Amazon, Hachette, Publishing, Etc — It’s Not a Football Game, People
Posted on July 3, 2014 Posted by John Scalzi 199 Comments
And now, some thoughts on subjects pertaining to publishing. I’ll use myself as an example for much of this.
1. I am in business with Amazon, though its Audible.com subsidiary. As you might be able to tell by my post yesterday, I am deeply happy with my experience working with Audible (and thus, by extension, Amazon). They’ve been a very good business partner to me.
2. I am also in business with Hachette, via its Gollancz imprint in the UK. I think what Amazon’s doing to US Hachette authors at the moment well and truly sucks. I heartily remind people that just because Amazon has been screwing these authors by making it impossible to buy their books there, doesn’t mean you can’t get those books — pretty much immediately — from all sorts of other retailers, including local bookstores. This might also be a fine time to install a Kobo or Nook or iBook app on your tablet or smartphone and diversify your eBook retailers.
3. I am in business with Random House, through its Heyne imprint in Germany. I have had an excellent business relationship with Heyne and think very highly of the people who work there. You may also recall that last year, when Random House attempted egregious bullshit with the contracts for their digital imprints Hydra and Alibi, I was happy to punch them in the throat for it, because they were trying to screw authors, no two ways about it.
4. I am in business with Macmillan, through Tor Books. As most of you know, I have been very happy with Tor, who treats me very well and who is very supportive of my career; I have the career I have because Tor has done well by me. What most of you may not know is that one major reason there was a three-year gap between Zoe’s Tale and Fuzzy Nation was because Tor and I had a substantial business disagreement, and I chose not to write new work for Tor for a while. The details of that disagreement are not important now — water under the bridge — but it was significant enough that I walked away from the company and worked on other things. Then it was done, we came to an understanding, and now we are working together again, quite happily.
What’s the point to all of the above?
Publishing is a business. As a writer, you are enaging in business with others, sometimes including large corporations. It’s not a team sport. It’s not an arena where there are “sides.” There’s no “either/or” choice one has to make, either with the businesses one works with or how one publishes one’s work. Anyone who simplifies it down to that sort of construct either doesn’t understand the business or is actively disingenuous, and isn’t doing you any favors regardless. The “side” you should be on is your own (and, if you choose, that of other authors).
These businesses and corporations are not your friends. They will seek to extract the maximum benefit from you that they can, and from others with whom they engage in business, consistent with their current set of business goals. This does not make them evil — it makes them business entities (they might also be evil, or might not be, but that’s a different thing). If you’re treating these businesses as friends, you’re likely to get screwed.
(And for God’s sake, don’t confuse being friends with people at those businesses with being friends with the business. I have very good friends at Tor. It didn’t stop me from having a substantial business disagreement with the company. Businesses aren’t your friends, even when they employ friends.)
Sometimes the goals of these businesses will align with yours. Sometimes they will not. And often a company that you’ve found yourself in alignment with previously will tack off on a different course, leaving you behind. Maybe you’ll realign at some later point. Maybe you won’t. If you’re under the impression that any business will always align with your own set of business goals, you are likely missing something. Expecting businesses that are not your own to act in a manner other than their own self-interest is likely to end in disappointment for you.
You’re allowed to think more than one thing about a company at the same time. I like what Amazon’s doing in the audiobook space, especially as it involves me. I think what it’s doing to Hachette authors sucks, in no small part because it happened to me, a few years back, when Amazon had a similar fight with Macmillan. Amazon has helped my career; it’s also made it clear to me that it doesn’t give a shit about my career when its interests are elsewhere. Amazon isn’t the only business partner I have that I can say that about. It’s clarifying, I will say.
Your business relationships are allowed to be complex, entangled and even contradictory. How do I feel about being in business with Hachette and Amazon? I feel fine about it, obviously. Likewise, I feel fine about being in business with, for example, Macmillan and Subterranean Press, both of whom have published the same work of mine, in different formats. I’m in business with a lot of businesses. I’m going to keep doing that, because I like to eat and I know where my ethical lines are. You can do this too. The person to decide what limits you choose to place on your business should be you.
Publishing is a business. I said that already. Guess what? I’m saying it again. If you’re not approaching it as a business, with the same eye toward your own business goals as those you’re in business with undoubtedly have on theirs, then when you find yourself completely at a loss and utterly dependent on the business choices of a company that fundamentally doesn’t care about you outside of a ledger entry, the amount of sympathy you’ll get — from me, anyway, and I suspect from other authors who tend to the business of their writing — will be smaller than you might hope.
Update, 7/10/14: An event relevant to this entry and discussion.
Preach it, Br
Preach it, Brother John. All of us here in the choir think you’re doing great and maybe some sinners’ll hear if you’re loud enough.
In unrelated news, sorry about the first partial post. I need smaller thumbs.
I remember the gap between Zoe’s Tale & Fuzzy Nation and remarking to some that “Scalzi is being lazy, resting on his laurels”. J then told me that I often jump to conclusions, am being an ass, & then offered multiple examples. As usual she was correct. Thank you John for being true to your principles.
Do you mind if i repost this?
I prefer a link in. You can excerpt if you like.
Totally agreed. Brilliant piece, John.
The best we can do is temporarily support the businesses that align with our principles, especially if they understand that we will remove that support the moment they change their ways.
I have read other authors’ blogs concerning publishers, and they’re pretty much spot on with yours. There are the problems that the parent corporations for these publishing houses aren’t even remotely connected with publishing. Such as a petroleum company owning a publishing house, because they saw an opportunity to make money from it. Whether they support that subsidiary in its mission to publish excellent literature is debatable. Most oil executives understand profit and loss, cost of research, etc., but don’t know diddly about publishing, yet are empowered to make or break a publishing house. Some publishing houses, especially those that are now publishing electronic books, are also violating copyright restrictions with impunity, on the grounds that it will cost the copyright holder more to litigate than it will to just let it go. Ethics of the business changing, too? Can’t say, but if it were a choice of where I could buy the book, either directly from the writer as an e-book, or from the publisher, well……sorry, it’s Thursday, this is my rambling day.
A big seconding of the concept that business partners are Not Your Friends.
I think that it is also worth pointing out something that I’ve been watching in the interests of learning more about the business of writing as a writer. Now is a very good time to be looking at the effects of disruptive technology like the services provided by Amazon on the industry. Amazon isn’t the only disruption to the traditional publishing model and the Hachette conflict is a microcosm of the larger waves being made in how writing is packaged and distributed.
Not everyone wants to wear their business hat as a writer, but for those who do, the Hachette conflict is a valuable reminder of the importance of eggs, baskets, and random bolts of divine lightning.
wisdom of all this goes multiple ways, publishers and authors are in business and will attempt to extract as much money as they can from the consumer. They are not your friends and any attempt to appeal to your sensibilities (via blogs, facebook, twitter, public appearances, etc) are designed with one goal in mind, to advertise themselves and get you the consumer to pay them. This in turn can be contradictory in that the consumer may buy into the shtick it may not generate real revenue or they may despise the company/author personally but enjoy the hell out of the product.
I’m not completely with you on the Hachette-Amazon thing, but overall I totally agree. I have a number of businesses I work with. They’re businesses. They often annoy the crap about me, especially when our business interests don’t completely align. I have a good business relationship with Amazon (and customer relationship), but that doesn’t mean I think it’ll never change. But it’s a better relationship than I had with one of my previous publishers.
And I agree. It’s complicated. I’m a bit tired of much of the media acting as if Hachette is a small, powerless Goliath fighting the good fight with the giant Amazon, when, in fact, both are multi-billion-dollar global corporations. But… business is business.
John, interested in your thoughts about two things. First, do you see the goal of Hachette and other big publishers to keep the price of e-books high; I’ve never seen the logic in pricing e-books higher than regular paperbacks, which they are largely replacing. I buy a LOT of books at $8 and below, but none above. Based on my budget, if books are priced higher than that, I go to the library. Second, what do you think about the difference between what Amazon pays authors and what big publishers pay authors? Hard to justify, imo, especially on e-books, paying authors 25% or whatever it is.
I’ve seen Eisler and Konrath make the point (pretty convincingly, to me) that publishers taking the vast majority of revenues for what, on e-books, amounts to editing and advertising, is pretty unfair to the author.
If you’ve answered these questions at length here or on twitter or whatever, please feel free to ignore me!
Regarding point 2, now is possibly a good time to point out that cross-ereader compatibility doesn’t have to be an issue: calibre is free, open-source, & does conversion trivially.
What Is Awesome About Capitalism is that you don’t have to like the Butcher, Baker, or Candlestick-maker. They don’t have to like you. You don’t have to be of a similar ethnic background, or go to the same church, or vote the same way. They know, and you know, that you are buying their stuff because, for the price, you like it better than the other guy’s stuff.
So long as we’re just focusing on the stuff, we’re not concentrating on what sort of things humans love to fight about.
Lose sight of that, and you lose sight of how to make the system work, and we’re just a couple steps away from brown-eyes shop here and blue-eyes shop over there, and then we’re freaking Bosnia. Again.
And all of the above is why government is needed to regulate monopoly power. That way companies can maximize their revenues subject to constraints without screwing over other companies or consumers. Because it’s always going to be best business practice to exploit monopoly power, and that’s going to hurt people.
Same thing you were saying about the tax code a few posts back– the rules need to change because we can’t blame people or corporations for playing by them. Hate the game, not the player. (Or rather, change the game so the players don’t do hateful things.)
TL;DR, “I agree with our host because he’s smart”
(Disclosure, I’ve worked for amazon as a contractor on multiple occasions, and probably will again. These thoughts are my own, don’t represent the company, blah blah).
I’ve worked at various parts of the retail edge of the publishing industry for most of my adult life, and a consumer of it for longer than that. I’ve always been bemused when people hold up this indie bookstore as a ‘friend to authors’ or this retail website as ‘the enemy’.
They’re all actually in it for themselves. The indie shops I’ve worked in? Were in the business of finding product they could sell to their customers. Part of the reason we tried to sell you stuff you may not have heard of? Because then there wasn’t a price disadvantage with Borders/B&N/Giant Retailer of choice, who could afford a thinner margin on books they were selling a higher volume of.
But, a book beloved by the staff that didn’t sell? Not gonna get kept in inventory, sorry folks.
Same for publishers. Random House net 90 instead of net 30 on their summer front list? Guess what, we’re probably going to be more willing to take a chance on those titles than another publisher who is only offering net 30. But that narrative doesn’t sell well, so we just say to customers “this is what we like this summer and here’s why we like it, and why we thought you’d like it.”
This follows to larger retailers also. It’s in amazon’s interest to sell me books that I like, but if they think I’ll like two books equally, it’s a no brainer to me that they’ll try and sell me the one that *they* make more money on, not that makes the author (or the publisher) the most money.
I’ve also seen this flow the other way. I remember the feeling of bemusement I had when the owner and manager of our little store were FURIOUS when Barry Eisler decided to move to direct amazon publishing, because it would make him (the author) the most money. They felt betrayed by him because we’d discovered him as a fledgling author and then hand sold dozens of copies of his books, and then he was turning that success into success in a market that didn’t make our store any money. My thoughts at the time were more “I wonder if this experiment will actually work”.
Anyhow, yeah. Companies are not the people who work at them, and a companies interests and yours can both align and not align at the SAME TIME.
 This isn’t to say we’d carry books we didn’t think would sell, or not carry books we did think would sell. But with 24 front slots to sell of facing books, given equal chance of selling, we’d be more likely to go with the one with better terms.
 Small town, small customer base. I probably knew about 60% of the customers by reading habit if not name.
 Who’s views on selfpub v tradpub are easily findable on the internets
As a reader, prices (etc) matter to me (I am not rich). But I will look for a bargain for my auto-buy authors, and unfortunately Amazon holds the market in the UK. I do occasionally buy from Waterstones or WH Smith, but only when they have ‘special offers’. I cannot afford the £20 plus some hardback books carry; I’m happy to wait for the PB.
But as for e-books, more often than not I go DIRECT to the e-publisher. That way, I can hope that the author (who has spent time, energy, sweat and tears on a book) may get the royalties they deserve.
I KNOW the Big 5 are in it for the money; but I also know that they’re running a business; and that they’re out for as much profit as they can get. However, Amazon’s tactics are/can be deplorable; so I do support Hachette, and the German publishing group, who are challenging Amazon’s methods. I hope there is a FAIR way to solve all these problems, but I’m not holding out.
Well reasoned post, by the way. Thank you!
@MikeR One of the things a ‘traditional’ publisher offers for their larger cut is also what I think of as a gatekeeping tax. I’m more likely to read a book (written by an unknown with nobody I trust recommending it) by a reputable publishing house than I am a selfpubbed one. There’s also advances and marketing. It’s more complicated than it seems at first blush.
The one thing I hate about the whole Amazon/Hachette thing (other then the fact I apparently was pronouncing Hachette wrong) is the whole call to “punish” Amazon. (Stephen Colbert, looking at you). Why? They are in contract negotiations. It has nothing to do with me. They aren’t doing anything illegal (selling pirated copies) or unethical (smearing the names of authors). It might make life difficult for authors published by that house, but those authors take that sort of risk when they sign with a company. In fact I could see a case for authors suing Hachette for potential lost revenue for failing to deliver the promised access that justifies a portion of the publisher’s cut.
I realize a big deal is being made about new titles and timing, but how much do those first few weeks really matter? Does anyone still pay attention to NYT bestseller lists? 99% of my book recommendations come from friend’s reviews on Good Reads, Amazon “if you liked” formulas, seeing what new ebooks are on the library website, and general word of mouth. I never read anything just published, it goes on my wish list and I buy it when the paperback release causes the ebook price to drop. I’ve got a good 50+ titles on my “to read” list. (Yes, Lock In is on there.) I discovered Scalzi not because of some published book rankings but through an online book group at Good Reads.
(This is slightly off topic, so I’ll stop in this thread after this) another author just this morning weighed in on the whole ebook/amazon/hachette thing this morning: http://t.co/SJsuuZ4mIZ
On a not-unrelated note, what much of the publishing industry seems to forget is that the Author is the brand (in the same way that Oreos, not Nabisco, is the brand). I’ve never bought a book because of who the publisher is, and outside of Harlequin, and perhaps a Baen book with folks in futuristic admiralty garb on the cover, I imagine few other people do either.
And yet, Publisher’s Weekly insists on making the publisher the #1 bolded item, with the title second, and the author a distant third. I see the same thing in other listings (although not with Locus).
I don’t find it hugely surprising that the trade magazine ‘Publishers Weekly’ regards the publisher as the most important aspect of any particular book; indeed, I would be exceedingly surprised if said trade magazine forgot what its market is…
Joel: you aren’t PWs target audience. Bookbuyers and other professionals in the field are, and the publisher is relevant info to that market.
5 years ago I would have accepted that. But I’ve bought tons of e-books over the last few years, some from traditional publishers, some not. I’m pretty confident in my ability to judge for myself, not have some fat-cats sitting back in New York or Paris deciding what I can or cannot read, and then going off to an expensive lunch, the cost of which gets built into the books. There has been an explosion of new material available, some great, some good, some crap. But I’d never want to go back to a situation where I can’t judge for myself. or where big publishing means that I have to pay $12 for an e-book where I could previously have bought a paperback for $8.
You may want someone to “gatekeep” for you. I’m pretty confident the good stuff will rise to the top. And I’m not willing to pay a “tax” of $5 – 7 per book to have someone in New York tell me they’ve decided something is good enough for me to read.
Frankly, the whole “gatekeeping” thing is, to me, condescending crap that we’ve been shoveled by big publishing.
Here’s a link to Barry Eisler’s latest blog post on the issue. http://barryeisler.blogspot.com/
@Lara Amber – I viewed the Stephen Colbert piece on punishing Amazon as 1) drawing attention to the issue and the parties for audiences that might not be aware/interested and 2) more intriguing for someone who isn’t a “big time” author…the person who might be self publishing with Amazon (or elsewhere), or trying to get Hachette or another publisher to sign a deal with them. I don’t think it should be a “too bad, so sad” treatment of risk when someone signs…yes the pub. houses want to make money, and so would authors…but they need to get published to make that money, regardless of the medium.
FWIW, the issue with Amazon is an example of a larger trend I’ll call the Walmart-ization of Amazon. Amazon is starting to become too big/acquisitive/powerful for its own good, and is doing (mostly virtually and likely physically) to sellers, resellers, creators, manufacturers, etc. what Walmart did to sellers, resellers, creators, manufacturers, etc. as it expanded its reach across the world in the brick-n-mortar space. Example: It’s considered “news” when WM considers making smaller stores in locations, instead of big boxes of junk everywhere…which is the complete script-flip of how many years ago when we were told how awesome the big-box format is. But in now way are they in danger of going out of business because of a backlash against sprawl.
Yes, Amazon is great to find things you’d like shipped to you, physically or electronically…so is, or was, that store around the corner. Same with WM or any large conglomerate retailer. The business relationships have changed for the worse IMO because it’s far too easy to stomp out that tiny person making widget X, music Y, thing Z.
Sure, an author/creator can go to any number of the multitude locations online to sell things…but it’s very difficult, without an entity that has broad reach, deep-ish pockets, and iterative pull to get noticed, sold, compensated, and repeat the process, so to be fiscally secure & creative in the long term. Case in point, how you found out about and read this author.
If it’s that much harder for lone voices to create, and be sustained by sharing that creation, and continue again you’ll wind up with a pasteurized & homogenous pablum of entertainment that’s been properly approved, sanctioned, packaged and delivered to you via drone…because you can’t go anywhere else to get it and you had to get it overnight, plus the mp3 download.
“for God’s sake, don’t confuse being friends with people at those businesses with being friends with the business.”
I do so wish SCOTUS had made a similar distinction. (Sorry, it’s been a rough week.)
This isn’t the thread for yet another dreary and pointless discussion of pricing.
You said “Sure, an author/creator can go to any number of the multitude locations online to sell things…but it’s very difficult, without an entity that has broad reach, deep-ish pockets, and iterative pull to get noticed, sold, compensated, and repeat the process, so to be fiscally secure & creative in the long term. Case in point, how you found out about and read this author.”
Was that also directed towards me? Because I have a hard time lining that up with what I said. I didn’t find Scalzi through a publisher or major purchasing house. It wasn’t because of a bestsellers list in some magazine or newspaper. I found him through a book group at a (then) independent website. It wasn’t even through a newsletter blurb or ad on that website, but because other readers discussed it. A website where I also discovered several self published authors also through being selected as groups reads by the same book group.
How have I found bad writers? Reading anything that is being touted as the “next blockbuster” of “book of 20XX” and making the rounds of all the talk shows.
Concerning “lone voices to create”. My dad is published. His first book was completely the traditional route. He could never find his book in bookstores, so how was he supposed to get people to buy it? He got the rights back and went e-book. Now there is no issue of “is it on the shelf to draw the eye” or “oops no copies in print”. Someone could mention the book to a friend, that friend can purchase immediately. Downloading sample chapters make me more likely to give a new author a shot because I’m not out cash if 10 pages in I realize it’s a complete mess. I’ve also found authors because of “first book in series free/$0.99” short specials run by Amazon for ebook editions. Pretty smart move.
Speaking as a reader and a consumer, I’m inclined to root against the companies that clearly don’t give a darn about me. Or, y’know, the laws of the land…
I don’t know that I’d necessarily root for Amazon, unless it’s a binary choice between supporting the one side or the other. But I’ve harbored a grudge against the major publishers ever since the late ’90s when they couldn’t be bothered to adjust their e-book prices on Fictionwise and Peanut Press downward when the book in question passed from hardcover to paperback. (The Pendergrasts explained that they had to finagle the price changes out of the publishers themselves, and it was always like pulling teeth.)
There were still a substantial number of hardcover-priced paperback e-books on Fictionwise even as late as the imposition of agency pricing in 2010. The publishers just didn’t care about e-books or the people who bought them, and I passed up buying any number of e-books I otherwise would have bought because they were mispriced. (Folks think agency pricing was bad? Try being asked to pay $25 for the e-book of an $8 paperback.)
The publishers don’t care about me? Well, fine. I don’t care about them right back. I guess that leaves me in Amazon’s corner, if anyone’s. At least Amazon made the publishers finally care about keeping their e-book prices in some sort of parity with the paper ones.
I do think it is unethical of Amazon to use individual authors as collateral damage in its dealings with the publishers; I’m not surprised, because I don’t expect companies to act ethically, but that is not the same thing as believing that it’s right…
Something interesting about the whole Amazon debacle is that while Amazon has been as jerky as possible to Hachette and their authors, I don’t think Audible has had any restrictions on what you can buy re: Hachette books. That made me feel a little better about shopping at Audible (though I wish they’d go DRM free finally).
“I think what Amazon’s doing to US Hachette authors at the moment well and truly sucks.”
I definitely fall toward the ‘Amazon is evil’ camp and do as little business with them and their tentacle operations as possible. That said, Amazon isn’t doing anything to US Hachette authors. That is business world collateral damage, nothing more.
Having never seen a publishing contract that I would sign, I am so happy to be a ghostwriter / freelancer.
For fiction, I self-publish limited edition small runs. I will never be a name, but I make a living.
John – have you never been tempted to self-publish in parallel? Or is that verboten by contract? If I had the choice of buying an ebook from you or from Amazon, even at the same price, I’d totally buy it from your e-shop.
First of all, I want to chime in that I agree with your blog and appreciate you bringing some nuance to a debate that’s suffered from its absence.
Now on to my point: The reason this debate is being treated as a football game is, I think, because it’s not *just* about Hachette. Emotionally, it’s about more than that. It’s about generational/economic/technological change, and the fear that accompanies it.
The traditional publishing world carries around a lot of anxiety, and there’s a circling of wagons happening. This leads some folks to not behave logically, but behave *sociologically* (in other words, responding to the perceived interests of their subculture/team, rather than taking a more analytical view of things).
The self-pub subculture (with its “authorpreneurs” — for good and for bad) is at odds with the trad publishing subculture (with its hierarchies — for good and for bad). That’s a simplification, as there are plenty of folks who have a hand in both pies. But those aren’t the folks going berserk about this.
Just my two cents. Your mileage may vary.
If you “…think what Amazon’s doing to US Hachette authors at the moment well and truly sucks” then I’m curious, do you also think what Hachette and the other NY publishers (along with B&N and the rest of the traditional publishing monopoly) are doing to the authors published by Amazon’s imprints sucks, too?
B&N has long refused to sell Amazon Imprint books on their shelves. Originally, they set guidelines for Amazon to meet before they allowed their books on their shelves, but when Amazon went out and met those requirements, B&N still refused to stock those titles. Meanwhile, the Big NY publishers have refused to allow Amazon to use their distribution network to sell their books, which hurts those innocent authors. Why not mention this fact?
Hachette has shown no interest in helping authors, or that they care one way or the other, but that’s not surprising, is it?
James, showing that he’s completely missed the point of the entry in his mad rush to erect his soapbox.
Well, that’s the trouble with soap; the damn stuff is so slippery that it’s a triumph to actually erect a soapbox at all.
Which probably explains why people completely forget that they are also expected to have read the post they are replying to…
Didn’t Amazon and Macmillan put together a fund in 2010 that distributed money to Macmillan authors whose sales were impacted by the negotiations? Were you part of that?
Didn’t Amazon offer to do the same thing with Hachette this time as well and Hachette said no?
I don’t think this particular fight is white hat vs black hat, any more than Simon and Shuster vs Barnes and Noble was white hat vs. black hat, each company is trying to do what it thinks is best for it.
As a reader, I’m going to go where I can get the best deal, and when 5 of your Barnes and Nobel ‘Nook Books’ are more expensive than the paperbacks, I’m going to get them from Amazon. Or maybe Kobo.
I have no idea about that fund or if I was part of it, so, uh: Maybe? I don’t remember thinking 2010 was a noticably off year, in terms of royalties, but I also didn’t have any major fiction releases that year, either.
John, thanks for the reply. I don’t know all the details of that Macmillan/Amazon fund, maybe having something published that year was a requirement. Makes sense that it would be…anyhow appreciate the reply and the insight, looking forward to August 26th
Reading your article put me in mind of past claims that the 08 crash was the fault of the companies but not of any specific individuals at the companies—that somehow, responsibility for corporate bad behavior can be so diffused that there’s nobody to blame for it. If that’s true, don’t we risk losing the ability to steer corporations to act to increase the general welfare?
I don’t comment much, but I just wanted to say I’m grateful for this post. It’s distressing to see so many people emotionally tied up in what are ordinary business disputes—especially when people get mad at *each other* on behalf of corporations that wouldn’t give any of them a second thought. I hope everyone can take it all a bit less personally.
I’m a bit confused on point 2.
Amazon has removed/not put up pre-order buttons for books not yet available. In my mind that’s not really refusing to sell a book. As soon as the book is released for sale the buy buttons show up.
Amazon is placing small restocking orders for paper books. Delivery will take longer but the books are still for sale.
Amazon also did a press release suggesting if people needed books sooner they should shop at competitors stores.
So I don’t see how you get “books not for sale”. Pre-order buttons are only available to a few privileged publishers/authors. Whether or not its moral/ethical/fair to remove them during long ongoing negotiations may depend on where you fall. To small presses and most indies this seems fair – see how the rest if us live. To trad publishing that still works on a short-term sales model to decide if a book is successful this is a big deal. Unfortunately the authors suffer under this model if negotiations lead to this action being used.
Amazon did offer to work with Hatchette to create an author fund 50/50 funded to be doled out when negotiations are over. Hatchette declined to discuss/consider until negotiations are complete with the wording vague as to their participation. Here is the Amazon announcement explaining stocking & the fund http://www.amazon.com/forum/kindle?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdThread=Tx1UO5T446WM5YY
@Scalzi: Here’s the letter with the details about the Macmillan royalty compensation. Should at least tell you which royalty statement to look at.to see if there’s something about that fund there.
You said that “what Amazon is doing to Hachette authors truly sucks” – but isn’t what Amazon is doing what you said a few paragraphs later? Publishing is a business.
Amazon is in negotiations with Hachette. They (in my opinion anyway) don’t go after the Hachette authors and they are not doing what they are doing “to” Hachette authors.
They have a disagreement over their contract, just as you had a disagreement with Tor that eventually got resolved.
I don’t think this dispute is any different, except maybe that your dispute with Tor wasn’t fought over blog posts and op-eds and with open letters by big authors decrying Amazons practices.
“isn’t what Amazon is doing what you said a few paragraphs later? Publishing is a business.”
Accepting that this is a business does not mean I have to be wholly without personal opinion on the bargaining tactics.
It is difficult to see how refusing to stock Hatchette’s authors books does not constitute Amazon doing something to Hatchette’s authors.
Quite clearly they are targeting the authors which is why the authors are writing open letters complaining about it.
You may believe that those authors should keep quiet, but that is an entirely different matter, and I suspect that authors, in general, have a very good idea what happens to their sales when a major retailer decides not to sell their books. This is one of Amazon’s longstanding tactics in negotiations with publishers; they’ve done it before and no doubt they will do it again. That still doesn’t make it right…
Personally, I’d like to know what Amazon could do to put pressure on Hachette without also harming the authors. It seems to me that, since Hachette pays the authors, any bargaining tactic Amazon uses that hurt Hachette would necessarily also hurt the authors. That doesn’t mean Amazon is obligated just to roll over and accept contract terms it finds unreasonable. (Nor, of course, is Hachette, which is why the impasse exists.)
I agree with all your premises, John–neither of these businesses really gives a rat’s ass about me as a consumer or an author–but in this case I’m still rooting for Hachette, an a “the enemy of my enemy is my friend” sort of way. If I’m Buffy, Hachette is Spike, and Amazon is Angelus, I’m going to side with the former because the latter threatens us both.
This post should be required reading for anyone who engages in contractual relationships with ANY type of business entity. Outstanding explanation of the differences and limits between personal relationships with the people who work for a business and the business itself.
Well said, sir.
A little more balanced than your past writings on Amazon, etc vs the legacy publishers. Perhaps you are slowly coming around.
Still trying to convince folks that Hachette is some helpless authors collective rather than a multibillion $ media group involved in negotiations with a primary distribution partner…..
I’m not sure where you get the idea that I think Hachette is anything other than as I described it in the entry, i.e., a corporation with its own agenda.
@Robotech_Master – Does the delicate dance of offer/counter-offer have to involve actively harming someones’s business as part of ongoing negotiations? I mean, I’ve haggled in honest-to-Allah souks* and the worst I can remember is emotional blackmail of the ‘my children will starve’ variety. It seems a bit odd to me that people can go from ‘it’s not show-friends, it’s show business’ straight to ‘whatever is, is right’ in one bound. (Not that I’m saying that’s what you are doing, it’s just that your comment brings out this observation from me.)
I’d also disagree with Mr. Scalzi’s characterisation of football games. I get what he means, but while some think of football games as the ne plus ultra of ‘My team, right or wrong!’, others find it perfectly possible to watch a game looking for the good in both teams, or for both teams to lose, or to want one particular team to lose not through any particular prejudice but because that team winning would be bad for the game as a whole.
*Pro-tip – a $20 bottle of duty-free whisky is worth more than $20 in barter.
Actually, on reflection I find I’d also disagree a tiny bit with Mr. Scalzi on the sentence ‘The “side” you should be on is your own (and, if you choose, that of other authors).’
Again, while I think I know what he means, there is also the notion that sometimes you should show solidarity with others who are being affected now because while something may not affect you in the short term, in the long term hanging together may stop you being hung separately. So the phrasing of being on your own side could, could, be taken as being a bit ‘I’m all right Jack’ when it’s not meant to be.
I GOT MINE, CS CLARK. ALL Y’ALL CAN GO SUCK IT.
More seriously, however, the point would be that no one will mind your own business better than you, and it behooves you to do so. And I would agree that writers should think of the long term as well as what will be advantageous to them in the short term.
I’ve never really thought of ‘Mind your own business!’ as a positive, life-affirming message until now, but I suppose it is really.
@scalzi I get it from “I think what it’s doing to Hachette authors sucks”
When multinational distribution partners have a contract dispute it is not about one side “doing” something to the other. It is two entities engaged in profit seeking. If you have a financial interest in it that is your choice in working with a partner who does not have a stable biz model.
“I get it from ‘I think what it’s doing to Hachette authors sucks'”
Which is about Hachette authors, not Hachette. I understand you wish to lump them both together, but the reality is not that simple or clean. Which is, of course, something noted in the entry.
Your analysis of whose business model is more stable doesn’t especially impress me, incidentally, given that a large part of the reason Amazon is attempting to put the screws to Hachette is that its shareholders have decided they need to see actual profits out of Amazon. Amazon has as much risk of destabilization here as Hachette. Which is one of the reasons this business negotiation has gone on as long as it has.
“Which is about Hachette authors, not Hachette”
Walmart and Coke have a dispute and soda inventory plunges for coke while every store has mountains of Pepsi on supersale. Is Walmart “doing” it to screw over the good folks in Mexico stamping out coke cans? Or are we authors special snowflakes whom deserve extra consideration?
You have a good point. Writers are in business for themselves, and should act accordingly. Find the way you can help each other make money. Try to keep emotions out of it. Too many try to feel part of something bigger.
As for who has the best biz model, internet focused distributors vs legacy media conglomerates. Well I concede the game is still in play. But most metrics would tend to be pointing towards the amazons of the world, gross profits being a possible exception, maybe… for now.
Re your point 2. Do you have an example of a Hachette author Amazon is refusing to stock?
I’m not aware of saying Amazon is refusing to stock Hachette authors. Taking 2 to 4 weeks to ship books that are immediately available elsewhere is not an innocent tactic, however. The goal is to force Hachette to accede to Amazon’s terms by hurting its sales by making it difficult to obtain the books. Which is one reason why I encourage people to look at other retailers (which is a thing I rather strongly suspect Amazon hopes they won’t do).
Interesting to learn that you appear to consider authors functionally in the same category as factory workers stamping cans, and their individual works as commercially and functionally indistinguishable for any other work done by any other writer. One beverage can is as good as another, apparently.
You know, I often find that when I have time to read and can’t get the book I want, I can turn to another one that I enjoy just as much. From my point of view, one book often is just as good as another.
The relevant phrase here being “one that I enjoy just as much,” however. If you like mysteries and and not romance (or vice versa), then handing you a romance when there is no mystery books on offer is not an equivalent reading experience. Or more narrowly, if you hate cyberpunk but love space opera, Neuromancer will not be an acceptable alternative for Honor Harrington. And so on.
Along the same lines, there are publishers that have a house style, as a way to suggest that if you like one of their books, you’ll likely be inclined to like another; in Science Fiction, where I do my work, Baen is an example of this, as much of their stock in trade is in action-oriented, male-skewed science fiction and fantasy. Even then, however, you might find that one author or work is not always sufficiently enough like another that an even swap will work for you.
When are there ever “no mystery books on offer”? Amazon stocks millions of books of all genres. There’s always more mysteries, or romances, or cyberpunk, or space opera, or whatever. Hell, I have dozens or hundreds of e-books that I bought as bargains or in Baen bundles that I haven’t even read yet.
And if I just have to read a specific book that’s not there, there are plenty of ways I can get it, including the library. (Indeed, at the prices Hachette wants to charge, I’d be more likely to go that route.)
@Lara Amber: So criticizing Amazon is wrong, because you feel they aren’t doing anything illegal or unethical*, they’re just using their influence in negotiations. And so you’re…criticizing Colbert, for using *his* influence, even though he’s not doing anything illegal or unethical?
*Note that I kinda disagree with you on the ethicality of what Amazon’s doing, but I think that’s irrelevant to my point. Or do you feel that what Amazon is doing is ethical, but what Colbert is doing is unethical? In that case, I guess you’re being internally consistent, but I really disagree with your judgment.
@Scalzi, Maybe getting too personal here, but was this something you’ve always known, or something you had to learn through experience? Speaking as a non-entrepreneur employee, I do have a personal relationship with my boss and kinda like it that way. I don’t think I’d like having to negotiate a purely business relationship, and I think that’d be a hard transition for me. Was it a transition at all for you? Something that came naturally?
“When are there ever ‘no mystery books on offer’? Amazon stocks millions of books of all genres.”
However, even if you pattern your life such that you never have to be outside of the sweet, sweet embrace of Amazon, this is neither here nor there to the point that if you like mysteries and not romance, a romance book is not equivalent to a mystery book for you. Which is the point; all books are not interchangable cogs (or cans). What you’re doing is noting the point at which for you the difference between one book and other is not large enough for you to choose not to make the substitution.
Which, incidentally, I think is fine. Read widely, man.
The issue isn’t that publishing is a business. The issue is that Amazon doesn’t give a crap about the book publishing industry. It’s not a money maker for them. They only started out in books because books had a returns system and so was cheaper than other products. Amazon is a combo growth/retail/tech company. For years, they coasted on their growth potential to get investment capital, losing massive sums of money and showing no profits. But growth potential online operations are losing luster for investors because they keep not producing profits and the stocks can collapse.
Amazon has enough cash from retail and tech to buy up companies, crush their enemies and lose money in order to do so. But they need more cash to placate stockholders and run operations. So they are using their market leverage to scrape and gut suppliers, demanding more and more fees and greater share of the proceeds to the point that publishers and authors can’t make profits once Amazon takes their cut — they are squeezing. They’ve been doing it with the small publishers for years, so many of them have had to stop using Amazon. In the last seven years, with the leverage of the e-book market (which is now leveling off,) they’ve been doing it with the big publishers. But they’ve been reaching the point where the publishers can’t go that low, especially since other vendors may try it too. So Hatchette is the latest digging in their heels, because if they give Amazon a larger cut, Amazon will demand more later and they lose money. And unlike Amazon, the publishers’ profit margins are so thin, they can’t do that much, and the authors certainly can’t. Amazon is not as much a percentage of the big global publishers’ sales as they are with small presses, so Amazon doesn’t have quite as much leverage.
On self-publishers, Amazon also squeezes, taking thirty percent or more to simply provide one platform vendor. A small percentage of authors make money from this, but most do not. (But this is a normal sales pyramid for publishing.) And Amazon is already demanding a bigger cut in audio from self-published authors — the start of a shift in terms. The self-pubs were a useful PR device and customer loyalty strategy for launching the Kindle. But seven years in, they aren’t that important to Amazon anymore, except that self-pub authors will buy their goods from Amazon. And self-published authors are now beginning to spread out more as the e-book market, audio and podcast market, and POD market all develop, which means Amazon eventually loses their AOL-like monopoly, just like AOL did, and just like Amazon lost near monopoly market share with the publishers’ e-books. This is a good thing for authors, since numerous authors have been shut out of the market because of monopoly control by big booksellers or wholesalers (Amazon is both.)
So now is a prime time to force gut scrape deals with publishers while they are expanding successfully on other fronts and before they lose more market share in book sales. It’s really just a sop to shareholders so they’ll shut up while Amazon works on being the next Apple. The media used to take Amazon’s side, but since Amazon’s stock is a bit less attractive, along with the other growth tech stocks, not surprising the media is now frequently shifting from painting Amazon as the little engine who could to the big bad wolf. Neither picture was ever accurate, but if Amazon can actually be a player in the phone market and increase its web services, it’s going to get interesting.
Amazon is a predatory company, however, and globally expanding. But it may be reaching the saturation point by which book publishers can afford to do business with them. Hatchette Livre is a global media conglomerate partnered with China, Europe — and Google. They aren’t dependent on Amazon.
Authors are in the state they are in because the publishers got too comfortable relying on Amazon to fill in for the collapsed wholesale market of the 1990’s, because the large North American market was dominated by booksellers who were mismanaged in the oughts, and because self-published authors used Amazon because it was easy rather than trying to branch out their business. But the market is changing, and Amazon cannot, like the telecomm companies who help run the planet, control government legislations enough to maintain dominance. (Especially since Amazon doesn’t make profits.) So they are capitalizing on what they can and going global, but that ends up rather like the pirates burning up the fleet rather than just raiding it for goods covered by insurance.
The disagreement was:
Tor: jon, pls rite guder
Tor: jhn, pls
Tor: need rite gud jon
Tor: jn pls we need u 2 b btr so rite gud pls
Tor: we no pay 4 no gud
I learned it by getting laid off from AOL in 1998. What happened there was my group dissolved and no one wanted to put me on their department payroll, because as the company’s in-house writer/editor, I was a company-wide resource, and no one wanted to spend money meant only for their department on someone who everyone was going to hand work to. This taught me that regardless of how well liked or useful I was (and I was in both cases), the contingencies of business would override those factors. It was useful to learn at that time, because I went freelance immediately thereafter.
As for authors vs laborers;
Different jobs have different financial value and opportunities. But I certainly do not consider myself superior in any way to anyone who works hard and takes pride in what they do.
It appears to me that Bob Jones is conflating “doing it to them” with “doing it to screw them.” They are not synonymous. The effect happens, regardless of the intent. Amazon may be doing it to screw Hachette; this doesn’t necessarily mean that Amazon is doing it to screw Hachette’s authors. The authors get screwed as collateral damage. So one can think that the effects of Amazon’s actions on Hachette authors suck while neither painting Hachette as “a helpless authors’ collective” (a straw man of Bob’s own invention) nor painting it as an evil entity.
How is the disruption caused by Amazons dispute different than the disruption when Walmart has a dispute with a producer?
Employees, 2nd order suppliers, contractors are always hurt in a dispute between multinationals.
Just because you personalize the amazon dispute does not make it about you. Authors are producers and choose which if any middlemen they work with. If your partners are not reliable or value you sufficiently than get another partner or suck it up.
Amazon is also not discounting. Virtually no one sells books at the cover price. Amazon has Cibola Burn by James SA Corey for $27. Its $17 on Barnes and Noble. The ebook price is the same.
I got mine off of barnes and noble…
Sure is funny how Hachette authors are suddenly all upset with Amazon for not discounting their books when a couple years back their publisher broke the law in order to force Amazon not to discount them…and if they win the negotiation, will likely force Amazon to stop discounting them again. Just no pleasing some people, I guess.
Reality is either Amazon is adding value by being a unique distro channel and thus they deserve to dictate terms to publishers.
Or they do not add value and are replaceable. Which means they can not hurt authors. Raising prices and limiting stock on hand does not reduce sales just pushes those sales to other outlets.
Inasmuch as Amazon’s dispute in 2010 was with Macmillan, not Hachette, your version of history here is slightly suspect. It was Macmillan who initially forced Amazon to accept agency pricing, not Hachette.
Also, I will note, agency pricing did not stop Amazon from substanially discounting my books at any point.
“Reality is either Amazon is adding value by being a unique distro channel and thus they deserve to dictate terms to publishers.”
“Deserve” has nothing to do with business. Amazon will get what Amazon is able to negotiate, whether it is a “unique distro channel” or not. What you believe Amazon “deserves” is neither here nor there to that.
I’m off to do holiday things with the family and am unlikely to participate further in this thread today. However, I’ll be checking in to see that you’re all playing nicely with each other. If you’re not, a star spangled Mallet may be applied to you. So play nice, please.
According to a federal court’s findings of fact, agency pricing was imposed through a joint effort by five out of the six publishers—including Hachette—working in concert with Apple. Were you really not aware of that?
Terminology aside if Amazon brings value publishers and their partners will have to pay for it eventually. If so Hachette is one who “sucks” causing their own pain by fighting the inevitable.
If amazon does not add value than authors are not being hurt and you’ll are getting worked up about nothing.
Indeed, if Amazon got what they deserve…well, let’s just say there’d be a lot of fleeing and screaming.
@Xopher – Indeed. Imagine the horrors if all of us got what we deserved, instead of the many graces with which we are favored.
Thanks for posting that. I read it at the time and re-read a few pages now as a refresher. It’s important to add context to what JS is saying about his publisher being great and giving him this and giving him that.
This is what the big six do:
“Reidy, Murray, and Young exchanged at least five telephone calls on December 10 and 11 alone. These calls among the Publisher Defendants’ CEOs would continue and intensify at critical moments during the course of the Publishers’ ensuing negotiations”
“They speculated about how they might turn Apple’s entry into the e-book business to their advantage in their battle with Amazon.”
The publishers try to act as a cartel over the industry. They are not good organizations. As much as we like JS. These are not rival organizations, working hard to deliver a great product.
These are anti-competitive organizations, they seek:
– to collude to keep payments to authors down
– to extract maximum profits from consumers (often illegally)
– to control and act as gatekeepers of the industry
They entered into an illegal operation to raise e-book prices for no reason other than they could.
Time for them to be broken up and sold off, or forced out business by staggering anti-trust fines.
Just think about that. The CEO’s of 6 rival companies that should be viciously, endless, incredibly competitive called each other to gossip and strategize five times in two days.
“Were you really not aware of that?”
Leaving aside the fact that none of the publishers who settled admitted guilt, nor did the courts find for either side in the dispute, your new point is immaterial to your original assertion regarding Hachette authors. Whether the six publishers colluded or not, it was Macmillan who initially moved to force Amazon to accept agency pricing, not Hachette.
Please keep track of your own arguments. I understand the desire to shift to a new argument when your first argument is undercut, but I’m not obliged to shift the argument just because you want to obfuscate a previous bad argument.
“It’s important to add context to what JS is saying about his publisher being great and giving him this and giving him that.”
You mean, like my publisher, Amazon, who I praised in the entry?
It’s becoming increasingly clear that some of you are not paying even the slightest bit of attention to the entry; you’re just coming around to pull out cue cards and get your hate on for whatever aspect of the publishing industry you don’t particularly like. You can do that somewhere else, thanks.
It’s becoming increasingly clear that some of you are not paying even the slightest bit of attention to the entry; you’re just coming around to pull out cue cards and get your hate on for whatever aspect of the publishing industry you don’t particularly like. You can do that somewhere else, thanks.
I think a lot of us are hoping you would throat punch Macmillian/Tor for their role in price fixing and collusion. Yeah, they were not found guilty. They paid fines and promised not to do it again. It’s small hill to die on I suppose – yes not guilty. But the Court did find that Apple engaged in an illegal collusion to fix prices, and that the other parties were the big-six publishers.
I think most people are sensitive that you do have to eat and it’s a business. But it just seems like you ate fine in the 3 year Tor drought. Unlike some of the other punches and beatings you have handed out (Random House comes to mind), the ones getting a bad deal in this case were really bystanders who are your customers and just love to read and immerse ourselves in your work. And we suffered and MacMillian and the other big six publishers were responsible (plus Apple, and a lot of us fans do not do business Apple because of this case).
My argument was never that Hachette was the first to impose it, just that they had a part in imposing it. You’re the one changing the argument.
I simply said Hachette broke the law (which they did—in finding Apple guilty of illegal collusion, the court made a factual determination that the other companies did, in fact, also break the law. They weren’t held legally accountable for breaking the law, thanks to the terms of their settlement, but that doesn’t change that the court’s findings of fact said they broke it—Apple didn’t just make mime-like colluding motions with imaginary partners) in order to force price raises on Amazon (which was the point of the entire exercise—to get away from the hated $9.99 price point and into something higher).
dh–I don’t know why you thought most people here were waiting for Mr. Scalzi to “throat-punch McMillan/Tor”. It would have been interesting to see just what the behind the scenes maneuvering were that started the whole thing–who triggered it, for example. Amazon, Maybe?
And seriously, this caused you to “suffer”? I’m old-fashioned–if something’s too expensive; I just don’t spend the money for it. We’re talking books-not food.
Nice passive-aggressive approach, though.
“My argument was never that Hachette was the first to impose it, just that they had a part in imposing it.”
Well, no. Your argument — at least as I saw it — was about the Hachette authors, and their supposed hypocrisy given Hachette’s collusion, a thing which, it should be noted, they would not have known about at the time, since it was Macmillan who forced Amazon to accept agency pricing, not Hachette. Again, keep track of your own arguments, please.
That said, I think we’ve chewed enough on this particular bit of gristle, so let’s leave it and move on.
“I think a lot of us are hoping you would throat punch Macmillian/Tor for their role in price fixing and collusion.”
You may have missed this post, where I said if they were colluding, they were stupid to do so, not in the least because it wouldn’t have been necessary.
If you’ll read the rest of that particular entry, you’ll also note some rather substantial similarities to this entry, in which I note the various business associations I have, the notation that the businesses involved aren’t always aligned with my interests, that cheering on a “side” is naive, and that writers need to be looking out for their own interests. I am nothing if not consistent.
I’m going to agree with Harold Osler that I’m not entirely convinced you (or consumers generally) suffered because Amazon and publishers had a fight over whether the price of an eBook should initially be $9.99 or $11.99. One, as Harold notes, if you didn’t want to pay $11.99 for an eBook, you simply wouldn’t have had to buy it; you would have waited until the price dropped. People who buy print books do this all the time; it’s called “waiting for the paperback.” And in the meantime, you could borrow the book from the library if you wanted to read it sooner.
Two, as I noted back in 2010, I have a sneaking suspicion that if Amazon had prevailed and capped eBook sales at $9.99, publishers would have responded by standardizing *all* eBook prices at $9.99, i.e., the eBook price would not have dropped in concert with the paperback price. For the obvious reason that if the publishers were going to lose revenue one way, they were going to make it back another. I’m not convinced that this strategy, if they employed it, would have been better for the consumer than what actually happened. I think it’s better for the consumers (and ultimately, authors as well) to have the price for books to be more flexible, rather than standardized.
(And with that noted, we could speculate as to whether any publisher attempt to standardize eBook sales at $9.99 would have been successful, especially as Amazon was encouraging self-publishing both as revenue stream for it and as leverage with publishers to drive down individual unit sales of eBooks. However, let’s not go into that now, here.)
The point in all of this, of course, is that Amazon, publishers, and indeed pretty much any profit-centered business is going to do what it can to maximize its own interests and as a writer (and for that matter, as consumers), those interests will coincide only occassionally. If you think Amazon was trying to cap eBook prices at $9.99 because they were thinking of consumers primarily, rather to lock up a monopoly position on the eBook market, well, I wish you joy in that world view. Certainly Amazon was happy to use “consumer first” rhetoric; so did the publishers. So do they all even now. Remember, however, that any corporation’s fidiuciary duty is to its shareholders and to its own interests. Again: Sometimes they will align with yours. Other times, they will not.
If you think Amazon was trying to cap eBook prices at $9.99 because they were thinking of consumers primarily, rather to lock up a monopoly position on the eBook market, well, I wish you joy in that world view
I think Amazon is an interesting case, but it’s irrelevant to the fact that your publisher, the one that is indirectly responsible for your career (apparently.. I think it’s very gracious for you to say that of them), colluded to fix prices. You seem to be saying that the end result would have been better for consumers because e-book prices are flexible, and that is is better for consumers in the long-run. Unfortunately, no one can say this for sure. Even if it was true it’s no excuse for their behavior.
It is also really just bizarre to cling to this “if they colluded”. The conspiracy is documented in the Apple case finding of fact. It is discussed as a matter of fact, because it is. The CEO’s of the six publishers talked dozens of times and created a strategy together on how to use Apple to fix prices higher than the market was then presently set at. The only question was if it was illegal. That was not settled, the publishers admitted no wrong doing. The Court’s finding in the Apple case made it clear that the publisher and Apple had basically no case. It was not a close case, it was not a gray area. All of Apple’s claims were rejected, easily.
Honestly it seems to be a very inconsistent standard that you and (and Harold) have set. Which appears to be that the price fixing wasn’t all that bad (i.e. not harmed) because there were other alternatives to get the content – paperback or library. This standard is rarely ever applied to other crimes. It’s only ever white collar crime where there are all the sudden of shades of gray. You never see people coming out of the woodwork claiming such gradations when it’s a person who is assaulted or some other violent crime. The harm done to consumers by collusion is serious, and the after-the-game quarterbacking about what might have happened will never be known, because the market didn’t develop appropriately in it’s natural alignment with demand. Your speculation may be right, but we will never know. Maybe if Apple and the publishers didn’t conspire the publishers would have formed a joint venture, ala Hulu, and offered their own e-book platform that would have been more author or consumer friendly. Or maybe Apple would have had minimal success with the iPad due to lack of content and another tablet would be dominant. This is the harm of collusion, it breaks the marketplace. And that is exactly why it is illegal and has been for close to a hundred years.
I guess fundamentally I believe there are sides. Maybe it’s because I am left-wing socialist, but there is a concept of solidarity, and the solidarity that I most express with is that of the law and that of the consumer. You have consistently noted how things are messy – many relationships, many partners and many companies that have worked to align interests with you. But for consumers, it’s much more straightforward. The publishers have a track record of not acting on the behalf of consumers as well as not acting on the behalf of authors. You make a strong case for “hey, it’s a business, and every business has a responsibility to extract maximum profit from consumers” and I really get that and as a shareholder, agree. But it is not etched in stone that the way you do that is through charging more per unit. You’ve spilled a lot of ink protecting authors, but show, as you say, not a lot of sympathy for your customers.
Anyways, thanks for the open discussion. It is too rare in the author world.
And seriously, this caused you to “suffer”? I’m old-fashioned–if something’s too expensive; I just don’t spend the money for it. We’re talking books-not food.
I just wanted to really address this, because it’s an abhorrent view of the law and what the law intends to do. The harm that consumers suffered is that we will not ever know or gain the benefits of the e-book marketplace and all that surrounds as it should have developed. The birth of the industry is a one-time event, like the birth of a star. It’s wrong to steal from consumers, just like it’s wrong to steal from the collection plate. But the real long-term harm is that we’ll never know how the market would have developed absent the collusion of the big six publishers.
@dh This standard is rarely ever applied to other crimes. It’s only ever white collar crime where there are all the sudden of shades of gray. You never see people coming out of the woodwork claiming such gradations when it’s a person who is assaulted or some other violent crime.
I want to live in your world, where people have *not* been getting into screaming fights on the internet over this sort of thing since, oh, thirty seconds after the internet was invented.
On second thought, actually, no – for all its frustrations and outright errors, I muchly prefer the world where people (including educated intelligent people) can have broadly differing values and opinions, such that these values are reflected in their opinions of what is (or should be) right, just, moral, and/or legal. Feature, not a bug.
“Even if it was true it’s no excuse for their behavior.”
To be clear, I don’t think corporations should break laws, and if they do, they should be punished for doing so. I also think that corporations choose to factor in a substantial amount of challenging rules and regulations ( or breaking them entirely) into their corporate practices, because our government practices allow them to. If the government is willing to allow corporations to settle without admitting guilt, or if being found guilty offers little more than a fine that is negligible the overall scheme of the corporation’s money flow, as a matter of corporate practice, breaking the law is a legitimate (in a strategic, not legal, sense) corporate tactic. This is not me saying it should be done. It’s not how I would run a corporation. This is me saying, corporations do what they do in their own interests. I would personally be happy to strengthen penalties for corporations that break the law (presuming, of course, it’s proven in a court of law).
Also, and this is the part that’s tripping you up, I think, independent of the tactics used in the scuffle, I think consumers benefitted better from having a range of prices available to them then a $9.99 cap, for the reasons explained. I don’t personally go for the ends justifing the means, but I am also dispassionate enough about this stuff — in part because I’m aware of the environment in which all this goes on — to be able to look at the end result, independent of the means, and see what it means for me and to others.
“But for consumers, it’s much more straightforward.”
I would disagree with this. I think it’s easy to craft rhetoric to make things appear straightforward, but I don’t think that generally speaking the implications for consumers in any set of corporate wrangling is always transparent and obvious. This is why, incidentally, the corporations spend so much time and effort trying to convince consumers otherwise.
Re: Sympathy for the consumer — To be blunt, when I am considering my own interaction with corporations, be they Amazon or my (other) publishers or whomever, the consumer’s interest is only one part of the equation, and not always one of the primary concerns. From a practical point of view, I want consumers to be able to get my work at a price that makes them happy. I also want to make as much money as the market will provide me. Where the balance is with that varies considerably based on several factors. Now, personally, I do a lot of things — from offering work for free to reader, to serializing, to trying out flexible pricing in things like Humble Bundles — to see what the market looks like and what works for my career. I also try to share that information when I can so other writers can benefit from my experience in their own interactions with readers.
But certainly I tend to think with my own commercial concerns first, which often but not always coincide with those of my audience, when I am discussing and/or negotiating with the corporations with whom I work to bring my work to the public (or when I am writing about such things here). I’m not entirely sure this should be surprising.
Sorry–i still don’t equate the possible banding together of e-book publishers to fight a predatory entity bent on control (which is what it was all about) with braking up Standard Oil. Besides, from just a quick look at the wording, why didn’t they go after Amazon for trying to control e-books? Just a rhetorical question-not that I really care.
Course, I don’t have an e-reader so I don’t have a dog in this fight.
I’ve always thought that the publishers would have been better off by setting up some system with booksellers to sell e-books through them–lots of people would prefer to support bookstores that way.
after Amazon for trying to control e-books? Just a rhetorical question-not that I really care.
Because it’s entirely legal to have a monopoly, it’s entirely legal to try to get a monopoly. It is not legal to collude with suppliers to price fix, abuse a monopoly, or try to extend one monopoly into another. Amazon does not have a monopoly in any market.
i still don’t equate the possible banding together of e-book publishers to fight a predatory entity bent on control
1. Not “possible”. Why is it that a few people can’t admit it. It’s a fact. The Big Six conspired to fix prices.
2. “Banding together” means “collusion” in legal terms. These six companies are supposed to be at odds with each other. It’s really the biggest smoking gun here. Ask yourself, why didn’t Tor/MacMillian’s competitors come calling to John Scalzi during his three year dispute. It happens in almost every other industry – competition for the best assets. But not publishing. Obviously can’t know in JS’s case, but in other cases, it’s because of a gentlemen’s agreement to stay off each others turf. It’s corruption, all the way down.
3. Amazon is ALLOWED to be bent on control. They are ALLOWED to be predatory. They are ALLOWED to abuse suppliers/vendors/partners whomever they want. All that is legal and often encouraged. As John says, it’s not a game, it’s a business. Amazon has a mission, they are executing whatever they think will deliver on it.
I think JS has done a nice job illuminating his point.
There was an interesting (ymmv) article I read the other day which, among other things, discussed how in the early 80s all the other negative effects that might make the US government bring out the antimonopoly, anti-trust laws, such as a merger leaving one company with almost 5% of a national market, were thrown away in favour of a general ‘consumer welfare test’. Which meant that you could have just one or two companies controlling a market as long as you could prove, for a given level of proof, that having more companies actually competing might mean some things might cost a little more. Because real competition is often inefficient. Why, sometimes two different novels aren’t even remotely fungible…
In the spirit of the original post, it should be noted that properly applied antimonopoly laws that might stop companies having control of almost 5% of a national market would hit both Amazon and the Big Si.. Big Five.
“In the spirit of the original post, it should be noted that properly applied antimonopoly laws that might stop companies having control of almost 5% of a national market would hit both Amazon and the Big Si.. Big Five.”
You are 100% right. The interview is with Barry Lyn, and Tom Franks, both authors who have tackled anti-trust and anti-monopoly in the past. A great conversation.
Think about 5% and monopoly. Wal-Mart has revenue of just of $500B. Which is just about 3% of the ENTIRE US ECONOMY. Meaning, by classic American standards, Wal-Mart is a monopoly of everything. Scary! Makes the Big Six look like bit-players.
It’s not at all clear that the Big Six actually did collude with Apple to “fix prices” as opposed to simply switch to an agency pricing system that would allow them to branch out to more vendors for e-books. What is clear is that they all settled with the government to not have to deal with the expenses of an extended trial on that very issue. And Amazon sicked the DOJ on the publishers to preserve their monopoly of the e-book market, which also wasn’t kosher under U.S. laws. Kathleen Sharp’s article for Salon.com shows that the situation was a lot more complicated than the gristle gnawers would like it to be: http://www.salon.com/2014/01/12/amazons_bogus_anti_apple_crusade/
E-book prices on average were lower than $9.99 when Amazon brought their suit, and they grew lower after the agency model went into play and other vendors could get a toehold in the market. Amazon lost part of its monopoly on the e-book market, allowing consumers more choices and greatly expanding the e-book market.
All of this is not unusual in business. The desire to name one corporation the Death Star and another the Rebel Alliance may be innate to humans, but it’s very seldom factual. And the current dispute between Hatchette and Amazon has nothing to do with e-book prices or prices at all and does not involve any colluding issues.
Quite simply, Amazon wants a bigger cut of the sale of all the books of Hatchette it sells, in whatever form. And that bigger cut means less for the publisher and the authors. Hatchette feels that the amount that Amazon is now asking for cuts too far into what they can manage with costs, and that since Amazon keeps demanding a bigger and bigger cut, going along with it now means more demands soon after. (Since that has happened with a lot of other deals of Amazon and publishers, large and small.) So they are negotiating with Amazon. Amazon reneged on agreements and stopped selling Hatchette’s books to blackmail Hatchette into accepting their terms. Hatchette’s leverage is that they have the products Amazon needs to have for their book division. (I don’t really think Amazon cares about their book division — they just are finding ways to scrape up more cash for stockholders. But they also don’t need to show any more losses on their revenue.)
Many Hatchette authors do not appreciate Amazon using them as a football and messing up their launches, which has serious effects on their livelihood and reputations in the marketplace. They feel that Amazon should engage in a straight negotiation with Hatchette over business terms instead of involving the authors. And Amazon’s desire to cut into the money coming to the authors obviously isn’t something that they like. That doesn’t make anyone evil. It does mean that as a business partner, Amazon is becoming increasingly difficult for authors. And Amazon is showing signs of becoming increasingly a difficult business partner for self-published authors, especially as it continues a near monopoly over the self-published e-book market and largely controls prices for that market.
All of that may eventually be worked out in new business terms. But you can’t expect folks in publishing to be happy about Amazon’s business practices in this area, as a lot of their demands are highly unreasonable and not geared towards growing the retail book industry. But what Scalzi’s piece was actually saying is that it’s not a matter of picking sides — including picking a side against Amazon. The business relationships of these business partners are much more complicated and interlocking and are not team against team.
I think you are rewriting history. This is from the Court’s finding after the Apple bench trial:
“The Plaintiffs have shown that the Publisher Defendants conspired with each other to eliminate retail price competition in order to raise e-book prices, and that Apple played a central role in facilitating and executing that conspiracy. Without Apple’s orchestration of this conspiracy, it would not have succeeded as it did in the Spring of 2010.
There is, at the end of the day, very little dispute about many of the most material facts in this case. Before Apple even met with the first Publisher Defendant in mid-December 2009, it knew that the “Big Six” of United States publishing -– the Publisher Defendants and Random House (collectively, the “Publishers”) — wanted to raise e-book prices, in particular above the $9.99 prevailing price charged by Amazon for many e-book versions of New York Times bestselling books (“NYT Bestsellers”) and other newly released hardcover books (“New Releases”). Apple also knew that Publisher Defendants were already acting collectively to place pressure on Amazon to abandon its pricing strategy.”
It’s plain black and white. The Big Six colluded to raise prices of certain books.
“Many Hatchette authors do not appreciate Amazon using them as a football and messing up their launches, which has serious effects on their livelihood and reputations in the marketplace.”
Authors should take it up with Hatchette. Amazon and the authors do not have a relationship.
Great advice but really hard for writers to do. Writers, as a whole, are just too emotional and thus easy prey for publishers. Anybody with any sales experience would laugh at what many writers put up with.
And businesses colluding with each other is nothing new. Actually it seems to be SOP in the US. Tech companies in Silicon Valley were recently busted for secretly agreeing not to poach workers from each other. And for years real estate agents were in cahoots to maintain a 6% commission across the country at all times. LOL. Americans are sheep. And the biggest sheep are writers.
“Amazon and the authors do not have a relationship.”
I have a direct business relationship with both Hachette and Amazon, as noted in the entry. I suspect there are other authors for whom that statement also applies.
Once again, it’s not wise to assume that “sides” apply here; business relationships are entangled and messy.
Likewise, bluntly, the argument that Hachette authors (or any other authors) cannot or should not complain about (or directly to) Amazon about their negotiation tactics is stupid. If Amazon slices out a larger chunk of the profit pie on each book, that is something that will directly affect the authors. They have a vested interest in Amazon’s and Hachette’s actions here and have as much a right to make their case as the corporate titans involved, to either or both companies, and to their readerships and the public at large.
Re: Amazon and the collusion case: At this point I think we’ve well-chewed this matter, and as Kat points out, it’s not actually here nor there with regard to the current dispute between Hachette and Amazon. Let’s cap it here and move on, please.
I have a direct business relationship with both Hachette and Amazon, as noted in the entry. I suspect there are other authors for whom that statement also applies.
This is in regards to Audible/Audiobooks? That is an interesting corollary. You effectively circumvented your paper-publisher for audio, which was probably something you asked for in your contract or negogiated for.
But regardless, the point holds, that you have no relationship with Amazon for your MacMillian/Tor non-Audible published works.
It’s like if you own a Ford and your wife owns a Chevy, complaining to your Chevy dealer about the Ford. Chevy is, as you say, going to be unsympathetic.
“But regardless, the point holds, that you have no relationship with Amazon for your MacMillian/Tor non-Audible published works.”
The tracks you see on the ground are made by you moving the goalposts of your argument, there, dh.
It’s also not true. For (just one) example, in a very practical sense that Audible both wants and needs books of mine whose rights they don’t hold to be successful, for the sake of the rights they do hold, and in regard to its relationship with me. Macmillan has the audio rights for four of the six OMW books; Audible has the rights for the other two — the last two in the series (to date). If Amazon the retailer were to suddenly delist (or otherwise make difficult to purchase) the OMW books they don’t own and make them more difficult to purchase, that will have implications both on Audible’s ability to sell the ones they do own — and also will color any future discussions of audio rights purchases by Audible, an Amazon subsidiary.
Which is to say, due to the entanglement of my business relationships, how Amazon treats the works of mine they do not own will make a difference how my business relationship with Amazon will proceed. So again, in a very practical sense, I have a relationship with Amazon for every book of mine they sell, whether it is from Tor, Subterranean, Gollancz, Penguin, or any other publisher I have worked or will work with. This does not mean I expect Amazon (or any other business partner) will treat me like a special snowflake, nor does it mean I necessarily have to get het up about every twist and turn of negotiation between Amazon and whomever. But it also does not mean that I should just ignore what Amazon (or any other business partner) does to throw spanners into the works of my life.
A flaw in your argument, dh, is that you appear to be thinking of relationships in terms of individual properties, whereas I, and I suspect many writers, tend to think of relationships in terms of our overall careers. Now, you may or may not think it’s fair or correct for me to do so, but ask me if I care about that. I know my business rather better than you do, and I can say without reservation that your understanding of it is, at best, deeply limited. Which is not surprising, mind you — you are not me. But it does mean that when you inform me of what my relationship with one of my business partners is, or in this case is not, I’m not going to feel obliged to privilege your opinion over my own experience.
DH — you clearly do not know anything about bookselling or book publishing and the legal and marketing obligations between authors and booksellers, particularly booksellers who are also publishers and production partners in e-books with publishers. You clearly also don’t know anything about licensing contracts and what rights and business situations authors have with their own books. Amazon dragged the authors into the negotiations by stop buttoning their works, which has greatly effected the business relationships and actual contracts between Amazon and authors. It also effects other authors who are not with Hatchette because of the business situation of precedent and sales contract terms. This is not just about Hatchette and Amazon; it’s about how the entire industry is going to do business.
You seem to be simply trolling here, so I’ll leave you to Scalzi.
For a funny take on this issue, I also enjoyed Chuck Wendig’s piece: http://terribleminds.com/ramble/2014/07/06/publishing-is-not-a-religious-war/
Amazon dragged the authors into the negotiations by stop buttoning their works
Are you claiming that Amazon is violating agreements they have with authors? Obviously you can’t speak for JS, but is the case for you, or anyone you know, that Amazon promised to do something and they are not doing it? If that’s the case, by all means, Amazon should face every repercussion.
As JS said, he’s the world leading expert on his own business arrangements. What he wrote was:
So again, in a very practical sense, I have a relationship with Amazon for every book of mine they sell,
Which he is prerogative. What that reads like to me is that Amazon has an interest in JS’s works, as it does with most vendors. Stuff that people like sells more units and more units makes Amazon more money. If that interest is a relationship to JS, or anyone else, I get it now. I had missed that aspect of the business. It’s just not what I think of when you say “I have a relationship with X”. When you say something like “I have a relationship with X” that more often implies a contract OR a personal relationship. (I immediately rule out “personal relationship” because Amazon is not exactly a retail organization that you would develop a frontline relationship with). As far as I know, based only on what I’ve read, the authors who are signed to big publishers do not have contracts with Amazon for marketing, or any other services. They have, literally, no right to expect to be buttoned or receive anything from Amazon.
JS has accused me of moving the goal posts for not intimating that Amazon’s interest in his books selling well means that he has relationship with Amazon. I don’t think that is a fair characterize, and neither is your claim of trolling. But I suppose that’s your opinion.
There is an alternate explanation that explains Amazon actions better. Hachette posted to their blog that, something to the effect of, books are not like other consumer goods. I am sure they whole-heartedly think that it is true. But what if Amazon has discovered, through their superior information advantage, that they are like other consumer goods. What if, Amazon has learned, that for their customers, they’ll spend a certain amount of money at Amazon every month regardless of the items that they buy, and that the slow-down/no ship/no button experiment with Hachette has validated this theory. Perhaps when they have to decide, customers will simply spend their disposable Amazon income on some other thing than the book that they had previously decided to purchase.
If this were the case, then JS and other authors reaction that this whole thing is very messy and there are not sides to choose (i.e. it’s not football) is hopelessly naive. If this is the case, Amazon has figured out that they only need authors in aggregate, and that any certain slice of authors are fungible to another similarly made up cohort of authors. And MAYBE SF fandom knows this to be true. Did any Whatever readers book buying budget decline when JS didn’t publishing anything through Tor for three years? I know mine didn’t. And when I buy Lockin, it’s not going come from my food budget, or my gas budget, it’s going to come from my entertainment budget. And if the book was never written, that budget item would not change at all.
This is not just about Hatchette and Amazon; it’s about how the entire industry is going to do business.
I certainly agree. The rest of the economy is being affected by disintermediation, the thinning of supply chain, and the squeeze of value and excess out of the final product. All of the rest of who manufacture, or produce content, or distribute products have been dealing with this for decades. For most of the rest of the economy it is war – you pick a side and you fight or go under. I can tell you from personal experience that dealing with Wal-Mart, as a vendor – it is daily, ongoing, frictive, frustrated, trench warfare. My opinion: this style has already come to publishing, and the big publishers are losing. And Amazon is winning.
JS has made a strong case that it’s not football, but Amazon is making a stronger case that it is.
dh = dpmaine… Just fyi
“JS and his cohort of mid-list authors are almost interchangeable with their peers. They have dedicated fans will always buy their work, but the majority of their sales will just be gone if the product is not easy to buy. And that gone sale will not on hold, that spend will go to another competing author.
That’s the real worry here. Authors are used to getting what they want for almost no reason. Amazon is changing that. They have an incentive to promote products that will maximize their profit. Full stop.
b-face – I post as dh, here and everywhere.
“And that gone sale will not on hold, that spend will go to another competing author.”
I’m sorry, were you trying to say something here? Because that makes no sense at all. If you’re trying to say that all authors are interchangeable, I have to disagree. I prefer authors who can write coherent sentences. And “Authors are used to getting what they want for almost no reason”? Are florists used to getting what they want for almost no reason, too? Again, you’re not making sense.
dh and dpmaine are not the same person. Also dh, while having strong opinions in this discussion, often counter to my own, has not been actively rude to me or anyone else. He’s fine.
I think this argument is pretty simple. JS didn’t publish a book with Tor for 3 years. During that time, did your book budget decrease because JS didn’t publish a book with Tor? Likewise, when you buy that book, are you taking money from some other category of purchase, or are you delaying or not making a purchase of another book?
I suspect Amazon has the data to back up something I have observed, which is, that with very few exceptions I SPEND the same amount of money, on the same categories of stuff, month after month. There is just not that variability in my purchases anymore. If some purchase doesn’t happen, for whatever reason, it’s not like that money goes into my 401k. It goes for something else.
That’s what I suspect Amazon has found out with their Everest sized pile of data. If I go to order JS’s newest book, and it says “sorry, this is not available for 4-6 weeks”, and I decide not to buy it, I will either immediately or eventually buy something else with that money. And if that something else has a better margin or better terms for Amazon they just made more money by not selling JS’s newest book.
That’s why I think that the mid-list cohort of authors in each genre are basically interchangeable. And I think Amazon has figured this out with hard data. Those sales aren’t really lost. The money just goes to other Amazon purchases. If I don’t buy JS’s book (well, one of Hachette let’s say), I am going to just buy something else, also from Amazon. That’s why they are taunting, essentially, their own customers – “sure, go by it from another source”. They may actually do it. But their monthly spend with Amazon won’t move much. If at all.
If this is true JS’s contention that the business of selling his books is not football where you pick a side is inherently faulty. Because Amazon doesn’t need any given author, or any given publisher. Their customers are picking Amazon’s side. They just need enough to get you to spend your entire budget. With millions of items they probably feel that the odds are high they can sell you something else.
“JS didn’t publish a book with Tor for 3 years.”
This is incorrect. I said that I didn’t write new work for Tor for three years. Tor purchased the rights to two of my books that were originally with other publishers and published those in the interim.
Aside from that, I’m not entirely sure I buy your theory of authors here. It’s not that authors are interchangeable; it’s that people have more than one author that they like. Someone who likes me and, say, China Mieville seems unlikely to consider either of us interchangeable for the other. However, they may buy one if the other hasn’t put out a book recently. However, if one is specifically going for the new China Mieville, it’s not certain they will buy a different book in its absence (or some other good, which is not a book).
What you’re theorizing, basically, is consumer behavior never being discriminate — i.e., that if the consumer can’t find what she wants on her terms, that she won’t simply close out the browser tab, leaving Amazon with no sale where they had a sale before. Being someone who frequently closes out tabs at Amazon when I don’t get what I want on my terms (most recently with the Blu-Ray of Winter’s Tale, which had a shipping delay of a couple of weeks, probably due to Amazon’s negotiations with Warner Bros), let me just say I’m not convinced that your hypothesis is as great as you think it is. I’d need to see data to back up the assertion.
“If this is true JS’s contention that the business of selling his books is not football where you pick a side is inherently faulty.”
One, you’ve not come even close to showing this is true, so that’s a substantial “if,” which you should acknowledge. Two, while I’m sure you hope that I won’t see you palm the card which you’re using to conflate the authors’ interests and the consumers’, I see it just fine. The entry is not about the consumer, as much as you want it to be. It directly addresses writers and their business.
Also, since you’ve done it a couple of times now and it’s worth calling out, labeling me as a mid-lister is inaccurate, both in terms of my sales numbers and in terms of the amount of effort my publishers put into marketing and promoting my work. This further undercuts your hypotheses, at least as they apply to me. To get ahead of what I suspect will be your attempt at qualification here, be aware that the sales profile is not JK Rowing, Stephen King, John Grisham and then everyone else as a “mid-lister”. There are a couple more levels on the sales gradient than that.
The upshot of all of this: dh, if you’re going to use me as part of your hypotheses, please attempt to be accurate. Otherwise your hypotheses will be as specious as they are highly speculative.
JS, where do you think you are on the scale of authors sales wise? What are the other categories? I pegged you as mid-list based on the Tor best sellers list for the genre. It is not intended as disrespect. I view it as NYT Best Sellers list, then Top 100, then mid-list, then a long-tail down to self-published and ‘sold a few books at a convention”.
In my head, you are in the same cohort as a large bunch of authors I enjoy reading. If one of you do not have a new book I haven’t read, my budget for entertainment and books doesn’t change. If you do have book I want to buy, I buy it, and someone else gets a delay or maybe never gets bought.
You are right that I don’t have any data to back up my theory. BUT I have something else, which is a proxy. And my proxy is Amazon’s actions. BIG SELLING authors from Malcom Gladwell to Stephen Colbert to, now, the SFWA, have come out against Amazon, yet Amazon is undeterred. In a few more weeks we’ll be able to compare Hachette’s numbers with Amazon’s publicly reported numbers. What do you think they will show? I think they will show that Amazon has lost effectively no sales from the dispute with Hachette. I think that Hachette will show a marked decrease in future booked orders (pre-orders). And keep in mind that Amazon’s actions are actually very mild – they haven’t actually delisted anything, just made it slightly less convenient or cost-effective to buy some of the titles.
I think all of Amazon’s actions suggest my theory of consumer non-deterrence is the prevailing one. I would be HIGHLY interested for you compare your March, April, May, June and July Amazon.com purchases and plot them on a graph. When I used QuickBooks to get a report of my own Amazon.com purchases, I found less than a 10% variance in monthly purchase dollars. Amazon has me trained, between Prime and the Kindle, to just buy stuff, within my budget, when I want it. I’ve also not purchased stuff that was not priced right, not able to get to me in 1 or 2 days, or not ideal for some other reason. But it seems to come out in the wash.
I grant that it’s a big “if”, but I think Amazon’s actions suggest that they intend to bring the Wal-Mart economic model of vendor-retailer warfare to the industries where it has not been done yet. To me, when I look at their Kindle-direct publishing platform it is exactly an image of the economic trench warfare model that many other industries have experienced.
Peeling the consumer and author/publisher side of this equation apart is difficult, I know it’s your intent to try to do it. So I will leave it at that and save it for another post.
Final thought: do you think your business entanglement/arrangements/partnerships will be more or less simple five years from now? Ten years from now?
Thanks for a good discussion.
“JS, where do you think you are on the scale of authors sales wise? What are the other categories? I pegged you as mid-list based on the Tor best sellers list for the genre. It is not intended as disrespect. I view it as NYT Best Sellers list, then Top 100, then mid-list, then a long-tail down to self-published and ‘sold a few books at a convention”. ”
Since John has made the NYT Best Seller list several times, I guess that puts him in your personal top tier, two above “midlist”.
Dude, you have no clue what you are talking about. Fiction authors don’t compete with each other. The market is symbiotic; they help each other sell. The better more authors do in sales, the bigger the fiction market grows. Fiction fans — particularly SFF core fans — will wait years for authors to get books out. And if one vendor doesn’t have the book available that is out, they just buy it from another bookseller, or even from the publisher directly. And Scalzi is an international bestselling author. Authors have both direct and indirect business relationships with booksellers, including promotional issues. License contracts between authors and publishers are not the same as between a vendor and a retailer. The returns and accounting systems of book publishing aren’t the same as other industries and involve different business arrangements. And reading customers do actually get pissed when a bookseller uses their authors as a blackmail threat. They do not see books as an interchangeable commodity with a garden rake, even when they aren’t bestsellers.
And Amazon isn’t winning — that’s why they are trying a desperate tactic and trying to squeeze more than is feasible out of publishers and authors. Their shareholders are pissed at them. Their growth expansion is based on them being a growth stock for investors plus the potential as a wholesale retailer, but their profit problems have been slowing that model down, which is why they are getting a lot more bad press than they’ve been used to. They are succeeding in some areas, not in others. But even when they are succeeding in say tech areas, they are a drop in the bucket next to companies like Apple and the telecoms. They lost their monopoly of the e-book market several years ago, though they are still a large player and the largest player in the tiny market of electronic self-pub. And while Amazon’s actions do hurt authors a lot, as has been explained before, they are not going to take Hatchette out at all. Hatchette has only one part of its operations in the U.S. and is not dependent on Amazon.
Amazon and Hatchette are in a business negotiation, not a war. A war might occur if they were both mainly booksellers competing for the same turf, but that’s not the situation at all. (It was that situation when Amazon went to war with WalMart and Target over various online3 selling markets including books, and WalMart and Target kind of won, although all three companies have had declined profits.) Book publishing is a small industry that mixes art and commerce and works with narrow profit margins, slow growth by primarily association and core readers, marketing resistant customers in fiction, and products that are in the larger non-book markets not valued at all, but within their market valued highly as a cultural item, allowing the industry to survive numerous tough economic periods. Amazon is a big player in that industry, but the online market is rapidly changing. Microsoft and Samsung are dipping into the electronic side because of Apple’s penetration, there are a lot of online vendors for print, and weird and interesting things are happening with indie bookstores and chains, depending on the country.
You are basically sounding off on an industry you really don’t seem to know anything about.
RE: Bestseller’s. I gauged JS’s status based on his biblio page (http://whatever.scalzi.com/about/books-by-john-scalzi/), which doesn’t mention NYT listing. A Google didn’t turn it up. Before I wrote that JS was “mid-list”, I checked the Tor Sci-Fi best sellers list, and that’s how I concocted the rating. JS mentioned he was below King, Rowling, Patterson’s of the world, which I think is obvious, but is above mid-list. I am not familiar with what you would call that, so until JS has specified, I think “Bestselling” is a fairer description. Willing to be corrected.
Fiction authors don’t compete with each other. The market is symbiotic; they help each other sell.
I think this can’t literally be true. For this statement to be true, the market must be expanding, but it’s not. In units and dollars, publishing in the US as a whole is slightly down year over year. Growth areas are audiobooks, young-adult fiction, and adult non-fiction. Within the SFF genre, sales also seem to be down. I am basing this off Publisher Weekly/BookScan. I have no idea how accurate it is. Link
I also think that it’s naive to assume that sales can expand indefinitely. Even avid readers have a budget or maximal amount they can spend on entertainment. It doesn’t matter how much certain authors recommend me to buy another book, I cannot conjure the money out of nowhere.
And reading customers do actually get pissed when a bookseller uses their authors as a blackmail threat. They do not see books as an interchangeable commodity with a garden rake, even when they aren’t bestsellers.
I know this is the contention that I am challenging, and Hachette agrees with you. But what evidence do you have to support it? I take it that you are an avid reader. I re-iterate my question. If you have an author who doesn’t publish a new book for a while, does your book buying budget decrease? I know mine doesn’t. For me, it all comes out in the wash.
Book publishing is a small industry that mixes art and commerce and works with narrow profit margins
I know it’s fun to say I don’t know what I am talking about, but US publishing is a $26B a year industry. That is a huge industry. There are 2 billion+ units sold, and 300k + traditionally published books a year being moved through the traditional publishers. This is not a small industry.
I totally agree with you re:Amazons position – I would NEVER invest in Amazon. They are a company that is not profitable, and they have as of yet undefined business model for making, you know, money. They are able to use their digital media profits to expand into new areas, and yes shareholders are testy.
But I can’t agree with your description as Amazon being a drop in the bucket. Amazon does approximately 50% of the yearly revenue of Apple, and they are closing the gap at about 3% per quarter. They just launched a phone. They do a nice digital media business with comparable margins to Apple. Compared to Microsoft’s digital media revenue they are a monster. Verizon is the largest telecom in the country, and Amazon is about 66% of their revenue, and they are closing the gap at about 5% quarter.
I am not a wild-eyed nut who thinks traditional publishers are going away.
It’s no secret I don’t know everything about hte industry, but it is a virtual certainity that Amazon has more data than you, me, or Hachette, about what their own customers buy and don’t buy, and why. They have more of this data than probably anyone in the world.
JS’s claim is that it’s not a choose sides arrangement, but since he posted his assertion that it’s not, the world is neatly dividing into two sides. I am sure for JS it’s not an easy decision – its asking to be split the baby. But for a lot of authors & publishers (and consumers), it is a binary choice. I don’t think this is on accident, I think Amazon knows exactly what it is doing.
Kat, also, a bunch of posts up thread you suggested that “Amazon dragged the authors into the negotiations by stop buttoning their works, which has greatly effected the business relationships and actual contracts between Amazon and authors.”
Was that a mistake or is that the case? Do you know of any authors whom Amazon is breaking their contractual promises with?
It seems to be counter your point. You make a point say that Amazon is the one in deep trouble, with it’s profit problems, etc, but you also seem to be saying that Amazon is a drop in the bucket, while also saying that just removing pre-order buttons from some titles is greatly effecting the business relationships and contracts of authors.
How influential do you see Amazon in the market?
I heartily remind people that just because you can’t pre-order Hachette books from Amazon during this dispute over the publisher’s attempted price fixing, doesn’t mean you can’t get those books — pretty much immediately — from all sorts of other retailers, including local bookstores.
FTFY, John. You know, I really used to admire you both as a person and an author before you waded in on the wrong side of this dispute. Now I just think you’re a stupid p####. I will no longer be visiting this blog and posting comments as I used to.
I’m a peony? A stupid peony? I think they’re lovely flowers, personally.
And no, you didn’t fix what I wrote. You have introduced your own editorial slant, however. I’ll thank you not to do any more “fixing” of that sort.
Also: Reminding people that they can take their commerce somewhere besides Amazon constitutes being on the wrong side of the dispute? Well, oooooookay. If that’s being on the “wrong side,” then yes, it’s best you wander off from these climes.
Furthermore, and again, if you wander through the site, you’ll see my opinion about all this stuff has been pretty consistent over the years. May I suggest that rather than attempting to castigate me for wading in on the “wrong side,” you might ask yourself what it is that has suddenly gotten you so heated up about the topic that suddenly I’m on the wrong side when in fact this is where I’ve always been.
“BUT I have something else, which is a proxy. And my proxy is Amazon’s actions.”
And? All this means is the you are using anecdotal information to posit a hypothesis based on your own knowledge of both publishing and this specific event. Okay, but this leads to the question: What is your knowledge, both of publishing and this specific event? What evidence do we have that your hypotheses are grounded in something other than your own idle speculation? Please do understand, dh, that neither I nor anyone else here knows much about you other than what you choose to call yourself here. And while your arguments here have been creative and interesting (thank you for that!), I’m not entirely convinced they are based on anything other than thoughts running through your head.
Which is fine — speculate away. But it does color the credence to which I give your arguments. Which leads to the next point:
As noted in the entry, I think arguing sides here is foolish, naive and misunderstands the nature of the issue, particularly as it comes to writers and their business. If you’re adamant on maintaining there are “sides” to this particular issue, then I wish you joy. However, generally speaking I’m not seeing very many arguments here regarding “sides” that are much more than assumptions and rhetoric. At the very least, my argument is backed up by my decade and a half experience in actively publishing work and paying very close attention to the field.
This is not to say that I can never be wrong about things. I am frequently wrong. It does say that when you make an argument to me that is largely supposition and opinion, and which to a greater or lesser extent runs counter to my own at this point extensive experience and knowledge, I’m going to privilege my own experience and knowledge over your supposition and opinion.
JS– Fair enough point, it’s true that it’s idle speculation. Trying to devine Amazon’s intentions can be frustrating. I tend to assume that a company that is on track to double revenue in four years (2011: 48B, 2012: 61B, 2013: 74B, 2014 est: 84B) has a lot of data to back up their actions.
I would end with I disagree about the ‘sides’, and in the last few days the number of people picking sides has grown a lot. It may be that you are an author with unusually diverse business arrangements – multiple publishers, channels, separate audio/foreign rights, etc and that this puts you in a somewhat unusual position regarding this dispute. Appeals to authority about your business arrangements are the natural way to settle any question on that front, and for good reason. But I don’t think appeals to authority on the publishing industry is a sound argument. There is no precedent for Amazon’s actions, there is no industry precedent for whats happening with digital distribution. The precedents that I think apply are for industries that have through disruptions. In universally, the middlemen get squeezed.
“you clearly do not know anything about bookselling or book publishing”
I know that 70% of retail is more than 12.5% of retail. A helluva lot more.
I know that getting a clear, accurate, and current statement of sales (typically updated within minutes), and getting paid in full, on time, every month, is better than an arcane quarterly or semiannual royalty statement that requires a team of lawyers and forensic accountants (and maybe a subpoena or two) to decipher, in part because the publisher itself doesn’t have a clue as to how many copies of the book have actually been sold. You can’t run a business like that in the modern world. You just can’t. If it weren’t Amazon, it would be someone else drinking their milkshake.
I know that retaining all my rights is better than handing them over for the life of of the copyright (and good luck getting them reverted without lawyers and cash).
I know that having my books on sale — worldwide — within 12 hours is better than a year or more of delay and negotiating a separate (but equally lousy) contract for each country.
I know that being able to write what I want, when I want, and as much as I want is better than a contract that prevents me from doing those things.
I know that not having the first book of my series disappear before the third book comes out is a good thing.
I know that producing books doesn’t require expensive Manhattan real estate and a gaggle of people living expensive Manhattan lifestyles. My editor lives in Indiana and she is awesome.
I know that Hachette and its ilk have cheapened every aspect of book production, and that authors are far from the only creative professionals they have abused. From outsourcing editing to underpaid freelancers to outsourcing printing to shoddy outfits in China, everything has been cut except executive salaries. Amazon’s POD books are printed in North Carolina, by the way.
I know that dealing with a company that’s entered the 21st century is more pleasant on every level than dealing with a company that combines the worst aspects of a Scrooge-era counting house (if Scrooge had been incompetent as well as greedy) and a car title loan operation (if they kept your car title even after you’d repaid the loan).
I know that Amazon has offered to split the cost of reimbursing any author who has been damaged by this dispute, and that Hachette has thus far spurned the offer.
I know that, despite all the rhetoric, Amazon hasn’t “boycotted” anybody. They’ve stopped taking preorders for books they may not have available to sell and they’ve stopped providing free warehouse space for Hachette books. Amazon can somehow deliver books to an individual residence in two days, for free, while Hachette takes two weeks to get books to an Amazon warehouse. Perhaps they’re sending them from the Chinese sweatshop printer via clipper ship. Hachette’s antiquated supply chain is not Amazon’s problem.
I know that those who heretofore have made their livings by inserting themselves between the money and the talent know all these things as well, and don’t like them one bit. I know that…but I don’t actually care.
You may know a lot about the quill-pen-and-green-eyeshade era of bookselling and publishing, but that’s completely irrelevant. I know a lot about chemical photography, but I haven’t printed a negative in 20 years. Remember Kodak? Legacy publishing is headed for its own Kodak Moment as we speak. Change or be left behind.
P.S. If Amazon’s 70% payout is “squeezing”, what do you call 12.5%? Diamond manufacturing? Nuclear fusion? The Big Crunch?
P.P.S. “[Amazon’s] shareholders are pissed at them.” Yeah, sure. That’s why people are still buying their stock at a P/E ratio of 520. I myself would not buy the stock, but I see no signs of a general exodus. Far from from it.
“I know that 70% of retail is more than 12.5% of retail.”
But you apparently don’t know why it’s not a sure thing that the author will make more at that 70% than at 12.5% — assuming they get that 70% rate at all. Also, note well that Amazon just slashed royalties for its ACX program; if you’re sanguine about that 70% lasting forever, you may be in for a surprise further down the road.
Much of the rest of your post is standing on a soapbox. It’s nice you get to write whatever you want; so do I, because I find the right market for it, including self-publishing if I want; thing is, having a book contract is not actually the same as indentured servitude. It’s fine to decry the “Manhattan lifestyle” and ignore that Seattle, where Amazon is at, is one of the most expensive cities in the US. Are you not paying for a “Seattle lifestyle”? (Also, one of my publishers is in Burton, MI, where the cost of living is an 84 and the national average is 100, with Seattle at 122.) It’s amusing to decry middlemen but then ignore that Amazon is your middleman, taking a cut for the same reason any middleman does: because it offers you something useful in return. It’s fine to decry slashed costs in book production; I hope you are equally fervent about the conditions in Amazon’s fulfillment centers. And so on; honestly, we could spend the whole day goinng tit for tat with regards to the various practices of these companies that we find outrageous and/or unethical.
Which is, of course, my point and has been all along. Amazon is not your friend. Neither is Hachette. Neither is any corporation. They have plans and strategies that don’t involve you; they’re happy to exploit you (and to convince you they’re not exploiting you) until such time as you’re no longer useful to them, or the set-up they’ve provided you to play in no longer suits their business needs. At which time, off you go, over the side. If you don’t think it can or will happen, again, I wish you joy in that worldview. But you are being, bluntly, stupid, and when you eventually get screwed, hard, you won’t have anyone to blame but yourself.
Pay attention rather than tromping over here with the pre-formed notion there are only two sides to this great clash of civilizations, and likewise assuming that I am on the other side of whatever foolishly reductive scenario you have imagined in your head. I am telling you that Amazon has done both good and negative things for and to me. I am telling you that publishers, large and small, have done both good and negative things for and to me. I’ve been self publishing novels since 1999; I’ve been publishing books with traditional publishers since 2000; I’ve been publishing novels with literally dozens of publishers worldwide since 2005. I am here to tell you that your “us and them” worldview is going to hurt you.
Publish however you wish and however seems right for your work and your life. Don’t pretend that those you’re doing business with, whomever they are, are anything other than what they are: businesses, looking to maximize their own goals.
yes, but, who are you again? I apologize if that comes across as condescending, but I really don’t know who you are, or why I should listen to you, or heed your advice, over the experiences of an author who has been very successful in the “quill-pen-and-green-eyeshade era of bookselling and publishing” (whatever the hell that means but apparently is the 15 years immediately previous to today).
“yes, but, who are you again?”
Someone who doesn’t want a lynch mob of bad reviews.
I don’t see what difference that makes. Everything I posted (e.g., Amazon giving a 70% payout) is a verifiable fact. Check for yourself.
Scalzi: “Which is, of course, my point and has been all along. Amazon is not your friend.”
I never claimed that they were. I claimed that they’re giving me a better deal at present. If that changes, I’ll look elsewhere. I can do that because I’m not contractually bound to them for any specific term, number of books, or anything else
You yourself admitted that you had a three year gap because you were on the outs with Tor. That’s a long time without fresh income, dude.
(apols for bad close tag… only “three year gap” should be bolded)
“But you are being, bluntly, stupid, and when you eventually get screwed, hard”
How am I going to get “screwed, hard” when I can take my books off sale at Amazon by clicking a button? For example, how are they going to keep me from writing a new novel for three years?
“How are they going to keep me from writing a new novel for three years?”
You’ve apparently made the entirely erroneous assumptions that when I said I did not write for Tor for three years:
a) Tor was somehow preventing me from writing anything I wanted, including novels;
b) I was not otherwise writing or making money.
Both of these are, to put it mildly, wildly incorrect.
It also suggests that you’ve created in your head a conceptualization of the world of publishing that has little if anything to do with the reality of what publishing is or does or how writers interact with it.
“How am I going to get ‘screwed, hard’ when I can take my books off sale at Amazon by clicking a button?”
The fact that you don’t appear to be able to imagine such a scenario, when at least three such scenarios pop into my head nearly unbidden, suggests to me you might want to think about your question again, possibly with a touch more paranoia.
No, I won’t help you by giving you an example. This is an exercise best left to the student.
Someone who doesn’t want a lynch mob of bad reviews.
Well, that would be one of the downsides of this model of self-publishing: your success or failure (of not just individual books but of your writing career) is highly dependant on the vagaries of The Internet™.
I don’t see what difference that makes. Everything I posted (e.g., Amazon giving a 70% payout) is a verifiable fact.
Well, hardly everything. Some of it is. Some of it is verifiable, yet it’s meaning is debatable (e.g. that having your book available for with in 12 hours of, I can only assume, you approving the final draft for publication is somehow significant). Some of it is only tangentially relevant opinion (e.g. that your Indiana-based editor is “awesome”, implying that her location is relevant to her ability). And some of it is pure speculation on your part (e.g. that “legacy publishing” is irretrievably on its way to a “Kodak moment”).
It goes to credibility, madam/sir. Why should I take your word for anything that is not verifiable fact? Why should I give credence to your interpretations of the verifiable facts? How do I know that you are successful in a way that you would not be under “legacy publishing”? When Scalzi writes his opinions, I know his bone fides. I can use that information to give his views their due. I’m not being facetious or dismissive when I tell you that right now, I can’t do the same for you no matter how much I’d like to.
For those still reading this thread, an interesting wrinkle:
I think it’s clear that some people who are refusing or ignoring good advice to not pick sides in a negotiation between two businesses are doing so because they’re using these companies as proxies to advance their own particular little corner of whatever kulturkampf they think is actually happening rather than because they actually care. What I really don’t get it is how much they are aware that they are doing this – will they scream of treason when Amazon and Hachette make up, or are they quite cynically saying ‘Let’s you and him fight’? At any rate, maybe the real warning about not treating people willing to exploit you as friends needs to go to the respective PR departments.
The full text of that Amazon letter can be found here
I have to say, it’s definitely a lateral move to both blame Hachette for all the foot dragging in the negotiations and at the same time give authors reason to believe that negotations that never resolve anything would be better for their bottom line.
And yet you have no problem pontificating as fact claims about the business you don’t have even the most basic familiarity with.
Yes, I know you do because everybody who doesn’t have any familiarity with fiction publishing thinks that. But nonetheless it happens to be true. Scalzi, Mieville, and all his buddies happen to be buddies because they aren’t competing directly with each other and help each other sell. That’s why they do panels at cons and promotional events together, etc. Fiction readers browse and want variety. Fiction is primarily sold not through advertising or status selling but by word of mouth, including e-books and the hits in self-publishing.
Book publishing sales actually went up overall a little bit, including up for trade paperbacks, which is part of the economic recovery of the last few years. Book publishing makes most of its money from non-fiction and educational, neither of which is a big market for e-books. Fiction expands not necessarily from getting readers to spend more money on books, but by bringing in more new reader/buyers. Big bestsellers bring in lots of new readers through name recognition and occasionally film or t.v. adaptations, which Scalzi is having. Some of these readers then do symbiotic browsing, which spreads out like ripples in a pond. On such thin margins, book publishing continues.
The declining sales figures of publishers were due to the collapse of the wholesale market in North America and then elsewhere in the 1990’s. That collapse where many wholesale vendors became few very rapidly. That collapse particularly hurt mass market paperbacks, which particularly hurt fiction (and particularly “genre” fiction,) which relied mainly on mass market. As a result, overall sales of fiction declined in the 1990’s before Amazon existed and long before it launched the Kindle. So we’re still actually in the contraction, although now it’s slowly expanding, with the market being more fragmented but also more international. Amazon helped with some of the losses of the wholesale market when it made books its show product because books could be returned for a full refund (returns.) And e-books helped replace a lot of mass market paperback sales. However, having done that to rapid growth, e-book sales are now leveling off, as expected.
The e-book industry existed long before the Kindle, since the late 1980’s — there is no digital revolution. Everyone knew there would be an on-line expansion into a full retail trade market. But what they didn’t foresee was Amazon driving that expansion full throttle and having that happen to coincide with 1) the tech industry launching tablets and the next generation of phones that could also use e-books, and 2) the Great Recession which dried up cash for hiring people and building infrastructure to service the expanded e-book market. So publishers scrambled for a bit, but things stabilized, again as expected.
Amazon is a big player in book publishing, though it isn’t very interested in book publishing. It is a major bookseller of various degrees depending on which country territory you’re looking at. Amazon is a drop in the bucket in the TECH industry, where telecoms, Samsung, Apple, etc. are way bigger players, but Amazon is very interested in the tech industry. However, tech growth stocks again aren’t as favored as they were in the 1990’s and again in the oughts because the prolonged lack of profits limits the growth. So Amazon is having to deal with investors. But there’s no way for bookselling to satisfy Amazon’s need for cash (not that books are the only area of Amazon’s business that Amazon is squeezing.) It’s not a cash business. It’s slow and pokey. So negotiations are tense.
The rhetoric about the Amazon-Hatchette dispute is basically melodramatic PR. There isn’t a war between publishers and self-publishing authors. There is no war between Amazon and the publishers. And the authors certainly don’t want to be at war with anyone, and are not at war with each other, even the non-fiction ones. That doesn’t mean, though, that there aren’t disputes, burned bridges, long-term negotiations, ruthless tactics and mess-ups. It just means that the industry is not dying. The industry is supposed to have been dead since, oh, 1910’s or something around there. And fiction is supposed to have been dead. And original fiction (killed by tie-ins and humor books.) And science fiction particularly, has been dead about ten times. What’s going on isn’t some kind of new trench warfare. That’s a romantic notion, but no.
As for Iku, he does not seem to understand what publishers are or the nature of the business relationship between Amazon and self-pub authors. Which is a bit of a problem if you are self-publishing as a publisher, but unfortunately the situation a lot of self-pub authors are in. The expansion of the potential market for self-published books electronically has been an interesting thing for the whole industry and definitely has helped expand the market. But increasingly, having Amazon be 90% of that market is going to be problematic for self-pubs. Luckily, that monopoly is eroding too, which is good since Amazon seems to be losing interest in the self-pubs.
Scalzi: “Tor was somehow preventing me from writing anything I wanted”
Oh, so the dispute didn’t prevent you from working at all. It just prevented you from working on the novels for which you are best known and which (no doubt) have made you the most money. That was mighty considerate of them.
Scalzi: “No, I won’t help you by giving you an example.”
Maybe they’ll lower the payout to 12.5% or start demanding exclusive rights.
Scalzi: “It’s fine to decry the “Manhattan lifestyle” and ignore that Seattle”
My editor, as already noted, doesn’t live in Seattle. She works out of her house in Indiana. Your best-known editor has offices in the Flatiron Building. Let’s see a comparison of real estate costs and general cost of living for those two.
Scalzi: “I hope you are equally fervent about the conditions in Amazon’s fulfillment centers.”
Let’s see a comparison of conditions between Amazon’s warehouses and those of Hachette, Barnes & Noble, Ingram, Baker and Taylor, et al. Oddly, we never do, any more than we saw a comparison of the conditions in Apple’s Chinese factories to the conditions in the Chinese factories that make Android phones.
While you’re at it, how about a comparison of wages and working conditions between Amazon’s POD plant in North Carolina to whatever plant in China or India is cranking out Hachette books?
docrocketscience: “e.g. that your Indiana-based editor is “awesome”, implying that her location is relevant to her ability”
It implies nothing of the sort. Her location is utterly irrelevant to her ability. That was…umm…rather the point — that she can be a good editor without living in Manhattan.
dockrocketscience: “Why should I take your word for anything that is not verifiable fact?”
Except that I never asked you to do that. I explicitly urged you to verify the things I said for yourself. In a (probably fruitless) attempt to avoid further intentional misreading (I mean, you don’t seem stupid, so what does that leave?), that was limited to my factual statements, not my opinions.
Actually, what you said was ” Everything I posted (e.g., Amazon giving a 70% payout) is a verifiable fact.” At best, that’s an exaggeration, as some of what you said was editorializing, and some of it was rhetoric.
Also, your defensiveness aside, I’m not accusing you of lying. Or of being wrong. Or anything else (a courtesy I note you can’t be bothered to afford me).
What I’m wondering is, is the proof in the pudding. Your facts may be lined up, but do your conclusions follow. Is yours really the better way to go. And I gotta to you, you’re going for the hard sell here. You haven’t qualified your position at all. OK, so, you’ve made the pitch; now I’d like to actually see the product.
Or, you know, don’t. Just flounce off in a huff, and I’ll have no choice but to file you away under “Internet loudmouth: may have a point, but is kind of a childish dick about”. And given that nothing, but nothing proves that Sturgeon’s Law is an optimistic estimate better than Kindle and Nook self-published books, I can at least rest assured that I won’t ever be buying one of yours.
“It just prevented you from working on the novels for which you are best known and which (no doubt) have made you the most money. That was mighty considerate of them.”
No it didn’t. I was entirely free to write novels if I so chose (and did write one, in fact, just for fun, which I then sold to Tor after they asked to see it). So the idea that Tor somehow prevented me from writing novels is, flatly, wrong. Likewise the idea that Tor stopped me from writing novels in the OMW universe; had I wanted, I was free to write another. I didn’t because it was time to give the series a rest for a while. Likewise, while I was not writing novels for Tor during this period, I was working on a project for Disney, and on the television show Stargate: Universe. So your “no doubt” supposition here is in fact deeply in doubt.
You genuinely have no idea what you are talking about. Please stop pretending that you do.
“My editor, as already noted, doesn’t live in Seattle.”
Amazon does, however. Do you believe the cut Amazon takes goes to charity?
“Let’s see a comparison of conditions between Amazon’s warehouses and those of Hachette, Barnes & Noble, Ingram, Baker and Taylor, et al.”
Ah, so I see that you are interested in doing tit for tat. You apparently missed entirely that I wasn’t defending Hachette or running down Amazon but rather pointing out that if one is so inclined, one can point out as many positives and negatives about just about any large corporation one can imagine. Well, as I’ve said elsewhere, I hope that gives you joy.
Iku-Nuku-117G: …any more than we saw a comparison of the conditions in Apple’s Chinese factories to the conditions in the Chinese factories that make Android phones.
Yeah, just so happens they’re the same factories. An electronics manufacturer called Foxconn contracts with Apple to make some of its hardware. It also does with Microsoft, Nokia, Dell and a bunch of other big names. You know what’s really funny, though? That very “Apple’s Chinese factor(y)” also makes … *googlegooglegoogle* … the Kindle Fire.
And yet you have no problem pontificating as fact claims about the business you don’t have even the most basic familiarity with.
And yet you have not taken the obvious step of specifying how you would describe JS (and neither has he, which is his choice) other than mid-list. It’s so obvious, yet you haven’t defined it. Why is that?
t. But nonetheless it happens to be true.
It cannot be true. Three reasons:
1. BookScan reports that trade paperback fiction is down, heavily, and the trend is clear. So far 2014, it’s down 12%. That means if JS or anyone convinces a reader to buy another authors book, it helps that author, but it does not generate a net new sale. This is just math. In this segment, there are net new sales. This may be difficult to hear, but everytime JS sells a book, it comes out of the sales of another author. Link.
2. This of course makes sense and jibes with the data. As I asked before, did you spend less money in the 3 years when JS did not have a new title published with Tor (other than republishing existing titles)? If you didn’t, you are a core fan, who spends a certain amount of money on books regardless of what is the marketplace. If you did not spend less while you waited for JS’s latest book to be published you are proving that your assertion is false. Your assertion would mean that JS and his author friends are growing the industry and the genre, generating net new sales. That is not case (see above link). The inverse therefore must be true – they are competing with each other for sales.
(It should be said that certain authors have the ability to move the needle of sales and revenue. Fifty shades did. Divergent. JK Rowling. Stephen King has his moments. Oprah used to. If you read the BookScan stats, the loses would have been worse if not for the sales of Divergent and video game tie novels. Which means, when you take out those rare mega-authors who can shift the entire industry with a blockbuster, there is quite a bit more competition than the numbers really reveal. It also means that practically speaking any net new readers that are being “born” into the genre are being sucked up by the mass-media tied in works, and that bestselling non-blockbuster authors like JS and his cohort of similarly popular fiction authors are competing very hard for readers).
The short version here is that every sale that JS makes (and the cohort of authors he is similar to) is either:
– To a new reader who is replacing an existing reader that has stopped buying new works, died, or moved onto other media OR
– To an already engaged fan who would otherwise buy another authors work.
3. The growth such as it in the publishing industry is in digital distribution, audiobooks, and young-adult. But even with those bright spots, units and revenue are flat or growing at most 1-2%. At the same time, genre’s like SFF are declining in units and revenue. At the same, total entertainment spending is growing despite the bad economic conditions in the last several years. Again this is from the numbers available by BookScan.
Your argument rests on the idea that authors must be not be fungible, because you love certain authors, and authors get along well, do panels, cons, appearances, book signings, etc. But really when authors like JS do those events, they are not growing their industry and genre, they are growing their own personal share of the shrinking pie. As we know, JS likes pie quite a bit.
I would ask you again, when an author you love doesn’t have anything new to buy, do you spend less on books?
Finally, I really enjoyed this part, because I think it encapsulates a denial of the reality of the situation:
. There is no war between Amazon and the publishers. And the authors certainly don’t want to be at war with anyone, and are not at war with each other, even the non-fiction ones
This is at odds with events. Obviously authors don’t want to have their publishers at war with Amazon. But this is what happens in disruptive industries. You think millions of call center employees wanted to have their jobs eliminated and outsourced? You think lawn mower factory workers wanted to lose their jobs to cheap foreign imports and disposable consumer goods sold at Wal-mart? Probably as much as you want war with Amazon.
But there is a battle going on. Authors and Amazon are openly warring now. Since JS posted this it has become even more clear that there are sides.
The press seems to think that Amazon is raging a war on Hachette.
Anyway, interesting conversation. It led me to research business war. Now, I don’t care if people consider this dispute a war or football, though both sides do have cheerleaders :)
Originally I thought your rational plea to view these negotiations as business would be ignored by many because a significant amount of writers don’t seem to care about business. But from reading other sites some writers are feeling too much fear and hate towards Amazon or the Big Five to not pick sides.
Well, you tried.
Obviously authors don’t want to have their publishers at war with Amazon. But this is what happens in disruptive industries. You think millions of call center employees wanted to have their jobs eliminated and outsourced? You think lawn mower factory workers wanted to lose their jobs to cheap foreign imports and disposable consumer goods sold at Wal-mart? Probably as much as you want war with Amazon.
Are the authors the call centre employees here? Because they’re not interchangeable. John Scalzi has a monopoly on books by John Scalzi. Are the publishers the call centre employees? They’re not Amazon’s employees, and Amazon isn’t really showing signs of wanting to become the world’s biggest publisher any more than the three of four Amazon original titles you can stream from them show that it actually wants to become the world’s biggest producer of TV shows.
Now if you were to combine the two and suggest that authors are in danger of being treated like employees at Wal-mart (and by both sides) well, then you may have something. Not something new, mind you, or disruptive, since that’s always been the case to an extent. But you might find that a number of Wal-mart employees who would like better working conditions would also like to continue working at Wal-mart.
The report you link to says that sales of hardcover and trade paperbacks are up 2% in the first half of 2014. It says that sales of mass market paperbacks are down 12%. This doesn’t surprise me. I haven’t bought a mass paperback in 4 years. The difference in price between a mass paperback and the ebook of it is very small, if there is a difference at all. I suspect ebook sales are the main thing causing that decrease in paperback sales.
Your points on business are very good, pragmatic and balanced. But, your list makes you sound like *GASP* one of those dreaded conservatives or libertarians!
I note to people that 40 years ago I would have been called a “Rockefeller Republican,” i.e., socially liberal, fiscally conservative (especially in the realm of my own personal finances and business). It’s obviously not a one-to-one comparison, either to Rockefeller Republicans back then, or to conservatives today. But that’s definitely a part of my makeup.
Doc — Iku doesn’t actually have facts. Authors don’t sell their rights in their properties to publishers. They negotiate a business partnership in which the publisher invests in and is given a production license under certain terms and the author owns the rights. Tor doesn’t own the rights to the Old Man’s War universe; Scalzi does. Amazon does not give self-pub authors royalties — they are not the publisher. Instead, Amazon takes a fee, ranging from 30% to 80% of the author’s take in their marketplace in return for access to their marketplace and accounting services — which is a very large fee. Amazon also gets to set the price of the self-pub authors’ e-book wares on the entire Internet if they sell part of their wares on Amazon, and they get that power for free, with no restrictions. It’s an entirely different business arrangement than the investment partnership with a publisher, so the comparisons Iku was making make no sense in an author deciding costs, market penetration, investment over outlay, vendor relationships, etc. Iku is able to do some business because Amazon has made it easy for self-pubs to do business with them, because it profits Amazon in several ways, most having nothing to do with the actual sales of the self-pub books. And so Iku is operating a business where he doesn’t actually understand how it operates. Which is not unusual and not necessarily problematic in book publishing for an author. But not a very good source of business advice.
And yet I have, as I explained twice that Scalzi is an international bestseller, and also is having one of his properties adapted into a television series. All of which you are perfectly able to find out yourself on the Internet; in fact, on this site even. You went around shooting your mouth off about mid-list when you had no idea what the term meant. And when it was explained to you that Scalzi isn’t mid-list but is a major bestseller, you keep going, are you absolutely sure he’s not, which is getting silly.
Even if Scalzi was a mid-list author, mid-list fiction authors are not actually interchangeable to the reading audience. They like the stories of the authors they like, regardless of whether they try other authors or not; they will wait for new books in those series from authors they like and sometimes for those books at prices that work for their budget. If a book they want is not available from one vendor, they have the entire retail and retail Internet markets to go get it from. Book customers are not at all loyal — they don’t care who publishes a book or who sells it. And since the majority of the book customers are middle class or up, with discretionary income, price is not always the major factor for them. That’s why Subterranean Press can sell more expensive special editions of Scalzi’s works and fans will buy them, even though they could just buy the work more cheaply as an e-book or regular print.
As has already been pointed out to you, trade paperback fiction (the larger paperbacks,) sales are up. It’s mass market paperback sales that are down. This is not unusual as mass market paperback sales have been declined for the last twenty years. This is again due to the collapse of the wholesale market in the 1990’s which was almost all mass market paperback, the need then to raise prices on mmps as they moved more heavily into the bookstores, and the costs involved with mmp re the returns system (mmp are “returned” for full refund by ripping off their front covers, returning those to the publishers and the rest of the books are pulped because that’s cheaper than shipping those units back, which has been a real mess.) E-books have taken over part of the market that went to mmps and that was lost in the wholesale collapse. These are then additional sales to what the market would have had, but not quite as much growth as utopian prophets of e-books were declaring would occur.
No, it’s not math. It’s a fantasy in your head. Why would JS run his Big Idea series encouraging people to check out other authors if it cost him sales? And what has the decline or rise of mmp sales got to do with author recommendations? It is not a zero sum game with a finite market — otherwise the market in all forms of books wouldn’t grow at all. If someone likes JS’ books, they keep buying them, regardless of whether they try other authors or not. That is the reality of book buyers that publishers actually have to deal with. JS brings in readers to the marketplace, some of whom also try other authors. JS’ success also provides funds for Tor and his other publishers to launch other authors into the marketplace. Those authors in turn develop reading audiences, some of whom may then also try out JS’ books. Books, especially fiction, are read/bought by only a small percentage of the population on a regular basis. Getting more people of the non-regular buying percentage to partake is the main goal of fiction publishing, along with servicing core readers. Symbiotic marketing methods and word of mouth have been highly effective in doing that, which is why JS is a bestseller.
Core readers are not fans who “spend a certain amount” on books. Core readers are fans who are willing to try writers they’ve never heard of in the areas of fiction they like in addition to buying the authors they do like. These core readers allow for the existence of specialty category markets, which are the adjunct interactive markets with general fiction. This is where symbiosis and browsing (and variety) come into play. Additionally, more readers come in with bestsellers — which make them aware of fiction titles — and some of them browse symbiotically. Some of those then become fans of various areas of fiction and buy more in those areas.
They are growing the industry and generating new sales. They help each other sell, which is why they are often promoted together.
To give you an example, before J.K. Rowling’s word of mouth Harry Potter success, the YA/teen division of the children’s market was a sleepy, small area with some success and longevity that children’s has, but not a rabid fan base and certainly not a large adult reader market either. Because of Harry Potter, books and movies, which allowed in the States the U.S. publisher Scholastic to grow phenomenally, the YA fiction section expanded into the largest, most vibrant market in children’s publishing, with thousands of titles, hundreds of bestsellers, other phenom sellers, tons of media attention, loads of new kid and teen and adult readers and that growth is still going on twenty years later as you saw in the sales figures you looked at. Rowling did not take sales away from the other YA authors — she made it possible for them to have careers and their publishers to fund them. Likewise, JS is a boon to science fiction, which, after having a bit of a slower period in the late nineties and early oughts, is having a nice slow expansion, including in YA.
Again, you don’t know what you are talking about. A certain percentage of new readers don’t just buy the bestsellers and media adapted. They browse outward. And on that percentage the fiction market continues.
Why exactly you think they are replacing an existing reader is the weird thing. They are new readers — they don’t replace people. They may buy little and move out but a percentage of them does not.
Again, your idea that core fans play Russian roulette with authors is incorrect. The core fans buy JS’ books and other authors’ books. Otherwise the category markets wouldn’t exist.
Yeah, here’s the thing. Book publishing always has small growth and narrow profit margins. 2-5% growth is normal for book publishing and fiction publishing. These numbers of course would be a death knell for most other industries. They aren’t a deathknell for publishing. Book publishers were quite happy with the improvement in numbers in 2013, for instance.
Fiction authors aren’t fungible. Readers don’t treat their books as equivalent and substitutable. If they did, the fiction market would be a lot easier to manage.
But let’s just ignore all that for your dog eat dog fantasy scenario of the marketplace?
So let me get this straight, you think readers sit around waiting for authors they like to put out new books? And proportion book spending out like calorie counting? Fiction books are a luxury item in retail (not counting the educational market.) People don’t budget for them. People who aren’t regular readers buy a bestseller if they want one. Then they may or may not try other books because they’ve been made aware that books exist and are an option and some of them get curious. When you ask a SFF reader what got them into reading SFF, they’ll usually mention an author they read whose work they liked. And then they went browsing for others. They didn’t stop buying the author whose work they liked if they still like the author. They just added on. The core readers buy who they like and then additionally take a flyer on new people. They do this more easily and regularly than casual readers. That’s why self-pub e-books had considerable early success for some authors in genre fiction — the core readers took flyers on the self-pubs. That did not take sales from other authors, and in fact, also brought in new readers playing with their shiny Kindles and tablets.
So you feel that Amazon is trying to destroy the fiction market so it doesn’t have to sell fiction anymore? Why doesn’t it just stop selling fiction (or books entirely) instead? Originally, you and your ilk said that authors had no business relationship with Amazon at all, so then how could they be at war? Again, you’re making stuff up about a business you don’t even know the basic mechanics of.
Authors and Amazon are complaining and negotiating about business terms. Authors can no more destroy Amazon than they can ride unicorns and Amazon may be interested in sucking all the money it can out of authors’ products regardless of the consequences but as its recent snuggle gesture towards authors shows, the company isn’t out to get rid of books from the marketplace. Amazon wants to get lots of money off of book sales, but book sales are pretty unimportant overall to the company — they aren’t looking to rule over book publishing. They’re trying to make themselves a major tech company. They managed to hold off a lot of the retailers like WalMart and now they are going after the phone and tablet market.
Authors don’t take “sides” because book publishing is not a religious cult. They make business decisions — about production, licensing, sales agreements, vendors, publicity, etc. Authors are on their own side. Amazon is treating them as collateral damage in business negotiations, up until recently when they are reassuring them that they aren’t collateral damage despite plain facts, and authors aren’t thrilled, because it’s Amazon’s antics that are eating up the pie than other authors. But the relationships between Amazon and authors will continue because Amazon is a major seller in the market. And the relationship with authors and other sellers will also continue. It’s a complex web of sales arrangements, not a football field with only two sides.
It’s not a sports competition where you root for teams. Book publishing and fiction publishing improves when as many areas of it are as healthy as possible. The mechanics of being healthy are what gets argued and negotiated.
Sorry for the italics problem with the blockquotes. It just seems to do that randomly.
Fixed it, I think.
“Authors don’t sell their rights in their properties to publishers. They negotiate a business partnership in which the publisher invests in and is given a production license under certain terms and the author owns the rights.”
Then why do most publishing contracts include a clause wherein the authors signs their rights way to the product in question? Often for the life of the writer plus 70 years?
Sure, bigger, more successful authors can retain their rights, but then there are such things as non-compete clauses that come into play. Authors can get reversion clauses, a good example is Howeys rights with Simon And Shuster reverting back to him after seven years…but those are the exception. More contentious are those reversion rights that predate the digital boom, in which “X number of books or less must be sold for the rights to revert”, many authors are having to sue to get the rights to their backlist returned to them.
But a first time or midlist author is definitely not signing a “Production License” agreement.
“Amazon does not give self-pub authors royalties — they are not the publisher. Instead, Amazon takes a fee, ranging from 30% to 80% of the author’s take in their marketplace in return for access to their marketplace and accounting services — which is a very large fee.”
Many Self-Pub Authors use the word “royalty” to describe what they get from Amazon. If I self Publish on Amazon, depending on where I price my book, I get 35% (if priced below 2.99 cents or above $9.99), or 70% if I price between. There’s an incidental fee for transmission, but unless I am releasing the digital equivalent of ‘In Search of Lost Time’ in one huge ebook instead of seven, it’s something like .15 cents a download. I’d call what I get from each sale a royalty, but that’s just semantics. Giving up 30% of what I can make for access to Amazons Algorithms is worth it, especially when you consider that going the “Traditional” route I’m giving up a lot more than 30% for that sort of access.
“Amazon also gets to set the price of the self-pub authors’ e-book wares on the entire Internet if they sell part of their wares on Amazon, and they get that power for free, with no restrictions.”
IIRC, you have to be enrolled in the Kindle Select program for that to be true. I set the price of my books, and Amazon will price match, so if I price a book for 2.99 on Kobo, Amazon will pricematch to that if my price on Amazon is $3.99. kdp.amazon.com is pretty clear on this. Now, I’ve never looked at the Select terms, so I may be wrong there. But if I price my book on all the digital platforms at $4.99, Amazon will not arbitrarily lower it to $1.99 “Just Because”.
“Authors are on their own side.” Evidence to the contrary notwithstanding…
“Amazon is treating them as collateral damage in business negotiations, up until recently when they are reassuring them that they aren’t collateral damage despite plain facts, and authors aren’t thrilled, because it’s Amazon’s antics that are eating up the pie than other authors.”
Hrm, twice now Amazon has offered to help authors affected by these negotiations. The first time they offered to do the same thing they did with Macmillan back in 2010, by setting up a fund that the publisher would then match and administer the distribution.
The second time they offered 100% of the profits of e-book sales to the authors.
Each time, Hachette has said “No”. Then again, Hachette likes to “sift and nurture”, maybe Amazons offer is getting in the way of that? :-)
Honestly, If your a Hachette Author, why is the Amazon offer, either Amazon offer, bad for you and your fellow authors?
Russell: Many Self-Pub Authors use the word “royalty” to describe what they get from Amazon.
That’s because they’re still deluding themselves that they’ve been published by a real publisher.
Giving up 30% of what I can make for access to Amazons Algorithms is worth it, especially when you consider that going the “Traditional” route I’m giving up a lot more than 30% for that sort of access.
Are you being ironic, or do you actually believe that that’s all people get out of publishing the “traditional” way?
“That’s because they’re still deluding themselves that they’ve been published by a real publisher.”
Yeah, and all those books they are selling must not have been bought by real readers either…
Self Pubbing is hard work, I’ve yet to find a successful self pubbed author that’s said it was easy for them.
But then getting published traditionally is just so easy, right? Riding the query-go round, getting your book past marketing, a middling advance against joint accounting, waiting 18 months to see your book buried on a shelf in Barnes and Noble because there was no promotion behind it…could be worth it for some people.
There’s options out there, an author should choose what works best for them.
Russell, chill. I’m a fan of self-pub. Scalzi is a self-publisher. Scalzi also has more than one publisher, as many authors do. A writer puts together material for a written book. That’s an intellectual property. The writer has the rights to that property their whole life plus a period of time for their estate, said period varying depending on their country’s copyright law. The author holds the copyright automatically and does not lose it.
With an intellectual property, the author then decides how he is going to present it to an audience — what form and what methods. He can give it away for free or he can sell it in one form or another — written print, written electronic, audio, etc. The author has to deal with production, marketing, distribution, publicity, sales, and accounts. For print books, authors are also dealing possibly with return shipments and refunds. The author can try to do all of those things or can contract out for services, for which the author pays as an operating cost. The author can solicit investors, such as family or a Kickstarter to fund the expenses, including possibly the author’s labor. Such investments normally need to be returned (unless they are mainly a donation thing like Kickstarter) with interest which is deducted from gross profits before operating expenses are then also deducted for net profits.
The author can also solicit a licensing investor — that’s the publishers. The publisher takes on all the costs and labor of production, marketing, distribution, some publicity, sales and accounts (and the risk therein,) in return for an exclusive, specific license — the right to produce, distribute, etc. the work for and with the author in specific forms as business partners. In return for the license right to produce the licensed forms of the author’s asset, the publisher pays the author a royalty on those sales. This royalty is paid out of gross profits, before operating costs are deducted (except for some kinds of sales which may involve deductions of freight charges or heavy at cost discounts as specified in the contract. Some small presses may have to do net receipts with more deductions rather than unit price before paying the royalty.) Returned copies (in print sales,) that have been returned are deducted first before royalties, as they are no longer gross profits. After the author’s share is accounted, the publisher then subtracts the operating costs apportioned to the particular asset and whatever is left, if anything, is the publisher’s net profit — the return on the investment. Some investments don’t net a profit for the publisher, but may be part of a longer term plan to build an audience.
Larger publishers can afford to take money from their share of other books’ profits and pay the author an advance on the author’s share of estimated sales. This helps the author for his operating costs preparing the asset for production or working on other projects. If the author’s share in royalties goes past the advance amount, the author is then paid that additional money per the royalty schedule. If the author’s share of sales doesn’t go past the advance, the author keeps the whole advance and the publisher absorbs the extra as an operating cost.
So when they talk about an author selling rights to a publisher, they aren’t talking about the author turning over his copyright rights to the publisher. How do you think Scalzi sold t.v. rights to Red Shirts if he had given his copyrights to Tor? He hadn’t. He’d granted Tor a production license to produce for the books and various other rights, but kept the license for dramatic exploitation of his asset, which he then granted to the production company and network for the t.v. show. The rights being discussed regarding a sale are the PUBLISHER’s rights in the grant of the license that the author has granted to the publisher in exchange for the publisher investing costs and labor of production, etc.
Publishers don’t have non-compete clauses in their licensing contracts. They will have clauses that are meant to protect the exclusivity of their license. If the publisher has the right under the license granted by the author to produce print and e-books of the work and then the author goes out and sells his own version of the e-book, that’s the author reneging on the exclusive license he granted to the publisher. Publishers also like to have option clauses that range in language to give them a shot at the author’s next work or next work in a series.
But that doesn’t mean that the author has to give them the sale of the license for the next work. It’s not unusual for a SFF author to have one series with one publisher and other books or series with another publisher. Sometimes a series moves from one house to another, through a reprint sub-license or a licensing rights revert to the author who then grants the license to the backlist to the other house. (For instance, fantasy author Carrie Vaughn’s Kitty Norville series moved several years ago from Orbit to Tor.) And then there are foreign territory English and non-English translation licenses with other publishers. And authors reprinting titles they had licensed with publishers and had rights revert as self-pubs — something that is going on a lot these days. When they talk about rights reverting to the author, again they aren’t talking about copyright rights. They are talking about the license rights to produce exclusively the asset in that form in partnership with the author.
The relationship between Amazon and self pub authors is not an investment production license grant. Amazon has no licensing rights to an author publisher’s work and is not a publisher. The author is the publisher. Amazon is not producing/exploiting the asset and is not paying authors royalties. Amazon is instead a distributing vendor. When a small press or self-pub hires a distribution company to market and distribute the product print or electronic, the distribution company is paid by getting a cut of the gross profits on unit sales as an operating cost.That’s what Amazon also does as the distributor in its marketplace and for accounting of those sales like any wholesaler. But Amazon doesn’t do any marketing to other vendors, charges you for production services to fit their required format, and has no exclusive license of sale. The cost you pay is purely for access to their marketplace, so it’s not as much service as a distribution company.
So you discount the price of your book to $2.99 to reduce the operating costs with Amazon in getting access to their market (which can work as it is a pretty big market.) The books sell and the amount collected is the author publisher’s gross profit. From the gross profits, you subtract operating costs, which can include a hired editor, cover artist, your own labor though authors usually don’t do this, formatting assistance, publicity costs, etc. And the biggest cost (unless you are doing a lot of publicity — which may not be necessary because word of mouth is how fiction is mostly sold again,) is Amazon’s fee for the access which they helpfully deduct for you. After the deduction of their fee cut and all your other operating expenses as a publisher, that’s your net profit. So the 70% isn’t a royalty for the exploitation of an asset under a license. It’s your pre-net profit — gross profit minus some operating expenses (Amazon.)
Amazon also gets for free in return for giving you access to their marketplace control over your pricing on the entire Internet. As long as you sell with them, you can’t give a better discounted price to other e-book vendors (like publishers get to do,) or Amazon will drop your price to match. You can’t do a free giveaway with another vendor or by yourself, (like publishers get to do,) or Amazon will drop your price to zero to match the promotional giveaway. They will not allow free competition on the Internet if you want to do business with them for self-pubs. And the tier system on the fee pressures you to keep your prices as low as possible, whatever your other operating costs, which limits how much you can spend on marketing to other vendors and publicity. You can stop selling with them, but since they are 90% of the self-pub market, that wouldn’t be very practical.
So you can potentially make a fair amount with Amazon as your main/sole vendor if word of mouth catches on your book. But you are entirely dependent on Amazon for your sales and constricted in some ways doing further business on the Internet if you sell with them. Amazon already increased its fees with more tiers for self-pub e-books and raised its fees for self-pub audio books. They can change their terms at any time. So Scalzi was suggesting to Iku that he get a better picture of his business factors. The assessment may very well be that the cost of Amazon is worth it for sales, at least at the moment — it often is — but for the entire self-pub market to continue to grow, the monopoly of Amazon is a problem. The biggest problem the whole book publishing industry has is that books are less visible and sold in fewer places, and most of those destination places readers deliberately go.
A number of self-pub successes have gone on to license various bundles of license rights to publishers in different countries to get wider distribution, marketing, etc. than they’ve had so far and to have the publisher take over chunks of labor and cost in those things because that has value to them in running their business. Hybrid authors — those doing self-pub and publisher partner operations — are common and probably will be the main form for author businesses. But each author, as you note, has to figure out things that will work for that particular author. All authors work hard and there are no guarantees of sales no matter how hard you work.
But it would not hurt self-pub authors to better understand the mechanics of the business, to understand the agreements that they are actually signing, and to at least know what a licensing contract is. Because if you are successful, your situation will get more and more complicated, and the amount of labor and operating costs will grow. I’ve had friends running small presses/self-pub or partial self-pub operations who decided to continue self-pub instead of reprint partner with publishers, friends who went hybrid one direction or another and friends who have many different situations in partner publishing. And they all, as fiction authors, help each other sell and work with sellers and publishers. That’s why it’s not a sides thing with two teams. It’s a business thing.
The only reason the authors are affected by the negotiations is because Amazon ruthlessly refuses to sell their books as a bargaining tactic. Which not only effects sales through Amazon, but their entire launches and opportunities for reviews as well, which is why Amazon did it. The damage Amazon is deliberately and unnecessarily causing the authors is actually grounds for a lawsuit. For Amazon to say that hey, we’ll hurt you and then throw some pennies your way is not Amazon making an offer. It’s basically a slap in the face as well as Amazon trying to counter negative press by making an unreasonable proposition that they know no one is interested in. And if Amazon gets their way in the negotiations, they’re taking money away from authors for a bigger cut. If they actually wanted to help the authors, they wouldn’t be trying to take a bigger cut from them.
So no, that’s not really what’s going on. But it doesn’t require people to be team Amazon and team Hatchette. Amazon and Hatchette aren’t at war either — they’re negotiating about how they’ll do business together. Amazon is using blackmail and Hatchette is saying that they can’t afford the ransom money. They’ll probably meet up somewhere in the middle, just like Amazon did with Macmillan. But there is a point at which Amazon’s demands on a cut — operating cost — means that publishers and their authors can’t make money on Amazon sales. There is a point when the well runs dry and in book publishing, profit margins are narrow so it’s a narrow point. A number of smaller presses have already reached that point with Amazon. Hatchette is looking ahead at that point coming up in its negotiations with Amazon.
And Hatchette authors — some of them do or will be doing self-pub on some projects. James Patterson is basically a book packager at this point with a sizable business, not simply an author. So having those authors upset at how Amazon treats their books and business isn’t great for Amazon as the self-pub market opens to new vendors. On the other hand, this is a very small and not particularly important part of Amazon’s business, so they may not entirely care.
Many Self-Pub Authors use the word “royalty” to describe what they get from Amazon. If I self Publish on Amazon, depending on where I price my book, I get 35% (if priced below 2.99 cents or above $9.99), or 70% if I price between.
Yeah, that’s not a royalty. That’s a commission for a consignment sale.* And that is, in effect, what you’re doing by self-publishing through Amazon. They aren’t doing any of the producing of the book, they’re just giving you “shelf space” – in this case, an entry in their database. Now, having recently done some research on consignment selling, 30% isn’t ideal but it’s not by any means unreasonable, and Amazon does provide a lot of value. A 65% commission, on the other hand, is outrageous. (That 15¢ transfer fee also troubles me. It’s taking another 1.5 – 5% from your sale because reasons, and thus puts the lie to the 70% rate.) Plus, the 30% commision is the exception, not the rule, to the KDP program. That rate comes with a lot of restrictions, puts a lot of power into Amazon’s hands.
* I appreciate that this is largely a semantic argument. But I also think that Amazon knows that, too. They appreciate that “royalties” is the publishing world term. They know that “we pay you a royalty” sounds better than “we take a commission on your sales”. They know that a lot of their KDP customers have little to know experience in publishing. And they understand that “selling on consignment” has kind of a low brow reputation, especially relative to “publishing my book”. So, yeah, I think Amazon is absolutely playing a semantic game against the author-publishers own psychology and vanity.
I’ll just leave this here: Evidence that Amazon is not in the wrong and John Scalzi is.
[Deleted because Jeff Bezos did not actually leave a comment here — JS]
Not every Hachette author I know was thrilled with Amazon’s offer or position, nor should they have been, because, again, Amazon isn’t their friend. It is, however, trying interesting and innovative ways to leverage the authors against Hachette (also not their friend, remember), in order to get a leg up over the publisher. It’s short-term concession against a potential long-term advantage; Hachette knows this, and so does Amazon, as do at least some of the authors. I’m not sure how this makes me wrong; indeed, inasmuch as I’ve been noting that businesses do what businesses do in order to reach their goals, this is showing rather the opposite.
Amazon’s move here was clever, to be sure, and I admire, in a purely tactical sense, the hardball tactic it’s making to brush Hachette back from the plate. But I should note I don’t believe for a moment that Amazon made the offer out of a concern for the authors. Rather, it knew the offer would probably be untenable to Hachette before it made the offer and did it for positioning and PR. A hand tip on this was the fact that Amazon made the offer in public before it made it to Hachette.
So once again: This is a business negotiation. Authors will need to decide for themselves where their actual interests lie. If this were me in this position, I would not be willing to accept the short-term profit of a few weeks, if the end result meant a long-term step down in net from sales through Amazon, one that plays out for years and possibly over the rest of my career. That little bit of money up front would almost certainly not replace the income I would lose on the backend.
Incidentally, Haydn, sock-puppeting Jeff Bezos here doesn’t suggest either that Amazon is not in the wrong or that I am; it does, however, suggest that you are somewhat less than 100% objective in this particular case.
Is anyone actually 100% clear whether Amazon is ‘offering’ (scare quotes, because a leaked letter floating an idea to only a few authors isn’t an actual offer) to give $9.99 for every e-book sold straight to the authors, or just offering to give Amazon’s share of $9.99 as long as Hachette agrees to hand over their share? A lot of people seem to be treating it as the former when Amazon’s response that it’s not gonna kill Hachette seems to indicate the latter.
Incidentally, I wonder whether it’s about separating Hachette and Hachette authors as much as it is separating the richer, more famous authors (who obviously don’t need money, so they wouldn’t get this offer) from the midlist and newbies.
Whats your position on Amazons previous offer of a 50/50 “pot” similar to what they did with Macmillan in 2010. Was turning that offer down the right thing for Hachette to do by its authors?
I don’t know any of the specifics of the offer so I couldn’t say.
I’m generally for doing as little as possible to disrupt authors’ flow of income. So on average I would say I would really rather prefer Amazon (or any retailer) simply not fiddle with the consumer’s ability to make purchases while it is negotiating with a publisher (or other vendor). This would also keep Amazon from having to suggest convoluted ways to keep authors from being collateral damage. But I also understand that Amazon thinks attempting to pit authors against publishers might be useful. Perhaps it will be. We’ll see.
Neither; it’s a media soundbite meant to reassure business news and force Hatchette to deal with media questions about why won’t they cooperate with Amazon’s solution to the problem that Amazon is causing. It’s mainly a temper tantrum tactic because the authors said Amazon was mean for blocking their sales as a bargaining tactic. There is a lot of melodrama in business negotiations.
Not every Hachette author I know was thrilled with Amazon’s offer or position, nor should they have been, because, again, Amazon isn’t their friend.
Given the fact that authors can get 35-70% royalties from Amazon compared with a maximum of 15% from traditional authors like Hatchette, in what way is the retailer not the athors’ friend?
@ Kat Goodwin: Amazon hasn’t blocked sales at all, they simply cannot sell books they’re not having delivered to them, nor can they take pre-orders they aren’t certain of their ability to fulfil. The fact that Amazon is redirecting people to other websites to get the books they want proves that they’re not blocking sales, plus the fact that every book not purchased from them (whether purchased elsewhere or not) is a bite taken out of their bottom line.
“Given the fact that authors can get 35-70% royalties from Amazon compared with a maximum of 15% from traditional authors like Hatchette, in what way is the retailer not the athors’ friend?”
Something tells me that you’ve not actually read much of the thread you’re posting in; if you had, you would have seen this already addressed. Off with you, to read earlier parts of the thread.
@Kat Goodwin – Oh sure I don’t think it’s an actual strategy (and I probably didn’t phrase what I wrote very well) as much as a brief bit of PR, I just wonder how much the target is the Kings and Pattersons and Colberts who are causing Amazon bad PR – you’re rich Stephen, why don’t you support authors who aren’t as successful as you kind of thing – rather than Hachette. But then, I’m seriously in danger of treating it as a football game where I don’t have any real emotional investment in either side winning but am willing to waste my time second-guessing the coaches’ tactics when it’s really nothing to do with me. I really should just get back to work.
Of course, Stephen King and James Patterson have done quite a lot for authors who aren’t as successful as them. King has regularly supported with quotes, media cheerleading, and joint promotion authors who aren’t as well known. In earlier days, he would sell new filmmakers film rights to his stuff for a buck. That started to become very complicated legally so he stopped but he continues to support a lot of people trying to break into creative mediums. And for one book, he did a tour where he rode a motorcycle and went only to independent bookstores for appearances to support independent bookstores. And Patterson turned himself into a book packager, teaming up with collaborators who then sell well enough off that to get their own original work out there in the market and selling, plus he’s been fairly supportive of SFF. And of course, Colbert has helped quite a lot of people while playing a satiric blowhard on t.v. Having Amazon scold them is kind of like Darth Vader scolding the Jedi for being mean to their padawans.
As already discussed, fiction is symbiotic as a market. Authors help each other out because it benefits the whole place and bestselling authors help fund the other ones. Which is why many of them are complaining not just for themselves but for the newer, less high selling authors who are getting hurt a lot more by Amazon’s favorite bargaining tactic.
And it is their favorite, little Haydn troll. When Amazon just happens to stop selling the books of publishers, large and small, that they are bargaining with for more money over and over again, no one, including Amazon, believes there’s a supply problem. They have the books, they can get more books in two seconds; they are just flexing their market muscle. Also, if I’m going to write a fucking long Publishing 101 post on what a royalty actually is, you could at least read it before trolling. You guys are disappointing Scalzi. The taunts have become very rote.
Look, everybody knows that Amazon is ruthless. They’ve been ruthless since the beginning. They undercut, they buy up competitors, they trash their own revenue streams to maintain monopolies and bargain with publishers, they apparently encourage little kids to charge up their parents’ credit cards (see Scalzi’s newest post,) they hide out in Luxembourg to avoid paying taxes in France and the U.K., etc. They have destroyed small presses and other companies. They are a corporation and they have a take no prisoners style.
So I’m pretty sure Hatchette knew going in that it was possible Amazon would press the no sale button tactic on their books. But again, Hatchette is also a large corporation and there is a point where financially it does not make sense to accede to a vendor’s demands, even if that vendor has a big chunk of the market. Whether they’ve gotten to that point, who knows. The numbers that get spouted in the media over who gets what in sales — those aren’t real numbers. But I don’t think either Hatchette nor Amazon think this negotiation is going to go on forever or be unresolved.
“I don’t know any of the specifics of the offer so I couldn’t say.”
Well, I’m wondering if/when any of your fellow authors published by Hachette were given a voice in deciding on the two Amazon proposals? Should they have been consulted before Hachette made its decision on whether or not to accept either offer?
“I’m generally for doing as little as possible to disrupt authors’ flow of income. So on average I would say I would really rather prefer Amazon (or any retailer) simply not fiddle with the consumer’s ability to make purchases while it is negotiating with a publisher (or other vendor).”
Well, they removed a preorder button, but linked to other places where you could buy the item in question. I can see a couple of more clicks being a drag in this day and age…then again driving them a competitors website with higher prices could pay off in the long run.
“This would also keep Amazon from having to suggest convoluted ways to keep authors from being collateral damage. But I also understand that Amazon thinks attempting to pit authors against publishers might be useful. Perhaps it will be. We’ll see.”
I think the authors v publishers fight has been brewing for awhile, and if it hadn’t been Hachettes turn in the queue, we’d be having the same conversation if it were another publisher, except Macmillan.
Thanks for the reply.
Apparently, Amazon and Hachette are out of contract. If so, Amazon has no obligation to sell Hachette books. They are still selling them right now most likely because their delisting of authors during the MacMillan dispute garnered them bad press. But if this drags on they might delist Hachette midlisters.
And Amazon is not throwing a temper tantrum. They and Hachette no doubt studied each other, developed their tactics, practiced, and devised scripts like some football teams do, running a series of plays to see what works and then altering their plans accordingly.
I don’t know for sure of course but if real estate agents, retail sales associates, lawyers and politicians practice and prepare (negotiation skills and strategies, selling techniques, trials, debates etc) then I can only conclude that both sides have done likewise. If they haven’t then they are fools.
Like you and others have said, Amazons offer to Hachette is just a ploy to counter bad publicity from Preston’s Poor Writer letter. Supposedly, Hachette could sue any of their authors who accepted Amazon’s deal.
“I’m a fan of self-pub. Scalzi is a self-publisher. Scalzi also has more than one publisher, as many authors do. A writer puts together material for a written book. That’s an intellectual property. The writer has the rights to that property their whole life plus a period of time for their estate, said period varying depending on their country’s copyright law. The author holds the copyright automatically and does not lose it.”
OK, reading through the last few posts, I’m wondering if theres not some talking past each other going on. So, kindly bear with me.
IP can be in a bundle of rights. Print, digital, television, movie, foreign and so on, yes? So when an author writes a book and signs a standard contract with a publisher, they are signing away their print rights to said IP, right? Thats why Jean Craighead George was sued by HarperCollins over “Julie of the Wolves.” when Open Road published it as an ebook. The book was her IP but a contract she signed in 1971 gave HarperCollins her publishing rights to that work.
Here’s the relevant clause HarperCollins used:
“Specifically, paragraph 20 of the 1971 contract states that HarperCollins “shall grant no license without the prior written consent of the Author… including uses in storage and retrieval and information systems, and/or whether through computer, computer-stored, mechanical or other electronic means now known or hereafter invented…”
HarperCollins sued and won, George had broken the publishing terms of her contract, even though it was her IP.
By signing with a publisher, you are giving them your publishing rights for that IP for the rest of your life plus seventy years (usually). The length can be reduced through negotiation, can be returned through reversion, or you may have sue to get them back. So, as an example, Old Mans War is John Scalzi’s IP, he has the copyright to it. However, TOR owns the print rights to the Old Mans War IP, because he signed those rights away when he signed the contract with TOR (Maybe, its an example :-) ). If Scalzi and TOR get into a tiff, he can walk away, but TOR still owns the publishing rights to the Old Mans War IP. Unless those publishing rights come back to him, he can’t publish anything else in that IP unless its through TOR. When other authors talk about “I had to sue to get the rights to my backlist returned to me” thats what they are talking about, right?
“Amazon also gets for free in return for giving you access to their marketplace control over your pricing on the entire Internet. ”
How so? In looking at the kdp info, Amazon cannot tell you what to sell your book for on a different website. You set your list price and Amazon will not arbitrarily change it “just because”. However, if the price at which an Amazon competitor sells your book, or the price at which Amazon sells a physical edition of your book is lower than your list price, your retail price will be lowered to that price. You can sell for $2.99 on Amazon, $3.99 on Kobo, $4.99 on Itunes, and $9.99 on BN.com and Amazon doesn’t care, as long as they have the lowest price. You lower your price on any of those to $1.99, Amazon price matches. You have to lower your price to free on another website in order to sell for free on Amazon, as they do not have a zero price point.
If your selling audio through ACX, they set the price there. I believe if you sign up for Kindle Select, you can’t sell ebooks on another retailer platform, but you still get to set the list price on your ebook. I haven’t looked at Select terms that closely though.
At the end of the day, Hachette is trying to return to Agency Pricing. Hachette also believes that “Publishers need size and muscle in order to keep control over relations with authors, over pricing, and distribution.” They’ve said so publicly. Amazon won’t go back to Agency, and honestly, I’m not sure why traditionally published authors would want to go back to Agency either, it wasn’t that good a deal for them.
Anyhow, Amazon vs. Macmillan was what, 8 months? And were only four months into this, and then the other publishers are next…fun times ahead…
@Andrew, from your link:
“While some have viewed the case as a follow-up to the 2001 landmark ruling in Rosetta vs. Random House, the judge acknowledged that her ruling “dependent as it is on antiquated language,” could be of “limited applicability beyond the confines of this contract and this case.”
Also: “HarperCollins argued that its contract with George included both a standard subsidiary rights grant (paragraph 23), which taken with another clause (paragraph 20), which referenced electronic usage, gave HarperCollins the exclusive right to license e-book rights.”
So no, this does not suggest that because a particular contract signed in 1973 was very broad and was found to have included e-books at a time when they weren’t a thing, that any author today signing a ‘standard’ print publishing contract automagically signs away all their “IP”.
I’m sure that Hachette is in communication with its authors, but the authors in the license grant allow Hachette to decide pricing, etc. on their editions of the book and what costs they will incur in return for Hachette taking on all those costs. Which Amazon knows perfectly well. The offer is not a real offer. And Hachette is looking at a longer time horizon, trying to protect both themselves and their authors. Scalzi already outlined why the offer wasn’t really helping authors. There have also been lots of folk in SFF writing to explain how Amazon’s do not sell action has done extensive damage to authors. None of that damage was necessary to Amazon’s negotiations with Hachette. Amazon simply chose to inflict the damage as leverage in the negotiations, as they’ve done before.
There is no authors versus publishers fight. There are negotiations on e-book deals and everything else, but that’s normal business. And that’s another symbiosis — an agent gets a good contract term for a big selling author. That’s then a precedent that can be applied in whole or part to other clients of the agent with that house. Then those terms become more common.
They don’t have a contract like that. Hachette sells Amazon print books as stock, which goes in Amazon’s warehouses — and can for an agreed upon time period be if unsold returned to the publisher for a full refund — and provides Amazon with the e-book template/file in Amazon’s desired DRM format that Amazon can then sell. Amazon is a wholesale retailer, meaning that Hachette sells them the print books at a deeper discount than they do retail stores. The terms of Amazon’s purchases and how the sales are accounted back to the publisher are agreed upon by Amazon and Hachette and include agreements for money from the publishers for co-opt advertising on the Amazon site and stuff like that, which are deducted out of the sales money or paid directly by the publisher. Amazon wants to change the terms and get more money, including for co-opt advertising and such, particularly on the e-books. Hachette doesn’t want to change the terms because they will lose on each sale, either now, or under expected further demands from Amazon in the future.
Amazon is never under obligation to sell Hachette books — or from any other publisher. It buys the books on a consignment basis (gross sales, copies shipped,) but it doesn’t have to sell them. And it doesn’t have to buy any Hachette book it doesn’t want. Amazon not selling books they bought on consignment/e-book file from Hachette is thus not illegal or breaking any contractual terms. It’s just a nasty negotiating tactic.
No, the author agrees to go into partnership with the publisher under various terms and license grants. The author grants the publisher the exclusive license to produce the book for the publisher and the author as partners and to exploit the sales of that production as they see fit in return for bearing the costs of production, marketing, distribution, etc. If the author agrees that the publisher will be his exclusive partner, the only company to have the license from the author, and then turns around and gives the same or partially the same license to another company, the author is reneging on the contracted partnership agreement and license grant. If the partnership ends — i.e. the publisher is not producing the book, nor reprints in a contracted time period, then the author ends the partnership and the license (reversion of the license rights.) This has become a more complicated issue requiring all sorts of renegotiations and contract adjustments and changes in new contracts regarding e-books. The license term is the full copyright period for the author (which is better than the movies which claim the rights forever throughout the universe,) but whether the partnership license will continue for that long varies by book.
The problem that they’ve had — and this was going on way before the Kindle — is that electronic rights were part of the license grant and nobody exploited them because there was no real way to exploit them in most forms, certainly not for the retail trade market. They were a subsidiary right in the license, which the author granted that the publisher could sub-license to another company (splitting the proceeds with the author to a contractually agreed on split,) or put out a version themselves, involving a royalty of some type. But usually the only electronic exploitation was maybe a charity thing the publishers would sub-license for free. Audio was basically the same way.
But in the 1980’s, audio books on tape and electronic CD-Roms in e-readers and computers became real things as small retail markets. Publishers built CD-Rom and audio divisions, their corporate owners — publishing being a hot investment at the time — bought tech companies and tried to diversify the companies outside of publishing. The electronic rights had to be divided — CD-Rom and information storage database rights. All sorts of negotiation fights occurred over authors not including CD-Rom in the license grant, of it requiring additional advance money for publishers to get that license in an agreed on deal, etc. They were dealing with a whole new infrastructure, and when that happens, you get a lot of negotiations regarding working that new market.
But the Internet knocked out the CD-Rom market before it barely got started in the mid-1990’s, corporate owners left publishing and the new tech divisions were dissolved mostly except for reference material. Electronic rights went back to being one set of rights instead of two. The Internet (e-book files,) is information storage databases. So then over the rest of the 1990’s and early oughts, there were further negotiations about electronic data rights and licenses.
But older contracts simply had electronic rights as part of the license — no specialty language. Sometimes authors or their estates were able to argue that the wording of those old contracts was too vague and didn’t really include an e-book form, and they would sell the e-book rights to e-book companies. And sometimes publishers would sue as part of the negotiations over what exactly the license meant. Sometimes the authors won (Rosetta Books re Random House,) and sometimes the publisher won, and sometimes a settlement worked out where it was treated as a kind of sub-license with the author-publisher split. This was all a tiny part of the market, but everyone knew it would one day get bigger.
With e-books, publishers needed not to sublicense them for a split but sell them directly like print units. And that meant rebuilding the infrastructure divisions again. And it meant a lot of renegotiations now that there was a lot more money attached to the rights. Old licenses and payment terms from them had to be renegotiated, and new ones took different tactics. Authors have all sorts of different arrangements.
The publisher who gets the license in partnership with the author cannot then go and pay royalties to another author and claim that the book is really the second author’s. The author continues to own all the rights to the IP and licenses out the rights to business partners.
He can publish any new book in the OMW universe he likes. But he can’t reprint OMW itself because he gave Tor the exclusive license to print it for him. The partnership has to be ended under contractual terms, ending the publisher’s license. All authors don’t have to sue to get their rights back.But if the publisher is still producing the book, then the license is still in effect. If the publisher has stopped producing and selling the book, the publisher has a contractually set period to re-produce the book or the license reverts to the author. Disputes and legal disputes can arise about these terms. And e-books technically don’t go out of print/sale, so there are also a lot of negotiations going on re adjusting old contracts and doing new ones re “out of print” and license rights reversion.
But a lot of authors don’t want the license reverted. They want the publisher to reprint the work and put out an e-book form. It depends on the author, the works, etc. Print only deals are being struck. Electronic only deals are being struck, etc.
Yes, exactly. Which controls what price breaks you can give other vendors. None of the other vendors can compete competitively with Amazon because Amazon won’t allow you to make special deals with them if you sell on Amazon. Amazon will not allow you to do a promotional giveaway through another vendor. They control the price of the book on the Internet with other vendors — never less than theirs. That means it’s much harder for other vendors to get a toehold in the market and reduce Amazon’s 90% monopoly of the self-pub market. But that’s not necessarily what’s good for your publishing business. It’s caused problems for a number of authors.
Additionally, since their cut is bigger the higher you price the book (even though you’re not getting any difference in service,) they are pressuring you to set the price very low. If you don’t make up the sales in bulk, you have less profits, which means you have less to reinvest in your business in production, distribution, publicity, etc. That also may not be what’s good for your publishing business.
1) Hachette doesn’t need to do agency pricing with Amazon because e-book prices have already dropped. The average e-book price was lower than $9.99 before the brough-ha, and it is lower now. (See the link to the Salon article I gave before.) And Amazon went from having 90% of the total e-book market to about 50%, with Apple, Nook, Kobo and others getting a footing in the e-book market, providing more vendors. Most of the roaring over e-book prices was smoke while infrastructure was being set up. Infrastructure is up now. The Android smartphones are now an area of e-book interest, further stretching the market. Since Amazon has the Kindle up and running now, it doesn’t care if the e-books are $9.99 or not. Amazon is in love with pretending e-books are just like print books for pricing, but the way that e-books are sold is very different from print. (Charlie Stross did a very good post on all this back during the initial Apple fight — you can look it up on his blog.)
2) The negotiations between Hachette and Amazon aren’t about agency pricing. It’s about how much Amazon gets as cut and fees for e-books, whatever their price and whoever sets it, (and that’s because there’s a cut issue with e-books because e-books are sold differently than print books are.) The negotiation is about the cost of doing business with Amazon. Amazon is being pressured by stockholders to produce not just growth revenue but cash profits. So it’s demanding bigger cuts in most of its operations. (Frankly, I’m not really sure why the book negotiations are getting more media attention than other negotiations with Amazon; maybe because everybody’s running to the press or because all the journalists also want to do books. I suppose if Stephen King and James Patterson yell, it’s news.)
Incidentally, Haydn, sock-puppeting Jeff Bezos here doesn’t suggest either that Amazon is not in the wrong or that I am; it does, however, suggest that you are somewhat less than 100% objective in this particular case.
I have only ever posted here as myself. Now, if someone else sock-puppeted Jeff Bezos from this server, I don’t know, but the details in the little boxes when I post are my own.
Here is John’s recent overview of his business relationships. It is a lot more diverse than he sold his rights to one company.
I have to say Kat, you exhibit the patience of a saint.
Over on Slate, further elucidation on why Amazon’s offer to authors is more about PR than it is about anything else.
The comments on that Salte article are… enlightening?
But then, that’s what I get for reading the comments on a Slate article.
Kat Howard: So then Amazon doesn’t have to make books available per contract? Interesting.
I feel bad for Hachette writers but I’ve seen worse. And its going to get worse for debutants and midlisters.
Scalzi: Ha! That agent said it was unseemingly. Nah, just predictable. Poor Hachette got stuck going first against Amazon. At least Tor/MacMillan will be ready when its their turn to face the dragon.
From the Slate article: “It does kind of stink to have your book on hold when you have to promote it yourself and people can’t get it,” says Jay Bakker, a pastor and Hachette author.
Wait, what? But isn’t promotion of books the publisher’s responsibility? What is Hatchette, a vanity press or something?
The following link leads to an interesting insight into the truth behind this dispute.
A link to more of Hugh Howey’s biased and mostly baseless speculation. I have toured Baker & Taylor’s New Jersey facility. They process quite a lot of Amazon’s book orders there. Part of how Amazon delivers so fast is by using distributees like B&T and Ingram to fill its orders. So no, not a very interesting insight
I meant distributees of course. Big fingers tiny keyboard
Shit. Distributors. Sorry John. I am messing up this morning.
Howey has some rather odd ideas. For one thing, he makes this statement: “A pre-order is a guarantee of a future transaction.” I’m not sure where he gets that. I’ve never seen any contract language to that effect when I have pre-ordered something. At Amazon, a pre-order is reserving an item so that if and when it is stocked, you’re already in line for it and can get it presumably more quickly. Amazon offers pre-orders on items that may or may not ever become available. I know several people who pre-ordered a certain CD, for instance, and for whatever reason, Amazon didn’t stock it when it was released. I don’t think it happens a lot, but it happens, and while it’s annoying, it hardly rises to the level of Howey’s pearl-clutching. My friends didn’t need a refund because–wait for it–they had never been charged for the CD in the first place.
Howey doesn’t seem to know how the pre-order system actually works at Amazon. In his post, he imagines Amazon saying, “That book you pre-ordered from us two months ago? We no longer have a sales relationship with that manufacturer. Here’s your refund.” Except that no refund is necessary, since Amazon doesn’t charge the customer until they ship the book. So really all that would happen would be that they say, “Sorry, we will not have that item in stock in the foreseeable future.” The only time a refund is necessary for a pre-order is when it happens that (quoting information from Amazon’s web site) “your order enters the shipping process before the release date and the price is lowered before the end of the day of the release date.” That is, you pre-order an item, it comes into stock, they charge you the current price and start the shipment process, the price goes down, and they refund the difference (I’ve had that happen, and that was how it worked).
In short, Howey’s take on the Amazon pre-order system is faulty, leading him to a silly and erroneous speculation about “legality” and casting doubt on his grasp of the situation as a whole–at least in my mind.
Given his penchant for finding something “far more likely” with no basis except his experience at a small bookstore, the assumption that Amazon’s order process must be the same, and his misunderstanding of how Amazon does pre-orders, it seems to me that Howey’s post is not so much “an insight into the truth behind this dispute” as a somewhat interesting but faulty speculation about what might possibly be behind it.
BW said: Howey has some rather odd ideas. For one thing, he makes this statement: “A pre-order is a guarantee of a future transaction.”
In a brick and mortar store – WH Smith, for example – the above is held to be true by the people running the place.
Were the people who were called saints ever really that patient? I don’t know about that. Me, I’m methodical and pedantic, which comes in part from a past working on contracts. And I know what authors are going through and how confusing it can be. Fiction and book publishing are odd businesses, using systems that other industries don’t use. The fiction market is symbiotic, counter-intuitive, largely marketing resistant, reliant on getting as large a variety of books as possible seen as visible to get them to core readers and dragging in as many others as possible. It is a slow and low money business with narrow profit margins, low growth rates, churning cash from one successful sale to pay for newer gambles and frequently in flux on distribution methods. It has a glamorous profile all out of proportion to its actual presence in the larger business world because it publicizes art. It experienced in the U.S. particularly but throughout the world market a crash shrinking of its primary wholesale market in the 1990’s that lost it investor interest and enormously effected the fiction market still today.
And the media continually, as media does these days, presents things incorrectly when they decide to notice book publishing. For instance, the Slate article Scalzi linked to — it talks about authors signing away their rights, which is not the case. So naturally, that’s what people think occurs. They’ve never seen a publishing contract.
No, it is not the publisher’s responsibility. That’s not part of the license. A vanity press is a printing press. The author PAYS the vanity, just like the author would pay a free-lance editor, a book cover artist, etc., to produce the work so that the author can try to market it and sell it as an author publisher. A partner publisher does not charge the author. It takes on the cost of production all forms, marketing the work to book vendors large and small in all the licensed forms, distributing and shipping, distribution of e-books, managing sales and accounting, sub-licenses of granted subsidiary rights, and in addition will do some publicity to further market and sell the books, ranging on their estimates of what will be most cost effective. The author pays nothing to the publisher, and, if the press is large enough to afford it, receives an estimation of the author’s cut off the top in advance that the publisher pays for whether or not the author’s cut actually comes to that amount in sales.
So the author, who is paying none of the costs and labor, doesn’t get to dictate to the publisher what the publisher is going to spend producing, marketing and selling the book and how the publisher is going to run its business, especially if the publisher is selling thousands of books with different authors. In addition to what the publisher decides it can afford to do on publicity, the author can do publicity for the book in coordination with the author’s partner publisher’s efforts, and also agrees as part of the license to cooperate with and participate in those publicity efforts that the publisher is doing.
So Scalzi is contractually obligated to go on the author tour that his publisher is largely paying for. But when Scalzi had a problem with going to San Diego ComiCon proper, he and his publisher figured out how to work around that. And in addition to whatever Tor is doing, Scalzi does promotion on his own, at his own expense, but coordinates it with Tor so that Tor can have books at events, etc. It’s a partnership.
I like Hugh Howey very much. Amazon gave him a marketplace and word of mouth built him a following, as so often happens in fiction. But like a lot of authors, even successful ones, he really does not get how a lot of the business works. And the reality is, he has partnered with a dozen or more publishers worldwide and given them a copyright length of license to his work, taking the royalties. Because he thought partnering was good for his business.
Now does that mean that he never negotiates with his publishers on better terms? Of course not. That’s why Scalzi and Tor had their negotiations as well. Authors are business people — publishers are their business partners, not their parents. But those business relationships are about everybody selling books together, not market share of one industry such as bookselling. If Howey wants to side with one business partner (Amazon) against his other type of business partner (publisher,) he can, but that means he’s sort of fighting himself.
Amazon wants more of Howey’s and other authors’ money. This isn’t the first time they’ve asked — more like the tenth. And they’ve gotten it in the past. But Hachette is looking at costs and at Amazon demanding further money past any point of profitability, using it’s dominance in the e-book market (and in the print market as well.) So siding with Amazon that it’s terrific that Amazon stops selling books as its favorite negotiation ploy, and that it’s terrific that Amazon wants a bigger cut from authors for letting the books sell there — I don’t see that as being a terribly smart business decision for authors. But a compromise to keep Amazon placated might be, and that’s what the negotiations are working towards. The rest is hyperbole.
And the problem is, Amazon is never placated for long. They lost and are losing their monopolies in e-books and e-book sales are leveling off. So they are scooping out what they can. That’s not necessarily a good thing for authors, especially long term. That doesn’t mean blindly siding with Hachette. Authors are still in the first stages of a long negotiation with publishers over how e-book sales will work and be accounted. But publishers trying to open up the market, preserve profits for themselves and authors and get more vendors and price flexibility generally will also benefit authors. More books in more places is essential.
Remember, the average cost of an e-book was below $9.99 before Apple entered into it. And it is still below $9.99. Amazon didn’t price that many e-books at $9.99. It was an arbitrary idea that did not necessarily serve consumers or anyone else. It just looked impressive when they were launching the Kindle to get and keep market dominance. If Amazon can get a bigger cut of partner published e-books (which bring in most of the money,) since they can change the terms with self-pubs whenever they want — guess what they will do/are doing with self-pubs? So the big thing self-pubs need, again, is more, viable vendors for e-books, particularly in the English market.
Haydn, you’re kind of making my point. It looked to me as though Howey was using assumptions about brick-and-mortar stores and extrapolating that to “the most likely” scenario about Amazon, which does not do business that way. By carelessly basing his analysis on at least one misconception about Amazon (and it’s no secret how Amazon handles pre-orders) he undercuts his credibility, at least as far as I’m concerned.
Every main bookseller uses pre-orders. Just in time delivery was not something established by Amazon — it was established by the publishers, who borrowed it from the music industry as an ordering and accounting system. It took several years to set up with the major retailers and wholesale suppliers and there were lots of problems due to the returns system, but it got worked out in the late 1990’s and cut down on returns and speeded orders.
Booksellers make initial orders for print books directly from the publishers, which also pay for the shipping of the books to the booksellers. Booksellers work with the publisher’s marketing reps to determine what amount of the print books they think they’ll need. The buy decisions for big chains are made in the central office, not the individual bookstores. In addition to the order for the books, they work out with the publisher co-opt advertising, which the publisher pays for (in-store displays and special positioning,) or partially pays for (the bookstore’s advertising in newspapers, featuring the publisher’s big titles, etc.) These co-opt deals effect how many books the booksellers order. (And is part of the Amazon-Hachette dispute — Amazon wants more co-opt money.)
Another way they work out that estimate for the initial order on big name titles is from pre-orders they’ve gotten (which customers aren’t charged for as a final sale unless the bookseller can actually deliver the customer the book.) The initial order the booksellers place with the publisher and any others is called copies shipped (gross sales.) The bookseller pays all or part of the seller price for the books and the publisher puts that amount on deposit account for the bookseller because those aren’t actual sales yet.
If the bookseller doesn’t sell all the books within an agreed upon time period, the bookseller can return the unsold books to the publisher for a full refund, the returns. The publisher pays for the shipping of the returned books back to them, which return to stock if not too beaten up, (except for mmp, which just gets the book covers returned,) and gives the bookseller a full refund. The returns are subtracted from the copies shipped and that gives you net sales — the actual amount the book sold. On the books that are sold, not returned, the bookseller has to send the money owed the publisher/author.
For second and additional orders, when booksellers need more books, they usually order from the resupply wholesalers, mainly B&T and Ingrams in the U.S. They again have a set period in which to return unsold books for a full refund, except they return them to Ingrams, etc., which refunds the returns to the bookseller and in turn puts the books back in stock to resell to another bookseller or passes the books back to the publisher for refund. The bookseller can also still order directly from the publisher — which it might do if Ingrams is saying no more orders until you pay up for your other orders that you sold, for instance. Everything is now set up so that this process happens as quickly as possible, with secondary orders being turned around very quickly and additional printings faster.
Amazon has numerous ways to get copies of books to it quickly. Other booksellers are not having any problem getting Hachette books. Amazon is fully fine with losing huge sums of money for a market advantage. They operated at a loss for ten years. They sold the Kindle at a loss, e-books at a loss to get market share. They deal with smaller competitors in retail by undercutting them on price, taking an enormous loss on the sales that the other company can’t afford to do and either the company goes out of business or is bought by or partners with Amazon by force.
And they routinely stop selling the books, and only those books, with claims of sudden problems, of whatever publisher they are currently negotiating with. They did it with Macmillan, with British publishers, with the distribution company that marketed for dozens of small presses — they are notorious for it, and they have absolutely no problem letting books sit in a warehouse at a loss, etc. to do it. So if you honestly believe that Hachette is causing this pressure tactic that works for Amazon with “sudden” delays, there’s this bridge. It runs between Manhattan and Brooklyn. I own it, really I do. And I’ll sell it to you for a reasonable price. :)
Maybe so, but that particular phrase is so vague that it could accurately describe any number of models of “pre-order”. The crucial problem for Howey comes when he talks about Amazon issuing refunds on pre-orders. As others have noted, it signals that he doesn’t know how Amazon actually processes pre-orders. Amazon (and Barnes and Noble, incidentally) doesn’t charge for a pre-ordered product until it ships. The may collect payment information, but that’s a “convenience”, so that they can then authorize the shipment as soon as the product becomes available. Otherwise, they could only contact you that your order is ready to ship, at which point you provide payment, causing a delay in the arrival of the item with the customer.
Also, “guarantee” is an awfully strong word for what Amazon is actually offering. What they are offering is more of an assurance, backed by little more than their word, that they will sell and ship you this item as soon as they have it available. If they fail to make good on that promise (and they do, more often than they probably should) the only hit they take is on their reputation. It costs Amazon nothing more than an entry in a database to take a pre-order. However, the practice has become an industry standard, So for Amazon to refuse to take pre-orders on Hachette books is not a hedge, but a deliberate slight.
Now, technically that only calls one aspect of Howey’s blogpost into question. But, given the “I know better than Hachette does how to sell books” tone of the piece as a whole, that’s a significant loss of credibility in his expertise. It causes one to wonder, “How many other (easily verifiable) details does he have wrong, simply because he’s relying on his bookshop experience over actual research on the subject. Maybe the Big 5 could possibly understand how their distribution chains actually work. And also, is reading off a bunch of ISBN numbers for 30 whole minutes really such a hardship?””
Pre-orders can last for years. Think about how many people pre-ordered A Dance with Dragons and then waited, and Scott Lynch’s third novel when he ran into health problems. If a bookseller absolutely has to — if the publisher says, it’s not coming — the bookseller will cancel the pre-orders and stop taking any more. But that’s on one individual title at a time and it has to be definite. Otherwise, fiction bookselling is an optimistic business that expects the books to show up eventually and readers to be waiting when they do. And in fact, Amazon expects readers to still be waiting after it’s done playing games with Hachette’s titles. The money they lose now with the stunt, they expect to make up later. And the books in this case are entirely available elsewhere and Powell’s, for example, which does both online and brick and mortar selling, doesn’t seem particularly worried — it’s not a publisher supply problem.
Apologies for getting your name wrong. I hate when that happens. It won’t happen again.
@ Jim Hines
Is there any way you can correct my error? Thanks in advance.
Not directly on point in this discussion, but interesting to me at least, this dustup caused me to investigate doing a bit more business with B&N. I’ve always bought /some/ stuff from them simply because they’re the only local bookstore left and I wanted to support them at least a bit. But I’ve discovered if you have a membership, it gets you free shipping just about as fast as Amazon, and the discounts are pretty similar. And a B&N membership is a lot cheaper than Prime. Of course, you don’t get the Prime Instant Video, but it does make them a viable place to buy books.
A New York Times story about Amazon, authors, publishers, and other related matters:
“Spoiler”: The author, who at the beginning of the article is portrayed as as owing his success to Amazon, is described thus at the end: “So in the Amazon-Hachette dispute, somewhat to his surprise, he is on no one’s side.”
The following was a new one to me: “Amazon has been reported to be seeking a new concession from publishers: If a customer orders a book and it is not immediately available, it wants the right to print the volume itself. An Amazon spokesman said it does not compel publishers to use the technology but offers it as a service. The customer wants the book immediately, so this makes obvious sense. But it chips away yet again at the publisher’s role.”
It’s not so much that it chips away at the publisher’s “role,” as it is that it gives Amazon a whole bunch of license rights that it didn’t pay anyone for. POD isn’t the same as an Amazon Kindle specific e-book. Publishers are still figuring out how they’re going to use POD because it sets up a whole new type of business relationship with the booksellers. And with Amazon taking a big cut for doing it, likely having Amazon do the POD would not make the author/publisher a lot of cash — same sort of problems. Also, as we’ve seen, Amazon tends to claim there’s a problem making a book available when there isn’t. There’s not much incentive for publishers to help Amazon expand a POD operation to go with its e-book, audio book, and new print imprint businesses. However, POD might be of use to small presses with Amazon. Trouble is what Amazon would charge them for that and if it’s feasible for them. (Remember, Amazon doesn’t give out numbers much and some of the numbers it gives out are pretty likely not accurate but serve their purposes. So a lot of the numbers you see getting bandied about are entirely guess work about what’s going on.)
Two articles of some possible relevance and interest: a piece in Salon about Amazon and sales tax, which has a lot of stats that match other stats that have been reported. The headline Salon gives the article is ridiculous, but the text has solid info. And the official announcement in Forbes of the launch of the new HaperCollins.com which will include selling directly to consumers e-books, print books and audio books. This is not a new thing — publishers always did direct mail to consumers and in the 1950’s-1980’s it was a much bigger thing. And some publishers have at times owned and run bookstores and small chains of bookstores, though most of those were shut up in the 1990’s with the wholesale collapse. But this is a more concentrated effort at such selling, attempting to further broaden the market for e-books. Forbes sees this as a direct response to the current Amazon negotiations with Hachette, because again that makes a good headline, but the relaunch has clearly been in the works for some time.
@ BW and docrocketscience: As I understand it, Waterstone’s pre-orders are promises to reserve books they know they’re getting in at a set date in the future, whereas Amazon’s pre-orders are nothing more than a promise to ship you the book if it comes in. With Amazon, there are no guarantees with printed books because they can’t make any, especially with this current dispute.
As far as I can tell form the their website, Waterstone’s pre-order policy is identical to Amazon’s (no charges until your item is dispatched (shipped); pre-order price is locked in; timely correspondence if your item is delayed.) Granted, I’m not seeing the pre-order policy in its entirety anywhere; I’m pulling multiple bits of info here, so if you’ve got something better?
How do you suppose Waterstone’s “know[s] they’re getting [books] in at a set date in the future” in a way that is fundamentally different or more certain than Amazon does? (Publisher disputes notwithstanding, of course, because the kind of dispute Amazon and Hachette are having is, despite all rhetoric, an unusual occurrence.) Is Waterstone’s just a lot more pensive in putting a pre-order button on their pages? How do you know?
@ docrocketscience: Well, that was Waterstone’s policy when I last pre-ordered something from them (Harry Potter and the Goblet of Fire). I don’t even know if WH Smith still has that policy since it’s possible they also changed theirs, but they did when I last pre-ordered a book with them back before the boycott including them was launched.
That’s not what a pre-order is and that’s not what Waterstone does. Pre-orders are people ordering a book that is up-coming and the vendor has not yet gotten in stock. Those pre-orders affect how many copies of the book Waterstone will order of the first print run from the publisher. Other factors affecting the order include previous track record of the author, guessed at demand, if the publisher is paying for co-opt advertising, etc. Once the books come in to the vendor, the vendor fills the pre-orders first and at that point, the person who orders pays for the book on the charge card they already gave to the store.
That’s how all pre-orders work. There are not different kinds of pre-orders. Pre-orders are critical for major bestsellers on the ordering front. They are less critical for new and mid-list launches because consumers don’t know those authors well or at all and are much less likely to do pre-orders.
Again, this is something that Amazon has done repeatedly with publishers they are negotiating price terms with over the last twenty years in multiple countries. Amazon’s algorithims of sales affect the Book Scan numbers and those affect how much the other booksellers order from the publishers. So it’s massive leverage for Amazon to pull this stunt every time they want a publisher to accept terms that give Amazon a bigger cut and/or more control. Some of the books effected in this tactic aren’t pre-orders but books that Amazon had in stock and then magically somehow did not. This tactic has been extremely effective with a lot of publishers who can’t afford the losses from Amazon doing this. With Hachette, it’s been less effective so far.
@ Kat Goodwin: Is Waterstone’s just a lot more pensive in putting a pre-order button on their pages?
I didn’t spot the above sentence in docrocketscience’s comment earlier (my bad, dyslexia), but it seems he was referring to online sales whereas the transaction I mentioned took place in the physical store.
Pre-orders are critical for major bestsellers on the ordering front. They are less critical for new and mid-list launches because consumers don’t know those authors well or at all and are much less likely to do pre-orders.
Again, this is something that Amazon has done repeatedly with publishers which like to fix prices over the last four years in multiple countries.
Hadyn, it’s a pretty safe bet that when Scalzi disapproves of people fake-fixing what he wrote, he doesn’t really want people doing that to others either. I’ll quote what he said upthread to someone who tried that would-be-clever FTFY thing on him:
“And no, you didn’t fix what I wrote. You have introduced your own editorial slant, however. I’ll thank you not to do any more ‘fixing’ of that sort.”
The problem for you, Haydn, is that cutesy stunts of that kind undercut your credibility. If you’re not trying to be credible, no problem. If you are looking to participate in a serious discussion, it might be worth reading or rereading what Scalzi wrote a while back about the failure mode of clever.
Assuming you do want to be credible and have a serious discussion, I’m wondering what Waterstone’s pre-order policies in a physical store have to do with how Amazon, Waterstone, et al. conduct their business online. Are you saying that they should do it the way brick/mortar stores do? Or that customers will assume that they do? Or something else? In other words, what is the main point of your comparison?
BW said: You have introduced your own editorial slant, however.
Well, if you google ‘Big Six’, then you’ll find what you’re incorrectly assuming is ‘[my] own editorial slant’. It’s a known fact that Amazon didn’t resort to pulling buy and pre-order buttons until the collusion reached the point where they couldn’t afford to stock ebooks because people didn’t want to buy them at the prices Amazon was forced to sell them at. Simples!
BW said: In other words, what is the main point of your comparison?
If you had any reading comprehension, you would know that by now.
Since that’s not a factual statement, no, you didn’t. And it doesn’t matter if a pre-order is online or at a physical bookstore — they all work the same.
Okay, so now you’re admitting that Amazon did do it deliberately, whereas before you claimed that it was Hachette failing to fill orders of actual books. Also, Amazon’s actions are recent. There has been no price collusion currently going on between publishers now (and there really wasn’t before, although Amazon did attempt to set the entire e-book market on a fixed price while not actually adhering for most books to that price themselves. Remember, publishers and Amazon itself were selling tons of e-books below $9.99 before the DOJ lawsuit, which was only in one country, not multiple ones. And that lawsuit was not this year but in the past and Amazon won, so Amazon isn’t forced to do jack shit.) Also, Amazon’s battle with British publishers where they pulled this sort of thing a number of years back did not involve e-books at all. It involved print books and co-op advertising fees/take, and the exact same thing occurred.
Second, Amazon and other vendors don’t “stock” e-books. That’s the whole point of e-books; they are electronic files and don’t need to be stocked in a warehouse. The idea that Amazon, the leading retailer who regularly deliberately loses money as a business tactic, is somehow unable to sell e-books at a variety of prices — most of them rock bottom again — is ludicrous. While e-book sales have been leveling off as they absorbed the replacement audience for mass market paperbacks — because e-book prices are cheap in mass market territory — the sector of e-books that have been selling the best are the first-run new bestsellers — the ones with the highest e-book prices initially (although those prices come down over time, just like a paperback edition and the e-book prices are lower than hardcover and trade paper usually.) Amazon is perfectly able to sell e-books — they still own about 50% of the e-book market.
And their dispute with Hachette is to get a bigger cut of the e-books sales they are selling. It has nothing to do with the price of the e-books. It actually may raise book prices, because if publishers have to give Amazon a bigger cut of the sale, making their return below cost, then they’ll have to raise book and e-book prices to make up the difference. One of the reasons mass market paperback prices climbed much more quickly than hardcover and trade paperback is because the amount of return kept getting smaller with non-bookstore vendors demanding deeper and deeper order discounts to compete with warehouse stores.
Third, if Amazon doesn’t want to do business with Hachette, they can stop selling Hachette’s books. But that’s not what they did. They claimed they suddenly couldn’t fill orders — which were not all pre-orders but included books they had in stock — and on print books as well as e-books. Which is what they’ve done repeatedly with publishers whenever they are negotiating with that publisher to get a bigger cut of the sales. And as they have in the past, they claimed it’s all the publisher’s fault. It’s remarkable how it’s always the publisher that they are negotiating with.
Amazon isn’t evil, but it is using a strongarm negotiating tactic that puts authors in the middle. Which is why many, major authors, some of whom aren’t even with Hachette, are publicly upset that Amazon keeps doing this with authors when negotiating with their publishers.
Now, you may like Amazon’s service and price range, which is fine. So do I, although I order less from them than I used to and am not happy about their labor conditions in warehouses. But the dispute Amazon is having with Hachette is again not about e-book prices. It’s about their cut. Which really has little to do with their customers. But they don’t mind dragging their customers into the middle of the negotiations either. it will, however, eventually get resolved, and Amazon is already backtracking from this particular tactic. But this time, they’ve accidentally caused a new author organization to be started, so that’s going to be interesting.
So you might want to take a deep breath and relax. Your e-books with Amazon are perfectly safe.
” it seems he was referring to online sales whereas the transaction I mentioned took place in the physical store.”
Yes, I was. So what? Do you have evidence that they conduct pre-orders in different ways between the physical stores and their online store? Recent evidence, that is. “Goblet of Fire” was released in 2000. Your recollections of a purchase you made 14 years ago, even if accurate, are not necessarily representative of current practices.
It wouldn’t, however, answer the question of why. Why would a company operating 200+ stores require payment in full on pre-orders placed in the store, but only request payment information for orders placed online? Customers will eventually notice.
Not that I expect you to have an answer, mind. You clearly have a narrative in your head, and are becoming increasingly agitated that reality refuses to conform to it.
The relevant quote in the recent New York Times article on Amazon: http://www.nytimes.com/2014/07/25/technology/revenue-swells-at-amazon-but-losses-do-too.html
Amazon is growing great guns so it’s going to be fine. But investors are weary of its strategies of overspending on that growth past revenues, so Amazon is squeezing its business partners for more cash to increase revenues so that it can keep growth spending and acquiring, especially in tech. The Hachette dispute is getting the attention, but I’m pretty sure Amazon is doing this stuff with lots of other vendors too at the moment. They need to increase retail revenues in order to fund their growth tech operations like the Kindle phone that will be losing money for some time to come. It’s standard business in tech.
Amazon has succeeded the past 20 years by combining the market share muscling of a big corporation with the lose money and depend on investors and venture capital strategy of a start-up. But after all that time, that strategy is becoming more of a problem to them at a time when they are doing the most ambitious tech and acquisitions expansion they’ve ever done. So they are trying different adjustments, including their old strategy of the equivalent of a lockerroom lock out on book publishers they are negotiating with. It’s petty change for them, but since books aren’t the key area of their business they’re trying to develop and they don’t care if they lose money — that’s their operations strategy to lose money — why not. But this has been a long term issue for publishers long before the e-book retail market took off. It’s really not about e-books. It’s about money splits in doing business.
“But investors are weary of its strategies of overspending on that growth past revenues, so Amazon is squeezing its business partners for more cash to increase revenues so that it can keep growth spending and acquiring, especially in tech. ”
There is very little doubt with investors that Amazon has a massively overvalued share price, and that on a technical basis they do not justify the price they command in the marketplace. Even the promise of huge future profits can’t justify the price they command.
Investors have a problem which is that even if they agree with this, creating a rush to the door is difficult and risky. A slower replacement where bigger investors sell shares to millions of smaller investors is less risky for the institutions with lots of Amazon shares.
This is only a problem to the degree that the market is going to really punish Amazon.
You mean like selling their shares and their stock price dropping as is going on currently? It’s not just Amazon dealing with this — all the growth and online growth businesses are dealing with it. The market is currently down on growth mainly companies. But Amazon still drags in an amazing amount of revenue. If it was not frantically spending as much to grow and acquire new companies — expanding out into new business industry after new business industry — it would have a profit, not a loss. So there’s an argument going on between Amazon and its stockholders and venture investors, and that has spilled over into a negotiation between Amazon and various publishers, with Hachette putting the brakes on.
Remember, Amazon has negotiated for a bigger cut with Hachette and the other biggies before — and gotten it. But then they keep asking for more, and at this point Hachette feels it’s reached or nearly reached the cut-off point for that to work. Amazon is working on a model of short term loss (short term now being 20 years,) for long term growth. Hachette is not working from that model. I’m not sure any publisher can work from that model because they have nothing like the growth of a retail and tech octopus like Amazon. The book market just isn’t wired that way — it’s not tech. It doesn’t have pools of cash reserves and exciting stocks.
Probably they will end up in the middle, with Amazon getting a smaller cut increase than they wanted, but something. But RH Penguin has even more muscle than Hachette in terms of titles, so it will get interesting. Amazon has alienated a lot of big authors with this, not simply the actions with Hachette but because they’ve done this repeatedly with publishers. But that’s not a big concern for Amazon. Books are not their money maker.
The “suggested retail price” on a novel means nothing. I don’t know why they don’t simply print $99.99 on the cover and then suggest how deeply they’re discounting it for you at $10.67. Nobody pays the “suggested retail price” unless they happen to be in an airport and need something to read on the plane. I don’t understand why publishers don’t simply get their head around the new price structures and stop inflating cover prices to make it appear that they’re giving the consumer a discount.
The thing that bothers me most lately is that publishers are delaying the printing of paperback books in favour of printing trades. I guess that they’re losing out on hardcover sales so they figure that if they print a trade version and knock $10 off the price that they’ll sell more. Well trades take up too much space! I want paperbacks! If you want people to buy more books, stop jerking around, print FEWER hardcovers and print MORE paperbacks. Fewer hardcovers means less cost in printing, shipping and storage and fewer returns. How many times have I seen a “Suggested retail price $28” hardcover in the remainder bin for $6 only one year after it was printed?
I do not purchase eBooks because I want to own what I spend money on.
I do not shop at Amazon because I do not agree with their business practices regarding their employees and their evasion of taxes worldwide.
Any monopoly is bad. Anyone who believes that a corporation is doing something to help them is a fool.