Blogger: Janet Kobobel Grant
You might have heard about the pitched battle between two giants in our book economy–Amazon and Hachette Book Group–on television news, in newspaper articles, through blogs or other online sources. Last week both parties took their pitched battle to the public through press releases and television interviews. What’s the fuss all about, and why does it matter to writers?
Hachette might not be a familiar name to you, but it’s one of the Big Five publishers in the United States; its multiple divisions carry a variety of names: Grand Central, Hyperion, FaithWords, etc.
As a result of the Federal government ordering publishers to renegotiate their e-book selling agreements with Amazon, Hachette is the first of the Big Five scheduled to do so. Everyone in the industry knew the negotiations would be tough because so much is at stake for each player: Amazon wants a higher percentage of each sale, and Hachette doesn’t want to give that higher percentage.
To leverage its distribution power, as negotiations faltered, Amazon at first delayed shipments to readers of some 
Hachette books 2 to 5 weeks, suggesting other books the buyer might want to purchase in light of the Hachette title “not being available.” Then Amazon ratcheted up the pressure by taking down pre-order buttons on Hachette books about to release, including JK Rowlings’ upcoming title. Some Hachette books aren’t available at all, some don’t have Kindle versions, and some don’t have print versions.
In 2010 Amazon used the tactic of having “buy” buttons disappear on MacMillan titles when the two companies were negotiating percentages. Amazon eventually gave in, as MacMillan chose to lose short-term sales for long-term higher percentages.
Why should writers and readers care?
If Amazon wins and receives that higher percentage, it sets precedent for that percentage with every other publisher when that publisher’s current agreement is set to be renegotiated. If each publisher gives in to Amazon’s pressure tactics, that means not only will every publisher make less money on every book sale, but authors also will take a hit in the royalties paid for every sale.
If Amazon wins, it has been rewarded for a tactic that has a tinge of censorship to it. Would we stand by if a library banned a book we wanted to read, offering us another in its stead? Why, then, is it okay for Amazon to censor Hachette titles and to state they aren’t available when they are? Since Amazon sells approximately 60% of all books and has always shown itself more interested in having the majority of a market over making money on the sale of each item, it can put a smaller company on its knees financially. (As it’s done in the past. Read The Everything Store for a deeper look into how Amazon gains control of a market segment.)
If Hachette wins, Amazon is in a weaker position for each upcoming negotiation, the publisher will be financially stronger, and authors will receive more royalties.
We don’t know if these negotiations will have any affect on the price the reader pays for a book on Amazon when negotiations end. But it’s hard to imagine how Amazon, the distributor, can present itself as serving its customers when it chooses not to fulfill its job of distributing. And that is how Amazon is positioning itself publicly.
Those who buy books on Amazon must decide if they will buy the substituted titles suggested to them, seek the book they initially wanted to buy elsewhere, or not buy anything. But it would be a naive buyer who thought whatever decision he/she makes doesn’t matter. That decision is casting a vote for Amazon or for Hachette.
As negotiations continued, Hachette sent out communications to authors and agents about the deadlock. Amazon kept silent for a couple of weeks and then wrote a blog post (with no comments allowed) saying they didn’t see the negotiations ending any time soon and offering to pay 50% of whatever monies Hachette believed authors had lost, with Hachette paying the other 50%.
As reported by Publishers Marketplace, the next day Hachette responded with this:
Once we have reached…an agreement, we will be happy to discuss with Amazon its ideas about compensating authors for the damage its demand for improved terms may have done them, and to pass along any payments it considers appropriate.
In the meantime, We will spare no effort to resume normal business relations with Amazon—which has been a great partner for years—but under terms that value appropriately for the years ahead the author’s unique role in creating books, and the publisher’s role in editing, marketing, and distributing them, at the same time that it recognizes Amazon’s importance as a retailer and innovator.”
Authors, with whom we at Hachette have been partners for nearly two centuries, engage in a complex and difficult mission to communicate with readers. In addition to royalties, they are concerned with audience, career, culture, education, art, entertainment, and connection. By preventing its customers from connecting with these authors’ books, Amazon indicates that it considers books to be like any other consumer good. They are not.”
Lest you think this sort of rough-and-tumble negotiations have never occurred outside Amazon, Barnes & Noble used the same approach of “greatly diminished” numbers of a publisher’s titles when it was negotiating terms with Simon & Schuster. That battle went on for almost a year, and neither party was forthcoming about how the disagreement was resolved. One thing is certain: Both companies lost sales during those long months, and authors’ income was diminished.
What are your views on the Amazon-Hachette dispute?
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Why the Amazon-Hachette battle matters to writers. Click to tweet.
This makes me think of David and Goliath. Only this Goliath has bottomless pockets and seemingly very little desire to play nicely.
Does that mean God is on Team Hachette? 🙂
Neither Amazon nor Hachette is required to play nicely, until we, as voters, define the very concept, and define its implementation – through the promises and actions of the people we elect to public office.
Hachette ain’t David. It’s apart of the Lagardère Group, a multi-billion media company. It’s not as big as Amazon, but it’s no shepard.
The publishers’ side needs to beef up their own “distribution” channels and cut out the middle man. It would have been easier ten or fifteen years ago, but I think it still needs to be done.
They should build up their websites, hand out their own (non-kindle) e-readers as book-club prizes and freebies, and give at least part of Amazon’s “cut” to the authors. They should use the extra 30-40% to encourage authors to forgo Amazon “distribution.” There’s no reason why a well-known publishing company with a website should pay a different website to “distribute” an electronic product.
Here’s a scary thought – what if Amazon does something similar?
What if they approach their more prolific and better selling SP’d Kindle authors, with an offer of salaried employment to turn out books in various genres, directly competing with market share for Hachette’s imprints?
A lot of authors would gladly write for a regular paycheck. Would I? No one’s offered me one yet. I don’t know how I would respond.
With a top-down presence in the supply-to-retail chain, they could eventually squeeze out or at least marginalize the major houses.
Would customers buy it? Probably, because there are a lot of good writers out there, and our choices and subsequent word-of-mouth recommendations have to start somewhere, and that ‘somewhere’ is publicity.
There are a lot of five-star books with lousy sales figures, and even more really bad ones (Fifty Shades comes to mind) that are bestsellers.
If Amazon follows this path with a strong strategic vision, the changes we’ve seen in the past few years will be nothing compared to what’s coming.
I would hate to see it.
It’s a very interesting and important subject, Janet – thank you for bringing it up, and for going into such depth. It affects not only how we shop, but how we will live in the future, and it also casts a light on how we, as Christians, interpret Scripture.
On the face of it, Amazon (and before them, B&N) is using its dominant position as a retailer to shape the marketplace to optimize profits. They’re in the position of being private owners of a toll road, with the power to control traffic.
Amazon’s job is not to serve the public; it’s to make money for its shareholders. The interests of the public are secondary, and as they’ve shown in their battle with McMillan, will be sacrificed for a better potential bottom line.
As such, it’s not censorship. It’s a marketing choice, because Amazon has absolutely no obligation to us, other than contractual, when we buy something.
Right or wrong? Depends on how you look at it, which economic and philosophical model you prefer. Lassaiz-faire economics would say that Amazon should be free to be as ‘tough’ in negotiations as they want, and that Hachette should be prepared to fight back in kind. May the deeper pockets win, I guess.
Any cry of “they shouldn’t be allowed to do that!” immediately refers the issue to some sort of arbiter, which is in this case the government. That implies a level of government control of the economy – how much of that are we willing to accept? (This issue does have some similarities to the growth of trusts over a hundred years ago; we see Teddy Roosevelt as an icon of individual freedom, but he did take the lead in trust-busting and the reining in of corporate power.)
Finally, as Christians…what do we want to support? Modern Evangelical thought tends toward free-market economics, and is strongly against any taint of socialism. Wealth is admired, with David, Solomon, and Job being seen as Old testament role models of God’s favor, and the the New Testament verse that he who does not work should not eat being quoted quite often.
The Scriptures are there – but there are others, that include the parable of the rich man and Lazarus, Jesus’ comment that it’s easier to get a camel through the Eye of the Needle (the gate in Jerusalem’s walls) than for a rich man to get to Heaven, and the society of the Apostles in which each gave what he had to the common pool, and was given what he needed.
It’s not as direct as either side would have one believe; it’s been kind of like a theological tennis match, in which the clerical justifications for the abuses of the Industrial Revolution were overcompenasted by the “preferential option for the poor” and “liberation theology”, which in turn has been opposed by the “prosperity gospel” and economic conservativism.
Personally, I think that what Amazon is doing is reprehensible, and is a blatant effort to replace governmental control of the market with commercial control (a la Microsoft!) by destroying competition and controlling supply.
I avoid shopping at Amazon; I use Alibris and Abebooks as well. I pay a bit more, but I feel cleaner.
Deeper pockets: Hachette is worth about 10 billion but Amazon about 75 billion. If it comes to deeper pockets, there’s no contest.
Exactly. We have to decide, by our preferences exercised in the voting booth, exactly what kind of control we want in our society, because it WILL be controlled.
To say “I want God to control it!” is meaningless, because we don’t live in a Christian society. We’ve got to choose between bad and worse, so to speak, and to let our faith inform our decisions.
Abebooks? No reason to feel ‘cleaner’ buying books from them. They’re owned by Amazon.
http://www.abebooks.com/books/CompanyInformation/
Iola, you just ruined someone’s day.
Thank you for your thoughtful exploration of this issue, Andrew. You write that we have our say by how we vote, but this specific battle has its genesis in the Federal courts when Justice Cote ruled against Apple for colluding with the publishers on price setting. I personally think she should have listened to the argument that the real price-setter is Amazon, who happily was left out of the fray. But Cote’s decision empowered Amazon and required Hachette to pay millions to settle rather than fight.
I view my opportunity to “vote” as whether I buy from Amazon. They make it so darn easy! But it’s a siren call, in my opinion.
I believe Amazon has domination of every market as its goal (aside from keeping stockholders happy). Then it can charge us whatever it wants, and we’ll have no options left. Actually, I think options will be left, but every other book source will be so diminished that we’ll find ourselves automatically turning to the Everything Store for whatever we want.
But in this particular battle, if we want to buy a Hachette book, how will we “vote”?
Thanks for this post. I haven’t heard enough about this to really understand what’s happening. I love my Kindle, but I’ll think twice before I buy another Kindle book. I don’t want to support a company that uses such dirty tactics. I’d rather support my local bookstore. I’ll be following this story to see how the resolution plays out.
Today I heard the term monopsony for the first time; as opposed to a monopoly (one seller who can raise prices), a monopsony occurs where there’s “one” buy who can demand lower prices. If the govt can step in regarding a monopoly, can it do the same for a monopsony? I don’t know NEARLY enough about law or economics, but as an author, I’m very concerned about how this plays out.
Thanks for supplying the word to define Amazon. Publishing professionals are very aware of Amazon’s desire to be a monopsony–if not a monopoly. That’s clearly how it’s positioning itself.
There’s a deeper issue here, and we may need to address it in our hearts.
This conflict will affect us, as writers, so we’re interested and vocal. But it might be better to say that we’re vocal because it affects our personal bottom line, and not on principle, because…
…in the 70s, companies started outsourcing the production of everything from clothing to electronics to steel, sending the work overseas and costing millions of Americans their livelihoods. Whole industries were destroyed, and communities ruined.
Did most of us protest by electing representatives who’d fight outsourcing? Generally not, because they weren’t elected.
Did we protest by not buying products manufactured overseas under an American nameplate? No. We bought the best and the cheapest.
Reminds me of something written by Elie Weizel, I think…
When they came for the Jews, I said nothing, for I was not a Jew.
When they came for the Gypsies, I said nothing, for I was not a Gypsy.
When they came for the Protestants, I said nothing, for I was not a Protestant.
And when they came for me, there was no one left to say anything in my defense.
Elie Weizel’s comment could well be publishers and authors this very week.
“Amazon came for Hachette, but because I didn’t care who published a book, but only who wrote it, I didn’t defend Hachette.”
Somehow that has a very silly ring to it.
It’s silly because it’s not stated correctly.
Might be better to say “I didn’t care that Amazon drove Hachette to their knees, because I didn’t read anything from their catalog”.
When Amazon moved the control the publisher of what I did read, everyone else had gotten used to Amazon’s control of the publishing world, and no one cared when I protested.
You are so on target, Andrew. I have met several Holocaust survivors that echo these words.
And I remember well the 1970’s fall-out. My husband’s hometown died when the steel mills closed in the mid-west. The devastation remains to this day. Shocking lost of hope in the people.
This Amazon/Hatchet issue is truly something we each as individuals need to act on. I am voting tomorrow in our local election and am grateful I live in a county with 90% voter turnout.
I do believe that one person can still make a difference. And as writers and authors we can stand united.
And Janet, thank you so much for addressing this crisis.
90%, wow, that’s great!
Have you read Amazon’s response to this dispute, along with the blog post they linked? http://www.amazon.com/forum/kindle?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdThread=Tx1UO5T446WM5YY
Honestly, I hesitate to side with Hachette. It fixed prices, which negatively impacted readers by artificially raising prices. Also, it’s possible that Hachette has a hand in shipping problems. It’s not that black-and-white.
Thanks for posting that, CZ – it makes Amazon’s position on this issue very clear, and much more understandable.
The issue really isn’t Hachette versus Amazon – it’s Amazon’s effort to be be the dominant retailer by squashing all competition (which was described in one of Rachelle Gardner’s previous posts).
Amazon’s got a point. They can stock, or not, and it’s their right to choose. And Hachette can hold whatever prices for their prodcuts they choose. They’re not beholden to be a public service organization, and make their books available to all.
It’s the use of either illegal or ethically unacceptable practices to facilitate becoming a sole source, either in wholesale or retail, that forms the issue about which we should be concerned.
I don’t know or understand the dispute enough to comment intelligently, Janet, but thank you for your detailed analysis. My one thought in response is that I need to shop CBD more!
Me either, Meghan. But thank you, Janet.
Me too, Meghan. CBD is a great place to find books.
Thank you, Janet, for so clearly expressing what’s at issue here. I haven’t studied this great debate enough to share a well-formed opinion. Thanks for adding understanding and perspective to what looks like a complex issue.
I don’t understand it all, but I am grateful nonetheless. In a world where many people don’t have clean water and safe homes, I am blessed to have energy to devote to the topic. That said, I guess I need to devote a bit more time to studying the state of the industry. Thank you, Janet, for the wake-up call.
“Amazon wants a higher percentage of each sale, and Hachette doesn’t want to give that higher percentage.”
How do you know that, Janet? Or are you just assuming that? So far as I can tell neither party has stated the specifics of the negotiations. For all we know Hachette is trying to have Amazon accept the Agency pricing model in the absence of a price-fixing coalition, and Amazon is resisting, insisting that it, as the retailer, be allowed to set the retail price. Or it could be over the cost of co-op placement in a digital sense: where links and thumbnails appear on Amazon pages.
David, no one knows for sure what’s being negotiated, but every pundit I’ve read believes the percentage of sales is the issue; that’s been the core issue in all Amazon-publishing negotiations in recent years because that’s the core point of difference. I don’t think any publisher would attempt the agency pricing model at this point because of concerns the court wouldn’t uphold it. And the co-op issue doesn’t strike me as significant enough for Hachette to be willing to lose sales over. What are your thoughts on the issue?
The agency model is perfectly legal. The problem was collusion to fix prices, not the agency model. I don’t know what the issues are. I think it’s ironic, however, that Hachette would break the law to achieve higher book prices, and now complain that Amazon raises the prices on all their titles to the list price that Hachette set. And I don’t agree that most pundits believe the percentage of price (i.e. the wholesale discount that Amazon gets) is the issue. The industry people that I read state that they don’t know for sure what the issue is. Everything else is speculation.
I also take issue that Amazon is somehow engaged in censorship. If I ran a bookstore, I would refuse to stock erotica. Would I be guilty of censorship? No. What to stock or not stock is a business decision that has nothing to do with censorship, which, by definition, is government prohibiting the conveying of information, printed or verbal.
And, by the way, the DoJ said MacMillan’s 2010 tactics were illegal.
Here’s a quote from an article yesterday in the New York Times on the negotiations.
“Because Hachette and Amazon have signed confidentiality agreements as part of their negotiations, the particulars of their dispute have been kept secret. But inside the publishing world, the consensus is that Amazon wants to offer deep discounts on Hachette’s electronic books, and that the negotiations are not going well.”
Is it possible that Amazon wants to undercut not only the competition, but also the publishers, and acquire their catalogs (or parts thereof) when the houses are no longer financially viable?
Kudos, David A. Todd.
There’s one aspect left out of this depiction of the battle, Hachette is not an innocent party. They delayed shipments in the beginning, attempting leverage of their own. Amazon’s customer is the reader. Hachette’s is their pockets, and supposedly their authors (still 25% royalties for ebooks, cough). They come from two different directions, and I tire of Amazon being painted the big bad bully. They are business savvy. They know how to build the better mousetrap. It angers me that people hate the most creative innovator. I strongly suggest people read the various angles of this battle, to get a true perspective. Amazing how everyone wants Amazon to take the beating when Amazon is the best thing to happen to publishing. And BTW, I am a traditionally published author.
Publishing has a love-hate relationship with Amazon. What an amazing distribution channel it is! But Amazon’s methods of operating are anything but benign. There are no innocent parties here;Amazon wants to make its stockholders happy and Hachette wants to make money. Nonetheless, we must never assume that it doesn’t matter who wins this battle. It does. And it does not help writers for Amazon to be the winner. That’s my opinion anyway.
The entire negotiation can be solved with a simple – Noun.
com·pro·mise kämprəˌmīz (noun)
1. an agreement or a settlement of a dispute that is reached by each side making concessions. . . . it’s might be time to send in a Literary Envoy.
Not the Klingon way.
We eat envoys.
I stopped shopping at Amazon years ago because I found their “negotiating” tactics reprehensible. After reading expose articles earlier this year in the New Yorker, it reaffirmed my decision to avoid Amazon like the plague.
It’s not just what they do to publishers, it’s their entire way of doing business that I can’t stand. After reading the New Yorker article, which revealed Amazon’s next big thing is PUTTING THINGS IN YOUR SHOPPING CART WITHOUT YOU TELLING THEM TO I removed my credit card from my Amazon account. Which I would delete if the Amazon marketplace wasn’t the only source for my preferred cell phone battery.
Amazon really is putting things in your shopping cart without your permission. Two days after I read the article, Amazon put things in a friend’s shopping cart. She was ticked and immediately removed her credit card info.
With Amazon it’s not just about books. It’s about total domination of the marketplace as a whole.
Hm, I’ve never had Amazon shop for me by putting things in my cart. I would find that pretty annoying.
I’ve long been fed up with Amazon trying to corner the market on everything. I live 30 miles from the nearest grocery store and over 100 miles from the nearest bookstore. I buy many things over the internet.
I am not buying anything from Amazon again unless it’s something I truly must have and it’s absolutely unavailable anywhere else.
Elissa, you’re making some hard choices because you live in a pretty isolated place, and Amazon could be such a convenient shopping place for you.
I wrote this post in part because I don’t want people who shop at Amazon to think they can do so with impunity.The price to be paid will, in my opinion be high, but it’s also down the road.
Janet, it’s possible I’ve read too much dystopian science fiction, but I can’t imagine that letting Amazon be the world’s biggest retailer is really a smart thing to do. So far, I still have other options. I hope that will always be the case.
Censorship? Janet, don’t you think that’s a bit disingenuous? Amazon is not a library. It’s a business and has a right to sell, or not sell, whatever it pleases. Amazon controls 60% of the business because they offer a good service and people like it. And don’t think for a minuet that Hachette is more concerned about that whole litany of high-minded ideals than they are about making money. Two centuries is a long time. Maybe it’s time to shake up the industry.
Mark, yeah, I probably did over-reach with the censorship thing. Thanks for calling me on it. I do disagree with you about what motivates Hachette. Sure, the bottomline is money. But I know very few people in publishing who are indifferent to the fact that books are part of our national conversation. I might not think certain books should ever be published because they aren’t adding much to that conversation, but I think it’s important to recognize that finding a book to order on Amazon is not the same as ordering a shirt. A book contains ideas.
I don’t think you over-reached on the censorship issue – it is commercial censorship, since the action’s being taken to damage Hachette’s profitability and force them to negotiate from a weaker position.
If Hachette’s books were not selling, that would be a different issue. But to intentionally damage the financial standing of a supplier to force compliance is a form of extortion.
Perhaps we can substitute ‘extortion’ for ‘censorship’.
Andrew, thanks for your thoughts on the censorship issue. I don’t want to exaggerate by incorrectly labeling Amazon’s practice, but censorship is what initially came to my mind. I just can’t ignore that Amazon is the bigger of the two gorillas. Any entity that sells 60% of a commodity is a hefty force to wrestle with. And while several commenters have pointed out that both Hachette and Amazon are giant, Amazon is the bigger of the two not only in terms of finances but also in terms of being the major seller of what the publisher produces.
I would just caution against throwing the baby out with the bath-water, so to speak…if you withdraw all support from Amazon, you’re withdrawing support not only from authors, but also from agents and other publishers.
I’m not sure I understand how, if I buy the books I want to buy some place besides Amazon, I’m withdrawing support from authors, agent and publishers.
Speaking primarily of e-readers here. I realize softcovers are often available through other outlets for traditionally published books.
I’ve found every book I wanted to buy at sources other than Amazon. I admit I don’t have a kindle–and I don’t want one. If I ever buy an eReader, it will be nonproprietary.
I do think there are many indie authors who use Amazon Select. They can’t sell through other outlets if they wish to schedule freebies/countdowns. So possibly that’s only a small portion of authors who are affected. However, I know larger CBA pubs also use the countdowns, etc, so they might not list through Barnes/Noble, Smashwords, etc. But maybe the regs are different for traditional publishers using those options.
I own a Nook. Specifically so I will not be tied to Amazon.
As a Nook owner, and a reader of a genre that’s about 60/40 self-published, I am continually disappointed when a book that interests me is enrolled in KDP Select. And when I contact the author to see if they plan to make it available in other places, without fail they tell me to just get the Kindle app. Uhm, NO.
That attitude tells me, as a reader, that my potential for becoming a fan doesn’t matter to the author. It tells me they’re not interested in reaching all the fans they possibly can, but just in reaching the potential fans who own a Kindle. Relying solely on one source of income is bad business when you’re self-employed. And that’s what indie authors are, self-employed.
Putting a book in Select is a great way to lose potential fans. Those of us who don’t own Kindles DO exist, in far larger numbers than Amazon would have readers believe.
Rachel, that’s why I don’t use Select. But as a self-published author, I have to choose: do I get more sales and more fans through the benefits select gives or though selling on multiple platforms? I have a few friends with Nooks, and I read on my Nook, so I choose multiple platforms. Even though 95% or more of my sales are Kindle ebooks.
Same issues as Walmart. We all like a deal… and people will often times sacrifice service (e.g., a bookseller who actually knows books, and can put a good one into your hands) for price or convenience.
It’s a market… and the market will do what it does. These are times of great upheaval in may sectors. For me, writing is a mission, and I’ll do it anyway.
Great product commands a premium, even when the market is screwy.
Thanks for this thoughtful, informative post.
I’m disappointed to see such a one-sided and publisher slanted report on what is happening with Hatchette and Amazon. I faithfully read this blog and have always been impressed with how even-handed it is with regard to many of the changes happening in publishing. This post was not even-handed, however, and seriously slanted in favor of Hatchette.
This is not a David and Goliath story. This is a Goliath and Goliath story and both parties have the right to try to negotiate a deal that serves them well. As agents, that’s what you try to do for your authors, but by the sound of this post, it seems you’d side on the side of the publisher before the author.
I’m including a link to Amazon’s statement re: this dispute, as well as some very interesting commentary. Just because the products being negotiated are books, doesn’t mean a business should change common business practices. Amazon has proven they’re concerned about authors (as evidenced by the offer to pay for royalties during this conflict, just as they did with MacMillan).
I find it fascinating that if they hate Amazon so much, they continue to sell their books there. The publishing industry is changing and part of those changes are challenging traditional publishers in ways they’ve never dealt with before. Understandably, they don’t know exactly how to handle it, but blaming Amazon or any other distributor for not readily agreeing to the terms the publisher sets forth, is silly.
Many bookstores won’t carry my most recent book because I self-published it and they don’t think it would be a profitable move to carry it. I can’t insist they carry it. I’d be a fool to try to force them to with lawsuits, press releases or legislation. They have a right not to carry my book if they don’t think it’s in their best business interest. It’s their right.
Anyway, please read the Amazon release and please be careful not to write emotionally because you have more of a relationship with the publisher than the distributor.
http://jakonrath.blogspot.com/2014/05/amazon-speaks.html
Konrath’s post is informative, but it’s also pretty biased – there seems to be no neutral ground.
The issue for authors (and, I assume, for agents) is that Amazon is using its dominance of the retail book trade to force publishers to accept terms that work in its favor.
For Hachette to walk away from a business relationship with Amazon is unrealistic; they could only achieve a Pyrrhic victory. They will lose market share regardless, unless they agree to Amazon’s terms.
Authors will lose out in the long run; Amazon’smarketing strategy of deep discounting will (and has) driven other retailers out of busniess. They have the capitalization to hold discounts for along time, and then can revert back to ‘normal’ pricing – after negotiating a larger cut from the suppliers, who will have fewer and fewer retail options.
Publishers have some level of irreducible cost; they’ve already cut editorial and publicity staff, and the one area that can still be reduced is payments to authors.
Sure, we’ll still write books, but we won’t make as much, and if publishers have to reduce cost by reducing catalog, we won’t have as many opportunities.
I think that’s why there is a dread of Amazon in publishing.
Regarding Konrath’s invocation of the Special Snowflake Syndrome, books are not a simple commodity. They carry the cultural heritage of our society, and to dismiss that as irrelevant is to dismiss much of the history of 20th Century totalitarian states.
Nazi Germany, the USSR, and the PRC used control of books and other media as a cornerstone for control of society. While I doubt that Jeff Bezos is bent on world domination, placing the vast majority of the book distribution mechanism into the hands of one company is disturbing.
Amazon has already demonstrated a willingness to engage in commercial censorship, in making it more difficult for companies with which it’s in negotiation to distribute product (after a long-term and mutually profitable relationship). It doesn’t follow that it’ll lead to political or ideological censorship, but the potential is there.
“Sure, we’ll still write books, but we won’t make as much, and if publishers have to reduce cost by reducing catalog, we won’t have as many opportunities.”
Self-publishers have 70% royalties from Amazon ebooks. And if you look at the author earning reports, you’ll see that it’s profitable. The fall of the Big Six won’t mean the fall of novel writing as a profitable profession. It’ll move on. Storytelling has always found a way to evolve.
And I find your comparison of Amazon to totalitarian governments inaccurate. Those governments used media for propaganda. Amazon has no such ambitions. “Commercial censorship” does n
Sorry, pressed submit too early.
I wouldn’t accuse Amazon of commercial propaganda yet. As stated before, Hachette might have a hand in shipping delays on their side, which manifests in Amazon’s actions. And considering that Hachette committed price-fixing, I’m not ready to give them the benefit of the doubt.
I’m on mobile right now, but look up David Gaughran’s blog. He has a more organized take than Konrath.
Hugh Howey had another take on it here, Chihuahua Zero: http://www.hughhowey.com/winning-at-monopoly/
Karey, thanks for the links. They’re an important part of the online conversation about Amazon-Hachette.
I don’t know that I’m pro-publisher so much as I’m pro-author. I read a comment from Malcom Gladwell that his book sales have fallen by about half during this negotiation. He stated he was disappointed that Amazon didn’t find having made millions of dollars off of sales of his books as a good reason to continue to have his books available. My suspicion is that the loser in this negotiation will be the author. We can’t know the details of that loss yet, but ultimately I think it’s unlikely this battle will end up benefitting writers–and probably not readers. But that’s speculation.
While an independent bookstore can decide not to carry a book because the store’s buyer doesn’t see it as a book that will make a profit, Amazon is choosing not to offer certain Hachette books because Amazon is willing to pass up profit today for more profit tomorrow. That’s how I see it, anyway.
I’m not sure what Amazon’s real motives are, but their behavior isn’t something I consider in the authors’ or readers’ best interests. Books aren’t just a “product” and shouldn’t be treated as one. I think the current 99-cent trend devalues how much effort it takes to produce a good book.
I do agree that eBooks don’t cost as much to produce as printed books, but you still need good layout, editing, a wowza cover, etc. That stuff doesn’t come cheap. I think there’s room to negotiate between publishers and retailers, but I don’t think Amazon is making a stand on the authors’ behalf.
The current 99 cent trend doesn’t just devalue books. It means less money to the author who wrote it.
Every time Amazon discounts a traditional book, the author makes less money in royalties. Amazon does their contracts where THEY keep the lion’s share of the sale price, and what’s left is split between the publisher and the author. I have a friend who was on a 99 cent deal for two weeks with one of her books. She sold three times as many in those two weeks as she had in her previous royalty period, and you know what? She made the exact same amount of money. Because of how Amazon distributed the money between itself and the publisher.
How does that serve authors? It only serves Amazon.
I think it’s just a matter of each author weighing what they are willing to do in marketing (speaking of indie authors here). No one forces us to go free or run 99 cent specials. But for many authors, it provides an astonishing boost, not only in sales, but in reviews. Making my book free via Select was the single most effective marketing strategy I’ve yet implemented, and trust me, I’ve implemented a few. I’m grateful for the chance Amazon has given me to reach a wide audience with relative ease.
I think if you approached those authors who are with Kindle Select about getting a review copy of their novel formatted for Nook, they would probably be happy to do that on a case-by-case basis. Most indie authors aren’t in it solely for the money, but for the reward of having a readership. For me personally, Smashwords wasn’t worth the formatting time and it was just an extra hassle that produced very few sales. But for some, Smashwords (Barnes/Noble) sales can be worth the effort.
I have asked my Nook readers if they would be greatly offended if I went with Kindle Select and I never got a “NO! Don’t ever do that!” type response. And again, if I did, I would probably offer that reader a file that would be uploadable to Nook.
I have done that, Heather. Without fail every single author I’ve asked about providing a Nook copy, tells me to just get the Kindle app.
As I said earlier, uhm, NO.
I can only conclude they’re not interested in being accessible to as many readers as possible. The one book I did download when it was free in Select and converted, is one I was unable to finish because of craft issues. The characters had no depth and no motivation, and the conflict was superficial at best. It had no business being for sale anywhere.
Smashwords is not the only option to sell on the Nook platform. B&N has a Nook portal like KDP. There’s also a place called Draft 2 Digital, which I’ll be using this fall when I publish my science fiction romance.
That’s sad, Rachel, but maybe if they’re tradpub authors they can’t offer other copies? Just know that if you’re ever interested in any of mine, I will be happy to work w/you to get a Nook-readable file into your hands.
Thanks for explaining this, Janet. I knew there was some uproar over the way Amazon does some things, but I didn’t know the ins and outs.
It is a beautiful, sunny day on Long Island, and I was just getting ready to read a good book. I stopped by the B&S Blog and got exactly what I was looking for. Action, suspense, and conspiracy theories!
This really is an action packed post, Janet. I believe that you know more than most how important this situation is. The truth will come out soon, and hopefully everything can be settled for the good of all.
“Everything done in darkness will be revealed in the light.”
Well said, Jim.
Could the problem be that publishers aren’t paying authors enough royalty on e-books? That seems to be what this article from Slate is suggesting. There’s a pool of money on the table, the publishers have it, and Amazon wants it. But if the publishers had given it to the authors, there wouldn’t be money to fight over. Your thoughts?
http://www.slate.com/articles/technology/technology/2014/05/amazon_hachette_dispute_how_the_big_five_publishers_could_have_avoided_the.html
Jennifer, well that certainly is a different take on the negotiations. In a way Slate is right, but the reality is that the publishers are pretty reliant on e-book profits to keep them afloat. Their margins aren’t that great. The bottomline is that neither Amazon nor publishers are thinking about how to pass more money on to authors.
What do I think of the Hachette / Amazon deal? Put me back on the traditional independent bookstore floor, and I’ll soon have customer’s answer. Most of whom, like myself, despise censorship and will gladly “…take the path less traveled by… .” to support the creative initiative.
“If Hachette wins, Amazon is in a weaker position for each upcoming negotiation, the publisher will be financially stronger, and authors will receive more royalties.”
This is so incredibly wrong. Hachette and other NY publishers don’t care about paying authors fairly. If they did, they wouldn’t offer such low royalties and take the bulk of the profits for themselves. Right now, Hachette wants to charge $15 for ebooks, and window their release so they don’t come out until six months after the hardcover, just like paperbacks but at 2X the cost. Amazon is fighting to keep those prices low, which means more sales and more money for authors.
NY publishing sees cut hors are a necessary evil, and they got together a long time ago and agreed on standard contract terms specifically to eliminate competition between the publishing houses. They’ve been the only game in town for so long that Authors no longer have a voice and they are all expendable. Amazon is trying to change all of that, and to some extent they already are.
Amazon’s publishing imprints (not self/indie publishing) offer higher royalties than NY Publishers, and their authors sell more copies and make more money than most traditional published authors coming into the business, despite the fact that B&N is banning their books from their shelves… Are you as upset about that as you are about Amazon removing buy buttons from Hachette titles? I don’t’ think you are… I wonder why.
Neither of these companies are good, and while a Hachette victory in this battle will be great for publishers and bookstores, it will be a disaster for authors. People are already starting to forget how horrible the industry was for authors as little as five years ago. I hope this doesn’t end up being a reminder.