here.
Also, there are very few artists which can actually live of their art alone, WITH copyright. That wouldn't change much without it. It's how things always have been, despite what the content industry would like you to believe. Your petty appeal to emotion won't change it, either.
Finally, ignoring the fact that rms is a strawman in this context, if you'd ever read what he writes about selling software, you'd know that it does not really matter to him as long as the essential freedoms are preserved (beer vs freedom).
You're committing a fallacy here, in addition to completely missing my point.
The fact that it still rolls in billions has nothing to do with any justification of the business model. To use an extreme analogy: slave trade rolled in a huge profit as well. Would that be a justification for slave trade for you?
No, it's like people read the book, went home, and wrote it down again. The original book is now back in the shop and the publisher is free to sell it.
How can you "lose" a sale that you don't know you'd get? I bet 6000 downloads for an unknown writer of zombie-pulp wouldn't have happened without the £0 price tag. We can argue about it all day, but the fact is that there is no direct loss, and if there is an indirect one, it's still very, very hard to quantify.
I find your argument poor in the extreme but to say "there is no direct loss" is wrong even at extremely confined levels of directness.
Your argument hinges on the idea that he wouldn't have made a single sale and would still have expended time and effort in promotion of the work if he knew it were being given away for free.
The difficulty in quantifying the cost is largely irrelevant IMO. Either Amazon are guilty or not and if found guilty the court I'm sure has an equivalent case of similarly priced works being given away for free that they could use to model the award given to the appellant (eg mp3.com $25k per work/CD made available). Such an award should be in terms of punitive damages.
>The difficulty in quantifying the cost is largely irrelevant IMO.
If you cannot quantify any damages, you are not entitled to any compensation. It's as simple as that, really. Or are you seriously going to argue that "there could have been possibly maybe with a certain unknown probability which I cannot prove" is a sufficient claim in court (or actually, anywhere else as well)?
Part of the reasoning there is in calculating the impact of redistribution. When someone tosses an mp3 up on a torrent the RIAA doesn't just lose the immediate (potential) sales for those who downloaded it, but also for anyone that that network shares the files with.
Mind you, I don't agree with the specific numbers they're citing, but the general logic works. It's kind of like the Drake equation, everyone can agree on the general format, but you can plug in specific values to make it mean whatever you want.
No, the model doesn't work. If the RIAA gets their huge multiple from one person they aren't going to consider downloads later in the sequence as covered. They would gladly go after a torrent swarm and charge each member based on the total number of copies.
If they only went after the initial seeder, I could understand. But that's completely counterfactual.
I'm sure their agreement had more than one clause. It could very well contain a set of clauses that limits amazon's liability to whatever it collects from customers (in this case, $0).
Maybe, but lets be honest the price they would have to pay for this is what a few seconds profit? Compared to the risk of losing the next great author because they get scared away that is a very small price to pay.
Not to mention that he may have a case for piracy for commercial gain, in which case Amazon is liable for $300000 a copy (which, at 6000, is more money than most authors will ever see).
Funny too since Amazon has the ability to revoke books and they did so last year over some issue when a big company was involved, and it pissed off a lot of customers. But now, not only will they not pay the little guy, they won't revoke the erroneously given away books.
Big business vs the little guy is extremely unfair these days. If I had given away 6000 free mp3s or movies via a P2P system you can bet they'd try me in court for the full price of them all, but in this article already they are equivocating saying "oh but they were free, less people would have paid for it so he can't realistically ask for all the money for all the copies we gave away".
How come when a big company gets "ripped off" they can charge far more than the retail price for every copy but when the actual creator gets ripped off he gets nothing and people equivocate on even the numbers?
You just described the problem of copyright as a whole: it was never designed for the little guy - as the popular myth goes (guess who is spreading that). It was invented by and for publishers (aka the big business), not for authors. That was true in the 16th century when the first ancestor of modern copyright was instated in England, if didn't change with the Statue of Annette, and isn't any different today, either.
I think the real story here is that he chose the 35% royalty rate over the 70% rate “because you can opt out of Kindle Lending.”
I understand that some people view disabling that feature as less of an anti-customer move than I do, but to hate it enough to waive half your royalties?
I am surprised that Amazon didn't pay him a small token payment, perhaps a couple of thousand dollars.
In the past Amazon has given me two grants for free AWS usage ($1000 and $300) so I personally consider them to be generous, for a corporation. I would bet that no one with real authority at Amazon reviewed this case because if they had, I think they would have made a small good-will payment.
If it does go to court, a goodwill payment might be interpreted as evidence of wrongdoing.
In your case, the marginal cost to Amazon of providing AWS was negligible, and Amazon has full rights to offer products they create as freebies, so such grants easily translate to goodwill. In this case, Amazon doesn't own all rights to the product, so it's a bit more murky. It would be as if Amazon was granting you freebies but were only resellers rather than providers of AWS, and didn't compensate the actual provider.
It's funny how amazon won't pay for their mistakes, yet sellers in their marketplace are kicked off for much less. If you have over a 1% failure rate, you are warned. If it continues, your account is put on hold and you might even be kicked off permanently. Failure can be a return, refund, or bad feedback (it doesn't matter why).
If a customer says they didn't receive a package and file an A-Z claim, they win 99% of the time, even when the seller has proof of delivery.
I understand that we don't want bad sellers ripping people off, but Amazon should at least hold themselves to the same standards.
They also can't really seem to get their act together. In the past 6 months, every time they make a change to their system, sellers lose orders for weeks. Amazon won't ever admit this of course, but as a seller, I can't chock it up to a coincidence anymore.
It really makes me wonder what kind of code base they are working with.
I think that Amazon should probably admit the error and pay the guy. However, the publicity that the author is now receiving over this is probably worth far more than the price of 6,000 books.
In the end, he'll probably be secretly thanking Amazon for allowing him to rise above obscurity.
Who sells in a marketplace where someone else sets your price for you automatically without your approval?
Amazon isn't a distributor in this case any more than the person who owns the tent at a fleamarket allows people to sell underneath it.
In any case, Amazon's automatic algorithm to save themselves money from having to pay humans to do it nipped them this time and they owe the author. Do the right thing and settle Amazon. Take it out of the programmer's pay if necessary - better yet their manager who was supposed to review the code before it executed.
Taking it out of the programmer's or manager's pay is ridiculous and probably illegal. You've never written code with a bug or two in it? If you want someone to right bug-free code or take financial responsibility for the code they've written, be ready to pay a lot more than you already do for that extra insurance.
It's a cost of doing business. I do think Amazon should reimburse the guy if only to save on negative publicity over a very small amount.
True, but the tricky part here is that Amazon got to set the wholesale price, too. Larger publishers have negotiated fixed wholesale prices (against Amazon's attempt to push back), but self-published eBook authors get a percentage of the retail price, so when Amazon varies the retail price, the wholesale price varies accordingly.
(To split a maybe-relevant hair) in a purely royalty-based resale model, with no pre-negotiated minimums, there is no wholesale price. There is only the retail price, and revenue flow per the royalty calculation.
Amazon clearly believes:
- the cost/benefit for this guy to sue doesn't work out in his favor
- no (or an insignificant number of) other authors will pull their content in an attempt to negotiate a change in the contract terms
Amazon isn't a distributor in this case any more than the person who owns the tent at a fleamarket allows people to sell underneath it.
I don't feel this is quite true. in the ebook-fleamarket example Amazon are also the person that handles any transactions under the tent, helps the customer find what they are looking for, designed the structure of the flea market, and is not insignificantly responsible for way in which a fair few people take their products home.
I think Amazon should be made to pay something, although maybe not the full $13k, simply to make damn sure that they sort out their systems and this doesn't happen again.
If Amazon gets off lightly they probably won't change anything, and this could happen to some other unsuspecting author.
> "this could happen to some other unsuspecting author."
Not to mention the now-clear potential for malicious activity that this process illustrates: If one wanted to cause trouble for an author, apparently they could just post three chapters of a book to the Nook store at $0 and watch the target author's Kindle revenue drop to zero.
Amazon's incentive is clearly to err on the side of price drops -- particularly if they suffer no serious legal/PR damage from false-positives.
I agree, although it would be even better if Amazon just paid the poor guy without someone having to make them do it. This clearly wasn't intended and it's not like paying even the full sum would make a lot of difference to their bottom line.
For the sales of Crawford's book to go from 6 (/day?) to 5,000+ makes me question how many of those aren't really fans and are just readers because it was an impulse "buy". At least he maintained his 4.5 star rating even with the flood of downloads.
The last time they did that, there was a huge upswelling of discontent, several lawsuits (which went nowhere, I believe), and they stated specifically that they would not do so again.
Am I the only one who read this and though, well that's sad for the author, but isn't Amazon asking for too much in general? I mean, we're talking about e-books. I imagine I could probably make an online bookstore that sells ebooks and gives the author 75% of the selling price. Amazon is taking $5.99 and offering him 35 or 70 cents. I fail to see how it could remain in business with the relative ease with which you could make a competitor.
You can only get %70 if you charge more than $2.99 and opt-in to Kindle Lending. Does that mean that authors don't get anything for books read through Kindle Lending? That seems terrible if true. Kindle Lending is the reason I finally signed up for Amazon Prime, and I would expect authors to get a cut of that revenue.
Libraries purchase physical copies of books (often at higher prices to get a sturdier binding). For popular books, libraries purchase multiple copies, some of which get lost or damaged, and must be replaced. In other words,authors still see some income from libraries.
With Kindle Lending, there is no substantive gain for authors.
Presumably one must buy the book before it can be lent. People may ascribe a higher value to a lendable book, or be more likely to purchase in the first place.
That's incredible, is that really what the revenue split with Amazon looks like?
I'm familiar with Lulu.com, and their standard ebook split gives 80% after the first $0.99 to the author. They even have a special going on right now giving 90%. (http://www.lulu.com/publish/ebooks/?cid=nav_ebks)
Granted you could argue that getting distribution on Amazon and all the Kindle owners is worth the difference. That's what makes it difficult to build a competitor. You could easily make an auction site, but the network effect of eBay is what sets it apart, not the features or pricing.
That's not the problem here. The author presumably found the price change rather quickly. It was Amazon that took a long time to respond to the error that's at issue.
The book appears to have been on sale for about 2 weeks, during which time 6 copies were sold through Amazon. So that is about 3 sales per week (from Amazon).
One would expect that this publicity will do a lot more for profits than the 'lost sales' would have.
The problem is that Amazon doesn't want to set a precedent by paying him. They want to be able make these mistakes in the future and be free to screw over another author without any previous settlement mucking things up.
Being the tech dude that I am, had I decided to write a book and do this I think (perhaps - hindsight and all that) I would have changed the title slightly to prevent the automatons from causing such a problem. Akin to how Apple's App Store policies recommend naming the free version of your app differently from the paid version.
Except he was playing by the rules, and got shafted anyway. They erroneously price-matched, making his book free, and depriving him of royalties. Their mistake; his loss.
I'm sure there's an area of the contract that he agreed to when he listed his book that Amazon is not liable for pricing mistakes.
So there's the trade-off: you're listed in Amazon's market that is seen by more people than probably any other e-book market and you're getting royalties directly, but if Amazon screws up, too bad.
The agreement wasn't that they get to change the price any time they like. The agreement was that they get to match competitors. They violated that.