Amazon Gets Increasingly Nervous

Amazon is not in the least bit happy about the full-page ad some authors have placed into the New York Times this weekend, complaining about its tactics in its negotiations with Hachette, so it is perhaps not entirely coincidental that this weekend Amazon is trying a new tactic: Trying to convince readers that it is in their best interest to favor Amazon’s business needs and desires.

Thus readersunited.com, which posts a letter from Amazon to eBook readers. Go ahead and take a moment to read it (another version, almost word for word, went out to Kindle Direct authors this morning as well), and then come back.

Back? Okay. Points:

1. First, as an interesting bit of trivia, readersunited.com was registered 18 months ago, which does suggest that Amazon’s been sitting on it for a while, waiting for the right moment to deploy it, which is apparently now.

(Update, 7:03pmmore information on the domain name and when it likely came into Amazon’s possession.)

But as a propaganda move, it’s puzzling. A domain like “ReadersUnited” implies, and would be more effective as, a grassroots reader initiative, or at the very least a subtle astroturf campaign meant to look like a grassroots reader initiative, rather than what it is, i.e., a bald attempt by Amazon to sway readers to its own financial benefit. Amazon isn’t trying to hide its association with the domain — it’s got an Amazon icon right up there in tab — so one wonders why Amazon didn’t just simply post it on its own site, to reinforce its own brand identity. The short answer is likely this: It’s just a really clumsy attempt to reinforce the idea that Amazon is doing this for readers, rather than for its own business purposes.

Well, surprise! It’s not. That much is obvious in the Tab header for readersunited, which (currently, at least) reads: “An Important Kindle request.” That much is correct — Amazon is doing this to support its own Kindle brand, not directly for readers (or for authors) at all. It was (again) clumsy of Amazon to leave that in there, but then I don’t think much of Amazon’s messaging in this corporate battle with Hachette has been particularly good. Amazon’s PR department is good at not commenting on its business practices; when it does comment, it does a lot of flubbing.

2. Amazon reheats in this new letter a number of arguments it made in a previous letter, arguments which have been picked apart by me and others. I’ll refer you to my previous commentary on the matter for further elucidation, and otherwise note that in general Amazon’s points make perfect and logical sense as long as one proceeds from the assumption that Amazon is the only distributor of books whose business needs one should ever consider.

Sadly for Amazon, the real world is not like that. Readers might see a benefit in not having Amazon being the only distributor of books in the world — if, for example, they like having physical bookstores in their home towns, employing local people and contributing to the local economy, and keeping money in the area rather than shipped to Seattle, or if, simply as a matter of practicality, they remember that companies trying to drive the market toward monopoly rarely are on the side of the consumer in the long run. Or for any other number of reasons.

3. Amazon’s new(ish) argument appears to be that the eBook is a new and amazing medium (which is in many ways true), and compares it to the paperback disrupting the publishing industry before World War II. Well, let’s talk about that for a second.

Leaving aside that Amazon’s initial phrasing of their argument seems to be largely and clumsily lifted from a Mental Floss article, and that paperback books existed well before the 1930s — see “penny dreadfuls,” “dime novels” and “pulps” (further comment on these and other flubs here and here) — the central problem with Amazon’s argument is economic, to wit, it’s trying to say that its drive to have all eBooks priced at $9.99 is just like paperbacks being priced ten times cheaper than hardcover books.

Well, except that $9.99 isn’t one tenth of the price of a hardcover book, otherwise hardcover books would regularly cost $100, which admittedly is a bit steep. $9.99 is something like 40% of the cover price of most hardcovers, and since most retailers discount from the cover price of a hardcover, the real-world price differential decreases from there. This is hardly the exponential cost savings that Amazon wishes to embed into the mind of the people to whom it is making its argument.

Amazon also continues the legerdemain of hyping very high e-book price points — it’s doubling down on its previous $14.99 boogeyman price point by introducing another one that’s even higher: $19.99! — while conveniently ignoring the fact that most eBooks are priced at neither of those price points, even ones tied into a new hardcover release.

As an anecdotal piece of information, the eBook price of my upcoming novel Lock In is $10.67 on Amazon — not $14.99 or even $19.99 — a price that is roughly 40% off the price that Amazon is willing to sell you the hardcover for ($18.62). As another anecdotal piece of data, Lock In currently the most expensive English-language eBook of mine in Amazon’s Kindle store — the other prices range from 99 cents (for various short stories of mine) to $9.01.

When Amazon’s absolutely-amazing, totally-disruptive price point of $9.99 is in fact less than 10% off from the real world price point of the latest eBook from a Hugo-winning, New York Times best-selling novelist with two television series in development, and more than the price of every other eBook of his, what does that tell you? It might tell you many things, but the thing I’m hoping it tells you is that the $9.99 price point is less about changing the world than it is about serving Amazon’s own particular business needs — not the needs of the consumer or (for that matter) the author or the larger business of bookselling. It’s worth it for readers to ask what Amazon’s business needs are.

4. My notation that only one of my English language eBooks is priced above $9.99 at all should bring home the point that this battle between Amazon and Hachette isn’t really about consumer choice. The consumer who wishes to buy a John Scalzi eBook will discover that more than 90% of his work available for sale for less than $10, just as she will discover that large majority of work of almost all authors is priced below $10. The budget-minded consumer is spoiled for choice in the sub-$10 eBook realm. If Amazon fails to get Hachette to bring down its prices on its new releases, than consumers will still be spoiled for choice in the sub-$10 eBook realm.

What it’s about is two large corporations — Amazon and Hachette — arguing about whose business needs are more important. Hachette wants to continue to price new-release eBooks above $9.99 so it can continue to make what it considers an acceptable amount of profit on new releases and then lower the price point as the new release matures, capturing other audiences as it goes. Amazon wants to nail the price at $9.99 because it’s in the business of selling everything to everyone, and price control is a fine way of locking the consumer into its business ecosystem.

But Hachette colluded! Leaving aside that Hachette’s past actions are neither here nor there in this new set of negotiations between these two corporations, if Amazon wishes to note the mote of illegal business action in Hachette’s eye, it ought to equally note the beam in its own. Which is to say that Amazon is no angel on the side of consumers any more than Hachette is — they both have their business interests, and by all indications they are both willing to see what they can get away with until they’re called on it.

It makes sense that Amazon wants to make this about the benefit for the consumer (or the author), just like any corporation wants to make their wholly self-interested actions look as if they’re meant to directly benefit their consumers and stakeholders. Consumers, like everyone else, should ask what’s really at stake.

5. Amazon is correct about one thing in this new letter — authors aren’t of a single mind about this. There are a lot of authors who rely primarily on publishers like Hachette for their income; there are a lot of authors who rely primarily on Amazon for their income; there are a lot of authors who publish in a wide range of ways and receive their income from both and from other sources as well. They will all argue from their own economic point of view because that’s how they keep their lights on. This is not (necessarily) disingenuous, but it may be uninformed or heavily biased depending on the knowledge and inclinations of the author in question.

Readers need to be aware of this and factor in who is saying what, and how their bread is buttered. They should also read more than one author on the subject. Corporations — and in this case Amazon and Hachette — benefit the less you know about their reasons for doing anything; their promoters and detractors benefit when you only take their word for things. So don’t. Find out more, and don’t rely on a single source for information on anything. Including me — look, I’m pretty sure I’m reliably skeptical all the way around, here, and anyone who thinks I have have it in for Amazon while fawning over large publishing houses is delightfully misinformed. But then I would think that, wouldn’t I. So, yeah, get other viewpoints. More information is always good.

6. With that said, if I were a writer whose primary source of income was Amazon’s publishing platform, I would be rooting like hell for Hachette to win this particular round of negotiations. Why? Because if I buy into the argument that Hachette, et al are artifically propping up eBook prices for their own benefit, and I’ve priced my own work below those artifically high price points, then in point of fact I’m cleaning up in the heart of the market while Hachette, et al are skimming in the margins — and the very last thing I want is a large and now-hungry corporation now competing with me at my price point out of necessity. Driving Hachette and all the other publishers into my territory is not likely to work out for me very well.

But they can’t compete there! They’ll die! They’re dying already! Well, I know you want to believe that. But if you’re basing your writing life on that assumption, then you’re leaving yourself open to a very very rude surprise. You need to understand that nearly all of these publishers have been around for a very long time — decades and in some cases centuries — and they’ve seen more market shifts in publishing and in the book market than possibly you can imagine, some of which were as disruptive as the current one. How many disrupting mammals have these lumbering dinosaurs already seen come and go? And believe this: These large publishers may or may not be able to eat Amazon, but they can surely eat you.

I think it is a very good thing that self-publishing and electronic publishing has come and shaken things up in the publishing field; it’s wonderful that authors can connect with readers without having to route through a publisher they have to convince that this audience is there. It is correct that large publishers tend to the conservative and safe, and do what they know, and often only what they know; it is correct that many authors are better off doing their own thing without them. It is wonderful, as a writer, to have options. Speaking for myself, I know I am better off because I have the option, at any time, to chuck my publishers and make a go of it myself. It keeps them appreciative of me, at the very least. But it does not follow that Amazon prevailing in this particular negotiation with Hachette signals the end of “traditional publishing” or that any particular author — independent or otherwise — will benefit if it did. It doesn’t follow that Amazon prevailing in this particular negotiation is beneficial to anyone other Amazon.

If Amazon does not prevail in this argument, it changes nothing for the authors who already use it as their primary means of distribution. They are still in the marketplace, they are still (largely) pricing their works below the very highest end of “traditional publishers” and therefore able to take advantage of readers who are motivated by price, and they are still able to benefit from not having to share their income on the work with anyone but Amazon.

If readers are in fact primarily motivated by price, then the revolution is already here and indie publishers and authors and readers are already benefiting from it while the traditional publishers slowly thrash and die of hypoxia. In which case all that Amazon will do by forcing publishers into lower price points is give them a shot of oxygen and cause them to compete on the point where indies presumably have the advantage: Price. If I were an indie author, I would rather let the publishers thrash and die away from me, then thrash near me and possibly crush me in their dying throes — which may not in fact be dying throes at all and just merely crushing me.

In sum and once again: Amazon is not your friend. Neither is any other corporation. It and they do what they do for their own interest and are more than willing to try to make you try believe that what they do for their own benefit is in fact for yours. It’s not. In this particular case, this is not about readers or authors or anyone else but Amazon wanting eBooks capped at $9.99 for its own purposes. It should stop pretending that this is about anything other than that. Readers, authors, and everyone else should stop pretending it’s about anything other than that, too.

(Update, 8/11: Followup responses to criticisms I’ve seen to this and other Amazon/Hachette pieces I’ve written.)

226 thoughts on “Amazon Gets Increasingly Nervous

  1. The usual caveats apply here with regard to the Mallet. Please discuss politely or I’ll whack your comment. Also as a practical matter, if all you’re doing is coming here to cheerlead, spare us all the pom poms. Please have something useful to say. I’ll specifically note that arguing about where the future is (in your mind) inevitably headed without taking into the account the realities of the bookselling world as it exists today, will not endear you to me. Thanks.

    Also, for those who are wondering why I’m noting what Amazon’s publicly in this negotiation and less about what Hachette is saying, the short answer is that Amazon’s talking more, and making more obvious errors in logic and rhetoric whilst trying to sway interested third parties to its side. Please note, however, that me commenting on Amazon’s tactics does not suggest or imply endorsement of Hachette’s tactics. That said, as a purely business matter, I’m not sure why Hachette would agree to Amazon’s new terms with any enthusiasm. Thus, the situation as it exists today.

    I am also aware that there are several folks who are annoyed that I keep repeating the “Amazon is not your friend” point. We know it’s not our friend! They maintain. Well, that’s lovely. Make sure your rhetoric on the matter matches your assertion, however, or I shall continue to doubt you.

    I put a link to my disclosure document in the entry, but if you’ve missed it, here it is. You will find I am quite a fan of Amazon when its business practices help me, less when they don’t. Same with publishers. Etc.

  2. I have seen no solid information anywhere on exactly what Amazon and Hachette positions are, which makes it hard to argue details. I’ve read all the articles and posts I can about this, and hard facts have been thin on the ground.

    For example, you point out that your books are already priced around the upper limit of what Amazon wants, so why the fight? But part of the reason for those prices is that Amazon is now able to set the price they charge, and the publishers are allowed to charge Amazon whatever they want. What if Hachette wants to go back to agency pricing and force higher retail prices? Most of the publishers did in fact set much higher prices when they were colluding and could force Amazon to agree. For all I know, the current fight is about whether to return to that or not.

  3. As Alex Irvine noted on Facebook “Email from Amazon asking me to ask Hachette not to put writers in the middle. Um…” Indeed. Also the Orwell quoting is hilarious. Especially because Amazon pulled all of Orwell’s titles from their store a few years back because of a battle with the estate over prices, I think. It really is a case of two giants clobbering each other and neither is our friend.

  4. FYI — The link to readersunited in the second paragraph resulted in a Whatever 404 Not Found page.

    Dr. Phil

  5. I got one of these KDP emails last night, and wrote it up on my own blog. And as I said over there, as an author who’s primarily digitally and self-published, my main boggle point here was wondering exactly what Amazon thinks it’s going to accomplish by trying to drag us into this, and how exactly they think Hachette is supposed to respond if they get a wave of email from KDP authors.

    My household thinks Amazon’s pretty much trying to drop the Internet on Hachette’s head. The problem with that in my experience is that it’s trying to drop a cat onto somebody’s head. You might think it’ll be an effective way to alarm or scare somebody, but meanwhile, the cat’s wriggling around in your hands and does NOT think this is okay, and there’s a very strong risk it’ll squirm around and bite you.

  6. Same old tired tripe. I live in Roanoke, Virginia. I publish my novel through KDP, someone down the street buys it. How does that NOT keep money in the local economy? Puhleese. Should I pay to print in paperback (probably using a Chinese printer because the American companies all need a car per kid and two plasma screens per home, which jacks the price), and then try to sell it in a local store who only want the same lame-ass book blessed by some overworked acquisitions editor with a torn-shirt pretty boy vampire on the cover? Or maybe send 100 manuscripts (no simultaneous publications, please) over the next ten years of my life hoping some dead-from-the-neck-up acq editor will like it. I don’t think so. I can write my ass off, Amazon let’s me publish that writing. I’m in love with ‘em.

  7. Dr. Phil:

    I fixed the readers united link; if you’re still having problems with the link it might be a cache issue.

    Mark Walker:

    “How does that NOT keep money in the local economy?”

    It’s nice you live everywhere a reader may be interested in keeping money in the local economy, Mr. Walker. Although shuttling between all those houses might get exhausting after a while.

  8. And now the link works. Sorry to me up bandwidth.

    Still, companies should stop trying to pretend that they are Jes’ A Bunch o’ Grass Roots Folks and hide behind such titles as Readers United.

    Dr. Phil

  9. Ha, of course I don’t, John. But you see my point. I’m a local economy guy, local veggies, local beef, country living. No sweat. I’m sorry that the B&N and Amazon’s of the world are killing local bookstores, and agree that it’s a complex problem. I am, however, a fan of lower eBook pricing. But guess what? That’s why crayons come in 64 (or is it more now?) colors. I respect your opinion.

  10. I agree with your logic, but I think your numbers for Lock In are slightly off (and part of why this fight is happening). The Kindle page says that the suggested retail price is $24.99, and they are discounting to $10.67. If $24.99 is indeed MacMillan’s list price and so wholesale prices are based on that amount, then Amazon is having to discount HEAVILY and making little if no money from it. Which is what Amazon has been doing, and so is trying to make ebook publishers reduce the list price to 9.99 so they can sell at the price without discounting.

    Should they get that, and thus every ebook publisher sells them for 9.99, I suspect there will be discounts below that and in a few years Amazon will be explaining why publishers are being bad people for not capping book prices at $4.99. Naw, they’d never use their market power that baldly, would they?

    I suspect that $24.99 amount is highly inflated, B&N has it for 11.99 as an ebook, as does iBooks, and they don’t discount as heavily and as often as Amazon does. It’s also $11.99 on the macmillan/tor store, so I strong suspect that the wholesale price is based on $11.99 and your argument still holds.

  11. I don’t understand why people complain about amazon not putting money into the local economy. It puts it into my local economy at least. Up to, and including paying my mortage! (note: I’m not an author)

  12. I think I would have far fewer concerns about Amazon’s position if, and this is a big if, they let me use my Kindle to easily purchase from ANY bookstore I wanted to, at the price I wanted to. If publisher A puts e books out at 19.99 and Amazon wants to take a loss and sell it for 9.99, that’s fine, as long as it comes out of Amazon’s end.

    Conversely, if Amazon chooses not to carry a book because it deems the price too high, I as a consumer, shouldn’t have to carry a different device to get that book. I realize Amazon had/has the long-game in mind when they came out with the Kindle… that they would own all the publishing…. but in that they sold it as a loss leader for so long so as to corner the market, they should not be throwing stones when it comes to pricing of ANYTHING.

    Disclaimer:
    I used to (up until the last year or so) only ready paper books. I resisted reading on a Kindle, for both aesthetic and fear of Amazon reasons. Now, due to a problem with my vision, I can only read on e-devices with the font turned up and the margins narrowed. I haven’t spent a lot of time looking at other reading devices… I never trusted that B&N would be around long enough to buy into their device, and my wife wanted a Kindle, so we bought Kindles. My wife has bought hundreds of books on the Kindle–far more than she would have bought had she not had an e-reader, so I guess Amazon’s strategy is working. But it doesn’t mean I don’t fear what will happen in 5 or 10 years. I’m not smart enough to play the long game with them.

  13. I want address the over $9.99 price point Amazon talks about. Before I do that, I want to say that I’m siding with Hatchette in this argument – or rather against Amazon, as I don’t like their business model or the Kindle format.

    I have been purchasing ebooks for a long time – since 2002, when I bought my first Palm handheld. My first ebook vendor was a company called eReader, who was layer bought out by Fiction wise, who later got bought by Barnes & Noble. I used to see brand new top market ebooks for around $14-16 all the time, but these were books that if I went to buy the hardback, I’d have to pay $22-24. I haven’t seen prices like these in a long time though, since around 2008. any guesses why? Market depression perhaps? To me, Amazon’ pricing argument is pretty ridiculous, as it’s nearly a decade out of date.

    Personally I’ve always felt $12-14 is a fair ebook price for a top market, long, hardback release. $9.99 is great for shorter new releases, and I love the $7.99 price point for ebooks that are paperbacks and have been around for a while. As for the $2.99 folks, to me, unless it’s a short story, or particularly poor quality (say a new author who can’t afford good editing), it’s silly to ask an author to get so little for a book.

  14. gadgetdon:

    “The Kindle page says that the suggested retail price is $24.99″

    They’re going off the hardcover cover price. You’ll see the same thing for the kindle version of Unlocked, where they’re going off the price of the signed, limited hardcover edition of the novella, despite the fact the hardcover is published by a different publisher who does not have any control over the e-book price. The eBook is 95% off the hardcover price! Which is true, as far as it goes.

    Mark Walker:

    “Ha, of course I don’t, John. But you see my point.”

    I see your point, but it’s not my point. Your point is “I sell a book where I live therefore I contribute to the local economy.” My point is “A reader may want to decide that buying from Amazon is less desirable than buying from a local bookseller, who will keep more of the cost of the book in the local economy.” Your attempt to use your point to counter my point is noted, but it’s not a particularly good attempt because in fact it only works for you, in only one location.

    Likewise I could say that the person in my town who buys my book from Amazon is helping a local business (mine), but that the person in my town who buys it from Jay and Mary’s Book Center is helping two local businesses, which is even better, and that both of us are more likely to spend that money locally.

    So, yeah.

  15. I’m a writer, but also a reader, and my mind honestly boggles at this notion that lowering the price of books is in my best interest as a reader.

    There are these things called libraries. Getting books without paying for them has always been an option for me.

    What’s in my best interest as a reader is ensuring that high-quality books are available for me to buy. Artificially deflating the price of books below what the market will bear means that publishers will focus on moving more copies of each book–which means they are less likely to take chances on books that differ substantially from past successes. That means less diversity and fewer opportunities for new writers to break in.

    And sure, yeah, I’m a writer. And as a writer, that frightens me. But as a reader? All the stars in heaven, that terrifies me. We’ve seen what that looks like. It looks like Hollywood, where the industry’s resources are focused on a handful of big blockbusters that follow a particular formula, and diversity and representation are the butt of a sick joke. Marginalized people get the industry’s table scraps, and we’re expected to be grateful for those.

    The publishing industry still has a long way to go when it comes to these issues, but they’re light-years ahead of their more blockbuster-driven cousins in film. While I own and enjoy most of Scalzi’s books, I think the reading landscape would be a sad and desolate place if mega-blockbusters like his were the only books able to get the kind of support a publisher can provide.

  16. “Or maybe send 100 manuscripts (no simultaneous publications, please) over the next ten years of my life hoping some dead-from-the-neck-up acq editor will like it.”

    Some (unintentional?) irony here.

  17. “Fast forward to today, and it’s the e-book’s turn to be opposed by the literary establishment.”

    And right here, their comparison completely falls apart.

    While publishers might not be dancing to Amazon’s tune, they aren’t trying to kill the ebook either. (There’s plenty of room for improvement in how they handle them, but that’s a different issue.)

  18. I have largely not had the spoons to get involved in this beyond the occasional comment on someone else’s blog–but seriously, what the hell? They just spammed me to get in a fight with a company I have no dealings with?

    1. Hachette has less than no reason to listen to me.

    2. I have chewed out business associates for spamming me with their not-related-to-my-business crap. This is Not Professional Behavior.

    3. I self-pubbed things because I didn’t want somebody else to tell me how to publish those things. It would be hypocritical not to extend that same courtesy to other publishers.

    4. No, I’m still pissed they spammed me. Hachette could be the parent company for Satan’s Assweasels for all I know, but at least they haven’t bothered me about it.

  19. John, what would you see as an equitable arrangement which would benefit publishers, retailers, distributors and readers? I know you can’t please everyone, but is there a solution that’s better than current state?

  20. I think Amazon’s appeal to readers is a nonsensical misfire (WWII? Orwell? Are you kidding me?). I am not an author, just a reader/consumer, and I think Amazon is missing other equally important points from the reader perspective. Price is one thing, convenience is another and most people are willing to pay for convenience. I like ebooks because I can buy them with one click, and carry a shitload of them in one handy lightweight device called an iPad Mini. I will pay “$14.99″ for a new release, or the next 10,000 page epic fantasy behemoth from (insert favorite author here). It’s not about what is or isn’t included in the production cost of an ebook – why would I know, or at a certain level, even care? It’s about is $10 a good price for the enjoyment/entertainment I will get from Lock In? (yes) Is it worth $11.99 for the next anxiously-awaited installment of the Iron Druid Chronicles? (yes) Is there a limit on what I would pay for a new Gentleman Bastards book if it ensured that it came out next week? (probably not). Again, just my view from down here in the consumer/reader trenches. $9.99 price points will make little if any difference in my purchasing habits.

  21. I think there’s a small point here that is worth noting.

    Lock In is $10.67 for Kindle only because Amazon currently has the right to discount eBooks according to the terms of Macmillan’s settlement with the DoJ. Without that, Amazon would charge Macmillan’s list price. I think that would be $11.99 as it is for Nook (since B&N rarely discounts eBooks now, IIRC). As a second data point, $11.99 is also what Google has as the list price before discounting to match Amazon.

    I didn’t go through the rest of your lineup, but I suspect the same holds true for at least a few other books (most likely the ones with prices that don’t end in .99).

  22. All disintermediation efforts ares good — the fact is that with either side here there is still a middleman (Hachette or Amazon) providing relatively little value to consumers — but we are getting closer to direct from writer to consumer…an ultimate win for all. Like this blog post. Hachette and Amazon both make no money. Scalzi goes directly to his readers — and could reasonably charge for this and for his books using the same means. Every battle like the current one brings us closer to that scenario….FIGHT ON!

  23. Regarding the 18-month old domain registration, is it possible that someone else registered it then and just recently sold it to Amazon? It seems like it would have been awfully prescient of Amazon to have registered it so long ago and then just get lucky that Douglas Preston and company formed something called Authors United.

    (I ask this without doing any of my own research, so it may be entirely possible to see the entire history of a domain and I just don’t know it)

  24. This is a MUCH better use of expensive ads in The New York Times, than those two times SFWA schizmed and placed such things: (1) During Vietnam War (one faction pro-US policy; the other anti-); (2) over “Star Wars” and militarization of space (one faction, including Sir Arthur C. Clarke opposed to any militarization of space; the other, including Heinlein and Pournelle, strongly in favor of same).

  25. You have some logical flaws as well in some of your points (pointing out gaps in a position is not the same as refuting it and longer experience does not automatically equate to being more correct), but the thought on the benefits self-published authors derive from price point diversity is excellent and not one I have yet seen. Self-interest should drive authors here as much as it drives Amazon/Hachette. The truth is that many publishers offer shit deals to B-list authors. The truth is 70% is a huge number and has demonstrably enabled many self-published authors to make a good living. The truth is also that Amazon cares about it’s shareholders first and any money made by authors is incidental to that bottom line.

    Incidentally, @Christon, that is part of the argument. Traditionally published authors receive a pathetic % from e-book sales. Amazon pointed this out in an obvious PR move (Yes John I agree AMAZON IS NOT OUR FRIEND), but that doesn’t make it less true.

    Nevertheless, I appreciate point #6 because for the first time it gives a reasonable argument for why self-published authors should consider supporting Hachette. Of course, a) it’s also a rather cynical argument and b) I think the Hugh Howeys of the world honestly do care about finding the best deal for all authors on all sides of the equation, which is yet another wrinkle.

    Ultimately, as a reader of books by Amazon supporters and Hachette supporters, I just wish authors would stop sniping at each other in rude and condescending ways. If anyone is categorically NOT the enemy, it’s the content creators, regardless of their views, and whether they are self published, hybrids, or traditionally published.

  26. Can you explain the math behind Amazon saying that a 74% increase in book sales will result in a 16% increase in author revenues? Even of they mean 1.74 times as many books sold at 9.99 as at 14.99, that should still mean a 25% increase in author revenues.

  27. Re: the Orwell quotation. That is taken from a review of Pengiun reprints in 1936. Orwell also says that “In my capacity as reader I applaud the Penguin books; in my capacity as writer I pronounce them anathema.” He was torn about a market of cheap reprints rising up. Contrary to the way that Amazon contextualizes his remark, Orwell wasn’t talking about something utterly new; cheap books had been around for awhile. He was referencing a particular use of the book type. Orwell’s comment reflects the bookselling economy of his time; he was worried about writers getting paid even as he said that the Penguin books were “splendid value for sixpence.” Orwell thought this trend “would be a fine thing for literature, but it would be a very bad thing for trade.” He’s really ambivalent, not some snarling enemy of inexpensive books. Amazon did Orwell a disservice by using that quotation the way they did.

  28. Ravi:

    “Lock In is $10.67 for Kindle only because Amazon currently has the right to discount eBooks according to the terms of Macmillan’s settlement with the DoJ.”

    So what you’re saying is that Amazon is choosing to price my book at above $9.99? Interesting!

    Nor does this change the argument much, as again, my most expensive book would still be priced well below the $14.99 price point (not to mention the $19.99 price point Amazon hauls in for this round), and all my other English-language books would still be below $9.99.

    An Avid Reader:

    “Scalzi goes directly to his readers — and could reasonably charge for this and for his books using the same means.”

    This assumes, mind you, that I want to handle every aspect of the publishing process myself, which I don’t. I want to write (and occasionally market) my work. I want a publisher to handle all the fiddly details of bringing the work to market, and I want retailers like Amazon to handle the work of selling them. Which leaves me more time to do what I want — write books. “The future” won’t be doing me any favors if it makes me do everything.

    Q:

    “pointing out gaps in a position is not the same as refuting it and longer experience does not automatically equate to being more correct”

    Correct on both counts. The point to make with publishers being around longer, however, is that their knowledge database on market conditions is more extensive and that they are also more entrenched than I expect many people, particularly many authors who have never dealt with them nor know their history, often appreciate. Publishers haven’t lasted as long as they have simply because their markets have not been disrupted, for example. Past performance is no indication of future success, yes, but also, experience matters. On the other point, of course, pointing out gaps in logic is its own reward.

  29. I agree with Annalee’s points, but my primary concern is different. I worry about whether lowered book prices will decimate the class of professional writers. When a new book by Scalzi, Bujold, or Willis comes out, I buy it. Not surprisingly, exactly once. Were the prices on those books reduced to 99 cents, I’d still buy them. Exactly once. So the author would get a fifth, a sixth, a ninth, whatever, of the money. Maybe the top tier authors could survive that, but I’m skeptical. And I follow several authors that I’m confident would have to find day jobs.

    “But Crystal, people would buy more books!” Perhaps, but I wouldn’t. I buy as many books as I can find time to read. Lowering prices won’t give me more time to read.

    “But Crystal, it will democratize book publishing!” I’ve seen this response made, and it just strikes me as ridiculous. An author wanting to publish their first novel directly through Amazon would be *insane* to be happy their book was going to sell at the same price as one by Stephen King or J. K. Rowling. To the extent that price matters to consumers, price differentiation only helps the small fry.

  30. @Crystal Part of the argument is also how much should authors receive per book sale. Self published authors can make more from their ebooks than traditionally published authors make from a hardcover sale. I’m not saying Amazon gives two shits about that, per se, but it’s one of the reason self-published authors tend to like them.

  31. Thank you for that reply. I think a world of choices for authors who want others to handle any or all of the process for them is great — let there be lots of options with market driven pricing allowing authors to do anything they want. Let’s not have intermediaries limit choice and abuse their market power to achieve their own business goals. This goes for publishers of any sort (traditional or electronic).

  32. No corporation is ever your friend. It is anathema to their existence. I agree there with John. But this no guidance in this conflict because both sides are corporations.

    In the conflict Amazon vs. Publishers, i am on the side of Amazon. But i am there due to my own interests, not because i see any kind of all-encompassing truth on their side.

    My reasons are:

    1. The book market before Amazon was to the disadvantage of the consumers. For their own purposes (because they need the support of the consumers), Amazon has been and is changing that. From my point of view, that is a good thing. This may change in the future, but currently Amazon is by an order of magnitude more consumer-oriented than 90+% of all publishers.

    2. The old-style book market was strongly favoring established authors and erecting high barriers for the entrance of new ones. Of course established authors approve and defend that. While i am a huge fan of several established authors, i like to see a lot of competition for the reader. Amazon (again for their own purposes) is pushing toward that.

    So while this may change in the future, i think the readers interests are currently better served by support Amazon than the publishers.

    P.S. I find it very strange, that what is consider the best justified attack vector against Amazon is rarely used: their tax evasion policy. My guess is, that this is because it would make you powerful enemies elsewhere beside Amazon.

  33. “It and they do what they do for their own interest and are more than willing to try to make you try believe that what they do for their own benefit is in fact for yours. It’s not.”

    A hundred years or so from now, our descendants will read (probably via some form of etext) about how we used to let corporations run our civilization for their own ends, how we treated them just like persons — except when they committed crimes — and generally gave them the same deference and leeway that the pre-Revolutionary French gave to their lisping, powdered aristocrats. Until it was time to be off with their heads.

    Disclaimer: I’m selling my backlist novels and stories on Amazon (and in other venues) at $3.99 a pop, which I figure is a reasonable price for an ebook. At least for as long as Amazon’s paying a 70 per cent royalty. But who knows how long that will last?

  34. It’s interesting that Amazon has chosen to demonstrate its PR ineptness once again, in the the light of the wide spread commentary on its smartphone; did Amazon really think that reviewers wouldn’t notice that most of the tech thereon is devoted to making it incredibly easy to impulse buy stuff on Amazon?

    As far as I can tell nobody in Amazon has the job of explaining to Bezos that in the real world people do notice the blindingly obvious, and that said people tend to be irritated by Amazon’s assumption that they are too stupid to notice…

  35. Speaking of propaganda, isn’t it a well-worn truth about propaganda that the only thing that is needed is to repeat lies enough times that they stop being called out.

    The Hachette authors are not being blocked on Amazon. Their primary complaint is that they are not getting co-op. Their expectation at this point is that they can antagonize their distributor and still expect the distributor to give them free extras like deep discounting, pre-order buttons, and accelerated delivery.

    They are enraged that they are being treated like everyone else and not the special snowflakes they believe themselves to be – even while these special snowflakes are gunning for their biggest distribution partner at every opportunity.

  36. Martin: “The old-style book market was strongly favoring established authors and erecting high barriers for the entrance of new ones. Of course established authors approve and defend that. ”

    But this debate isn’t about that. Neither side in the Hachette-Amazon debate is proposing to force authors to utilize the old-style market methodology. I’m sure Hachette would prefer authors turn to them rather than self-publish (or Amazon-publish), and I’m sure Amazon would be happy with more authors publishing through them, but neither side it trying to enforce that on the other.

    I don’t see any upside for established authors objecting to the current situation, where they get to use the services publishers offer, at a price, and anyone who wants to can go straight through Amazon. I’ve seen comments arguing that one side or the other is making an imprudent choice (“You need professional editors!” vs “Your publisher is leeching off you!”), but none at all which argue that authors should be denied a choice in the matter.

  37. Chris Armstrong:

    “Speaking of propoganda,”

    ie, “we’re not talking about the thing I want to talk about, which is not the thing under discussion, so don’t mind me while I attempt to wrench the discussion to something else entirely.”

    I can appreciate the desire to derail the discussion into another topic, but the topic under discussion here is the latest Amazon release. So let’s stick to our knitting, please, Chris.

  38. John –
    Seeing as others are already nitpicking your text, “will not endear me to you” was probably supposed to be the other way ’round… no?

  39. Matthew Hughes:
    Amazon doesn’t pay you a 70% royalty. They’re taking a 30% commission*. Amazon isn’t a publisher, they’re a consignment store. Amazon doesn’t own anything about your book, they simply offers virtual shelf space. It’s an important distinction, that Amazon likes to try and muddy. Don’t let them. Understand your business relationships, and apply the appropriate terms.

    * With the additional fees, and their right to discount from your “list price”, they actually get more than that.

  40. I’ve enjoyed reading all your thoughtful contributions on the Amazon-Hachette dustup, but especially your repeated refrain to look carefully at corporate claims and ask why each corporation is using this or that tactic. It’s never to better serve genuine human needs; it’s always to better serve profit-making. Those two motivations aren’t mutually exclusive in theory, but they certainly are in current US business practice.

    One aspect of this I think needs more exploration is Amazon’s justification for low pricing based on the entirely incorrect assumption that digital production costs publishers zero dollars or close to zero dollars. It certainly does not. That cost is completely unique to each title, depending on the publisher’s workflow. It’s true that an efficient workflow with digital production as a core value can produce simple reflowable ebooks that don’t include interactivity or audio/video in addition to or instead of print-ready files with relatively low impact on time and production cost. But most “traditional” publishers aren’t currently doing digital production in-house because their staff and their existing workflow just aren’t set up for that, and neither are digital-focused. Most traditional publishers are sending their print-ready files to an offshore company for conversion at the very end of a workflow setup that’s based strictly on traditional print production. Long story short, that’s not a “cheap” solution, even though it’s predicated on exploiting the labor of wage-slaves, because publishers use a middle-man service provider that charges its own fees to traffick files to the wage slaves, and maybe to house those digital assets too, if the publisher needs that solution. Ebooks don’t require warehousing space, true, but they sure as heck do require digital asset management (DAM) and plenty of hardware/software solutions, plus knowledgeable staff or vendor partner contracts to accomplish professional DAM. So does selling direct to consumer, which is why Amazon has been an important point of distribution for ebooks. And then we’re back to workflow: If your staff can’t accomplish all digital publishing processes in-house, then publishers must rely on freelance labor and vendor partners (which cost money, obviously). If they want to cut out third-party providers to take control of their own products, then they have to revamp their entire workflow, which very likely will require employee education, hardware/software overhauls, and hiring new in-house digital production staff. So. Yeah. “Ebooks are free to make because they don’t use paper” just isn’t true or reasonable.

  41. Well, cancelled my pre-order for Lock In. Add Scalzi to the list of writers that I’m no longer interested in reading.

  42. Crystal Shepard: “But this debate isn’t about that.”

    I think differently. It is a power struggle and every sub-conflict is part of that.

    But i think this sub-conflict an important one. Why?

    In the past, when publishers rejected an author, his chances to make an impact on the market was NIL. Even if he self-published his book and reduced the price to a fraction of his competitors, he still would have been shut out from the market.

    This made the publishers to gatekeepers of the market. And they fulfilled their role (in accordance to the rule John established above) with the goal to maximize their revenue.

    Amazon switches the focus to the readers. Not because of their love for them, but because it is a chink in the armor of their opponents. Established authors do not like this, since they cannot profit from any competition by price.

    The conflict about eBook pricing follows exact the same script. And this is not surprising because it is part of the same power struggle.

    Amazon is currently on the side of the consumers, Not because of any goodness of their heart, but still on what i consider my side.

  43. I’m just another failed one-time author who has tried a lot of pricing schemes at Amazon, only to see sales remain close to zero. So, I have thought a lot about this whole “mess,” and, as a (too) avid reader, who has dumped typically a couple of hundred per month into Amazon (mostly on ebooks), my reader’s view is that most ebooks are priced too high (I’ve paid $25 for some) and that the real problem readers have is that there is so much junk mixed in with good books that it’s hard to know what to buy any more. I can sometimes find a great book for 2.99 and sometimes be bitterly disappointed in a “14.99” book, and most 9.99 books might be worth closer to 4.99. I’m about ready to throw my Kindle(s) away and just go back to buying books at my local B&N. Amazon takes all of the three or four hundred thousand books published each year and makes them all almost equally available, including the 299,000 that are junk. B&N at least tends to weed most of the crap out. As an indie, that might make it difficult for me to ever sell anything, but it already is anyway.

    I do think you are right on all of your points. I’d love to see Apple or Google jump into this and offer their own versions of Prime (or “whatever”). I’m getting very tired of hearing Amazon trying to come across as a saintly company that looks out for its customers, even when it hurts itself to do so. What horse poop. Glad to see you calling it like it is.

  44. Do people really make lists with “Writers I’m No Longer Interested in Reading” printed in bold letters at the top? Apparently I need to organize my dislikes more thoroughly.

  45. So. Amazon is taking the next step in their bid to become the next great Robber Baron (like the railroads, manufacturers, coal producers, telephone carriers, OPEC etc.) in American history. I find this highly ironic. After all, Amazon said “history repeats, no rhymes, itself.” So I started thinking about why Amazon’s tactics were ringing the distant bells of history.

    Propaganda Machines. All the war-time propaganda machines in WWII for Hitler, Japan and the USA did their level best to hit people where they lived. “You have to be afraid of this! Unite behind my banner! See the sock puppets do their Othering Dance! Build those ghettos and internment camps!”

    Price Fixing. It was the favorite method Robber Barons used to build their monopolies. Undercut your prices so the competitors go out of business. Once you have no opposition, hike your prices to make up for your loss leaders and turn a steady profit. After all, your customers have no other place to go.

    Artificial Shortages. Blackballing, boycotting, blockading goods or sales …or exposure to sales…

    The problem with One Stop Shopping, is the customer doesn’t always get the best service. Or the best goods. Or even their basic wants met if the shop doesn’t think they need it. I’m thinking about those blue-lit movies, smutty novels and other “morally corrupt” things — like the comic books. (Because in the post WWII era that Amazon is pointing to, comic books were considered to be evil, smutty propaganda created to lead our young, innocent boys astray.)

    Amazon (who is starting to develop a voice not unlike Vincent Price in his most evil role): “Let me be your evil overlord, dear reader. Once I price those pesky publishers out of business, I can handle all your needs. Want to be a published author? Follow this link. Needing something to read? Here’s what I know you will like. No. No, don’t bother trying something new. I know all your habits. What do you mean, you’re not getting sales? I’ve been telling people how good you are and how much they will like you. It’s not my fault they don’t click the buy button. What do you mean, you’re not finding what you want? I know what you want, because I know best.”

    Now, I’ve got “Sixteen Tons” earworming. I sold my soul to the company store. Also, “Sympathy for the Devil”.

  46. One thing most people seem to miss about Amazon is that everything they do is planned out to the smallest detail. They have an army of lawyers that look at every single public announcement, and I’m sure every word in that letter was scrutinized by multiple departments then amped up for effect. They didn’t throw WWII and Orwell out there on a whim, they did it to pump up the melodrama and hyperbole and give the letter a punch, even if the punch was aimed back at them.

    Amazon wants you to think they’re playing the same game everyone else is playing, but they’re not. They want you to think they’re making mistakes or that they’re scared, but all they’re doing is running a distraction. They’re pulling your attention away from things they don’t want you focused on, or toward things they want you to see, and they don’t mind looking foolish in the process, as long as it works.

    The bigger the noise, the bigger the distraction.

    Remember the Drone announcement on 60 Minutes? Bezos knew the Drone idea wouldn’t… *ahem*… fly, but that wasn’t the point. The day after that story aired also happened to be the biggest online shopping day of the year, and EVERYONE was talking about Amazon.

    This letter came out and now EVERYONE is talking about it.

    On the other hand, no one is talking about Doug Preston and his $100K ad in the NYT.

  47. Thought of the perfect (though admittedly, rare) counter to Amazon’s numbers.

    Assume JKR announces she’s finished the first book of a three part series covering the first war against Voldemort. James & Lily Potter, Sirius, Lupin, Dumbledore, Moody, Hagrid. It’ll end where the first series began, Hagrid taking baby Harry away as the news spreads.

    For the first six months after publication, which price maximizes revenue for the ebook release – $9.99, $14.99, or $19.99. (Assume it’s of the same quality as the Harry Potter books, so first buyers aren’t panning it.) I’m not saying they should charge whatever the market would bear, but Amazon says revenue would be highest at $9.99 and I doubt that would be so.

  48. Jack:
    There’s the Amazon-insulter, and the others of his race,
    And the blogging novelist — I’ve got him on the list!
    And the people who don’t share my views about a legal case,
    They never would be missed — they never would be missed!
    Then the novelist who praises, with enthusiastic tone,
    All publishers but his and ev’ry bookseller but one;
    And the writer who sells more than me, I never shall know why,
    And the one who “hasn’t written, but would rather like to try”;
    And that singularitarian science fiction novelist —
    I don’t think she’d be missed — I’m sure she’d not he missed!

    (Chorus:)
    He’s got her on the list — he’s got her on the list;
    And I don’t think she’ll be missed — I’m sure she’ll not be missed!

  49. .
    “no one is talking about Doug Preston and his $100K ad in the NYT” — i did, in fact.
    Jonathan Vos Post August 9, 2014 at 12:07 pm
    This is a MUCH better use of expensive ads in The New York Times, than those two times SFWA schizmed and placed such things: (1) During Vietnam War (one faction pro-US policy; the other anti-); (2) over “Star Wars” and militarization of space (one faction, including Sir Arthur C. Clarke opposed to any militarization of space; the other, including Heinlein and Pournelle, strongly in favor of same).

  50. JR:

    “On the other hand, no one is talking about Doug Preston and his $100K ad in the NYT.”

    Except that pretty much every notation of this that I’ve seen — including the one I wrote — has noted this as a reaction to the Preston ad, bundling it along with the story and placing Amazon’s work into a reactionary role. Not to mention the huge play the Preston ads got in the NYT yesterday with its article, which was one of the most widely-shared articles on the site, and the fact that Preston’s ad has been making news for weeks now, starting from when he first started distributing it to other authors.

    So, uh, yeah, JR. I’m not 100% with your police work here.

    “Amazon wants you to think they’re playing the same game everyone else is playing, but they’re not.”

    This does not imply that the game they are playing makes sense, however. Calvinball is no way to run a company.

  51. Well, I think I’ll be sticking with local booksellers wherever possible for the near and medium term, as before. I’ve got a couple of places in particular I like for this sort of thing. Hoping I can help keep them going…

  52. Martin: I wonder whether you’d continue to believe that Amazon is on the side of consumers when you only get to read a new Scalzi book every three years, because vanishing margins force him to get a day job?

    And having read a fair number of books on Amazon *not* from the major publishers (I’m a Cthulhu Mythos fan, which pulls out amateur authors in droves), most would have been considerably better had they been professionally edited. A few were fine as is, a few made me long for gatekeepers to save me from having encountered them in the first place.

    Why do you keep talking about the past? I agree that the gatekeeper model was flawed, even as I love the professional editing and publication model. But that was the past – the “gatekeeper free” model that Amazon offers, and other gatekeeper free models, aren’t going away. You can choose to hate on Hachette for having been gatekeepers back when they could be, but I can’t see how it has any bearing on Hachette’s current argument with Amazon at all.

    Again, the model you hate is *gone*. It *isn’t coming back*. And it has nothing to do with the current dispute between Amazon and Hachette. So why bring it up at all?

  53. Maybe I just didn’t read this closely enough but it seems to me your non position is let them duke it out. Don’t get involved. The more you know the more you realize its a no win to choose a side.
    So don’t choose a side.

  54. Chris Armstrong August 9, 2014 at 12:47 pm
    [snipped]Their expectation at this point is that they can antagonize their distributor and still expect the distributor to give them free extras like deep discounting, pre-order buttons, and accelerated delivery.[snipped]

    And if Amazon gets the monopoly it’s hoping for? How long will those Free Extras remain free? After all, if Amazon becomes the only book publisher/distributor around (and yes, POD technology will allow that), those free services will be the difference between making a sale and not. So why not charge for the formerly free extras?

    Hatchett, if they succeed, will be Amazon’s example to people who protest at paying for formerly free stuff. “Remember what happened to Hatchett’s?”

  55. Jack: Fair is fair. I had told John that, though I’m a huge fan and normally read anything he writes, I wasn’t going to read Lock In, for reasons entirely unrelated to business.

    But you’ve convinced me to pre-order a copy. Thanks!

  56. I believe the reactions from many here (and elsewhere) is don’t mess with my gravy train. Mainly “I’ll use selected facts, logic and reasoning to show why Amazon is evil.” Much like Amazon doesn’t want its (lack of) earnings affected saying “We’ll use selected facts, logic and reasoning to show why traditional Publishers are evil.”

    Trying to sort through all of this leads me to say…here’s to a future where the fittest win! And it’s very hard to support the Hachette view of why they are the fittest — except to keep their stream of profits flowing. I don’t really care if a new kid on the block takes some of the traditional profits from traditional publishers.

    I just care about reading great books — and i’d just as not line the pockets of either new or traditional publishers….so i’ll go for the lower cost option especially since authors who adjust to the new way end up benefiting the most. Total win/win.

    Sour grapes just don’t do it for me.

  57. @Crystal I’m pretty sure JS would jump ship to self publishing if margins ever fell that far on the publisher’s side. People act like it’s impossible to get professional editing, cover design, etc. without signing on with a publisher. It’s not.

    “Couple of years ago, The Wall Street Journal showed that 1% of all e-book authors earn 99% of the total revenue. Probably still true. Amazon is NOT helping.”

    1. I doubt the figures are much different in traditional publishing and they at least act as gatekeepers, leading to:
    2. There are so so so many terrible self published books that the numbers are skewed quite a bit here on that end of things.

  58. @Victoria

    The items you referenced that one day Amazon may no longer provide for free – my point is that any independent author or small publishing house typically doesn’t get those things for free right now. They don’t even have an opportunity to buy them.

    My point was to say that the core of this battle (which I acknowledge is considered off-topic by our esteemed host) is basically about a bunch of privileged-class writers like Preston crying because they didn’t get to move to the front of the line and are stuck behind the velvet rope. This is the great injustice that requires full-page NYT ads to shout about the end of Arts and Letters in America. (Cue music)

  59. Damn it, Andrew Hickey, I’m going to have that stuck in my head all day.

    The old-style book market was strongly favoring established authors and erecting high barriers for the entrance of new ones. Of course established authors approve and defend that.

    Why would they?

    Established authors have nothing to fear from new authors flooding the market with self-published books from Amazon. They’re established. There’s a reason people joke that Stephen King or John Grisham or J.K. Rowling could publish their grocery shopping list and it would be a NYT best-seller. A slew of untested authors, with no barriers to entry other than access to a computer, is not a thought keeping GRRM up nights. Because given a choice between ‘a whole bunch of people I’ve never heard of, whose work is of wildly varying quality’ and ‘this author whose work I already enjoy’, guess what the vast majority of people are going to buy? Are you really trying to argue that Scalzi will end up hustling loose cigarettes on the streets of Cleveland because some new author published only through Amazon will eat his lunch?

    What you’re saying is not factually true, but it’s emotionally true for a lot of people. Discussions about traditional publishers are infested with that narrative: we, the struggling new authors, are being kept down by The Man, who snootily erects unfair barriers to our genius work, and Amazon is the hip new disruptor that will throw open the gates and let The People freely share their work.

    It’s a dumb narrative, bluntly, and one that serves no purpose but ego-soothing. It ignores real problems in the traditional publishing industry and the real value and benefits of widely-available self-publishing. Also dumbly, it pretends that Amazon is a champion of the People, instead of a corporation just as selfless and indifferent to the interests of authors as any New York publishing company.

    P.S.: this same dumb narrative has been around for along time, only it used to be ‘vanity publishers’ and later ‘zines’ before it was Amazon.

    I can write my ass off, Amazon let’s me publish that writing. I’m in love with ‘em.

    This is the equivalent of “I can’t get those ossified fools at the big department store to stock my hand-knitted scarves. So the flea market lets me put up a booth and takes a cut of my sales. I love ‘em.” The flea market isn’t doing you a favor, and it’s not taking a chance on your amazing scarves, the quality of which is overlooked by the stuffy management at Macy’s. It’s a business decision: they invest nothing in you, and take absolutely no risk of loss if you fail to sell a single scarf, unlike the department store. Whereas if – through luck or word of mouth or (more likely) heroic marketing efforts – you do well, the market profits. Certainly it may be a superior business model for you, but the idea that it’s a barometer of morality or the stupidity of people who won’t prospectively sink their money into your literary efforts is, again, a narrative, and a dumb one.

  60. maybe that letter is a subtle ad saying “buy your cheap ebooks now, ’cause it wont last, wink wink” (I actually doubt it)

  61. I don’t have anything substantial to add to this discussion – just a note for comparison. I own a Kobo and just checked the Chapters/Kobo pre-order price for Lock In. It is $12.99 Canadian. I believe that would be about $1US more than the Amazon price of 10.67.

  62. I have to stand with Amazon on this issue and here is why. Amazon is a private company that can sell it’s products at any price they wish. If a supplier does not lower their price to meet what Amazon wants to provide the product for to it’s customers, then that product doesn’t get sold. If Hachette, or any other product provider, wants more for their product than Amazon is willing to sell it for, then go somewhere else.

    It simply comes down to the fact that selling your ebook on Amazon is not a right, it’s a privilege. If you want your ebook sold on Amazon then you have to meet their terms. Publishers need to learn they can no longer strong arm and bully retailers to sell their books for whatever price they arbitrarily decide that want to.

    Lastly, if Amazon is so wrong about the pricing, then why don’t all those publishers that disagree just pull all their books from Amazon and start their own retail website. Since they know how to price ebooks better than Amazon, they should have no problem getting people to buy their ebooks at the inflated price they want to sell it at. If they are right, Amazon would loose out on all those sales and come crawling for their business.

  63. One thing worth pointing out, I think. It’s true that Amazon’s $9.99 price isn’t 1/10th of the new hardcover book price, as was the case for the hardcover->paperback transition. However, were you to ask Amazon what they thought the “best” price for e-books to be, if they were being honest, they’d say the price that maximizes total sales, because their marginal costs per-copy are nearly zero. At a wild guess, that’d work out to about 1/10 of the cost of a *paperback* book, or it the range of $0.50-$0.99. That really would be disruptive pricing, and it they can exert sufficient leverage on publishers, they *will* drive prices down to that level.

    You can pretty much put a stake in the very concept of local bookstores, at that point, and access to books by anybody without an e-reader device. I’m not sure I’m ready to live in that world, yet.

  64. @Crystal Shepard: All i have to make up my mind is the past and present. In a fight between someone who tried to screw me and someone who offered me fair deals, who should i choose?

    From my impression, the publisher have not given up on the gatekeeper model. They are currently retreating but they have not given up that fight.

    I am not afraid about a shortage of authors, even good one. I rather feel in a golden age of reading for SF&F fans (something i partially credit Amazon for). And my guess is that John will still make a good living even if the playing field becomes more leveled and complicated.

    I agree on the benefit of the editor, but that one is not tied to a publisher. You can hire such people ;-). I think Amazon envisions rather separate roles (editor, marketing specialist, logistic adviser, etc) rather than a bundle “publisher”. That does not make them popular with the publishers though.

    Writing,like a lot of creative jobs, has not been really industrialized. This will happen sooner or later. Amazon is nothing like a portent in that regard.

  65. Amazon is a private company that can sell it’s products at any price they wish.

    The dispute is not about Amazon selling its products. The dispute is over Amazon selling other people’s products.

    Amazon is obtaining products from others (in this case, books published by Hatchette) and reselling them to you and make. In order to obtain those products, it has to make agreements from the people who make them. Those agreements may include limitations on the conditions, such as prices, under which Amazon may sell those products to others.

    Following your logic there, it is a ‘right and not a privilege’ for a retail company like Amazon to buy products from, say, a publisher, and then to sell them to others. Hatchette is a private company that, like Amazon, can set whatever terms it likes, and if Amazon doesn’t like it, they can tell Hatchette “Thank you, but we will not stock books you publish”, and wait for Hatchette to come crawling back.

    (The moral of the story: don’t make Go Team arguments that cut both ways.)

  66. Ahh… so Amazon would like me to be on their ‘side’. I do buy a lot of e-books from Amazon. It’s easy, and I can usually find what I want. Cheap e-books make it easier to make impulse purchases, but I don’t think I have ever been deterred from buying a book I wanted to read because of the price.

    But I have been buying e-books for longer than Amazon has been selling them, so I know that for all the ease, and occasional really good discount, Amazon is not an essential part of my e-book buying process.If there were no Amazon, no Kindle, I could still get my e-books.

    In so far as Hachett helps authors to produce a better book, they are far more important to me than Amazon is. The only really necessary persons (real or corporate) are the authors. If our esteemed host here, and other writers did not write books, I could not read them. So if there is a ‘side’ in all of this, I am on the side of the authors. The companies that help in the process of getting a book from it’s author to me are only important for as long as they actually help.

  67. It simply comes down to the fact that selling your ebook on Amazon is not a right, it’s a privilege.

    Let me see that I have this exactly right: if a company that controls 50%+ of a market says to any producer of Product A that instead of buying at Price P and selling at Price X, they will only buy at Price P/10 and sell at Price X/5 because they have decided that they could make Product A much cheaper – y’know, if they cared to, only they don’t really have the time – you would have absolutely no problem with that?

    But seriously why would it be a privilege for you for Amazon to sell your book and not a privilege for Amazon for them to get to sell your book? Because unless I’m missing something, Amazon wants to sell books written by authors published by Hachette.

  68. Arphaxad:

    “Amazon is a private company that can sell it’s products at any price they wish.”

    Actually, it’s a public company. Also, Amazon can and does sell its own products for however much is wishes, for example, the books published by Amazon itself through its various imprints, or its Kindle line of ereaders and tablets. It’s when it comes to products of other companies that Amazon has to start thinking of the wishes of the other company.

    You’re laboring under the impression, it seems, that Amazon doesn’t want to sell Hachette’s books on its site. That’s entirely incorrect. Likewise, it would wrong to labor under the impression that Hachette doesn’t want to sell its books on Amazon, either. Both companies very much would like to do business with each other — just on their own terms. That’s the problem here.

  69. When you strip away all the fluff (and dubious historical analogies), Amazon’s core message to readers seems to be “if we win this fight, you will never pay more than $9.99 for an ebook again.” Of course, as John noted in the original post, many ebooks are already priced below $9.99. The people who would be most receptive to this argument would be those who currently buy a lot of books for more that $9.99. This category probably includes a lot of people who mostly buy recent releases from major publishers, including some people who currently buy hardbacks, but could be convinced to switch to ebooks if the savings were great enough.

    So, the implicit message to Hatchett (and other major publishers) is “we want to take your most profitable customers and lock them into our proprietary ebook system as thoroughly as possible. If you want to reach them in the future, you’ll need to go through us.” It’s not surprising that Hatchett sees this as a suboptimal outcome.

    Speaking as a reader, Amazon Prime subscriber, and owner of a Kindle, anything Amazon does to make certain books less available makes my Prime subscription and Kindle worth less to me. Yes, I can buy books from other sources, but I won’t get free two day shipping on paper copies or the ability to read on my Kindle for electronic copies*. Even if Amazon is ultimately successful in capping prices at $9.99, it’s not clear to me that the average price I pay will go down, since a lot of the ebooks I buy are already priced below $9.99.

    *Yes, I know it’ possible to buy from B&N, strip off DRM and convert the epub to mobi. It’s also a pain, not to mention technically illegal in the US.

  70. I don’t think Amazon is necessarily “for” the reader. But by being for themselves I think they benefit the reader greatly. I think they make their points well. Ebook prices are elastic and anything above $10 is too much to pay. I’d never pay more than that for an Ebook, ever.

    So, I think Amazon is right about everything in these matters. BUT…

    It doesn’t make sense why they are fighting Hachette. If what Amazon says is true then Hachette would end up lowering their prices organically to maintain competitiveness and increase their own profits. So Amazon should just let Hachette win and let them shoot themselves in the foot. Assuming Amazon has that much confidence in their own predictions.

    Still, over $10 for an ebook? I’ll hit the library. ($10.67 is doable)

  71. @Martin

    From my impression, the publisher have not given up on the gatekeeper model.

    So… publishers give authors money upfront (ideally and properly at least), pay for all the costs involved with publishing a book and take on the risk of it not selling enough to break even. I’m curious – what would a non-gatekeeper model for publishers involve? Doing the same for all books offered to them? Or doing none of that and still taking a cut?

    Writing, like a lot of creative jobs, has not been really industrialized. This will happen sooner or later.

    You know who wrote a book in which books were written by machines? Orwell. And he’s a very bad man.

  72. “and then try to sell it in a local store who only want the same lame-ass book blessed by some overworked acquisitions editor with a torn-shirt pretty boy vampire on the cover?”

    Really, Mark H. Walker, is this how you feel about your local bookseller? Well, shame on you and your comment laced with incorrectly placed apostrophes. I *am* a bookseller/bookstore owner, and I buy quality literature that is well-written, well-made, and–I might add–well-copy edited.

  73. John, I live in a very small town and we didnt have a nearby library branch until the last few years. So I’m in heaven right now. On book 6 of the Dark Tower and they’ve all come from the library.

    That said, I do purchase a lot of books but usually second hand. Though there are some new releases I preorder in Hardcover (Mark Lawrence, Joe Hill).

    Sadly, there isn’t one single Scalzi book in my library. I may be able to have them shipped from another branch but found none when browsing. They were selling a used copy of Ghost Brigade for $1.00 in a fundraiser and I did pick that up.

    Anywho, my whole point is that I agree with Amazon, but they need only to let Hachette win to prove themselves right.

    Also, thanks for the reply. I NEVER get replies.

  74. Arphaxad, definitely agree that there’s no right to be sold on Amazon, and if Hachette and Amazon can’t reach an agreement, they won’t be sold. Both Amazon and Hachette would like Hachette’s books to be on Amazon (Amazon sells a lot of eBooks, and Hachette sells a lot of books) which is why they’re still negotiating and neither side has walked away.

    But neither one deserves a halo and neither one deserves devil’s horns. They’re two businesses, each trying to reach a deal that serves their interests.

  75. Ebook prices are elastic and anything above $10 is too much to pay. I’d never pay more than that for an Ebook, ever.

    “I’d never pay more than X” != “the market doesn’t support charging X.” For example, plenty of people don’t preorder any hardcovers (as you do) because they refuse to pay hardcover prices for a book. Yet there’s clearly a market for preordered hardcovers, or it wouldn’t be cost-effective for publishers or Amazon to sell them, and you’d be stuck waiting for paperbacks.

    The fact that Amazon’s suggested price point coincides with your budget says nothing about whether their math actually makes sense.

  76. Dear Arphaxad,

    Not only is this supremely irrelevant to the discussion at hand (it seems to be a variation of the nonsensical libertarian dismount), it is legally and factually incorrect. Manufacturers can and do establish prices that retailers must honor (or suffer certain penalties). That one went all the way to the Supreme Court (twice… some decades apart). The law of the land, as it stands today, is that Hatchette, if it so wishes, can tell Amazon what price to sell a book at, or there are consequences.

    It is still irrelevant, but ‘y’know, if you’ve got to play the LD card, it should at least be fact-based.

    ~~~~

    Dear Folks,

    I’m not sure I understand where this whole gatekeeper thing is coming from. If this were a case of H *or* A owning the whole market, then it might be a talking point. But, with the rise of self-publishing as a real business (as opposed to vanity press), it’s no longer true. If you’re OK with traditional publisher gatekeeping, you go with a traditional publisher. If you’re not, you go with one of the ebook distribution channels. You’re not forced into one or the other.

    So what does this have to do with the H vs A fight? I fail to see.

    pax / Ctein

  77. An interesting discusison as always. FWIW, I did not make it through all the comments. Most, but not all. Also FWIW, my primary current interest is as a reader. In the future…who knows. I hope I have a few miles left to try other things.

    From the NYTimes article:

    “Douglas Preston, who summers in this coastal hamlet, is a best-selling writer — or was, until Amazon decided to discourage readers from buying books from his publisher, Hachette, as a way of pressuring it into giving Amazon a better deal on e-books.”

    I still find this line of thinking to be most curious. The Amazon/Hachett contract expired. Amazon was under no obligation to accept pre-orders for Hatchett publications after it expired. They kept accepting pre-orders (and offering other contractual bennies) after the contract expired. The reason those bennies disappeared is because Hachett decided that securing those bennies from Amazon in a contract was not in its best interests.

    If Amazon’s sales of Hachett titles has slowed, then Hachett’s decision not to sign a new contract is the proximate cause.

    From the NYTimes:

    No thanks, Mr. Preston said. A proposal that weakens Hachette by cutting its profits was not in the interests of Hachette’s authors.

    I’m not sure if Mr. Preston reads Whatever, but he apparently should. Hachette’s interests do not necessarily coincide with his. They might, but it isn’t as axiomatic as he suggests.

    From our esteemed host:

    The short answer is likely this: It’s just a really clumsy attempt to reinforce the idea that Amazon is doing this for readers, rather than for its own business purposes.

    A semi-corrolary to Mr. Preston’s condition, Amazon’s interests are not necessarily with readers, but they might be. The divergence between the interests of readers and Amazon is not as axiomatic as you suggest.

    Again, our esteemed host:

    Sadly for Amazon, the real world is not like that. Readers might see a benefit in not having Amazon being the only distributor of books in the world — if, for example, they like having physical bookstores in their home towns, employing local people and contributing to the local economy, and keeping money in the area rather than shipped to Seattle, or if, simply as a matter of practicality, they remember that companies trying to drive the market toward monopoly rarely are on the side of the consumer in the long run. Or for any other number of reasons.

    Amazon’s actions surely have hurt local retailers. So have the actions of Hachette and the other big publishers. Just like every other distributor of goods, they do not charge retailers less than the market will bear so that the retailers can put more money in their pockets. Big publishers keep retailer margins as small as possible just as they also keep royalty payments to authors as small as possible.

    Again, our esteemed host:

    Well, except that $9.99 isn’t one tenth of the price of a hardcover book, otherwise hardcover books would regularly cost $100, which admittedly is a bit steep. $9.99 is something like 40% of the cover price of most hardcovers, and since most retailers discount from the cover price of a hardcover, the real-world price differential decreases from there. This is hardly the exponential cost savings that Amazon wishes to embed into the mind of the people to whom it is making its argument.

    I agree that the marginal difference isn’t as huge as Amazon is trying to suggest.

    However, I do have a tangential point that I have not seen addressed anywhere. I recently looked at buying a new-ish book written by either Stephen King or George R. R. Martin. The paperback actually cost less than the e-book when I was looking.

    I supposed you might consider this another verse of the “but e-books don’t require paper, ink, inventory” song.

    Considering that I have already spent money on the means of presenting the book (i.e. the e-reader) shouldn’t there be a bit of a difference between the cheapest dead-tree edition (with dead-tree overhead costs included) and the e-book edition? Amazon’s efforts to make that happen seem rational in that they are selling e-readers. I think it is a mistake for publishers to think the convenience factor of an e-book is correctly part of their revenue stream. The convenience factor is covered by the purchase of the device, not the book.

    IMHO.

    From Crystal Shepard:

    And having read a fair number of books on Amazon *not* from the major publishers (I’m a Cthulhu Mythos fan, which pulls out amateur authors in droves), most would have been considerably better had they been professionally edited. A few were fine as is, a few made me long for gatekeepers to save me from having encountered them in the first place.

    I just read a couple books as a result of Mr. Scalzi’s generous “Big Idea” series. They were professionally published with editors and everything. The lack of editing skill was obvious. (I no longer read any sci-fi magazines due to the consistently atrocious editing.) I don’t think the benefits of having gatekeepers for new and mid-list authors is as great as your comment suggests.

    Regards,
    Dann

  78. Arphaxad

    As others have pointed out, Amazon isn’t a private company. It’s a group of companies, owned by the holding company which is publicly quoted; it has a legal obligation to maximise profit to its shareholders. If Amazon claims that it is seeking to benefit its customers at the expense of its profits then it is either lying or breaking its legal obligation to its shareholders; in either case it’s not something that I would wish to ‘stand by’.
    Incidentally, Amazon chose to start charging for UK deliveries on sales less than £10 in January this year; if it wants to persuade me it’s on its customer’s side then it’s not being very convincing…

    Mark Bessey

    Outside a total monopoly Amazon can’t drive prices down that far since big authors have the ability to command far higher prices; Amazon is going for the gullible because it hasn’t got any other negotiating strategy.

    Someone like Michael Lewis, who was working as a bonds salesman for Salomon Brothers in London when I first started working in the City, has an exceedingly good understanding of how markets work; he signed the letter to the NYT precisely because he does understand it and knows that Amazon is peddling bs by the bucketload.

    I suspect that institutional shareholders are rather more worried about Bezos’ inability to generate a profit; book selling is only a small part of Amazon’s trade, and this kerfuffle is running side by side by the perception that its smartphone is an overpriced piece of tech designed to sell lots of stuff on Amazon but not much else.

    Bezos has poured massive amounts of money into it, and instead of a mega PR campaign to sell the phone he’s tootling on about ebooks; this is not the way a successful CEO who wants to get the company into secure profitability behaves. It looks much more like an ego trip than a considered strategy; I am willing to wager folding money that John won’t make the same mistake on the Locked In book tour because he has a considered strategy…

  79. Corporate Warriors. If this tug-of-war between Hachette and Amazon continues I suspect some reality show with warring corporate sumo wrestlers or survivalists is right around the corner, This whole sideshow is kinda funny when the corps need their gladiators with pen in hand to champion their cause. Like the kings of Wall Street need the coal miners to argue their cause. Of course this is all about money. Nothing more–the rest is just–the side show. Money ($$$) is the main event here with 2 greedy corporations. Fight to the death.

    I would think an author or an author and their publisher should be able to set the wholesale price of their book, just like any craftsman or artist does. Makes sense to me. But Amazon has different ideas.

  80. “It’s just a really clumsy attempt to reinforce the idea that Amazon is doing this for readers, rather than for its own business purposes.”

    A slightly modified version could be applied to another camp:

    “It’s just a really clumsy attempt to reinforce the idea that Authors United is doing this for authors, rather than for its own business purposes.”

    I do agree with you that Amazon is certainly doing this in an attempt to benefit their company. But I take offense at 1%ers like Preston and Patterson claiming to speak for authors en masse. I’m pretty sure a whole lot of Hachette’s authors would have jumped at the chance to take one of the deals Amazon proposed, but they were never given the opportunity to do so. Preston dismissed them out of hand even before Hachette did publicly on at least two of the occasions.

    If we’re going to take Amazon to task for their rhetoric, then Hachette and Preston’s cadre should be as well. I truly feel sorry for the debut and mid list authors nominally under Hachette’s umbrella, yet are still being soaked because they are forced to stand beneath the many gaping holes in said protection. They aren’t blessed with writing shacks boasting high speed Internet on 300 acre retreats in Maine.

  81. “As an anecdotal piece of information, the eBook price of my upcoming novel Lock In is $10.67 on Amazon — not $14.99 or even $19.99 — a price that is roughly 40% off the price that Amazon is willing to sell you the hardcover for ($18.62). As another anecdotal piece of data, Lock In currently the most expensive English-language eBook of mine in Amazon’s Kindle store — the other prices range from 99 cents (for various short stories of mine) to $9.01.”

    Thats because of the discount Amazon is able to get from Macmillan due to the terms of their contract (which is expiring soon as well). Barnes and Noble has a different agreement with Macmillan, which is why Lock In is currently $11.99 there. It’s also why your paperback prices and ebook prices are higher on BN.com as well. Also as anecdotal information, until about a month ago, every single NOOK version of your OMW print books was priced higher than the paperback version. Also, I would note that the electronic version of your box set on BN.com is currently (well, as of the time/date stamp of this post) $4.80 more expensive in NOOK format than in paperback. Not sure why, I’m sure theres some sound economic theory behind that pricing…

    I’d get your ebooks from the library, but I recently found out my local branch had to pay $65 a piece for the last batch of ebooks it received. So I compromised and got the hardback. I’ll read it six weeks from now, pay the late fees to help defray the ebooks costs, and then the hardback of Lock In might be available then.

  82. I’m sure Amazon knows that Hachette and Michael Pietsch couldn’t give 2 shits about a flood of emails parroting the same talking points. This is all some weird piece of propaganda that some nitwit (or group of nitwits) felt compelled to send to their 1000s of KDP writers. All seems like a juvenile and rather unprofessional thing for a publicly traded company to engage in (and if I hadn’t already dumped my Amazon stock, I’d be dumping it Monday), and if I was Bezos I’d get to the bottom of which nitwits felt this was a good idea and clear house.

  83. Dann:
    The actual proximate cause is that the two sides have failed to reach an agreement. If you’re saying that NYT/Preston is slanting their interpretation in favor of one side, all you’ve done is commit the same sin in the other direction.

    How recently? King’s catalog us too ridiculous for me to dig into, but GRRM’s is pretty small. The only thing I can find on amazon or B&N where the ebook is priced higher than the paperback is one listing of the ASoIaF box set.

  84. Authors are showing how broken the publishing system is. They are appealing to their readers to appeal to Amazon to settle with Hatchette. And they are openly talking about how muh the dispute is hurting ther livelihoods.

    Both are indictments since the authors have no direct relationship with amazon regarding the rights the books in question.

    The authors are using the only weapon they have – their readership – to try to win the battle for Hatchette. Yet despite the fuss Amazon still increased both sales units and dollars with ebooks and traditional books.

    The claim that amazon is feeling the pressure is not substantiated. The NYTimes has a vested in bias in traditional publishing. Their claim about Amazon feeling the pressure is not sourced strongly. In fact their article suggests it’s the authors who are feeling the pinch.

  85. Alan Tucker

    Do you have any evidence that lots of Hachette’s authors would have wanted to accept Amazon’s terms?

    For that matter, do you have any evidence what Amazon’s terms actually are?

    It does seem to me that there is a remarkable absence of hard evidence about these issues; about the only thing we are sure of is that Amazon has used this ploy before with other publishers, and authors certainly suffered. On the whole, Amazon’s ploy damaged the debut and mid list authors because people would go elsewhere for the really big names; I see no reason why this should be any different with Hachette’s authors…

  86. The collusion you refer to briefly, is the one wherein five of the then “big six” publishing houses, colluded with Apple to change the marketing method of ebooks from the standard wholesale model to the agency model. Amazon resisted the agency model as it allowed the publisher to determine the retail price of the ebook, while granting Amazon 30% profit on each unit sold. All other books would remain on the wholesale model, allowing the retailer to determine the sale price.

    Part of the 2012 settlement agreement approved by Judge Cotes, was the requirement that the publishers accept staggered dates for contract renewals with Amazon, after the two year term that allowed retailers to discount ebooks by 30% expired. Hachette is the first publisher to negotiate a contract renewal with Amazon. That fact has to be weighing heavily on both parties. Whatever Hachette gains, or loses, will be used by, or against, Amazon as it negotiates with the other big four publishing houses.

    To see both Hachette and Amazon try direct public appeals is not surprising. The thing to remember is that they are both looking to increase their own interests. Amazon is not the only business who appears to want to become a monopoly. Before there was a “big five,” there was a “big six.” And before there were a big six (who used to meet weekly over lunch) there were hundreds of publishing houses, some of them reaching back, as you stated, centuries.

    It is difficult to pick a side when looking at both combatants objectively. Not that it actually matters, as neither Amazon nor Hachette really care what we think.

  87. Alan Tucker:

    “I’m pretty sure a whole lot of Hachette’s authors would have jumped at the chance to take one of the deals Amazon proposed, but they were never given the opportunity to do so.”

    Well, the thing there is that a) Amazon was not in a position to offer the deal it was trying to make, and b) Mr. Preston (or indeed anyone signing that letter) wasn’t in the position to accept it, either. He’s not in charge of Hachette. Certainly Amazon would have liked Mr. Preston to endorse it, but even if Mr. Preston had, it’s not at all certain that Hachette would have accepted it — or indeed could have accepted it, as all their relationships with authors are in fact governed by contracts. As, of course Amazon knew very well, when it suggested the plan in the first place.

    Which is to say, I suspect you (incorrectly) taking at face value the sincerity of Amazon’s ploy, as well as (incorrectly) overprivileging the power Mr. Preston has in this particular case. If you’re going to criticize Mr. Preston (or anyone else signing the letter), you should probably be sure you’re clear on what sort of power they actually have. Likewise, the viability of the “deal” Amazon was trying to offer — or not offer, as the case may be.

    Speaking as an author, incidentially, Mr. Preston doesn’t speak for me directly, nor do I assume that he believes he speaks for me. I speak for myself, quite obviously.

    Ian:

    Your point was already addressed in the comment thread above.

    Folks, this is a reminder to read the comment thread before posting, as you might find your points already addressed.

  88. You skipped over the price elasticity argument almost completely. It is an important one. Although I have oodles of disposable cash, I’ve bought dozens of e-books for a dollar or three, some even for $5 but absolutely zero works of fiction for $10 or more. Why? Because it’s not worth it. It’s a story that I can’t resell or trade to friends. Inheritancy law is really unclear. It would appear that you can’t pass your library on to your spouse or children when you pass away. It will vanish into the ether as you return to dust. Anyone who wants to read it in the future is going to have to buy another copy, which is already an author and publisher’s dream ticket of eternally recurring royalties as the market can never become saturated with old copies.

    If I’m going to pay $10 or more, I want the hardback (used) or the paperback (probably also used and $5 or less). Where does that help you as an author? It doesn’t. You get no royalties on that because you’ve priced yourself out. Sorry.

    I firmly believe in buying new to support authors. I call it voting with my wallet and will often buy extra copies for friends just to do my part to support an interesting, thought-provoking and pleasurable read. But I loathe price-gouging. Here’s the plain fact: editors and publishers don’t need high-rise offices in Manhattan. Yes, they contribute value, but not on that level. In this case, does Hatchette need five major offices (Park Avenue, New York; Boston; Indiana; Nashville; Toronto)? It’s their business, their decisions. But they’re not going to fund a lavish lifestyle from me, and, I suspect from many e-book readers. If they’re not having to spend money on printing, binding, shipping, storage, delivery, returns and physical inventory, they need to pass that savings along. Paperbacks that used to cost $1.99 (or less, I’ve been around a long time) are already inflated up to $8 or so new. E-books need to be priced less to compete.

    I suspect, like many things, this will end somewhere near the middle. Publishers will have to yield a bit and evolve with the technology. They may choose to take AOL’s path and continue seeking subscription revenue because they feel that broadband will never be popular. Alternatively, they can realize that e-books are the future and either move toward it or become archaic.

  89. BTW, do you have any idea of how much I hate the fact that my pre-ordering “Lock In” on audible.com is helping Amazon take over audio books? Honestly, I had to weigh that against the thought of having Wil Wheaton and another narrator read your work. I love Wil’s work, but I admit that I am looking forward to hearing Amber Benson read it as well. And, Amazon’s audible arm has introduced me to a new way to enjoy literature. Before audible.com, I never listened to books. Now I prefer it. Especially when Wil Wheaton is the narrator.

  90. Stevie,

    Amazons offer to Hachette of a pool they both contributed to and administered by the publisher was the same agreement Macmillan and Amazon used in 2010.

    Amazons made three offers of varying merit to Hachette in order to support Hachette authors during this negotiation. Hachettes rejected them all without offering any alternative of their own.

  91. I’m curious, surely someone somewhere has done an analysis of what effects it might have on the publishing/bookselling industries if Amazon goes under (which, despite their chronic [and now acute] losses no one ever seems to think of as a possibility). Could someone point me to such a projection if they know of one? I wonder if brick and mortar bookstores would come back strong, or is the expectation of “rock bottom prices” too ingrained now? (I apologize if this question is a derail, I didn’t know were else to ask it.)

  92. Caderyn:

    “Here’s the plain fact: editors and publishers don’t need high-rise offices in Manhattan.”

    Are we also accepting as a “plain fact” that Amazon does not need its plush and enviable offices in Seattle and elsewhere — including in a high-rise in Manhattan? Bear in mind Hachette is a retailer, too — it will sell you their books right off its Web site. Also bear in mind that Amazon is a publisher as well — it has a number of imprints — and it has substantial sunk costs in real estate. Are we going to castigate Amazon for these costs as well, seeing that they are in the same business as Hachette? Shall we say that offices in general are an intemperate luxury, and that everyone involved in business everywhere should either telecommute or work in cold, warehouse-like concrete bunkers placed in the cheapest possible exurbs? Because unless this is where we’re going with this particular argument, I personally will find your argument of punishing Hachette for its extravagance, but not Amazon, somewhat less than compelling.

    And, no, in fact, eBooks don’t have to reflect the cost of production in the slightest; what they have to reflect is the willingness of a readership to pay a particular price point. I’ve already addressed this point before, in a previous discussion. If you don’t like the price point, then don’t buy the eBook. But don’t expect me to accept the “eBooks should cost less” argument because you want to penalize the publisher for a posh lifestyle, but not the retailer, whose market capitalization is exponentially higher and whose lifestyle is just as posh. It seems a poor argument.

    Susan from 29:

    “BTW, do you have any idea of how much I hate the fact that my pre-ordering ‘Lock In’ on audible.com is helping Amazon take over audio books?”

    Audible.com is a place where I think Amazon is largely playing fairly, actually. I have audio books with other publishers but didn’t find that they were particularly well promoted or marketed, whereas with Audible I feel like they’ve really made my work a priority and have come up with creative ways to make and sell my titles.

  93. @Joe Beernink- you *can* buy an ebook from another source and load it on your Kindle, unless the publisher has put DRM on it that prevents that. All you need is to have the ebook in the Amazon format (mobi). If you buy something in another format (e.g., ePub) and it isn’t DRM’ed you can convert it with free software called Calibre. I am not sure whether Amazon puts limits on other people selling things in the mobi format, but if they do, those limits can’t be all-encompassing – I routinely buy things from Crossed Genres directly and get them in mobi format. Once I have the file, I can either email it to my Kindle or transfer it directly via USB. You can even set up Calibre to do the emailing automatically, I think. I’ve never bothered, I just use the USB cable. One advantage of going this route when you can is that it gives you a copy of the book that exists outside of Amazon’s purview, which means you get to keep it even if you decide to switch to a different brand of ereader. I keep meaning to write up how to do this as a blog post- it really isn’t hard to do. I would like to do some more research about other sources of mobi format or convertible ebooks before I do that, and I haven’t had the time.

    Also, I will freely admit that I find buying from Amazon more convenient, and that the fact that so many publishers put DRM on their books limits the utility of this option. But it is there, and it is an option I have started using more because as much as I love my Kindle (and I really love my Kindle) I don’t want Amazon deciding what I get the chance to read.

  94. Ian

    Can you provide the evidence to support your claim? Because Amazon has never set out what it’s actually asking for, and you airily assuring me you know the terms of the contract offered by Amazon isn’t the same as evidence…

  95. I wrote one of the letters to Hachette’s publisher; I suggested that instead of bumping heads with Amazon, the company begin competing.
    Here’s why I choose Amazon’s Kindle Select program: large market, several tools that Indie authors, including new ones, can use.
    I tried Apple, B&N, and Kobo for a month. One sale. Which is still sitting on D2D’s books, at least for the moment.
    Meantime, I’m moving books. I’m not threatening Mr Scalzi, but then I didn’t have the time to go the traditional route, nor do I particularly want to. I began writing about 15 months ago, finishing my first couple of books within about 4 months. Had I gone the traditional route, my books would be in someone’s slush pile waiting to be evaluated. And then rejected, perhaps, and I could have tried another publisher and started the cycle over again.
    But I’m 74 years old (late bloomer? Yep) and I don’t have the time. So I published my own books, learned how to format and get through all the niggling details, and publish my work. Five novels and a short story, and still writing.
    More important, thanks to those marketing tools that Amazon offers that AREN’T available to newbies through the others, I’m selling. To US customers, Canadian, British, German, French, and even one Japanese sale, plus a lot of sales in Australia.
    Instead of waiting for Hachette or Baen or whoever to finally decide I didn’t fit their model.
    What if Amazon fails? I’ll publish my own work on my own website and earn 100% of the sale. I won’t sell many books, because I lack that huge customer base that’s really what Amazon is charging for.
    But Indie suits me, where trad publishing does not.

  96. Does anyone know the email address for Bezos, so it can be published here in “response to” Amazon’s totally chickensquat tactic of posting Pietsch’s email? I wouldn’t mind emailing Bezos and telling him that I considered his KDP email to me and a billion other authors just totally low class.

  97. Cadeyrn, I hear that argument a lot (why should I pay $10 for an ebook when I can’t resell it, don’t really own it, etc, etc), and it often comes from people who regularly go to the movies. It is interesting to me that two hours worth of entertainment for $12 – $15+ is acceptable to a lot of people but several hours’ worth of reading enjoyment is outrageously priced if the experience can’t be resold, no matter the quality of the book. To me, it’s an expectation of quality experience (and I know any mention of “quality” is anathema to Amazon, which views all books as equal “products”). I am willing to pay $15 to see a movie I hear is great and has impressive production values. I am not willing to spend $15 to see a badly lit, badly edited Indie film that I know nothing about (though I might give it a shot at home for a buck or two). I feel the same with ebooks. If I love the author, their new book sounds good, and I can expect good production value (professional editing and copy-editing, fact-checking, etc), then I’m willing to pay a premium for the experience. If the book sounds intriguing but is an indie book, I don’t want to pay more than a couple of dollars. As others have mentioned, Hachette seems to believe that the consumer will determine whether $10+ is an acceptable price for certain titles–and if they’re wrong about that, the market would prove it to them soon enough without Amazon’s meddling.

  98. Anyone want to comment on Lee Goldberg’s letter here: http://www.leegoldberg.com/my-letter-to-douglas-preston/

    In it, he points out that a large number of retailers refuse to stock paperbacks of Amazon imprint books. If true, that certainly harms a great number of authors. While this is obviously an ancillary issue, I think it’s relevant since many decrying Amazon go on about how they are hurting both B&M bookstores and author’s livelihoods (and by implication they are the biggest bad guy in this picture). Looks like that door swings both ways as well, but you don’t hear a peep from the Author’s Guild or Author’s United on it. That said, maybe Goldberg has it wrong somehow, I don’t know. But if not, I think it’s worth throwing out into the conversation.

  99. As a consumer I am not sure that I could ever think of the collusion of the NY publishers as “neither here nor there.” Especially considering that the NY Times, the New Yorker and Hachette keep harping on what could happen if Amazon gets even more powerful.

    Hachette raised prices for libraries by 220%. Yet in your enthusiasm to make it clear that Amazon is not the good guy, you make it sound like Hachette is the good guy.

    As a reader it is clear to me that most publishers will do anything they can to slow down the growth of ebooks. Good luck to them. I can catch up on reading the classics for a few years and wait out the battle.

  100. Caderyn, price elasticity exists, but it’s not uniform. A new author with his or her first book? Price elasticity is probably very high, low price will encourage people to try, and the price point where people say “yes/no” is low, possibly lower than $9.99. A well known author in the genre like one with a hugo award and two shows being made into TV series (not talking anyone in particular), the elasticity is a lot less, and the point where people say “no, I’ll pass for now” is going to be higher. The superstars? Far less price elastic, particularly if it’s “special” (conclusion of a series, new series in old universe). Those books will sell very well at $14.95.

    What Amazon appears to be demanding is the generification of books and authors. All books by all authors will be priced as you’d price the first book of a new writer. And while that might be “nice” in a hey we’re all people under the skin we all put on pants one leg at a time there are no losers everyone’s a winner viewpoint, it’s not smart business for the publisher.

  101. @ John

    “Well, the thing there is that a) Amazon was not in a position to offer the deal it was trying to make…Which is to say, I suspect you (incorrectly) taking at face value the sincerity of Amazon’s ploy, ”

    What exactly were you doing in 2010 when Amazon and Macmillan were negotiating? It certainly couldn’t have been following what was going on in the publishing industry, otherwise you’d know Amazon offered the same “Fund Ploy” to Macmillan it offered to Hachette, and Macmillan accepted, and Macmillan authors were compensated. And Amazon was in the same position then it is now when offering such a plan.

    If Amazon wasn’t serious about any of those offers, it could have offered to do what Hachette has done, which is nothing. Hell, if Preston et al were interested in helping maybe that 100+K they spent on that ad could have gone to a similar fund?

  102. Fine, I’ll chime in…

    @caderyn: “Although I have oodles of disposable cash, I’ve bought dozens of e-books for a dollar or three, some even for $5 but absolutely zero works of fiction for $10 or more. Why? Because it’s not worth it. It’s a story that I can’t resell or trade to friends.”

    First, it’s not worth it *to you*. I prefer ebooks because they’re searchable, highly portable and in some reader programs I can even highlight a word and Google or Wikipedia it. This added a layer of interest to novels Richard Kadrey’s Sandman Slim books since he picks his names from actual mythology and it’s interesting to see how his names correlate to the character in his book.

    Second, I find the resale argument almost entirely specious in the case of fiction. One of the better indie stores here in Seattle will give me 25% of the price that they anticipate selling it for. They sell used copies – which must be in Like New condition by the way – for 50% of the cover price. So they sell an $8 paperback for $4 and will give me… $1. I just don’t find it compelling to say “But I can’t recoup an entire DOLLAR”.

    Third, the point about inheritance law is really reaching – how many books that we own are our heirs going to care about? Will anyone want to read, say, Redshirts 40 years from now? Or almost any mainstream fiction from the early 21st century? Before you jump to reply YES! consider how much fiction from the 1910s we read today.

    Fourth, I do wish DRM would go away. I admire Tor/MacMillan for doing this. For other publishers, well the DRM seems to fall off on my machines… *cough*. Note, though, that some books are, in fact, lendable. I wish all of them were, but a couple of nice things about lending a book via something like the Barnes and Noble program is that you can lend to someone across the country if you want…. and the book comes back automatically.

  103. Q:

    It’s not directly on topic, so I’d prefer not to go there, please. That said, I’ll note I’ve never had a problem special ordering Amazon imprint books from my local store, and that I special order form my local store fairly often because it’s an only medium-sized store.

    Kevin Parsons:

    “Yet in your enthusiasm to make it clear that Amazon is not the good guy, you make it sound like Hachette is the good guy.”

    This is where I note that I am not responsible for the fantasy version of me you have in your head, Kevin. I have made it abundantly and multiply clear that I consider both Amazon and Hachette to be self-interested corporations in this and other dealings; if you’re somehow reading “Hachette is a good guy” out of that, then that’s on you.

    Matt:

    “Amazon was in the same position then it is now when offering such a plan.”

    Strangely enough, however, Hachette is not Macmillan and 2014 is not 2010; you might entertain the notion that there might have been sound business reasons for Hachette to choose to refuse the scheme at this time (and likewise note that Hachette stated it would be happy to entertain such a scheme at a later point in negotiations). Mind you, that was just one “plan” Amazon floated — another “plan,” which involved giving Hachette authors 100% of sale from a Hachette book, was almost certainly contractually untenable.

    And none of that changes the fact that regardless, Mr. Preston is still not magically in control of Hachette.

    Also, if memory serves Amazon can afford to run its own full-page ad in the New York Times to promote its own viewpoint if it wishes; it should not be reliant on the charity of a bunch of writers whose combined value is still very likely a small fraction of that of Mr. Bezos. Mr. Bezos, incidentally, could probably run a full-page ad for Amazon in the Washington Post if he liked, for a decent discount — I hear he knows a guy.

  104. Q
    You can buy Amazon imprint books on B&N.com. As I understand it, some or all of B&N stores don’t keep them in stock in store. I am not sure, I bought a kindle specifically to be able to buy 47north ebooks and to explore the larger market of selfpubbed titles. I get most of my books on my Nook or Kindle now and haven’t been shopping in the store for a couple years now.
    ace –
    You have expressed what are largely my thoughts about eBook pricing as well. I don’t want to get too much into it as I am holding back a profane rant about how so very tired I am of the constant bitching about the prices of luxury entertainment items that no one ever really needs to buy.

  105. But you also miss the point here do Amazon now personalizing a business dispute, putting the direct work email address of the CEO of Hachette USA into an email sent to thousands upon thousands of people soon after close of business on Friday to maximize the disruptiveness of it come Monday morning. It isn’t just business now for Amazon, and I think that is a very relevant escalation.

  106. Dear Cadeyrn,

    There’s two ways that your economic thinking deviates from what actually happens in the world.

    First, book prices are surprisingly inelastic, considering that there are thousandfold differences in the volumes sold. Further, the correlation of book price with volume of goods is very, very weak.

    This is related to your second misimpression: that the selling price of art in any way parallels the cost of manufacturing art. It doesn’t. I never has. Not for any medium. That is the way it has always been, and it is not likely to change. The reason is that art is largely worthless– it has negligible intrinsic or utilitarian value. You can’t eat it, wear it, live in it, use it to conquer your neighbor, clean up the environment, etc. It is only good for one thing. To make the buyer happy.

    As such, it has no establishable value, beyond what someone is willing to pay for it. That certainly has nothing to do with cost of production. Something I have to explain to novice artists regularly– the buyer does not care what it cost you to make a work of art. An Adams or Mappelthorpe sells for 100 times what my work does. Mine sells for 100 time what the vast majority of other photographers’ work does. Our production costs/time are (were) not profoundly different.

    In the case of singular or limited-production works, the happy-factor primarily affects what you pay for it. In the case of mass produceable works, it primarily affects the volume sold.

    The games Amazon and Hachette are playing have absolutely nothing to do with costs of production (although, in Amazon’s case, they have a lot to do with costs of distribution). Don’t fool yourself by imagining they do.

    pax / Ctein
    ==========================================
    — Ctein’s Online Gallery http://ctein.com
    — Digital Restorations http://photo-repair.com
    ==========================================

  107. Joshua Bilmes:

    As an aside, I find it annoying that when I chose to focus on certain topics and not others, people will often say “you’re missing the point [insert point x].” It’s entirely possible I did not miss point X; it’s simply that I didn’t choose to write about that particular point at this time.

    And no, I don’t think personalizing it is new at all (which is, among other things, why I didn’t write about it). Amazon’s been doing that for a while now, trying to get authors on its side in its business negotiation with Hachette, first by floating the schemes ostensibly to benefit the Hachette authors (at the expense of Hachette itself) and then by making the argument that the $9.99 price point would naturally increase sales all around. That didn’t work especially well, it seems, so Amazon has now moved to what it sees as a potentially more fertile field.

    Also, to be blunt about it, if Amazon’s plan was to disrupt the day of Hachette USA’s CEO, doing it late Friday/early Saturday was a spectacularly stupid time to do so. One, the only person this flood is going to “disrupt” is some poor IT shmuck who is going to have come in on the weekend to install a keyword filter into the CEO’s outlook program — Amazon made that easy enough to do by giving everyone talking points — so that when the CEO comes in on Monday, all those e-mails are going to be in their own ignorable little folder.

    Likewise, as I noted on Twitter, having the brunt of this happening on Saturday means that to the extent that it’s a news story at all on Monday, the rebuttal response is included in the main stories about it, not as followup stories that will have less impact — or alternately, the main stories will be written up today and Sunday, with the follow-ups on Monday, where they will have a larger impact as more people will see them first. Basically, from a disruption point of view, it was, in my not entirely uninformed opinion, pretty incompetently done.

    If Amazon wanted to actually wreak havoc, 10 am on a Tuesday would have been a lovely time to do it. They would have had a news cycle all to themselves, Hachette’s CEO’s e-mail queue would have been rendered useless during an actual business day, and there would have been rather more people on the Internet to see the readersunited site.

  108. @doc

    Of course both sides are playing the same game. I am unwilling to indict one and excuse the other. Hachette is abusing authors at least as much as Amazon is abusing authors. They are both playing a public PR game.

    My bias is a bit against the old school publishers primarily because of their abuse of their status as gatekeepers. It’s my perception of their history.

    I’d say that the pricing issue was within the last 6 months. I think it was Mr. King’s “The Wind Through the Keyhole”. But please don’t make me swear to it. The price differential was not huge, but it was there. It was only one book, but it was a book I had been looking at for several months.

    I ended up buying “A Dance With Dragons” at Target (trade paperback) over a year and a half after it was published because the price on Amazon stayed up at $15. The the price on Amazon was the same for paperback and e-book; $15.

    Regards,
    Dann

  109. Here’s another interesting take that’s a bit different that what anyone has argued here and on it’s face seems pretty balanced and reasonable: https://medium.com/@jakedfw/making-sense-of-amazon-hachette-6ef55a961cbe

    It focuses mostly on explaining the motivations of the major parties. I’ll try to offer a TLDR summary:

    1. While a dominant force in the market, Amazon’s position is actually tenuous as it’s market share depends on low profit margins discouraging other big players (Google, Apple, Microsoft) from investing much into ebooks (since the cost of entry into that marketplace is so low)

    2. Publishers have benefited greatly from Amazon’s heavy discounts because they still receive the same profits as if there were no discounts while also enjoying higher sales. Thus, they have no reason to want that arrangement to change.

    3. Amazon mostly wants ebook prices to be forced downward to maintain low margins for the reasons above, but they actually don’t have a ton of leverage and Hachette et al have no reason to want to reduce their own profits to maintain Amazon’s market share. The article doesn’t say it, but this seems to imply that (as many of you suggest), Amazon is being a bit disingenuous about the profitability (for them) of a 9.99 price point, but they do still have a good reason for wanting it.

    4. That said, Amazon will probably have to capitulate to Hachette’s terms, but will also cut back its discounting which will reduce total sales (hurting Hachette) while simultaneously raising profit margins for Amazon. The problem is this might encourage major players to start exerting more muscle in the ebook market (and of course will annoy consumers and probably hurt traditionally published authors to some extent due to lower sales numbers).

    Ok, so that wasn’t so short. Sorry. Thoughts?

  110. I’m a reader. I buy a lot of books, and read a lot of books. Mostly ebooks these days, due to my eyes getting old (unlike the rest of me, of course). I buy books at $14.99 and books at $.99 and books at every price point in between. Although to be honest, I buy a lot more at the lower price points, because that’s the only way I can afford the volume of reading material I need to be content. Yes, that means I get a lot of stinkers – which also means that one good $2.99 book might actually involve spending two or three times that amount to *find* the good $2.99 book. Which in turn means I value the “gatekeeper model” rather more than you might think. When I really can’t stand the thought of possibly needing to tear even more of my thinning hair out over typos and atrocious grammar, I turn to one of my favorite “established’ (read: traditionally published) authors. Like John Scalzi, for one. ;)

    But, I’m not so much “for” Hatchette as I am “against” Amazon – I want whatever system will keep good authors writing and lots of publishers publishing – whether or not those two are the same person. I don’t think allowing Amazon to reach the point of being able to dictate bookselling or publishing terms serves that goal, in the long run. Writers need to write (and make a living doing it, so they keep doing it), and publishers need to publish (and make a living doing it, so they keep doing it), because I need stuff to read.

  111. John,

    I was going to bring up the MacMillan deal, but I see Matt already did that. Thanks, Matt. The first offer Amazon made to Hachette was the exact same deal. Subsequent ones were even sweeter for the authors and I’m sure if Hachette really wanted to, they could have found a way to compensate their authors along the lines Amazon proposed, whether the contracts specifically allowed for it or not.

    I think our issue is one of language. Why is it a “ploy” when Amazon proposes it? Who cares if the first time they did it was in 2010 and now it’s four years later? How does that invalidate the history?

    I am under no impression that Mr. Preston has contractual power to negotiate deals on Hachette’s behalf. He, however, seems to think his voice matters in the dispute. Otherwise, why would he keep spouting the nonsense he is? Amazon seems to think he has some influence as well since they floated the second and third ideas past him as well as Hachette.

    Stevie,

    The offers in question to Hachette’s authors have been talked about by all parties: Amazon, Hachette, and Preston’s Authors United group. I Googled and came up with hundreds of articles referring to them, take your pick.

    No, I do not personally know any Hachette authors. That was supposition on my part, but I can imagine in this day of dwindling advances and the terribly small number of authors who actually make a living from their writing, that those Amazon offers might have sounded pretty good to them.

  112. Q:

    There is no doubt that Amazon has excellent business reasons for wanting eBooks at $9.99 or below, and it’s certainly possible discounting there will take a hit if they can’t get Hachette to take their term, which will have manifold repercussions. It’s not clear to me that the result will be overall higher eBook prices (although if the market can bear it, then that’s certainly a possibility).

    What I do expect to see in the reasonably near future is rather more fluidity in the price of eBooks — publishers tinkering with price points for maximum sales effectiveness. This will have repercussions for authors, particularly with regards to royalties, which will need to be addressed. When that happens, any perceived good will anyone sees being given to Hachette, et al at the moment will evaporate pretty quickly.

    Alan Tucker:

    “Who cares if the first time they did it was in 2010 and now it’s four years later?”

    Obviously Hachette appears to care, which is of some relevance to the discussion. As to what’s different this time around — well, there’s that Justice Department settlement, for one. There are other differences as well. You might not think any of them are relevant, but then you’re not the one having the negotiation with Amazon.

    Again, bear in mind that Hachette may choose to reopen discussions about compensating its authors jointly with Amazon at some point; it has left open such possibilities. But it is not obliged during negotiations to consider any point before it is willing to, or (less charitably) has to. Evidently, it’s not at that point yet in the negotiations.

    “I am under no impression that Mr. Preston has contractual power to negotiate deals on Hachette’s behalf.”

    Your verbiage earlier suggested otherwise; when you said “I’m pretty sure a whole lot of Hachette’s authors would have jumped at the chance to take one of the deals Amazon proposed, but they were never given the opportunity to do so. Preston dismissed them out of hand even before Hachette did publicly on at least two of the occasions” it among other things you wrote pretty strongly suggested that it was in Preston’s power to dismiss them from consideration. Again, certainly Amazon would have been happy for him to consider them, because he’s a focal point for other authors. But that’s another dynamic entirely.

  113. “You need to understand that nearly all of these publishers have been around for a very long time — decades and in some cases centuries — and they’ve seen more market shifts in publishing and in the book market than possibly you can imagine, some of which were as disruptive as the current one.”

    Really? What past market changes were as disruptive as the change to e-books for the publishing industry? Certainly it was nothing comparable in terms of product format. Other forms of media have had to make drastic changes to their format within the past half century alone. The music industry had to go from records, to tapes, to CDs, to MP3s. The film industry has had to go from VHS, to DVD, to Blu-Ray, to streaming and digital download.

    These are media industries more susceptible to rapid change, and even the music industry got caught off guard by Napster. Their failure to capitalize on digital distribution before the internet pirates set them back to a point where they felt the hurt for nearly a decade, and might still be feeling it now. Movies and television fared better only because the large file sizes of a half-hour to two-hour audiovisual program, compared to a 3-minute purely audio song file, made it more difficult to pirate in the dial-up and T1 days. They were able to make the change to digital distribution with minimal collateral damage.

    But books? They have basically been words printed on paper for as long as I can remember, and dating back centuries to the printing press. There has been no major changes in format comparable to e-books that I can think of. This is an unparalleled disruption to both their traditional publishing formats and distribution methods, so I’d be interested to hear you elaborate on this point.

  114. John Well, the idea is that (as you have pointed out yourself), Amazon isn’t exactly raking it in at the moment so sooner or later they need to figure out the best way to improve profitability. The problem posited in the article is that increasing profit margins attracts players that can compete on even terms with Amazon, making the “monopoly” everyone is fretting over a bit overblown. It also notes that a major reason behind price collusion with Apple was almost certainly because that was the only way it was worth Apple’s while to compete in the ebook market. Thus if Amazoncan’t get Hachette (and by precedent, the other big publishers as well) to accept their terms, they will almost be forced to reduce their discounts to some extent. At least that’s how I understand the argument and it seems reasonable.

    The market can obviously bear higher prices, but very probably total sales will still go down in that scenario, especially of the non 1% author’s titles. On the other hand, we might eventually see more competition for Amazon’s online retail services, which is probably a good thing for everyone but their shareholders.

  115. Q wrote:

    Publishers have benefited greatly from Amazon’s heavy discounts because they still receive the same profits as if there were no discounts while also enjoying higher sales. Thus, they have no reason to want that arrangement to change.

    I suppose Amazon could, as part of their next public missive, say how for years they have been helping consumers by offering deep, deep discounts but now they’re a bit fed up of doing so and want the publishers – with their Manhattan offices! and their children drinking milk when there’s perfectly good tapwater available! – to lower their prices instead. But it would give the game away a bit, as well as being an admission of doing exactly what they’ve been accused of aiming at all along, deliberately deflating prices in order to build up market share so that they could then dictate terms that would suit them better.

    Apart from that, don’t 3 and 4 contradict in terms of who gets hurt? And since when did having more players enter a market be something that should be avoided?

  116. Well, the claims about publishers and book sellers wickedly abusing Amazon imprints seemed fascinating, so I ran some searches, coming up with a piece in the New Yorker which gives a great deal of background to Amazon’s ventures, far from confined to the imprint questions, so I commend it to anyone who is genuinely interested in the realities:

    http://www.newyorker.com/magazine/2014/02/17/cheap-words?currentPage=all

    I certainly was illuminated; for example, I hadn’t realised that Amazon had been systematically extorting fees from publishers which had nothing to do with the selling of specific books.

    ‘Many publishers had come to regard Amazon as a heavy in khakis and oxford shirts. In its drive for profitability, Amazon did not raise retail prices; it simply squeezed its suppliers harder, much as Walmart had done with manufacturers. Amazon demanded ever-larger co-op fees and better shipping terms; publishers knew that they would stop being favored by the site’s recommendation algorithms if they didn’t comply. Eventually, they all did. (Few customers realize that the results generated by Amazon’s search engine are partly determined by promotional fees.) Sales meetings in Seattle were now all about payments, not new books, and the size of orders was predicated on algorithms, rather than on the enthusiasm of the publishers’ sales staff and Amazon’s own buyers, who were rebranded as “inventory managers.” Brad Stone describes one campaign to pressure the most vulnerable publishers for better terms: internally, it was known as the Gazelle Project, after Bezos suggested “that Amazon should approach these small publishers the way a cheetah would pursue a sickly gazelle.” (Company lawyers later changed the name to the Small Publisher Negotiation Program.)’

    Those co-op fees seem not to feature in the PR image which Amazon touts so vigorously; certainly no-one on this thread who has assured that we do not understand how wonderful it is in bringing all sorts of books to eager readers, has mentioned that they charge large sums to publishers to improve their search function results. We know from the Lush Cosmetics case against Amazon that it doesn’t do honest search engines, but I had not realised just how far the rot had set in.

    It’s pretty long but I recommend the article to anyone who wants some well researched information.

    Sadly, people who want well researched information seem to be a bit thin on the ground if Ian’s latest response is typical; indeed, I begin to doubt whether they understand the difference between posts on the web and what the contract actually says. Having spent almost as much time in my life reading contracts as going mano a mano with balance sheets, both of which are essential prerequisites before you can even begin to determine the correct taxation consequences, I find myself baffled that people believe that they can dispense with such trifling details as the texts of the contracts themselves….

  117. @CS Clark

    First, more players in the market isn’t bad. Neither I, nor the author of the article argue that. The point is only that Amazon’s discounting is mostly aimed at keeping out players that could compete with them (not B&M or little guys, but the Apples, Microsofts, and Googles of the world). Point being that hand-wringing over monopoly is a bit silly because even if they do corner the market and jack up prices, there are behemoths out there that (attracted by the now healthy profit margins of the business) could open up pretty nice ebook stores overnight that would immediately start eating into Amazon’s market share.

    3 and 4 also don’t contradict each other although I see why you would think that. It was hard to summarize while keeping every nuance. The idea is that because publishers get paid the same regardless of how Amazon discounts their books they are clearly hurt if those discounts become smaller and sales go down (due to the consumer having to pay higher prices leading to fewer unit purchases). This also means their authors are hurt by receiving less commission. Probably this would affect only newer or midlist authors in a major way.

    Amazon profits don’t work quite the same way, however. We don’t know exactly what they make on ebook sales but we do know it’s not much and possibly even a money losing proposition for them. Thus higher prices would increase their margins and net profit even as it decreases the profits of the publishers and their authors.

    Again, I am no expert, but that is the argument.

  118. Reblogged this on Michido's Blog and commented:
    “I think it is a very good thing that self-publishing and electronic publishing has come and shaken things up in the publishing field; it’s wonderful that authors can connect with readers without having to route through a publisher they have to convince that this audience is there.”

  119. Hatchette wants to control both the wholesale AND the retail pricing of ebooks. Amazon wants sufficient margin to sell at $9.99 and below. I’m trying to think of another wholesaler who gets to set the retail price of their products, and I can’t.

  120. Joseph Lopez:

    “What past market changes were as disruptive as the change to e-books for the publishing industry?”

    Ah, I see we’ve come to the portion of the thread where I’m asked to do other people’s research for them. Which I might have done! Briefly! But then I kept reading!

    “There has been no major changes in format comparable to e-books that I can think of.”

    And? Who are you and what do you know? Please understand that all you are to me or anyone else on the thread is a name, a generic Gravatar icon and some sentences. Also, regardless of your knowledge or lack thereof, it appears that you are trying to limit what you consider sufficient disruption to changes in format, which to me says “I don’t know what I’m arguing about but I’m willing to try to define the rules of the discussion anyway.”

    “This is an unparalleled disruption to both their traditional publishing formats and distribution methods”

    Again: You know this how? You just said that you can’t think of another major change in format comparable to eBooks, so how can you say that it’s unparalleled? Do you understand why I might treat this assertion with total skepticism, given your own admitted lack of knowledge regarding the history of publishing?

    Additionally, given that you have already asserted that the eBook disruption is unparalleled, what chance is there that even if I did your own research for you, that you would feel inclined to agree with me? You’ve already staked out your position, and would likely feel obliged to defend it.

    Shorter version: Asking me to do your research for you while still asserting what appears to be certain knowledge does not endear you to me, Joseph.

    That said, your assignment: Go find out what happened when the rack-jobbers that serviced books to supermarkets consolidated from a couple hundred in the US down to just a few, and the implications of that for books, particularly in genre. Have fun!

  121. IMO, Amazon tipped its position badly with this move. Anyone who has ever taken Negotiating 101 would strongly advise against this letter. It makes Amazon look desperate and impotent. If I were Hachette, I would sit smugly back and keep on keeping on.

    If Amazon really cared about forcing Hachette’s hand, it would drop Hachette’s titles from the bookstore. But I suspect Amazon won’t do that because it prides itself on having almost every item a consumer could possibly want, and doesn’t want customers to get accustomed to checking B&N/iBooks/etc in case Amazon won’t have the title.

    Hachette isn’t going to care about emails from dozens of self-published KDP authors Hachette wouldn’t/couldn’t publish in the first place. They can only publish so many books a year, after all. (Side note: this is where I don’t get the “gatekeeping” hatred from certain sectors of the self-publishing community. There were only so many slots at the printers/so many editors/so many store shelves before digital books. Of course some gatekeeping had to happen – it would be physically impossible otherwise to print and edit and sell ALL the manuscripts! And publishers still can’t publish all the books. Again, it’s an impossibility due to resource scarcity; there are only so many employees and only so many resources to devote to book production/marketing/distribution etc. But no, let’s some of us hate on them anyway).

    Hachette is probably just as thankful as anyone else in publishing that the current high ebook tide is lifting all boats; a reader is a reader is a reader and few, if any, care about the publisher’s name on the spine. Readers just want a good book and an entertaining experience that justifies the expense, be it $0.99 or $19.99 (and, seriously, who has seen a bestseller/popular fiction new release ebook priced at $19.99?!?!). Hachette has its own data about price points and its own market research and it doesn’t need Amazon’s bias to determine its own best course for its shareholders.

    I’m stupefied about what Amazon thought this letter would accomplish. Certainly not change Hachette’s stance, because it won’t. Just a PR move – and a poorly thought out one at that?

  122. Michido

    I’m sorry to say that in my view you are a walking embodiment of the more popular version of Rudyard Kipling’s poem, which read

    ‘If you can keep your head whilst all around are losing theirs then you’ll be a man, my son.

    The more popular poem has:

    ‘If you can keep your head whilst all around are losing theirs then you probably don’t know what the f*ck what’s going on…

  123. @Q Thanks for the clarifications, sorry if I leapt to conclusions. I’m still not convinced that a market where there’s only one big player with a quasi-monopoly (and quasi-monopsony) who only keeps hold of that by keeping the squeeze on every supplier is healthy. Especially when the new entrants in the market would try to get market share by offering lower prices for specific books at specific times and the more players there are the greater the chance – DRM idiocy and brand loyalty aside – that the smart consumer will be able to find the right price by shopping around. (There are arguments that it’s healthy for the Culture in general – billions of cheap, interchangeable books! – but I always hear them in the voice of Harry Lime offering his opinions about the Borgias.)

    The thing about Amazon not providing as big a discount to consumers – leaving aside my belief that if they have been selling ebooks at a loss for years they should say so, because it’s their own bloody fault – is that it doesn’t explain why they should be so set on standardising at a maximum of $9.99 from Day One. If you have a range of ebook prices over time, why not a range of discounts over time?

  124. CS Clark

    I am entirely bemused by their actions; on the other hand I suspect that they are totally bemused as well. They are running around like headless chickens…

  125. it’s not at all certain that Hachette would have accepted it — or indeed could have accepted it, as all their relationships with authors are in fact governed by contracts.

    I’m pretty sure you aren’t suggesting the midlisters would bring a class action suit against Hachette if they found extra money in their quarterly payments. In many cases, they wouldn’t see a cent anyway, since it would funnel through Hachette first and probably go against advances.
    When you consider how many advances don’t earn out, it starts to look like Hachette turned down a chance to get their hands on Amazon’s share of the proceeds.
    So, what’s in it for them to refuse? There has to be a reason…

  126. The publishing companies and Amazon aren’t anyones friends, they are in the business to make as much money as they can by any means possible. By the same token I want to get what I want for the lowest price possible.

    E-books allow me to read all that I want at prices I can afford, and e-readers allow me to adjust the fonts to a size that I’m comfortable with.

    Amazon GETS this fact, the FOUND GUILTY OF COLLUDING major publishers do NOT get this fact. What they seek to do is keep e-book prices artificially inflated to prop up hardback paperback books.

    My aging eyes are NOT interested in reading any paper books whether hard or soft. I bought a Sony e-reader back in 2010 and have not bought a paperback book since. I prefer epub for my preferred format, but I also like the lower prices of Amazon’s books and the number of self published books that I have to choose from.

    I have NO problem using Calibre to change any format over to epub (not locked in to any one format) with the press of a button. I now read my e-books on my Sony reader, my Samsung Note 2, Samsung media 5 player, and my Nexus 7 tablet, and on my computer.

    I REFUSE to be locked into any companies proprietary format, I am perfectly capable of determining what I like and want to read, at quality I consider to be good enough and what price I want to pay. So I buy where ever I want at prices I’m willing to pay. CHOICE IS GOOD!!!

    Rather than all these childish antics on BOTH sides of this debate, I personally feel that since Amazon no longer has any contract with Hatchette, they should just remove all their books until such time as they finally settle their dispute and have a contract between them.

    However, if Hatchettes plan is to stall until all of the other colluding publishers contracts expire so that they can present a united front to force Amazon & other retailers to charge inflated prices, I certainly hope that Amazon IMMEDIATELY lets the Justice department know so that Judge Cote can promptly haul them back into court for once again colluding to illegally keep ebook prices artificially high to the detriment of readers.

    As for authors, they need to do their research into ALL their options, since they themselves now have a CHOICE on where/how to publish that suits them best. If they choose the traditional method for some supposed validity, then so be it. Don’t complain later when you are not getting enough money to make a living off of your books, and find yourselves no longer able to self publish since you willingly signed a contract giving those rights away. I have no sympathy for you.

    The plain fact of the matter is that change is inevitable, and it has caught up with how we purchase and read books. The publishers need to get with the program and accept and adapt to these changes, because these changes are not going to be undone.

  127. @CS Clark

    Not sure what I think about the monopoly/monopsony situation. But I am now convinced that Amazon is walking a very thin line and probably cannot easily maintain either long-term. The only thing keeping them where they are is their discount pricing, which is not sustainable in its current form. And unlike other industries, they can’t just crowd out competitors and then raise prices because it’s too damn easy for another corporate giant to step in at that moment and take them head-on.

    “it doesn’t explain why they should be so set on standardising at a maximum of $9.99 from Day One. If you have a range of ebook prices over time, why not a range of discounts over time”

    I’ll preface this by noting that I am going to make some presumptions since I don’t know jack about how pricing works. I think, however, that they want to set the max at 9.99 not to give the consumers a break, but so that they get a larger share of the publisher’s profits. I risk making myself look stupid because I am not an industry expert AT-ALL, but my understanding is that if Hachette has a book priced at recommended 14.99, for example, Amazon is probably paying them more wholesale than if they had a suggested 12.99 or 9.99 price, or whatever. Maybe someone who actually understands this stuff can clarify.

  128. Catherine Frizell

    The plain truth is that you didn’t bother reading John’s post, and you didn’t bother reading the people who commented.

    We simply have you ranting in a thoroughly ignorant way: for futures occasions you could try engaging your brain. That way people might take you seriously..

  129. You can use the Wayback Machine to look up the history of readersunited.com, if anyone’s interested. In 2007, it looks like it was a site that connected people so they could borrow each other’s books.

  130. Stevie:

    Be slightly more polite, please.

    Everyone:

    Early warning that when I head to bed tonight I will be turning off the comment thread. It’ll reopen in the morning. You have at least another hour. Yes, I’m likely to go to bed early on a Saturday night. I suck.

  131. @scalzi, I’m you’re average sci-fi fantasy novel reader who doesn’t know jack about publishing, and honestly, I’m not much convinced by your points. So try convince me again. I read Amazon’s letter. It has a clear logical statement: pricing it less will sell more copies – and everybody get’s more money than if it was priced higher, due to larger sale volumes. The readers pay less, Amazon, the publisher, and the writer gets more at zero extra cost of making extra copies. From my ignorant reader POV, it’s a pretty good argument…assuming higher volumes. That’s the only shaky assumption I find.

    You argue that setting the price at $9.99 for one will effectively set it for most books by a publisher inorder to recoup losses. Well that’s their choice, but I don’t think it’ll happen. I think they will set mediocre selling book prices lower, prompting undecisive customers to take a chance. For books that have negative reviews, they’re going to have to lower prices anyway to even tempt any informed readers. That doesn’t sound so bad, I’m all about paying more for higher quality work and editing. If they make it the same price, well, then well-reviewed authors will win anyway.

    I also don’t buy the ‘suffering local economy’ line either. From what I understand, brick-and-mortar bookstores days are done. I haven’t been to one in years. And I’m not an early adopter. I check blogs, listen to podcasts, talk to friends, go to the library, and read online book reviews to find my next book purchase. So I don’t think land-based book sellers are a big part of the local economy anymore. It’s time to stop using them as an excuse.

    Self-published authors’ futures are so wild, they’re nigh unpredictable. Let’s leave them out of the argument for now.

    So…What am I missing? What can go wrong?

    As Amazon, I see an immediate boon – Amazon no longer has to ship anything. So it technically will make more money along with it’s cut. But that’s a moot point, I feel…

    Maybe, some printers will go out of business due to lower print orders. The cost of surviving printers will then rise to make ends meets and also due to extra competition for their business. Maybe there will be outsourcing to foriegn printers? This may push publisher and readers towards ebooks even more, due to higher prices of hardbacks and even paperbacks.

    What’s bad about that? Well, Amazon can start calling the shots. Maybe it will put amazon ads embedded in e-books to get that sweet ad-rev, and without your say-so. Their proprietary format, right? Yes I can see Amazon do that. That would be bad, but I don’t think it’ll be that bad.

    Publishers can get creative too. Have ebook-only, and paper-only publishing. Or have a paper run, then an ebook run. I’m not industry-aware, have these things been tried? Publishers can also join together and create their own online ebooks retail site and side-step Amazon, Apple, etc. Why isn’t that happening? Publishers don’t get along?

    But it seems the authors are stuck either with Amazon or the publishers.

    Here’s the thing I dont get at all: why not have authors sell books through their own website? Why not find a freelance editor, artist, and marketeer who will make your work/website into a polished saleable product and get a share of the profit? Why not pay an eager CS major to develop a new ebook format championed by succesful authors (I’m sure you know a few)? Why not make publishing a cottage industry? Too hard? Too much time away from the keyboard?

  132. I guess I’m confused; can someone explain something to me explicitly, like I was a 9 year old?

    My first take is “If you don’t like the terms Amazon is offering – don’t do business with them”. But – I understand this is unattractive because of the dominant position they hold today in the book distribution business; you can’t easily find someone else with the market reach and network that will get your titles out in front of readers. Is that basically correct?

    It strikes me as similar to Walmart, who use their immense buying power and distribution to drive prices down so much it’s hardly worth doing business with them at all, because there’s nearly no profit. Is this apt?

    If the above is correct – here’s the kicker – why not just sell the ebooks directly? I mean – an online storefront is a big thing to set up, but it’s not THAT big – the internet is a big equalizer, and both the kindle reader and ibooks on my ipad will read non-DRMed books just fine. I understand this may cause Amazon to not carry those physical books, or to delay or de-emphasize those – but in the end, that’s to their disadvantage, as it makes them cease to be a one-stop-shop for things.

    In other words – the only reason Amazon has this power is because you allow it. If it’s unacceptable – boycott them, as publishers. (Maybe that’s the “collusion” I hear about, but it strikes me it’s not collusion for people to not take a deal they think is bad for them…)

    My take is that if I want to buy your latest book – I’ll buy it. And if Amazon doesn’t have it, I should be one google search away from finding someone who does, if your publisher/distributor is worth what you’re paying them. You hold the cards here – I can pick or choose buying from Amazon, but I can’t get my Scalzi books from anyone but you.

    These are real questions – I seem to be missing why Amazon has any real power here. Anything they do to harm getting books from a publisher to a consumer directly harms their own brand, with the possible exception of what they seem to be trying to do – drive prices lower. I can see how that could harm publishers/authors, but not the reader, at least in the short term. If you don’t like the deal, don’t do it.

  133. “And? Who are you and what do you know? Please understand that all you are to me or anyone else on the thread is a name, a generic Gravatar icon and some sentences.”

    I’m an intellectual property attorney who studied motion picture distribution at UCLA. I didn’t try to hide my real name or put up some sort of smoke screen. Admittedly, I know more about film and TV through my education and my practice, but I’m interested in understanding the publishing side of the transition to digital distribution. That’s why I asked.

    “Additionally, given that you have already asserted that the eBook disruption is unparalleled, what chance is there that even if I did your own research for you, that you would feel inclined to agree with me? You’ve already staked out your position, and would likely feel obliged to defend it.”

    Not at all! Unparalleled to my mind, but I’m not nearly as experienced with publishing as you are which is why I would love to hear your insight. Presumably, you already know or would not have made the assertion. I found your blog through postings by Peter Orullian and Stina Leicht on Facebook and found it interesting, and made an earnest inquiry. Putting the onus on me is a bit backwards – in both law and journalism, the burden of proof is usually on the person making the claim.

    I’ve seen authors and publishers saying for awhile now that Amazon is utilizing unfair business practices. With publishers I’m frankly less sympathetic, it’s just big corporation vs. big corporation. But I’m certainly sympathetic to authors struggling to create art who feel that they are being squeezed as a result of Amazon’s practices. None of the authors I know live like rock stars. Mark Lawrence still works his day job and spends the rest of his time caring for his disabled daughter.

    At the same time, I am a big fan of digital distribution, I’ll admit that. Both because I think it’s a result of the natural progression of technology, and ultimately more convenient for the end user. I’d rather carry a one pound Kindle with thousands of books onto an airplane then try to choose that one five-pound hardcover. But also, because it’s better for the environment as well. E-books cut out the carbon emissions from the manufacture and distribution of physical books, not to mention all the trees that are saved from being cut down for paper. This is true in music and movies as well – all those jewel cases and shrink wrap don’t have to be transported by diesel truck across the country and then dumped into a landfill.

    So, wherein do we strike a middle ground? Well, maybe if I want to have my cake and eat it too (have my e-reader but support the authors I love to continue making quality work) I should get a Nook next time around. I honestly don’t know but it’s something I’m looking into. My question about comparable disruptions to the publishing industry was purely academic as it relates to my line of work, and if you don’t want to respond to it that’s of course entirely your choice.

  134. G Zola:

    “Why not make publishing a cottage industry? Too hard? Too much time away from the keyboard?”

    Some people do it that way. Some people prefer to work with publishers to handle that part of the work. And some people like doing it all on their own. At this point it’s really up to the author. That said, the hardest part about being an author is not the writing, it’s making people aware you have written. Publishers still have an edge there.

    Tom Bortels:

    Why would I (or any writer) want to restrict my sales only to the people who come to my own site? My site gets a fair amount of traffic, but not, I suspect, to support my mortgage-paying habit.

    Again, as noted upthread, Amazon wants to sell books; publishers want to sell their books through Amazon. It doesn’t do either party any good not to work with each other. The current set of negotiations are about the details of how that happens.

    Joseph Lopez:

    “Putting the onus on me is a bit backwards – in both law and journalism, the burden of proof is usually on the person making the claim.”

    Heh. I get a lot of “Let me Google that for you”-level questions over the course of these threads (and the blog’s been here for 16 years), so I tend toward the “do your own damn legwork” responses. I may be a bit kneejerk on that score.

    In all seriousness, however, if your interest is academic, do look into how the collapse of the rack-jobbers (i.e., the guys putting paperbacks and magazines into supermarkets and drugstores) had an impact on publishing, particularly coupled as it was with the rise of the chain bookstores. It literally changed how books (particularly in genre) are written and sold — which is to say, there’s a reason why (as an example) science fiction novels in the 50s and 60s were between 40k – 60k words, and why today they’re between 80k – 100k, and it’s not (just) because writers today are more wordy. In terms of impact in the industry, it’s comparable to what’s going on today with eBooks.

  135. In a nutshell, it’s like battle of the greedy. I read Amazon’s side and the other publisher and it seems that both side wants to gain more income. Amazon wants more eBook reader for their site by offering less priced eBook– subtlely monopolizing the competition– while the other publisher wants to gain more income by selling eBooks– which got no production expenses at all!– priced like printed books. As a reader, I am rooting for Amazon. EBooks doesn’t need printing, transpo and other expenses that a printed books do. As a KDP, I think it’s pretty fair. Why would I sell overpriced eBooks to my beloved readers? #myopiniononly :)

  136. So publishers want to use Amazon…

    Okay here’s a solution: sell the book through amazon, but with only half the book readable. the Reader makes an ‘in-app’ purchase to get the ending at a publisher set price. Problem solved! :)

  137. oh, wait. I guess you could just split the book into two ebook volumes and sell those at $9.99 each. Readers will be pissed…and they’ll blame Amazon for forcing the split.

  138. “Heh. I get a lot of “Let me Google that for you”-level questions over the course of these threads (and the blog’s been here for 16 years), so I tend toward the “do your own legwork” responses. I may be a bit kneejerk on that score.”

    Trust me, I understand. I get asked for free legal advice all the time from people I don’t even know.

    “In all seriousness, however, if your interest is academic, do look into how the collapse of the rack-jobbers (i.e., the guys putting paperbacks into supermarkets and drugstores) had an impact on publishing, particularly coupled as it was with the rise of the chain bookstores.”

    I will! Thank you for pointing me in that direction.

    And I certainly understand your point about how the big industry changes in publishing could be more than just format. The scope of my question may have been too narrow in that regard. However, in terms of change to format and method of distribution, the rise of digital media has created huge shockwaves in the way our art and entertainment gets from creator to consumer. It’s created a ripple effect in society unlike anything that I can think of since perhaps the advent of television, and I think this is especially true of an older and entrenched realm of media such as publishing. Again though, I’m open minded and entirely willing to be proved wrong if someone wants to present comparable examples!

    BTW John, this is the first time I’ve ever visited your blog but I really enjoyed reading your post and sorry if it appeared otherwise from my original comment!

  139. I can’t help but laugh at the arguments in favor of the publishers as if the people buying physical books are going to stop doing so when Amazon lowers the price of the Kindle book enough. Consider that the few people who are still buying physical books are likely not going to be lured into the e-book marketplace simply by having cheaper products. They, like the people who are still insisting on purchasing CDs are interested in the physical product. Just like someone who is against the idea of paying for music downloads doesn’t run out and buy music when it is put on sale for $3.99 per album, the people who prefer physical books aren’t going to jump to e-books when Amazon sells a book for a discounted price of $4.99 for a limited time.

  140. Folks, turning off the comments for the night (because threads like these often sprout trolls whilst I sleep). It’ll be turned back on in the morning. Save your comments until then!

    Update: Comments back on.

  141. Joseph Lopez

    I think that part of the difficulty is that digital enthusiasts frequently condescend to inform us that printed books are obsolete, and that those buying printed books are Luddites unaware of the inevitable course of history.

    Actually, now I come to think about it, they don’t use the term Luddites because that would require them to have actually read some history, and history is, of course, for losers, but if they had read some history then Luddites would definitely be their word of choice.

    What this overlooks is that, going beyond personal preference, some books are simply unsuitable for digitisation; for example, I recently returned home with a bulging suitcase from the Mediterranean and the Black Sea since I had bought a lot of books at archaeological sites and museums. Rabid Amazonians seem not to grasp that the Kindle is useless for anything of that nature, though that may be because they don’t visit archaeolgical sites and/or museums.

    I took my Kindle with me for reading fluff, and my iPad for scholarly works and guidebooks, but the screen size is much too small for decent pictures and detailed maps which is what you want when you are visiting a site.

    That’s one example; there are a lot of others. Amazon’s comments about books needing to compete with playing games and watching videos suggests their strategy is based on an a customer base which is only marginally literate; that may well be their customer base but it isn’t representative of the entire population…

  142. I think at the root of this is Amazon’s hubris in thinking it could DO everything better than other businesses, not just sell everything better. And that hubris has come back to bite them in the patootie to the tune of $800 million. So now they’re squeezing everyone they can. Or everyone they think they can.

  143. I recognize the value that the publisher provides with editing and production quality for ebooks. I want to pay appropriately for that value, while not paying for value reducing behavior like Amazon’s walled garden restrictions. So I buy directly when non-DRM alternatives are available from publishers like O’Reilly and Baen.

    Does this really provide a net benefit to those authors and publishers? Or is Amazon providing some value to them like reduced retailing expenses? I thought someone would have asked this already, but they have not. Do you know the answer?

    (This is not directly Hachette related, since Hachette is one of the major advocates for DRM, but is related to customer behavior influencing vendor behavior.)

  144. Where’s the outrage when MacDonalds tells it’s producers how much it’s willing to pay for, say Blackberries?

  145. Rjh

    The article in the New Yorker I linked to above goes into quite a lot of detail about what Amazon does; there are all sorts of hidden charges to publishers which Amazon doesn’t disclose, for PR purposes.

    Amazon’s main problem now is that it has sunk vast amounts of money into a wide array of ventures but doesn’t have the hard management base that can make those investments profitable. Expertise in selling cheap things cheaply is not useful when it comes to content creation, and assuming that tech people won’t notice the problems with the phones because Amazon loves tech is just another demonstration of its naivity…

  146. Since Amazon has for almost two decades been about growth and market share, more than profitability, and their market valuation has grown because of it, this feels like another battle in the “platform wars”. Amazon wants to be able to lock in (ha! can’t believe that joke was waiting there) consumers to its ecosystem of hardware (Fire and Kindle) content (Prime) and e-commerce. They have pursued a strategy of cost undercutting to drive out competitors just like Walmart always did with the local store.

    Bad or good for consumers or readers is less the goal than good for control of markets and market share across those main three areas. (I’m leaving out services like hosting, etc.).

    This is the background to the article Scalzi posted a ways up.

    Joseph Lopez:

    One of the key differences between publishing and other media is that digital tools have actually lowered the entry to the market in a lot of ways, because of different, cheaper tools to make movies or music. Whereas, writing a book is pretty much still writing a book. Scrivener is not an industry changer the way, say, Pro Tools or After Effects are.

    So the disruptions, while major, are actually quite different. Where there are major similarities, they are often more about gatekeeping in the sense of FINDING material, rather than distribuing it.

    (I say this as someone who has watched this go on, while working in interactive / digital creation since pre-web, in publishing, marketing and general business consulting.)

    Pardon if some of this is skewing too off-topic.

  147. As a side note to someone’s comment above that brick-and-mortars don’t stock Amazon imprint books, since I don’t think anyone commented with how that works –

    I believe that Amazon imprint books are printed by Amazon’s POD press. Brick-and-mortars do not, as a rule, stock any POD press books. They don’t stock mine; they don’t stock things from other POD presses; it just does not happen.

    The arrangement between B-and-M stores and traditional publishers is, roughly, that if that shit doesn’t sell, they can strip covers and send them back for a (partial, I believe) refund. This is the deal that makes it worth the risk of stocking books in the first place – that if the bookstore takes a flyer on something that tanks, they’re not stuck with unsaleable inventory.

    The thing with a POD press is that the demand is embedded in the printing: they aren’t returnable. The ideal form is “Person wants book, book gets printed, book gets sold”. To stock a book of this sort on the shelves, the bookstore has to basically pay for the book straight up, and hope that “person wants book” shows up so that “book gets sold” happens, and if “person wants book” never happens, they have no recourse; it’s pure loss. It’s not a good risk.

    Many bookstores will let people order in POD books, because that’s following the POD model where “person wants book” comes first. But outside of tiny niches, you’re basically not going to find a POD-press book on a shelf, ever. It’s not a conspiracy to keep Amazon-based writers down; it’s basic economics.

    (This digression brought to you by Works For And Is Published By A Tight-Margins POD Press.)

  148. Oh, that’s interesting. I wonder how that shifted. (I’ll admit my awareness of Amazon’s dead tree publishing arm dates to back when they were trying to strongarm my employer into using their recently-acquired cruddy POD press, and I haven’t tracked further developments.)

  149. Tom Bortels
    If the above is correct – here’s the kicker – why not just sell the ebooks directly? I mean – an online storefront is a big thing to set up, but it’s not THAT big – the internet is a big equalizer, and both the kindle reader and ibooks on my ipad will read non-DRMed books just fine.

    Where do you buy the following if you need to get them all in the same day: shampoo, toothpaste, socks, paper napkins, shoes, a gallon of milk, gift wrap, ribbon, an educational toy, storage bins and candy?

    I’m going to make an educated guess and say Wal-Mart or Target or a similar retailer and nowhere else. Before Wal-Mart and the like came along, you would have to go to the following places: drug store, shoe store, grocery store, gift store, department store and a hardware store. You may, in fact, go to those places now. However, Wal-Mart based their business model of being all things to all people and doing it cheaply. That’s why a lot of people shop there. Because it’s convenient and saves them money and time.

    Amazon is trying to be the Wal-Mart of the Internet, if it hasn’t become that already. Sure, I can go to a publisher’s web site and buy a book directly from them. I do it to Baen when I want to buy one of their books because they were selling DRM free e-books in multiple formats long before Amazon decided to. Baen has my brand loyalty. However if I want to buy an e-book produced by another publisher? I go to Amazon because a publisher’s website is geared to do many things, not just sell book. So navigating those sites aren’t nearly as easy as Amazon’s “We’re here to sell you stuff” format.

  150. I think Amazon Publishing is one thing, a publisher with imprints for various genres, and their self-pubbed thing is another, more like a distributor for writers who are willing to take on all the other responsibilities for getting a book published. Those who wish to print books can POD on CreateSpace. But I haven’t tracked it much, either. Anyway, hope this isn’t too far off-topic.

  151. Someone up thread asked what value Amazon adds for authors (of any sort) whose books are sold via Amazon. I don’t have a bunch of hard evidence to back this up, but my conjecture is that the value Amazon adds is in boosting discoverability. Amazon has built a lot of algorithms to help readers find (and buy!) books that they might not have found otherwise- the “customers who bought X often buy Y” thing is only one. However, some of those algorithms take sales volume on Amazon into account, and so that is why you see advice to self-published and small-press published authors to try to drive early sales to Amazon. Since such a large percentage of overall online sales happen via Amazon, having increased visibility in Amazon’s algorithms can make a big difference to long term sales.

    As a reader, I appreciate the help Amazon’s algorithms give me… up to a point. I want there to be other ways to discover new books, too, and that is one thing I think we risk losing in this Amazon-dominated era.

  152. To keep it all in perspective, amazon, publishers AND AUTHORS are not your friends. They all want your money. Being a consumer I support amazon on this in that it makes eBooks cheap for me.

  153. Where’s the outrage when MacDonalds tells it’s producers how much it’s willing to pay for, say Blackberries?

    Leaving aside that books aren’t sold by the tonne and that nobody cares if they get the latest blackberry produced by JK Rowling, that McDonalds doesn’t sell 50%+ of blackberry products, and that McDonalds aren’t saying they can’t serve you a hot blackberry pie for 4-6 weeks or claiming that they should be 50 cents instead of the ten dollars some people would charge because blackberries are smaller than apples – and by the way did you know that George Orwell was in favour of you starving to death? – I’m gonna say… in the comments of a blogpost written by a farmer in which he continues to point out that both fruit distributors and McDonalds are not your friends but instead businesses engaged in negotiation?

    My second guess would be in the real world where millions of people make purchasing decisions based on things other than who offers the lowest price, that some of those include treatment of suppliers and employees, and that evidence for this is that companies use PR to make sure nobody thinks they are in fact nasty (advertising would sure be a hell of a lot different if people actually wanted to shop at the places that best oppressed the workers).

    My third guess would be Earth-451, where people announce on a regular basis that if anybody ever tried to sell them a fruit smoothy for more than a dollar they would just get one second-hand as a matter of goddamn principle. But that’s just spitballing really.

  154. John:

    Since I work for a giant corporation (and quite happily for various reasons) I wholeheartedly agree that giant corporations are not your friend. I’d also echo someone up-thread who added that neither are authors. You guys (sorry for the lumping, but commerce) are out to take the largest amount of my money you can get, for the least cost. Me, I’m for vice-versa. It’s all good until someone runs with scissors and pokes out an eye. (I was going to use an analogy about sticking it to the consumer and that the argument was only about lubricant quality and quantity, but the scissors thing seemed better.)

    Amazon-Hatchette is coming close to running with scissors for both of them. Authors and consumers who get in the middle of this risk the aforementioned eye-poking-out. The various authors & consumers publishing letters with strong opinions aren’t thinking clearly IMO about the possible size of downsides vs. upsides. Almost the same meta-argument is going on here in the People’s Commonwealth about a grocery store chain named ‘Demoulas Market Basket’. The workers have gotten in between two feuding branches of the Demoulas family, with the employees (IMO unwisely) taking sides. My wife is ticked at all of them and threatens to never darken their door because now all of the other grocery chains are overcrowded. Lose-lose-lose.

    That said, I’ll side with Amazon in a lukewarm fashion, since they’ll sell me books via a nearly frictionless interface at a low price. When Hatchette, etc. (or another party) set up a better bookstore, I’ll transfer my completely non-existent loyalty to them and buy direct. Then I’d probably side with them, kinda.

    Caveat emptor.

    Regards,
    Jack Tingle

  155. @stacyrchambers: It didn’t take me more than a couple of minutes to discover that Powell’s Books, very much a physical bookseller in competition with Amazon, stocks new, used and audio copies of at least one 47 North book. Ditto Barnes and Noble.

    So I’m not sure where Goldberg is getting his information that the brick-and-mortar bookselling world is presenting a united, hateful front against Amazon’s non-POD imprints.

  156. Mythago, he would know whether Amazon’s publishing arm prints POD or not and what its terms are with booksellers since he’s published with Amazon. That’s why I posted. And he’s not with the 47 North imprint–he’s with Thomas & Mercer.

    Powell’s is one independent bookseller among hundreds. I don’t think he’s imagining that indie booksellers have refused to stock Amazon books. Sounds like his sales were affected by that. I don’t agree with his stance on Preston’s letter (I’m not sure what Preston could do about, presupposing he even knew), but I can’t argue with Goldberg’s factual information.

  157. Amazon claim that authors deserve a bigger share of the proceeds from their book sales. It also says that ebook sales are price-elastic. So why, then, does it still insist on taking 65% of the proceeds on self-published titles below a certain price point? This relentless downward pressure on prices isn’t done to benefit the reader: ultimately it’s for Amazon’s benefit and theirs alone, and they don’t care how many publishers go to the wall as a result.

    It makes me furious that I am forever reading about Amazon “paying 70%” to authors, when in most cases nowadays (thanks to that price elasticity) they’re actually pocketing TWO THIRDS of the sale price for doing – let’s just remind ourselves – ABSOLUTELY NOTHING. Acquiring? No. Paying advances? No. Structural editing? No. Copyediting, proofreading, cover design? No. Marketing & publicity? No.

    And the unit cost of selling an ebook? Practically zero, I would have thought. All this talk of how publishers benefit from lower overheads with ebooks compared to physical, it’s nowhere near as much of a saving for them (because of all the services listed above) as it is for the retailer, whose overheads drop to nothing, effectively.

    All these deluded “indies”, as they like to call themselves, don’t seem to appreciate that if and when Amazon has got its way with the big publishers, they’ll be reassessing the KDP scheme and announcing that the royalty paid to authors will go down to 20%, or 10%… and when that happens, what will the Konrathites do? How will Hugh’s disciples respond and fight back? Who’s gonna bet on their chances of getting Amazon to improve their terms, if even a mighty publishing conglomerate has been beaten down into submission?

    The self-pubbers are, pitifully, flinging themselves into the arms of a grizzly bear because it’s promised to protect them from a snarling dog. Yeah, and when it’s dealt with the dog, the bear’s next meal is going to be a ridiculously easy kill…

    For all their many faults, Hachette and the other big publishers have to be supported on this one. Amazon is a monster, and its tactics now are a sign of clear desperation. The Ponzi scheme of growth instead of profit is starting to attract unwelcome attention – forcing Amazon to pursue a scorched earth policy against all of its suppliers in order to start generating some profit. Far better that it fails, because an Amazon that has to operate on a level playing field becomes just another retailer, against which other retailers can fairly compete – and all true capitalists have to agree that competition is a good thing.

  158. I have a simple rule whenever two corporations locked in battle are seeking my sympathy. Unless one is clearly more ethical than the other, say pretty much anyone versus Goldman Sachs, I will always root for the corporation that has less monopoly power. That would be Hachette in this case. By a mile.

  159. For all my doubts about some of Amazon’s business practices, there’s no doubt that they provide value to the publisher and to the customer. It’s great having almost anything in one place (and my customer service interactions with Amazon have been uniformly great). This has lots of people who look for it at Amazon and finding it there buy immediately (and if not there, look other places second, sometimes later, sometimes not at all).

    And Amazon gets a lot of credit for pushing eBooks as a consumer option with the Kindles. The Kindle was the iPod of books, one of the first good enough for normal consumers to love with the marketing to make normal consumers think “that could be nice to get into”. The Nook certainly wouldn’t have happened without the Kindle, and while the iPad probably would have happened eBooks wouldn’t have been part of it.

    But Hachette also has its value to the customer and to Amazon, value that’s been set forth before. (Just like Disney does, just like other suppliers Amazon has tussled with recently.)

    Just read something that surprised me. Publisher profit margins run about 10%. Maybe I’m too used to the tech market, but that seems a very reasonable profit margin. Bigger margin than retailers get and far far bigger than Amazon’s margin (which hasn’t been paper thin, but tissue paper thin). But they don’t have vaults where the managers go swimming through gold coins before breakfast.

  160. Two things puzzle me:
    1. Why on earth would an indie author who doesn’t publish through Hachette want to get involved with this? It seems to me that the higher the price charged for e-books from the big five publishers, the better that is for the indie author who can afford to undercut them on price. More power to Hachette; let them charge whatever they think the market will bear. If they price e-books high to protect their paper books though, then they will be heading for disaster.
    2. Why would an author price an e-book sold at Amazon at $10.67? Amazon pay a 70% royalty (less a delivery charge) on books priced between $2.99 and $9.99 and 35% on books outside that price range. Assuming a $0.10 delivery charge you would earn a smaller royalty from books priced $10.00 to $19.79 than by keeping to a $9.99 price.

  161. Douglas Harris

    Bravo! There are not many people without a financial background capable of recognising a Ponzi scheme when they see it; it’s good to know that you are out there!

  162. Stevie:

    “I think that part of the difficulty is that digital enthusiasts frequently condescend to inform us that printed books are obsolete, and that those buying printed books are Luddites unaware of the inevitable course of history.

    Actually, now I come to think about it, they don’t use the term Luddites because that would require them to have actually read some history, and history is, of course, for losers, but if they had read some history then Luddites would definitely be their word of choice.”

    What’s a Luddite? I kid. Although, having spent almost the entire day dealing in Spanish and not English, now I’m curious if there’s an equivalent term en español. If not, I’ll try to coin the phrase ‘Luddito.’

    “What this overlooks is that, going beyond personal preference, some books are simply unsuitable for digitisation; for example, I recently returned home with a bulging suitcase from the Mediterranean and the Black Sea since I had bought a lot of books at archaeological sites and museums. Rabid Amazonians seem not to grasp that the Kindle is useless for anything of that nature, though that may be because they don’t visit archaeolgical sites and/or museums.

    I took my Kindle with me for reading fluff, and my iPad for scholarly works and guidebooks, but the screen size is much too small for decent pictures and detailed maps which is what you want when you are visiting a site. ”

    Yeah, I don’t disagree. For sure eReaders operating purely in black & white eInk are not going to be useful for works that require detailed graphic illustrations. That includes fictional works as well like graphic novels. But as you noted, tablets are increasingly taking that role instead. An astronomer friend of mine relies heavily on his iPad in this manner. As technology continues to develop, who knows what the next generation of hardware and software will be able to replicate. Five years ago Blackberry was cutting edge, now I don’t know anyone who owns one.

    Physical books, I think, will see decreased market share but will probably not become non-existent like records of VHS. It’s not an entirely passive experience like music or movies, where you’re just listening or watching. It requires thinking and a certain level of interactivity. Sometimes it’s easier and preferably to flip through a physical book when researching something instead of constantly scrolling through a computer screen or tablet.

    MoXmas:

    “One of the key differences between publishing and other media is that digital tools have actually lowered the entry to the market in a lot of ways, because of different, cheaper tools to make movies or music. Whereas, writing a book is pretty much still writing a book. Scrivener is not an industry changer the way, say, Pro Tools or After Effects are.”

    True. It’s much easier to produce a movie and upload it onto YouTube than it was to get a short feature made in the days of film. But I mean, that’s true of self-pubs too. It’s easier to create an .epub or .mobi file and upload it then it is to bind a book by yourself. There were vanity publishers that people did, and still do, use to varying success (that’s how Christopher Paolini was discovered) but nonetheless the entry to the market for self-publishing is much easier in the digital age then it was in the past. It doesn’t mean you’ll be successful, anymore than uploading a video to YouTube does, but it certainly makes it easier to manufacture and distribute your own work.

  163. Joseph Lopez

    Back in the mists of time there were 3 video players; everyone remembers Betamax and VHS, but I bought the one which was the technically best, the VCC.

    Naturally no-one today remembers VCC even existed…

  164. I read a fascinating article the other day about the author’s experience working for Amazon. Apparently they have a huge staff turnover and employees are in constant fear of being fired. What a sad thing that a company with such a remarkable goal – to provide so many books to so many – should be so corrupted.

  165. @stacyrchambers: Goldberg specifically listed 47 North as one of the Amazon imprints he claims that “brick-and-mortar bookstores, from big chains to indies” refuse to stock; he didn’t limit it to Thomas & Mercer. B&N is a big chain. Powell’s is an indie. Since he won’t tell us which bookstores are behaving this way, I used those as representative examples, particularly as B&N is Amazon’s main ‘big chain’ competitor. (I couldn’t, for example, use my local bookstore Books Inc, because they are very idiosyncratic about which books they do or don’t stock regardless of publisher.)

  166. Stevie:

    “Back in the mists of time there were 3 video players; everyone remembers Betamax and VHS, but I bought the one which was the technically best, the VCC.

    Naturally no-one today remembers VCC even existed…”

    I’d never heard of it. But when I looked it up, it said it was only ever released in Europe, Brazil, and Argentina.

    In any event, this generation’s version may be HD DVD. I know plenty of people, whose tech opinions I respect, that thought it was the better alternative to Blu Ray. A mere 6 1/2 years since it ended production and conceded the market to Sony, hardly anyone even remembers it. Memories certainly can be short where technology is involved.

  167. My high school had a VTR, speaking of things nobody remembers. A Video Tape Recorder; essentially an open-reel VCR.

  168. I’ve enjoyed the comment thread. I’ve got two take-aways.

    My feeling of slight superiority over Kindle users is silly and I should stop that.

    I should continue reading via Nook with occasional dead tree, Story Bundle, and direct publisher purchase when unavailable via Nook because that’s what’s easiest for me.

  169. Honestly, I think Amazon needs to STFU with “Hachette are price-fixing scum” until they’ve got their own *cough* aggressive tax avoidance and not entirely fragrant labour practices sorted.

  170. I have no idea what this is about. The author is an author, I think, but does not write for people like me. I really need to read something like this which is instead written using fewer insider words. I need an article written with me in mind. I am a kindle reader. I read so many kindle books that I feel that if only I quit reading them, the industry would cave. I buy $50 in kindle books monthly. It is crazy but true. I love to read. Before kindle, my same $50 went to printed books purchased through amazon.com. From what I can see, the author is saying that kindle and amazon are looking to their own interests. I would expect no less from a buisness. I would have a hard time believing an author can make any money without them, as these are the sources I turn to for all my books.

  171. Dear John Scalzi

    I was wondering if you comment on Joe Konrath/Barry Eisler’s feeling are regarding this matter. They both are ardent supporters of Amazon via Joe’s Newbie’s Guide to Publishing blog and they fisk anyone who rails against Jeff Bezos and Amazon. Thank you.

  172. They may not be representative examples, but anomalies, Mythago. I’m not going to make any assumptions based on a couple of books, regardless of where they were found. If what Goldberg describes regarding indie booksellers is actually happening–which I didn’t really comment on in the first place so I’m not really sure how I got roped into defending him–it sounds to me like independent booksellers have good reasons for not stocking Amazon books: Amazon is a direct competitor, it doesn’t give them access to ebook versions, etc. I can definitely see how writers with Amazon–especially whose careers were revived by signing with AP–would want to defend Amazon. Doesn’t mean I agree. Based on what I’ve read, it seems like Amazon just wants ALL THE PIE. But I don’t blame Goldberg for not naming booksellers. I don’t think he owes anyone that information–especially when you consider that whatever chance AP authors have of those booksellers changing their minds would probably evaporate.

  173. 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.

  174. Slovak67:

    My opinion re: Mr. Konrath and Mr. Eisler is that they have the right to their own opinion on the matter, based on their own experiences and biases, and I encourage everyone to cast a wide net with regard to authors and their experiences and biases.

  175. I think it’s absurd that Hatchette and Apple got sued for supposed ‘collusion’ in the first place. Amazon is the monopoly. Just like Standard Oil (textbook monopolist) they drove all competition out of the market with low prices.

    When the iPad came out, it represented a HUGE NEW DEMAND for ebooks! When demand goes up, so does the price, but no one looks at it like that.

    Should the prices be lower? Yes, but keep in mind, it’s a VERY NEW medium–still. The prices will come down over time.

    Apple had EVERY RIGHT to charge a bit more for (on the surface) the ‘same’ book. (They are NOT the same, the book on iPad is a much richer environment and runs on far better devices.) And the publishers had every right to sell to them at a higher price–it’s THEIR commodity (at least as an agent on behalf of the authors).

    Amazon COULD HAVE continued to sell their LESSER PRODUCT at $9.99, but chose not to do so. How is this the publisher’s or Amazon’s problem? It’s not, but Amazon isn’t ramping up it’s legislative lobbying for nothing.

  176. @stacyrchambers: ‘if what he describes is actually happening’ is rather the point, isn’t it? Goldberg criticizes Preston et al as hypocrites, because (he claims) they are not applying their make-books-available-to-all plea to “the brick-and-mortar bookstores, from big chains to indies” that are boycotting Amazon imprints. If that isn’t true, then his entire argument – linked here by both you an Q – is also untrue.

    Was what I found an anomaly? I suppose I could do some kind of randomized trial, picking a sample from different imprints, but to what end? Couldn’t it be just as easily dismissed as “yes, but MOST of the books are boycotted” by someone who still wanted to believe that bookstores are punishing Amazon en masse.

    Does Goldberg ‘owe’ anyone the information on what bookstores are allegedly doing this? Well, he didn’t seem coy about listing the names of authors affected by the alleged boycott. I would think that even if we assume B&N would take revenge on anyone daring to call them out, that providing a laundry list of the heretics rather isn’t helpful in the interests of protecting them from that retaliation.

  177. ‘if what he describes is actually happening’ is rather the point, isn’t it? Goldberg criticizes Preston et al as hypocrites, because (he claims) they are not applying their make-books-available-to-all plea to “the brick-and-mortar bookstores, from big chains to indies” that are boycotting Amazon imprints. If that isn’t true, then his entire argument – linked here by both you an Q – is also untrue.

    Was what I found an anomaly? I suppose I could do some kind of randomized trial, picking a sample from different imprints, but to what end? Couldn’t it be just as easily dismissed as “yes, but MOST of the books are boycotted” by someone who still wanted to believe that bookstores are punishing Amazon en masse.

    Mythago, even if you were to do that, how many bookstores would it take before you could tell him this is all in his head? His definition of being banned may be different than yours.

    But he was wrong about one thing: many booksellers have a partnership with Kobo and so actually DO care about ebook rights. Even if it’s only those booksellers refusing to stock AP-imprint books, that could be hundreds of bookstores. For him, that could qualify as a ban. And if that doesn’t rise to your level of “proof,” well, I just don’t know what to tell you. I’m just saying his definition could be totally different than yours and he could still be right. Because it’s his bottom line.

    Does Goldberg ‘owe’ anyone the information on what bookstores are allegedly doing this? Well, he didn’t seem coy about listing the names of authors affected by the alleged boycott. I would think that even if we assume B&N would take revenge on anyone daring to call them out, that providing a laundry list of the heretics rather isn’t helpful in the interests of protecting them from that retaliation.

    No, he’s not coy about listing the authors affected. I assume that was a show of support. Which wouldn’t really directly affect business relationships, would it?

    What I’m saying is, I don’t have enough info to decide whether I “agree” with Goldberg or not. But I’m not going to ask for “proof” because, well, that’s kind of rude. It may be true for him by his definition because it’s affecting his and other authors’ bottom lines.

  178. Sure, Amazon’s nervous. So are Hachette, Bestsellers, and most of all Preston. Amazon’s not going to forgive him for telling people to send emails to Bezos. Amazon’s probably going to unleash the algorithm fairy on him permanently. And Amazon’s letter (orders to their minions) seems to have worked. People are talking about it. Not all positively but that doesn’t matter. For instance Amazon and its supporters already consider the New York Times biased so their opinion pieces are easily dismissed.

    And these aren’t normal negotiations. This is the beginning of a series of negotiations Amazon’s going to have w/ the Big 5. So of course they have developed a game plan. So has Hachette. They’ve no doubt practiced and researched. They might even have conducted negotiation war games or even hired consulting management companies like the one Snowden used to work for.

    This letter may be a preliminary move before Amazon starts delisting some newbies and midlisters. I think bestsellers won’t get delisted because of what happened with Macmillan. But that’s just a guess.

    I agree that it might be better for indies if Hachette wins but the majority of readers probably disagree. Also Amazon might not have a choice but to fight if Apple is going to be allowed to discount and they are not, and B&N is allowed to charge high co-op and unshelf writers but Amazon is not.

  179. @slovak67 – I don’t know Konrath’s history, but keep in mind that Eisler had significant success with his John Rain novels via traditional publishers. When he went to Amazon they gave his first book done via them (The Detachment), very prominent placement, front page of the site if I remember the launch correctly. All of this is to say that Eisler isn’t a typical self-pub author. I’ve nothing against the man (I like the Rain books quite a lot and have them all), but he loves Amazon in part because he believes that model is best for authors and in part, I would bet, because they’ve been very good to him. None of that invalidates his take, but it does color it.

  180. Shoeshineman

    On the getting nervous front:

    up until now Bezos has been the beneficiary of investors’ willingness to believe that it will all come good in the end; people who pour money into a bottomless pit are notoriously reluctant to accept that this may not have been a wonderful idea. There comes a point, however, when analysts start asking nasty questions, and Bezos doesn’t like questions at all, much less nasty ones; the culture at Amazon has resulted in an inability to deal with what happens in the real world.

    In the real world trustees of pension funds start getting worried about a company losing money hand over fist which has no strategy for making money other than telling investors to give them more money so that sometime soon they will make money.

    They get even more worried when Bezos declares war on numerous fronts, and apparently doesn’t even notice that Amazon’s expensive piece of flagship technology smartphone is getting lousy reviews. Instead, he’s launched a hearts and minds campaign, spamming writers with one of the most inarticulate and obviously untrue emails in the history of spam; at some point it begins to dawn on investors that his reluctance to ever disclose information may be the straightforward consequence of him knowing that if he did disclose it they would dump Amazon and run while they still could.

    Bezos has never dealt with a situation in which he is forced to disclose the real numbers in order to get more funding, and that is a huge weakness in Amazon’s management; investors can be, and frequently are, just as gullible as the general public but there are more constraints on their behaviour.

    There is a huge difference between ‘not making much money at the moment’, which can be resolved by calling it a long term investment, and ‘losing vast amounts of money at the moment’, which requires a lot more due diligence from people who are supposed to do due diligence. Hachette’s management know that, since they too have investors who may get nervous, but they have a lot more experience of dealing with it. That is why the email from Hachette’s CEO was carefully written to promote their case, and that is what it does.

    Amazon and its supporters may discount the NYT but nobody who matters really cares what the NYT says; they do care what Bloomberg, or the Wall Street Journal, or the Financial Times says. Amazon is discovering that harsh fact of life…

  181. Joseph Lopez:

    I left out some key factors besides production which makes writing — especially books — different from other media. Because the “object” created is singular, there are very few other sources of revenue from it besides sales.

    So for music, because music sales have gotten widely unpredictable across the spectrum of artists, revenue from performances has become more and more important. This article has an interesting viewpoint of it: http://www.wonderingsound.com/feature/too-many-summer-music-festivals/

    Movies / TV might be closer, but it sounds like you would know better than I would.

    In any case: Amazon has made certain types of distribution easier, without the overhead of ensuring quality (except through crowdsourced / social methods like reviews and behavioral recommendations).

    Back to the main topic: In general, if you read Pando Daily or Read Write Web or even Mashable, it’s easy to pick up a general sense that many technology focused companies are really poor at communications, except to controlled audiences. Lots of exceptions, but Amazon has never seemed like one of them. They seem to have an interesting combination of aggression, “true believer”-dom and lack of transparency, which makes this kind of public PR very difficult to execute. I am surprised they don’t just have hired guns like Fleishman-Hillard, Edelman or Burson-Marsteller handle all of this for them.

  182. MoXmas

    The hired gun part is fairly straightforward; big PR firms won’t touch clients who will damage the PR firm’s image. They do actually believe in what they do, so it makes perfect sense for people like Fleishman-Hillard to make those evaluations of prospective clients.

    This doesn’t mean that their clients have to be warm and wonderful human beings; it does mean that they have to be prepared to cede quite a lot of power to the PR firm, and I see nothing which suggests that Bezos is prepared to cede anything at all.

    PR firms are, after all, businesses in it to maximise their own profits; clients running amok damage profitability…

  183. My husband, a self-published author, received this email a few days ago and we were a little confused as to why it was sent out or what it was really talking about. Thanks for clearing this up!

  184. I just emailed Hachette as Amazon requested in their letter to readers, copying Amazon (also as requested). However, I don’t think the substance of my email will please them much. I am not a fan of any big corporation bullying suppliers into giving them an unfair market advantage. Diversity in buying options is a good thing; that’s why monopolies are illegal. I don’t shop at WalMart for the same reason that I’ve now cancelled my Prime membership and only buy from Amazon if I literally can’t get it anywhere else.

  185. I agree Amazon is nervous. But they’re not that nervous. They just forked over $2 billion in India. And they’re not nervous about Hachette. Why else would they antagonize Hachette’s CEO during negotiations by asking indie authors to email him? They will need a stronger message from Wall Street to really become nervous.

  186. Amazon is cash poor -it used its investors money for the $2 billion Indian gig- and most analysts think Bezos hasn’t a clue when it comes to the Indian market. As for antagonising Hachette, antagonising is Bezos’s default setting; he doesn’t know how to do anything else.

    And no, we don’t have to wait for Wall St to get more nervous; historically there have been a remarkable number of very large companies going bust before their bankers noticed anything amiss, and Amazon’s most likely demise would result from creditors demanding payment…

  187. Then Amazon won’t really get nervous until their creditors demand money. But right now they don’t seem to be that nervous. I’m not saying they shouldn’t be. And Bezos will be antagonistic as long as he can get away with it and Hachette isn’t going to change his mind. Maybe Disney. Plus I’m sure he’s not antagonistic with his investors. And he hasn’t been treating Preston all that bad.

  188. MoXmas:

    “I left out some key factors besides production which makes writing — especially books — different from other media. Because the “object” created is singular, there are very few other sources of revenue from it besides sales.

    Movies / TV might be closer, but it sounds like you would know better than I would.”

    Movies typically generate revenue through sales that are staggered over time through what are called “windows.” Historically speaking, the most important window is that between a theatrical release and a home video release. Back in the day, you could also throw in things like licensing rights to television stations, who would commonly air films on evenings and weekends, but these days that’s increasingly uncommon. Also, the gap in time between theatrical runs and home video release has been shrinking, although blockbusters tend to sustain longer theatrical runs because they’re more popular and thus can make more money over longer periods of time.

    To me, it seems like books traditionally followed a revenue generating pattern analogous to “windows” in film. Hardcover, trade paperback, and mass market paperback, with later release times corresponding with lower prices. The introduction of e-books seems to have disrupted that, because now you have e-books being released simultaneously with hardcovers but at a low price point, and with consumers expecting even lower price points still.

    [Some of which I don't doubt is Amazon driven, but some of which is also just in the nature of consumerism. People used to say the same thing in the 90s about music CDs. "Why should I pay $19.99? CDs cost pennies to manufacture!" Which of course ignores all the costs of creative and physical labor that go into making the product. It's also used as a fallacious justification for Internet piracy].

    It would be like if Amazon Instant Video started offering movies for streaming or digital download at the same time the movie debuts in theaters. Certainly, it would undercut sales. Living as I do in Los Angeles, it would be far cheaper for me to HD stream something online for $2.99 – $4.99 than to shell out $40+ for a night out with the wife at Universal Citywalk (although I do love Universal Citywalk!). To me, it seems that in this sense the publishing industry is having a harder time adapting to the digital wave than TV/film, the latter of which has historically been more adaptable to technological change. Music has too, but they were caught off guard by Napster in a case of the pirates utilizing technology before they did, a lesson not lost on the major studios.

    That was sort of the point of my original post. But again, as I have throughout this entire conversation (which is still going strong days later…glad I checked back in!) I’m entirely willing to listen to rational opposing viewpoints.

  189. It would be like if Amazon Instant Video started offering movies for streaming or digital download at the same time the movie debuts in theaters. Certainly, it would undercut sales.

    It might lead some people to stream it rather than go to the cinema, but it might end up with more revenue in total because people who would otherwise not see it at the cinema but who would like to and who might not care when it was available for streaming later on – related to all the publicity being massively based around the film’s release – would have that option.

    (Incidentally, I would assume people would understand if streaming on the day of release was $10, download on the day of release was $20, even though it costs less for films that are no longer in the cinema. Wouldn’t they? Or would Amazon be telling people that streaming films should cost a tiny fraction of cinema tackets because you have to provide your own popcorn?)

    However, there are huge qualitative differences between watching a film in the cinema and streaming it (unless you have a rockin’ home cinema setup). There is basically no difference at all in the experience of reading a book in different formats – some ease of use stuff with ebooks, like not having to find a sock to use as a bookmark, but nothing really comparable to THX. That’s the secret behind paying more for the hardback – that extra cost is mostly about time and only slightly about the extra quality of the binding. It’s a prestige signifier, like having $1000 of walnut veneer in a car that costs $5000 more than one without it, making you happier about buying the premiere product version.

    On the technological change thing, you should be aware that publishers – some at least – were majorly burned in the early 90s with CD-ROM books: partly because the Internet came along and made that obsolete very quickly, partly because people didn’t really want all the extras that publishers were paying a hell of a lot of money for – often to the same boosters who claimed that these Flash animations would boost sales of Jane Austen 174%. There’s a good blog post about, or around it, here. So if part of your belief that publishers are slow to adapt is because ebooks are so boring – well, there are reasons.

  190. Amazon it seems to me simply want to try and achieve a situation where they take a piece of every order that travels across the Internet – not a particularly healthy situation from a competitive viewpoint I would have thought – there web site is a mess and distorts the market horribly – I wonder for example why they allow 5 ‘sellers’ to list second hand copies of one of my books for 1 penny (with P&P of 2.80) which suggests to me the reseller is just making a margin on the P&P as in the UK it would cost £1.65 to deliver – so they are actually selling a second-hand book for £1.16 – not sure what Amazon’s margin is on this sale! Even more alarming is that a used copy of another of my paperback books (RRP £8.99) – is on sale for £2,449.50 plus P&P at £2.80 – they are really looking after the customer there aren’t they?

  191. The article was informative as hell. Fact is, I didn’t (& still don’t) have a clue about this kerfuffle. An apologetic tl;dr on the comments. I’m still trying to wade through them as time permits.

    Quick question: What are links that can help me get a grip on this: a timeline, interested parties, hilarious commentary, and all that?

    I really want to wrap my head around the conflict & get properly informed.

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