Friends and Corporations

We have entered a new and very bizarre phase of the Amazon / Hachette negotiations. Now that Amazon has come out and stated its ideal terms, which turn out to be entirely reasonable, the tactics from those who hate Amazon, no matter what they do, have gone from misguided to just plain crazy.

Amazon says it is fighting for reasonable ebook pricing. This matches a long history of actions from Amazon. Their focus on ebooks at $9.99 or below is why publishers had to break the law and collude with one another in order to artificially raise prices on readers. So we have an established pattern of behavior here of Amazon fighting for reasonable ebook pricing and publishers working together to screw readers.

Now that Amazon’s book team has come out and flatly stated their intentions, the response from some has been to assume that Amazon is lying. The response from others has been to say that Amazon is a corporation. And the mantra repeated to anyone who appreciates Amazon as a business partner is that “Amazon is not your friend.”

So, no one has anything to say about the actual arguments and positions from either side? Is that what I’m hearing? To equivocate between Amazon and Hachette by saying both are corporations is absolutely absurd. Monsanto and Whole Foods are both corporations. So they’re the same, right? No need to look any further?

I’d rather dig deeper than that, if nobody minds.

* Amazon allows anyone to publish. Hachette doesn’t even allow unagented submissions, meaning they require you to pay 15% of your earnings to a third party just to talk to them, no matter how well you can represent yourself.

 

* Amazon pays roughly six times the royalty rate that Hachette pays.

 

* For their imprint authors, Amazon pays double the rate that Hachette pays. In fact, they pay more in most cases than even the pie-in-the-sky 30/35/35 suggestion made to Hachette.

 

*Amazon allows me to retain ownership of my work, which means I can leave if conditions become unfavorable. Hachette is making it more difficult to reclaim the rights to one’s work.

 

* Hachette is fighting for and has broken the law to secure higher prices. Amazon wants ebooks to be affordable.

If Amazon isn’t my friend, this must mean that Hachette is my mortal enemy. Because these two corporations aren’t anything alike. Amazon is a frugal company that puts its earnings back into future investments for its own growth, knowing that the failure to do so will see a foreign competitor like Alibaba march in to the US and dominate.

Hachette is a wasteful company situated in Midtown Manhattan that sends its profits overseas.

And there are authors who want to trot out the “both are corporations” line. How about: “Both have an ‘A’ in their names?” Does that also work?

Amazon doesn’t have to be my friend for me to love them. I love chocolate ice cream, and chocolate ice cream doesn’t even know I exist. But you might say that enough chocolate ice cream shoved down my throat can kill me! Or what if in some future I become allergic to chocolate, and then it makes me sick every time I eat it! If that sounds crazy to you, you’ll understand how crazy a bunch of people I otherwise respect sound to me right now.

Yes, Amazon might turn on us in the future. But Hachette turned on me already. Until they offer direct submissions and pay 50% of net and get rid of term of copyright licensing, they are the enemy. Until they give up their asinine pricing philosophies, their insistence on hardback fiction for debuting authors, their love of DRM, and their non-compete clauses, they are the enemy.

I don’t want them to be the enemy, mind you. I want them to change, which will improve conditions for authors, prices and selection for readers, and help books compete with other forms of entertainment. If I didn’t care about these things, I would write books, make a lot of money, and watch them go under. I don’t want that. No one should.

What I think has happened is that it has become very clear that Amazon is fighting the good fight and Hachette is on the wrong side. And for those who hate Amazon no matter what they do, they are left attacking the company’s supporters with ad hominem diatribes. They are left equivocating between all corporations without looking at behavior, a history of law-breaking, or stated intent. They are left countering anything positive with “that entity is not your friend.”

You know how you can tell that these people are disingenuous? When was the last time a publisher did something great, and the response from one of their authors was, “But you have to understand that my publisher is not my friend.” I’ve never seen such a statement. And it makes just as little sense when it is directed toward Amazon.

Here is a company not just saying they are for higher wages for authors and lower prices for readers, but one that is backing up those claims with action. I stand 100% behind them. If the last tactic the traditional crowd has in its arsenal is to paint those of us who know a good thing when we see it as shills, fanboys, or the irrationally infatuated, then they must not have anything left.

When the haters are left accusing us of love, the end must be near.

COMMENTS (86)

No, Amazon is not your friend. They are a business. If you want friends, go hang out at the pub. Businesses stay in business by negotiating buying or selling terms that both parties find beneficial and worth their investment. This is not war. This is the free market. Amazon understands that authors are its greatest resource, so it will offer us terms that we can live with and make Amazon profitable at the same time. Hatchette will, eventually, figure this out and do the same. Or go away. If Amazon decides this is a war and decides to “screw” us later, then they will suffer the same fate. I doubt that will happen in the near future. By the time it does, there will be a new player in the game who understands how a free market works. Stop looking for friends. Look for your best opportunity in the market. When that happens, everyone wins.

Agreed. They are a company. My liking them doesn’t mean I think they are my friend, it means I appreciate their goals and actions and how my life is made better by partnering with them.

I love my car. My car is not my friend. What is anyone’s point by repeatedly stating this?

I think their point is that they can see the company they hate (Amazon) is better for the people they love (readers and writers), and they can’t stand to admit this. So the response is to say that we should hate them anyway, because maybe they’ll change in the future, and it’s just a big corporation.

It’s all so silly. Amazon opened the door for hundreds of thousands of artists. They pay monthly rather than by the Light of Halley’s Comet. They deliver books to rural customers who don’t have another shopping option. What’s not to like? And what does Hachette offer that’s one iota better?

Bringing friendship into this is absurd. The people who do sound like those who ask why we don’t marry our ice cream if we love it so much.

Exactly. My father-in-law started several companies over his lifetime. He always had a saying: I’ll be friendly but I won’t be your friend. When two entities come to a business agreement, both expect to profit. In most cases, both do. The “pie” is not finite. There’s plenty for all to benefit. The moment one of those entities decides to strong arm the other, that arrangement is a failure for both parties. It’s tough for some to grasp, but you really have to approach your business without emotion. You simply find your best opportunity. The other guy will do the same.

“It’s not personal. It’s just business.” -The Godfather

I’m just a reader… Authors… I’m your customer remember?

Amazon as a friend? No… but I love it all the same.

Because of Amazon I read at least three times the books as I did in the past. I’ve also managed to do this while spending less overall on these books. I’ve discovered new authors and have enjoyed seeing them grow in popularity and rise above the chaff. I now gamble more on new works because these are usually self published and priced at a few dollars or less. The gems I find at this price point are treasures compared to the bitter feeling I get while shelling out $10 or $30 for the latest paperback or hardback and finding a book that is not up to par.
I love the libertarian type approach to an author keeping the rights to his or her works and publishing themselves. I love seeing these authors succeed far beyond their dreams and “quit their day job” because of new found success and wealth.
With Amazon, I manage to enjoy reading without having to burn fuel to drive an hour to he nearest bookstore to shop a mediocre selection or find they do not have the latest new work of an author I love. I can pre-order and be assured that the day of release it will be here.
Both Amazon and the self published author have increased my love of reading and for that I will continue to be loyal customer and fan of the concept.

I love this point about the bitter feeling of buying an expensive book and not liking it.

I also have a bitter feeling about the high prices of traditionally published books, and I WON’T buy them, even though I can well afford to. I looked at a debut author’s book traditionally published book today, read all the excerpt, and I wanted it. But the price for the ebook was almost $9.00. So I passed. It’s the principle of the cost being too high! I will sometimes spring for $7.99 for a favorite traditionally published author, but that’s as high as I’ll go, and that’s rare.

I’ve found a lot of new favorite self-published authors at lower prices, usually with the first book being free, and I speed through the rest their series, and add them to my buy list.

I also just read a traditionally published series that I considered reasonably priced.

There’s so many people who can’t afford high book prices, or if they buy one book at a high price, they’ve blown their book budget for the month.

Maybe it’s time for self-publishers to just stop addressing the “Amazon is not your friend” meme. It’s getting old and I feel like the people saying it are just saying it because they don’t have enough real criticisms of Amazon. It’s now become their fallback saying.

Well said, Hugh.
Amazon isn’t my friend, but they’re definitely heads and shoulders (and whole body) better than any other book publisher at this point.

To be completely honest I’m not even sure why there is a debate about this anymore. Both companies want to make a profit – Amazon by giving people (authors and consumers) what they want, Hachette by getting the highest price possible for other people’s work (and by keeping control of that work). Yes, one day Amazon may become the enemy – one day France might become the USA’s enemy, that doesn’t mean you should be against croissants now just in case!
I am no expert in any of this but what I see is Amazon giving authors like me a chance to get our work out there, even if it is just to a tiny handful of people, while the big publishers try to keep a stranglehold on an industry by sticking to business practices from the nineteenth century. The publishing industry has changed, it is about time publishers worked this out – the rest of us already have.

Never be against croissants! Ever! ;)

Definitely well said. Especially regarding chocolate ice cream…

So hard for some people to think about things in terms of optimal vs. mediocre instead of right and wrong. Amazon is by far the optimal choice for authors who enjoy having options.

I hope you’re right that the end is almost near, because I am certainly tired of it (and worse, tired of watching people I otherwise would like or find inoffensive say regrettable things). :/

What MCA said. There are people I used to respect, people who I didn’t mind, and people I didn’t previously have an opinion about whom I now think of as somewhere between foolish and gibbering idiots, because of their public rhetoric on the Amazon-Hachette dispute.

Then again, there are a few people I always thought of as dishonest and/or stupid and ignorant whose rhetoric on this subject has merely confirmed my longtime opinion of them. And other people I’ve long thought of as smart who’ve continued being smart here, as well as people who’ve emerged as really smart and worth listening to who I didn’t even know about before.

So maybe I should let go of my crankiness and try to focus on how it all balances out? (wg)

No, Laura, your intelligent crankiness, is an endearing part of you. Don’t let go of it. :)

And here I thought you liked me for my delicate complexion and straight teeth.

Well said – the “friend” language shouldn’t be used in dealing with any corporation. It’s damaging psychologically to think that way because it sets you up to anthropomorphize a corporation. I always encourage authors not to talk about how much their publishers ‘love’ them. It sets up expectations that are almost sure to make them disappointed in the end.

I hate this whole situation, not because I am an author, I am just a reader who can look at this and see the obvious benefit of lower prices and higher revenue to the author. I hate it because Hugh is spending more time fighting the good fight then doing what I am sure he loves more, writing me a great piece of literature to read!

Well said. Though I’d have to go for Pralines and Cream ice cream over chocolate :o)

“I love chocolate ice cream, and chocolate ice cream doesn’t even know I exist.”

But what if it did?

One man, his bowl of ice cream, and a night he’ll never forget. Hugh Howey starring in, “Vanilla No More.”

But I digress….

Great article, Hugh. I believe it was Mitt Romney that said corporations are people (still makes me chuckle). While corporations will never be someone’s friend, it doesn’t mean they can’t be friendly. Whatever Amazon’s endgame is, they are a very author friendly corporation. I think people tend to look for cracks that they can exploit in large corporations, assuming they are *evil* at their core. However, Amazon has proven via actions rather than simple words that they do what’s best for the marketplace while still attempting to make a profit off of volume rather than high prices. And the market is obviously on board with this seeing as Amazon is huge. Sometimes people just pick the wrong side in an argument. In my opinion, Amazon is fighting for what’s right and for what the market demands.

Ice creams, cars and a hachet job on the ‘logic’ of the arguments. :-)

Silly stuff aside, excellent post. The argument about where Hachette puts their money doesn’t play so well over this side of the pond, where Amazon concentrate all their European sales in Luxembourg to minimise tax. Perfectly legal, as no doubt Hachette’s tax strategy is, but not winning Amazon any friends here.

I saw your tweets with Nicole Cushing the other day. I’m still trying to figure out what her point was. Amazon is bad? Self-pubbing sucks? I’m honestly not sure. She kept saying you were ‘blind’, but never articulated how or why.

I believe she’s one of the authors who voted against self-pubbers getting into the HWA, so her whole ‘I’m all for giving authors more paths up the mountain’ line is bullshit. That or there is another ‘ncushing’ posting in their forums.

My name is Steven Konkoly, and I have Amazon Infatuation Syndrome. Hugh, your posts continue to inspire. I wrote this blog post today to help get the word out.

http://stevenkonkoly.com/2014/08/01/my-name-is-steven-konkoly/

I enjoy your website and, in general, your thinking, but honestly you’re starting to sound like a shill. A shift to more useful topics would be nice.

This is a very useful topic right now and is going to inevitably affect all of us. Readers, authors, and publishers alike. Being this is directly relating to people’s careers, I think this is the most useful thing he could be doing. Getting information out there.

Useful is in the eye of the beholder, I guess. There’s an incredible amount of denial, distortion and misleading statements out there on this topic. I think re-stating a logical argument with an accurate account of the facts in a respectful way is incredibly useful.

Knowing what little I know still regarding publishing, business, etc, all I can see is that Amazon is making the most effort to please everyone involved:

The writer by offering higher royalty and retention of rights
The publisher by offering a lower margin for amazon with (data driven) promises of higher sales
Themselves by driving higher sales through a more-competitive cost model
And finally the reader by making reading a less-costly venture.

I almost feel that the publishers are moving in this ridiculous direction in a quest to separate themselves from the independent market through price-point. ‘It costs more so it must be better.’

Unfortunately it appears that they’ve forgotten value vs worth. Worth is only ever what someone is willing to pay for something. My perspective on value in the book world is based on fans. A more valuable work is one that touches a broader audience.

I could be a little misguided by my inexperience, but in either case, I know I don’t care how good an author’s reputation may be, if the ebook is more than $10, I am not buying. And I’ve stuck to that mantra even before the Amazon/Hachette issues caught my attention. I am sure that I am not alone either, otherwise Amazon would not have the research to back up their conclusions.

Big Pub wants to protect its paper sales. If ebooks are expensive (they think), more readers will buy paper books from brick-and-mortar stores. If the shift to digital continues, readers will be able to buy the books they really want, rather than being forced to buy the books chosen and featured by Barnes and Noble. If the paper sales decline, then the advantages conferred by big pub’s lock on brick-and-mortar stores will evaporate.

Maybe it works, to a certain degree. For example, I looked at my Kindle and found that Jim Butcher’s GHOST STORY costs $7.25. Sounds okay for an author I really like, but I paid $7.64 at B&N for the physical copy. (10% members discount and a 15% coupon) All in all, I’d rather have the physical copy for the extra $0.39.

I have bought a lot of ebooks, but I suppose it is people like me that they’re trying to keep at the bookstores. (As an aside, we have no bookstores in our area except for the Barnes and Noble.)

In reference to wanting this to just be over (especially since there are 4 more contracts to go) I posted an idea on Joe’s blog. I actually have no clue if it could work, but here it is:

If the contract has expired, then what is stopping Amazon from unilaterally doing something like what they have proposed in the past. Why can’t they just say something like: Starting tomorrow, we will reinstate pre-orders, prompt shipping, etc. on Hachette titles, but instead we will reduce Hachette’s share of revenue by 30% of sale price which is an amount exactly equal to our 30% share and donate this 60% portion of revenue to literacy programs. That way both we (Amazon) and Hachette will have an exactly equal incentive to complete the negotiations quickly.

Yes it would still hurt Hachette authors some but at least no one could continue to say that Amazon is asking Hachette to take on a bigger share of the burden to fund charitable causes. Both parties would be contributing exactly equally to any charity. And Hachette authors would still receive their percentage share of the remaining 40% of the sales price that would continue to be paid to Hachette, so they would still receive 25% of net or roughly 10% of sales price, but only until a new settlement is reached. Debut authors would again have a shot at a successful launch through pre-orders, etc. And of course, literacy programs would benefit.

Maybe someone knows the legal ramifications, but without a contract it seems that right now Amazon can pay Hachette whatever it wants to for every ebook sold. Of course Hachette could also then decide to withdraw their books, but are they really ready to take that big a step?

Seems like this could light a fire under Hachette and yet it would be a completely fair and equal temporary hit on both parties if Amazon only reduces payments to Hachette by the exact same amount as Amazon’s own share. And again, it seems that legally they should be able to do this unilaterally since there is no contract.

Could this work? Anyone know better why it could or could not?

That wouldn’t work because that would be a truly evil thing to do. Acting unilaterally and punitively would confirm every company’s fear of what Amazon will do. Not to mention the impression it would create in the Justice Department.

I guess you may be right that it would be perceived that way, although the actual impact would not be unilateral or punitive since it would affect both Amazon and Hachette equally. It may be better as a last resort than say, just removing buy buttons from Hachette’s titles like they did with Macmillan.

It would not affect them equally. Amazon says they are fine with 30%. For Hachette, 40% doesn’t cover costs. Hachette has to be a profitable company to remain in business, while the stock market has decreed that Amazon need not show profits. Amazon is 10 times the size of Hachette’s corporate owner. It’s only equal in the abstract, not in the actual world in which these businesses operate.

I am gonna be hated for this but I hope Hachette don’t cave to Amazon. Yes, Hachette should reformed. Yes, Hachette should treat their authors better but not by caving to Amazon. In a sense I really think that Publishers care more about book industry rather than Amazon. So, I am gonna support Publishers in this dispute. Without Publishers there are not many books I am gonna read since I am not in America (indie author basically non exist in my country). Amazon don’t do anything in my country. Amazon don’t cooperate with local publishers. Amazon don’t cooperate with local bookstores in my country. So no love for Amazon.

What I think Publishers should do is treat their authors better, develop their own channel for ebook, cooperate with retailers only on print book, be more creative, etc. This dispute should become catalyst for those needed change. Caving to Amazon is not the solution but assisted suicide.

Sorry if I offend anyone (no offence intended). Just sharing my opinion.

If Hachette was going to reform, it would have done it by now. If traditional publishing was going reform, it would have done it by now. The fact that they haven’t pushed for change in all these years shows you right there that it’s time to move on and stop hoping for it. They really don’t care about authors and what’s even less understandable than that is that they don’t care about readers either. It’s very naive to still think they’re going to change when they’ve shown no desire to change and they’re still fighting over whether they’re really guilty of the things they’re accused of doing. They. just. don’t. care.

What you’re seeing now, Hugh, is a full-blown panic on the side of Traditional Publishing. As David Gaughran so wonderfully explained in a recent interview (http://www.wordswithjam.co.uk/2014/07/the-industry-view-amazon-vs-hachette.html), and I’d never really looked at it this way, the desire to price ebooks higher isn’t so much profit-driven (well, it is, but it kinda isn’t) as it is a way to hold back the digital wave and keep people tied to print. If an ebook is only slightly less expensive than the print, well, maybe they’ll buy the print instead?

Now, why would the Big Five want to do that?

Because they’ve spent decades building a relationship with Distributors, not Readers. Now think about that for a second. The Big Five’s focus isn’t on the readers who buy the books, but rather the Stores that stock print copies. That’s who they’re trying to please and, frankly, keep in business.

And what’s killing their business? You got it. Ebooks and those annoying self-pubs who write them. So, in their minds, no better way to kill the momentum and keep their friends in business and keep that status quo than to price ebooks insanely high, make some cash, and THEN figure out how to take advantage of this ebook revolution — once they’re the designated Gate Keepers again — but on THEIR terms.

In this, without a doubt, Amazon IS my friend. As you said, Amazon is reader-based. Their focus is on the reader who buys the book, not the retailer who puts it on a shelf. I suspect once people make that distinction, the argument for continued support of Amazon becomes easier.

The digital wave is doing a pretty good job of holding back on its own. E-books have plateaued and the majority of the market is in physical books. That’s the reality has to grapple with.

Does the measurement of that plateau include independent authors who sell eBooks through Amazon?

This. Publishers are seeing their ebook sales plateau and since they think they’re the be all and end all of publishing it must be true for the whole industry. It’s not.

And a slowing of growth doesn’t equal a slowing of sales. This is disingenuous, illogical propaganda which anyone with an ounce of sense can see through. There is a HUGE difference between a growth % increase and a sales % increase.

There is a HUGE difference between a growth % increase and a sales % increase.

Exactly. For example:

Year 1 = 100,000 units sold
Year 2 = 1,000,000 units sold
Year 3 = 5,000,000 units sold
Year 4 = 15,000,000 units sold
Year 5 = 30,000,000 units sold

Growth:
+1000%
+500%
+300%
+200%

Rate of growth is slowing.

Sales:
+900,000
+4,000,000
+10,000,000
+15,000,000

But sales are growing.

Nice illustration. And to the original point: print sales are going down which also makes ebook sales more important even if their sales growth is slowing.

All this is irrelevant to the problem at hand. OK, let’s say that ebook sales have plateaued but just for traditional publishers. 75% of readers want to read books from traditional publishers in print form. How should a customer-centric company like Amazon deal with that reality? One would think, by making those print books easy to obtain. By setting terms with traditional publishers that make it possible to continue to produce those printed books that 75% of readers want. Publishing books in both print and ebook form is an equation, and the equation doesn’t always balance at $9.95.

I just posted something like this above. A trivial difference in the price of a paperback vs a Kiindle edition usually has me choosing the paperback. Not alway, but often.

Steven Zacharius

There is so much garbage being spread that publishers are panicking. Have you seen the financials being released lately…all the publishers are making more money. Profits are up. No major author has left a traditional publisher to self-publish. Indie and Traditional publishing can both coexist. What does one have to do with the other?

I suppose the struggle I’m having with this is that Hatchette and its supporters are raising a legitimate concern about Amazon that has absolutely no bearing on the actual struggle between Hatchette and Amazon.

In other words: yes, I am very concerned about Amazon eventually becoming a monopoly. They aren’t, yet, but it’s obvious they want to be (you don’t create proprietary devices and adopt proprietary file formats unless you want absolute control over the environment those devices and file formats exist in.) Amazon is a great service, has great customer support, and does not dick around when it comes to competing. In other words, they remind me a lot of a company called “Microsoft” as it existed in the late 80s, before it became a monopoly and slowed the advance of computing for about… uh… fifteen years or so.

Amazon hasn’t done this yet, obviously. At the moment they are doing what Microsoft was doing in the early days–providing a breath of fresh air from a pre-existing market that was suffering under someone else’s thumb. For Microsoft, the pre-existing thumb belonged to IBM, for Amazon the pre-existing thumb is some of the nastier and more inconvenient aspects of the traditional market.

I benefit from Amazon enormously. I never would have considered self-publishing as a viable option if it weren’t for Amazon, and the operation they set up outclasses all its competitors. And their struggle with Hatchette is basically just that — a struggle between two companies to get a better deal. Amazon’s position is vastly better for people who buy books, and reader-me wants them to win. But when they win this struggle (which they will) it will strengthen their ability to unilaterally dictate terms, and the part of me that distrusts the computer industry on general principle hates and fears that.

That’s the thing about me and Amazon: I don’t consider them primarily a retail company, or a publishing company. I consider them a product of the computer industry, which they are. All their business practices and the way they interact on a legal level fall in line with standard computer industry practices: the use of EULAs to enforce business relationships, the use of arbitration clauses to resolve business disputes, everything down the line. And historically computer companies can’t be trusted. You can do business with them and profit from them and have very good relationships with them as long as you have other options available. As soon as you’re in a position where they can call all the shots, you have a very narrow window of opportunity to prepare for your exit from that market.

So my position on Amazon is, essentially, contrary to everyone on both sides of this battle, because long-term I don’t want either of them to win. Call me a pessimist (because I am) but this fight looks rigged either way. If Amazon wins it’s short-term better and not hopeless because there’s still a *chance* that someone will step up and compete with them in a smart manner, but I haven’t seen any sign of that yet. Maybe Google will manage it with their Play store, but go back and see my paragraph about the Computer industry — yeah, that includes Google too.

I can understand why you see similarities between Microsoft as the young upstart against the established IBM corporation and Amazon versus the Big 5 traditional publishers.

The major difference is that Microsoft was never customer focused or an innovator. They copied Apple, bought up their competition and have always been reactionary. Amazon is very customer focused, seeks to innovate at every turn and helps their suppliers — namely writers to publish/market their stories profitably.

None of us can predict the future. Sure Amazon could change but I doubt they’ll follow the path Microsoft did because their corporate cultures are so very different.

Actually in the beginning Microsoft was VERY customer-focused. They had a reputation for having the best customer support in the industry. They put a lot of time and spent a lot of money on it. After they were firmly entrenched in the top spot that deteriorated quite a bit.

Amazon may be an innovator, but that has nothing to do with business practices. You can be an innovator and still want your monopoly.

“They copied Apple”

And apple copied Xerox PARC.

In other words: yes, I am very concerned about Amazon eventually becoming a monopoly.

It would help a lot if we had an examples of other retail monopolies. If we don’t, then perhaps there is something about free markets that prevents them.

Exactly! It seems like retail does not lend itself to a monopoly, as the retailer does not really control the supply in any market. Amazon inspires me to sell through them, but they cannot force me to.

And this is even more true when it comes to being a monopoly in the wider retail market. Companies gain market share in retail by offering lower prices, but that makes their profit margin slim. If they start raising prices, then other companies move in to compete: http://www.forbes.com/sites/panosmourdoukoutas/2014/08/01/pipe-dreams-why-amazon-wont-deliver-the-profits-the-momentum-crowd-has-been-wishing-for/

I wonder if Wal-Mart will ever get serious about selling books. Like Google and Apple, they have deep pockets and as the article above suggests, they are moving heavily into online selling and are growing faster than Amazon in that area.

This is all pretty awful, especially with author’s I have enjoyed reading are “tweeting” and posting things that are mean spirited. It is strange that I am taking it personally. John Connolly who I follow on Twitter and have enjoyed his books basically is calling people (reader’s like me) cheap for not wanting to pay more for e-books. He is not being articulate at all and fails to realize he is not just throwing rocks at Amazon with his words, but he is throwing them at me too.

Makes me glad I’m not following this on Twitter. Of course, the truth is, a person can do work that I really enjoy and turn out not to be a person I’d enjoy or admire so much. This is easy enough to handle at a distance and at the previous level of anonymity that used to obtain between writer/reader. It’s a lot harder in the Internet age when we’re all so much in each other’s faces. You’d think authors would be a bit more diplomatic.

Self-publishing via Amazon has been very very good for me.

I quit my day job and became a full-time writer because of having my books in KDP Select. While I have now expanded and have some books in other retailers, I still make 65% of my income from Amazon and got my start there. I credit my success, in large part, to their very efficient algorithms, which included my books in also-bought lists and for visibility in the Amazon Prime lending library. 70% of list is AMAZING as is the ability to edit my work on an ongoing basis, change covers, blurbs, and prices as I see fit.

That’s what I love about Amazon.

Are there things about Amazon KDP Select and KDP I don’t love?

Yes.

I would like to be able to do preorders for indies but I guess Amazon only provides those to the biggest selling indies. Even with 100K+ books sold, I am not counted among them for some reason. *shrugs*

I would like more categories for my books. I would like to be able to opt in to Unlimited and not have to be KDP Select.

Sometimes, the Customer Service Department responses seems to be a bit canned.

But other than that, I don’t have any complaints. Amazon KDP has great terms, is easy, fast, and provides me access to the largest pool of readers.

Amazon is a corporation, not a person. It cannot be my friend. But at this time, its interests in lower eBook prices and its terms for indie authors align very nicely with my interests in earning a living as a writer.

So, much love for Amazon from my quarter, but I don’t for a moment think it is my friend.

“Amazon pays roughly six times the royalty rate that Hachette pays.”

That 70% is not a royalty rate, but rather, a publisher’s piece of the pie. An author-publisher gets 70% just like a larger publisher does.

Whatever one thinks about the money Amazon pays an author per sale, it isn’t a royalty, and they also aren’t your publisher. They do not function as one’s publisher in that they do not edit, format, design, market, put together a cover, or anything. Whether that is a feature or a bug is up to individual authors, but everyone really needs to stop calling this a “royalty” and treating Amazon as if they a publisher and not a retailer/marketplace.

“* For their imprint authors, Amazon pays double the rate that Hachette pays. In fact, they pay more in most cases than even the pie-in-the-sky 30/35/35 suggestion made to Hachette.”

Some Amazon imprints pay 25% for e-books.

Amazon imprints also prefer agented submissions.

Also, my publishers — including Amazon as an imprint — are great.

But they remain my publishing partners, and not my pals. Because this is business. “Enemy” as a term feels loaded to me, and loaded terms are a good way to get people to make bad business decisions. Hachette contracts may be a bad business decision and Amazon might be a good one for some people. These are professional questions that are vital. But that means we shouldn’t muddy the waters with too much froth and vigor. (Example: “when the haters are left accusing us of love, the end must be near,” is something that sounds like you’d hear just before the cult leader passes out the cyanide drink. I understand that’s not your point, and I recognize your intentions here are noble, but do understand that it may sound that way to people not already inside the fence.)

Further, criticism of Amazon is not the same as hating Amazon. This isn’t binary. I live in America, but I don’t universally believe that everything that happens here or within our government is perfect. I would much rather see more nuance added to this discussion rather than have all the gray areas shellacked with black and white.

— Chuck

I agree that neither side should be casting the other as the villain in this situation. Unfortunately there are people on both sides throwing rocks. It’s an unfortunate example of cause and effect. The publishers are entrenched, and self publishing threatens their monopoly, so they lob a rock. Self publishers realize they have something great and don’t want to lose it so they lob a rock. And meanwhile a few authors are the ones caught in the cross fire.

It happened with the music industry when iTunes showed up. Now it’s happening with us. But I think it’s louder with our group for some reason. Self published assists are a friendly bunch. We thrive on helping each other. I suppose it isn’t that unusual that we would want to try and help those in the traditional industry as well.

Some sort of uneasy balance will eventually be made, and then maybe we can stop throwing rocks and start building some compromises.

I don’t think publishers feel particularly threatened by self-publishing. Perhaps they even appreciate how easy it has become, because it means there are fewer works in the slush pile, and some self-published authors who establish themselves can be enticed into traditional publishing. Downsides, maybe, upsides too.

Of course they’re threatened, they’re hemorrhaging ebook market share and they can’t see a way to stop it other than increase ebook prices.

For the record, I’ve self published and I’ve also signed a book deal with a publisher, because I believe there are pro’s and con’s for both paths. A modern author has to both be good at writing and the business of writing. If you tell me ebook sales are flat, then I know you have no business sense and no idea what’s really going on.

If you think they aren’t threatened then you aren’t paying attention. Some have accepted it more than others and some are just paralyzed by indecision about what to do about it. They know they’re on their way out, which is, ironically why they are insulting self-publishers a lot less these days. They’re quietly trying to court some of them and they’re being rejected. They know their business model is unsustainable and that bad days are ahead for them.

It has progressed beyond a threat. They have actually lost market share and continue to lose more.

Right. Call it what you will, whether ebook sales are flat overall or traditional publishing is losing ebook market share to self-publishers doesn’t matter–in either case it isn’t all a downside. If you have to deal with fewer unsolicited manuscripts that saves costs. If some self-published authors develop an audience and then are willing to try the traditional publishing route, that is lower risk publishing. There are upsides.

I talk like a hippie, because I like the way hippies think. I chopped the hair and stopped wearing tie-dye years ago, but I’m still the same guy who lived off the grid while in college and shunned worldly possessions. If slogans like “Huggers Gonna Hug” sound trippy and un-cool, that’s fine with me. I’m comfortable with who I am.

There’s a man after my own heart. I’ve never stopped being a hippie.

Your first point about unagented submissions is not accurate. Not accepting unagented submissions means that Hachette doesn’t accept unsolicited submissions. However, if you do the work yourself (go to conferences, network, make connections) they’ll gladly work with you.

A quick search of “unagented” or “represented [himself/herself]” across PW’s Children’s Bookshelf Newsletter (see 3/11/14 or 6/19/14, for example) will show lots of deals for unagented authors with “closed” publishers like Penguin, Random House, and HarperCollins.

Sean,

Hachette does not work with unagented authors. In fact, having an agent was a primary bullet point in their investor presentation.

So yes, as an unagented author you can close with RHP and HarperCollins, as they accept submissions from people without an agent.

Hachette does not.

Exactly.

If they make exceptions to their corporate policy, I’d love to hear about them. But they will still be exceptions.

No, you do need an agent to work with them. The good thing is, i hear that some agents have a lot less to do since self-publishers don’t need them anymore.

Sean, I submitted a project to Hachette in 2007. At the time, I was an award-winning writer with more than 20 novels published.

Hachette refused to consider the submission because I wasn’t agented. I’m not guessing. This was their specific stated reason for refusing to look at my work.

(The same week I received Hachette’s letter refusing to look at it, I also received a very good offer for it from DAW Books, where I have been publishing that series ever since.)

Hugh, don’t take that article seriously. Denial can express itself in strange ways, and ad hominem attacks are, unfortunately, one of those ways. I began following this fight some time ago, with little investment in either side of the debate. From my perspective, your arguments have been consistently cogent and data-driven, while the other side’s–well, not so much. That Amazon has done a great service to authors by providing them a viable alternative to the draconian contract terms of legacy publishers is undeniable. In the past when I’ve insisted that Amazon acts from self-interest (with an eye on market share) I did so in large part to underscore that Amazon can treat authors better and at the same time benefit enough to make them want to hold out even in the face of adverse publicity. For me, anyway, that makes Amazon’s persistence easier to understand. It also says far worse things about legacy publishers than it does about Amazon. In large measure, your arguments, along with Konrath’s, Eisler’s and PG’s convinced me not to avoid the legacy route when I self-published my first novel a couple weeks ago. To be fair, I guess Preston’s letter helped too ;) In a few years, when the remnants of print-distribution monopoly power presides only over a niche market, I expect I’ll be far better off owning the rights to my work. I, and many others, likely wouldn’t have realized that without your efforts. My hat’s off to you.

Thanks, Doug. We’ve been saying the same things for quite a few years now. The hystrionics from the other side have changed over time, as more and more of what we predict has come to pass. I remember when I floated the idea three or four years ago that people should self-publish and wait for agents to come to them. This heresy caused people to lose their tempers. But then it came true.

The ultimate progress I’ve seen lately is that talk of third-class cattle and volcanoes of shit has faded. Now, the argument is that traditional publishing is still at least as good as self-publishing. We’ve gone from the ghetto to equivalency. And in many quarters, people are getting comfortable with the idea that self-publishing is the best way to start a career, even if you aspire to publish in many ways in the future.

Progress, progress. I like to think fewer quality manuscripts are sitting in drawers and are now finding happy readers. And I like to think many who dreamed of writing but never gave it a shot are currently honing their craft. I may be deluded, but perhaps literature will be as popular as video games one day.

More popular, Ser.

You are so right there. It really has happened just the way a lot people in self-publishing predicted. It’s almost been a bit boring how predictably it went. The critics are toning it down and starting with all there “we can co-exist” rhetoric, which I HOPE authors are smart enough to see through now. They don’t say that until they start realizing they need you. Before they didn’t care. They thought we were all losers who couldn’t get into their club. Now they realize we really just don’t care about their club and we’re actually warning others to look carefully at the rules before asking to join.

I keep looking for the “like” button on this post. This’ll have to do.
:-D

As strictly a reader, and hopefully an informed one, I am firmly in Amazon’s corner. they are not my friend but I am all for them winning this fight. Why? Price.

Let’s use an example, one of my favorite authors in the past was Raymond Feist. His most recent book, published by HarperCollins, has a kindle price of $16.99. That is 14 months after it’s initial release.

Or I can look at Amazon’s recommendations for me and see that Blake Crouch’s newest “The Last Town” can be purchased for $4.99.

Given a choice of two books I would enjoy, the choice is pretty straight forward. Feist has lost a sale because of his publishers pricing. Crouch gets a purchase and with the $12 I saved I can pick up one of Hugh’s books that I have not read yet and I can even toss in the latest by Ann Voss Peterson (which I want to read) and still have a few bucks left over.

Will I ever make it back to the Feist book? Who knows. By the time that price drops I will have a nice backlog of books to read.

So, is Amazon my friend? No, but their policies allow this reader to stretch his book budget further and get more books and more variety for my money. As an added bonus, I also know that more of my money makes it to the actual authors which makes me happy.

Holy crap. Why is that book so expensive?!

I love Raymond Feist’s books and have most of them, many in hardback from my Science Fiction Book Club pre-Kindle days. I choked when I saw this price listed. Nope, won’t buy the book.

Let’s see, today, I was on the same Kindle Short Reads (SF, 30) top 20 pag with “Glitch” by Hugh. Amazon did that for me, for my wee story I uploaded 2 days ago. A non-techie like me published something in a day.

What did Hachette do for me? Oh, bupkis.

Uh-huh.

Where’s my “I Heart Zon” tee?

Time for me to post a selfie holding a sign saying, “@AmazonIsMyFriend.”

Spot on! As an author with novels both traditionally published and self-published, I can say that Amazon has given me the opportunity to make it (or not) on my own, without submitting to the required indentured servitude of the Big Five. I was able to get my digital rights back a year after my hardcover was released, and even though I have to fork over 20% to the “packager” for another four years, I feel fortunate that I’m not bound to them forever. These guys seem unable to recognize that the light at the end of the tunnel is in actuality a freight train.

Hugh, I’m surprised you can’t see the wisdom of this insight about corporations not being friends. For example, I love Ford cars. I think they are well made and reasonably priced, and I like the history of their brand. I’ve never had any problems with their cars. But now that I understand Ford is a CORPORATION, and has no FEELINGS about me, I realize how irrational it is to assume that they will build good cars in the future. They could suddenly start charging so much for cars that I would go bankrupt buying them, or even build cars that blow up when I try to start them. In fact, the more I like Ford cars, the more likely they will turn on me and do something horrible.

Same applies to Starbucks. I like their coffee, it’s a little pricey but they offer free internet. But clearly they are not my friend. And the more I support them, the more likely it is that they will turn to evil and work actively against me.

The only rational approach to corporations you like is to support any OTHER corporation that has a business dispute with them to make sure they stay in check and don’t turn to evil. So if Ford is renegotiating a deal with US Steel, I should assume Ford is in the wrong. Even if evidence shows Ford is right, or that what it would be in my own interests (like low prices) for them to win. If Starbucks is in a dispute with a paper cup company, since Starbucks is not my friend, I logically have to assume the paper cup company is in the right. It doesn’t matter if I don’t know what the negotiation is about. What matters is that I support the paper cup company, threaten boycotts against Starbucks and demand government action to force Starbucks to cave in. Otherwise, we’re on a path to poisoned coffee and death.

Is it clearer now?

I was just wondering to myself if Amazon might be better off at this point if it just stopped delaying shipments and removing pre-orders. They could make a simple statement to the effect that Hachette has still been dragging its feet, and so since their efforts to encourage a quicker negotiation are not working they will return to normal policies out of consideration for the authors being impacted.

Or maybe they could reinstate normal policies for debut authors, and apply pressure by delaying orders only for Hachette’s established bestselling authors. Either of these could help Amazon in the public perception of their side of the issue, and either approach would kneecap the Author’s United movement.

Or maybe I should spend my time thinking more about my own business :)

Hatchette not accepting unagented work doesn’t bug me in the least. As mentioned, this is a business, and it’s a fact that legitimate agents make effective slush weeders. Why? They are vested in it. Some poor slush editor weeding through piles and piles of poorly written crap easily overlooks the gems. The guy who gets 15% for finding the gem is hungrier to find them and sell them to the publishers. I would have been eaten alive had I not had an agent, and his 15% is easily the money I spend that gives the biggest return directly to me. How do I know? I am friends with unagented authors selling to the same houses, and those authors didn’t get the contracts I got. But children’s books, especially picture books, are a different beast. Self publishing them is more intensive as a lot of art and design and teamwork goes into it. In addition, buyers now expect children’s ebooks to be interactive, which means software and animation and all sorts of crap I wouldn’t want to undertake. :)

I’m not going to mention on specifics since I am a Hatchette author. I personally don’t have a beef with either company, and have had good dealings with both. My mom is a self published amazon author having great success, who was treated badly by her traditional publishers, and I”m glad they are doing what they are doing. I think all companies should be forced to stay on their toes and keep up with the times. Iron sharpens iron.

In addition, as was mentioned by somebody else–amazon truly must give more of the pie to the author as they ultimately do less for them in regards to design, editing, promotion, etc… The work I put into my books is less than what my mom puts into hers. She gets a bigger slice of pie because she works for it, designing her own cover, buying stock photos or hiring a photographer for covers, hiring editors and contacting outlets interested in buying her work. If she wants to enter a contest, she has to seek it out, fill out the paperwork, submit, etc… My books are all submitted to the top contests they are eligible for, and I never think about it. Traditional publishers have their areas that could change. Knowing some of the publishers and editors, I think there are people who recognize this and do champion authors, seek out different voices, etc…

But I do support self pub and ebooks. I’m thrilled the industry is expanding. These are just birth pains. :)

That’s a good point, Karma, about the financial difference between authors published by a house and self-published authors. Traditionally published authors get a royalty; self-published authors get sales revenue. Sales revenue recoups publishing costs; royalty is one of the publishing costs.

I don’t want friends.

I want reliable business partners.

This.

It’s very nice if they’re also friendly and courteous, but that’s like saying it’s nice if there’s a lovely garnish on the meal. What you’re at the restaurant for, though, is a delicious, well-priced meal with good service; not the pretty garnish.

Great post, well reasoned and to the point. How can you argue with this.
Question — Big named authors are siding with Hachette on this issue, they must stand to lose something if this proposal by Amazon is agreed to. It is reasonable to assume this or they would not be in a self interested position to side with Hachette. What do they stand to lose?

The battle – or market manipulation – here is Amazon trying to monopolize publishing by giving authors a better deal until there are no reasonable alternatives available. Then, as owner of the surviving market, they will be able to set the price and contractual terms that authors will have to accept. So, short term, it makes sense to take Amazon’s largesse, but perhaps consider it to be the bait in a trap. Better make sure there remain alternate publishers, platforms and/or venues that are attractive, because monopolists tend to alter the deal once they shut off other options.