The Co-Op Shuffle

I just left the following comment on this post over at John Scalzi's blog, but I'm posting it here as well, mostly so I can keep track of it in the future. (I have no illusions that there's even one single person who would see it here and not at the mighty Whatever.) It's driven by the odd Amazon letter that came over the weekend -- I'm signed up for KDP myself, since I keep thinking I'll turn a Book-A-Day run into an ebook, just because, so I got the letter myself Saturday morning -- which has not had the public reaction that Amazon probably expected.

Just a factual note: several people have said (or assumed) that co-op is free, or perhaps free only for big publishers.

This is very untrue; co-op is incredibly expensive, and one of the pieces of this conflict that has gotten overlooked is that Amazon is trying to turn into paid co-op some aspects of retailing that most people would consider the basic essentials -- such as having a buy button that works, or appearing in searches for the book's title. (Note that this is not unique to Amazon: Barnes & Noble has an extensive co-op program, and the details of what supermarkets do would curl your hair.)

Co-op is governed by the contracts a supplier has with a retailer, and those are inevitably secret, so no one will speak about specific terms in specific cases. But Amazon's co-op is a very large and pricey program, including such things as paying the entire cost for specific Amazon staffers to actually market one's books. Generally, co-op becomes more expensive the larger a publisher is: it increases with sales volume, and more opportunities open up with that volume as well. (So it increases not only overall, but as a percentage of sales.)

So neither Amazon nor Hachette will talk about any of these terms, but I expect the menu of exactly what services Amazon will provide and exactly what each of them will cost Hachette is one of the central details of this negotiation. It's entirely possible that ebooks are something of a sideshow, but it is the piece of the negotiation with the most public interest and media hooks, so it's the piece that drives the media attention.