monopoly copy

One of the yacht owners I worked for years ago was a master of the board game Monopoly. He did not like to lose, and so my boss left little to chance. In Monopoly, the element of chance comes from the roll of the die and the various intentions, choices, and strategies of individual actors. But my boss did all he could to bypass this democracy of the die by appealing to the emotions of the players and lobbying for sympathy and support.

On rainy days, we would unfold the board game and sort the money and cards in the salon of his boat. Me, playing the shoe, would dutifully serve as the reluctant fourth. I’d then watch my boss guilt his daughter into not erecting a hotel there, or cajole his wife into some disadvantageous trade. Pitting us against one another meant that even when he was behind, he was ahead. And once he did get ahead, he never let us think it. He was always the underdog, even with power. And we were each other’s threats, even when we were weak.

A similar game is being played in the book industry today, as it has been played in many other industries. Here at BEA, I’m hearing a lot about monopolies. (And monopsonies, for those who prefer to quibble semantically rather than understand what is meant and forge ahead in productive conversation.) Practically everyone here at the book expo believes that Amazon has gotten too big, that they wield a disproportionate amount of power, and that they must be reigned in or defeated.

I am told, without exaggeration and in all seriousness, that Amazon wants to “crush their competition.” I hear that they want to “put everyone else out of business.” Two things are true, both of which make these statements ridiculous: The first is that Amazon most certainly doesn’t want all of their competitors to go out of business, because then they’d be the only game in town and the government would have no choice but to break them up. The second is that of course they are acting as if they want to put their competitors out of business. That’s how you improve your business practices. You try to out-do your competition.

Unless . . . you don’t understand at all what it means to compete. Which I think explains the righteous indignation. But I’ll get to that in a minute.

The 800 Pound Bear Cub

Amazon is a young company, and already they have disrupted the entire publishing establishment. First with the stocking and discounting of practically every book in print, then with an online sales platform that employs customer reviews, shopping habits, and big data to provide algorithmic recommendations. More recently it has been with the release of the Kindle and the KDP self-publishing platform, before finally moving into actual publishing with their own imprints.

In many ways, Amazon has decided to compete with itself. The move toward e-books seems strange for a business founded on shipping the physical product, but it’s the companies who control their obsolescence who thrive. Apple is such a company. Eastman Kodak is of the other sort. Publishers could have realized years ago that they are in the story development and delivery service, but they thought it was all about books. Which pretty much underscores all that has happened since.

While Amazon’s developments and innovations have been lauded by customers, the same maneuverings have been just as vociferously impugned by legacy publishing and its adherents. A single company (often a single man’s name) absorbs the full and illogical blame for what has been an inevitable move toward online shopping and on-time delivery.

Ironically, the biggest losers in this shift have been yesterday’s villains. The massive brick and mortar discounters—who once were blamed for literature’s downfall, who sold “loss leaders,” who roughed up publishers in negotiations—have become the bulwark behind which all legacy hopes now hunker. Little explored is the possibility that Amazon is helping independent bookstores by clearing out these former predators.

When it comes to discounting and selection, B&N can’t compete with Amazon. When it comes to book browsing, Amazon can’t compete with curated independent bookstores. If you line the three sales models up from small indie stores to big discounters to Amazon, you’ll see that neighbors compete with and harm one another. Concurrent with the shuttering of Borders and the shrinking of B&N, we are also seeing a rise of indie shops. Coincidence? Or are we heading toward a future where Amazon and indie bookstores coexist because they provide two very different shopping experiences and fulfill quite separate needs?

Best estimates give Amazon roughly half of the book market. With the shutter of Borders, B&N now has a more disproportionate control of brick and mortar shelfspace than Amazon does of online book sales. This is especially powerful as the rest of the smaller bookstores have less leverage for bargaining with publishers. Who is the monopoly?

Similarly, the merger between Penguin and Random House has created a mega conglomerate that accounts for half of the major publishers’ revenue. There was very little outrage at this merger, which will result in lost jobs and fewer places for authors and manuscripts to compete. Instead, we heard how greater efficiency will help these grand institutions compete with that evil company trying to lower prices and raise author pay. Again, who is the monopoly?

All of this brings us back to the shock and indignation of Amazon as a company intent on eradicating its competition. Why shouldn’t they? Is diversity in the marketplace as important as progress? Is it better to have one or two companies fighting for writers and readers? Or do we need a nice mix of abusers thrown in just for the sake of variety? All businesses should approach the marketplace in an attempt to be the absolute best at what they do. To compete.

Ah, but all of this does seem crazy when you aren’t used to it. When you are used to living in a gentlemanly culture of collusion and cartel. When competition appears dirty and unseemly. Why compete when you can agree to offer the same terms to all authors and the same high prices to all customers? If you can milk your suppliers and your customers and get away with it, why bother with the messiness of innovation and efficiency? How dare anyone tip the applecart!

The real monopoly, once you start examining business practices and attitudes, is Big Publishing itself, a group so entrenched with one another and indistinguishable from one another that they simply go by the collective moniker: The Big 5.

Their contracts are functionally identical. Their e-book royalties (and most others terms and clauses) are lockstep and are not negotiable. They have a history of working together in a noncompetitive fashion in order to raise prices for their customers (prices that they would love to set at twice what mass market paperbacks formerly cost). Conferring by phone or email in this culture is considered polite, not illegal. It wasn’t long ago that top editors at the major houses would meet on Wednesdays to discuss the bestseller list, to congratulate one another on acquisitions, and to discuss business plans and practices. All completely normal. Celebrated, even.

When members of the Big 5 do compete (truly compete, not just offer varying marketing promises and sizes of advances), the offender needs to be reigned in quickly. When Simon & Schuster innovated with print-only deals—thereby landing bestselling authors who were otherwise never going to sign with any major publisher—the resulting press on these deals (and likely pressure from other publishers) caused an immediate retreat. The poor publisher who stepped out of line dutifully pulled back into rank. Print-only deals were no longer on the table. Contracts snapped back to their immutable and noncompetitive form.

Or what about the “most favored nation clauses?” These pernicious contractual entities stipulate that any authors who get higher royalties in the future will trigger a retroactive match in royalties for select existing authors. This is like a sports contract that simply stipulates “I’ll always be the highest paid player.” It hamstrings all the publishers in a knot of anti-competitiveness. Where is the outrage or the reporting? Once again, we have a hardening of the monoculture where dissent is impossible and innovation stifled. Instead, the major publishers play Monopoly like my boss used to.

Unable to tolerate a move toward democratic literature, where any voice is free to publish, where authors are paid 70% of list price instead of a mere 17.5%, they rely instead on appeals to litigation, on a public relations campaign within the press, and on collusion.

This is not new. Standard Oil received the same trifecta even as the company’s rise meant plummeting oil prices for consumers and towering advances in supply, quality, and efficiency. Unable to compete on the marketplace, other oil producers moved the war into the newspapers and then the courts, all orchestrated behind the closed doors of collusion.

The effectiveness of this campaign is still with us today, as all the small oil companies’ abuses go uncommented on while “Standard Oil” is the bogeyman lurking in the closet of antitrust conversations. The results are so sticky that many reading along right now are shaking their heads, thinking me the fool. And so the pattern persists. We watched the same thing happen to Microsoft. Interesting now all web browsers are now free and that companies can bundle them as defaults. But the stain of the campaign against Microsoft orchestrated by doomed non-competitors lasts.

Too Big to Fault?

So the question is this: Is Amazon a disruptor because of its size? Or is its size a result of previously stifled innovation? The culture of the Big 5, which was built by gobbling up successful small presses and rolling them into imprints, left the door wide open for Amazon, a company that dared to sell direct to consumers, innovate the way we read, and pay authors a living wage. You know, the first company to actually compete.

The response to this new competitor has been to blacklist Amazon-published books from brick and mortar stores and to collusion within the publishing monoculture. Where is the outcry for Amazon-published authors who are blocked from sale by practically every brick and mortar store? It doesn’t exist. The response is simply: That’s what those authors get for signing with Amazon. Imagine an observer today saying “That’s what those authors get for signing with Hachette.” The hypocrisy astounds.

In addition to the blacklisting and collusion, you now have the public vilification of this pesky upstart from Seattle who dares to compete and make the legacy publishers look bad on both price and payment. The vested interests are even able to rally the very troops they send to slaughter, as overcharged customers and underpaid authors alike fire social media broadsides in every direction, outraged that someone is fighting for the readers and the writers of the world.

Why show support for a corporation that may lower royalties to 30% in the future when you can celebrate a corporation that pays 17.5% today? Why show support for a corporation that may raise prices in the future when you can champion a corporation that colludes to raise them today? The groupthink and absence of reason is baffling.

Amazon has grown in size for many reasons, but the success of their publishing ventures has to owe much to the long-held and unbudging monopoly of big publishers. Because the moment Amazon provided a second option, customers and writers flooded to them in relief. That’s right, a second option. Cartel is just another name for a monopoly, but with more players.

We have suffered under the thumbs of a cartel that controls print distribution and refuses to compete on terms. They buy up the small and grow and grow. The company that comes along and threatens to bust this cartel up is supposed to be the bad guy?

If history is our guide, we might expect the real bad guys to pull off this campaign to the public and the courts. My boss rarely lost a game of Monopoly by employing these same tactics. Ah, but there was one day, rolling dice while anchored out in the Caribbean, when I dared to point out to my boss’s wife and daughter that they were being played against one another. It made subsequent appeals more transparent. My poor boss didn’t stand a chance after that. The democracy of the dice—that equalizing force of fair chance and individual, free-thinking actors—was too much to bear.

So let’s not be fooled by the “5” in the Big 5. Show me how they differ. Please. And while you think on this, I’ll remind you that they were once called the Big 6. And while you think further, I’ll remind you that HarperCollins just swallowed Harlequin. Keep thinking, and I’ll tell you about Borders closing and how B&N now holds publishers and authors hostage. Not only do these publishers collude and act as one, they are slowly becoming one as well. And people are pulling for them.

People are pulling for them as they refuse to pay authors a fair royalty on the e-books that provide a better margin than hardbacks. People are pulling for them even as they attempt to charge customers twice what a mass market paperback used to cost. Who will stand against them? The media who adores them? The writers who are contractually bound to them? They have no competition.

Sorry. They had no competition. Now anyone can play at this game. Watch and see what the small and medium presses do now that they have a level playing field, provided to them by print on demand and e-books. Watch what the self-published authors do now that they can have their voices heard. Pull for these actors, the true underdogs, the real competitors. I sure as hell am.

168 Responses to “Winning at Monopoly”

  1. Toby Neal says:

    I thought it was very gracious of you not to mention the contretemps between Simon and Schuster and B &N that I hear, impacted the sale of your books…if it had been Amazon, what an outcry would have happened.
    I’m sick of the media distortions.

  2. People pull for the Big 5 in part because they feel like its their responsibility.
    When I was a kid, I grew up outside of Ann Arbor so I was naturally a University of Michigan fan. I didn’t go to college there and never even considered it, but I still root for the Wolverines nonetheless — even after their scandals in the 90’s with basketball. Same thing is true with traditional publishing. Self-publishing and Amazon didn’t exist when we were kids. I watched Johnboy work tirelessly for a book publishing contract on The Waltons. We grew up rooting for ourselves to one day win the traditional publishing lottery and become like all the authors we grew up reading.
    But just like in Star Wars III (Bear With Me..) Anakin didn’t bring peace like Obi-wan thought – instead he was Darth Vader. As self-published authors we reject the Big 5 like Obi-wan rejected Anakin, but so many still hope that Darth Vader will just let them live. That the Big 5 that they believed in since they were a kid is as really as good as they so fervently believed.

    • Amen to that. It amazes me the authors defending their predatory publishers until you really they’ve literally grown up being groomed to believe in the system. Endless rejection becomes paying your dues. Signing a contract that gives away everything and pays you a pittance is considered success. Watching your book vanish after a month on the shelves without promotion is considered not being good enough. The few who manage to achieve success in this Byzantine system are considered heroes.

      Then along comes a system where anyone can publish their stories without rejection, get a %100 of the royalties, sell thousands of copies, and make a profit off their backlist, and keep all rights. The response by the groomed author isn’t joy. It’s anger, because it highlights how they’ve been exploited and makes them look foolish. Their response is “hey, those guys are cheating!”

      • Yes — after two-plus years of submitting my books to the Big 5, I became really depressed over not getting a contract. It took me a lot of introspection (and many hikes in the wilderness) to figure out why that was, and I came to the same conclusion: because I had been raised believing that PUBLISHERS were where books came from, that a book wasn’t REAL until it filtered through a publisher. Once I realized that was nothing but an artifact of the era I grew up in, and that I was in a new era now, it was surprisingly easy for me to fully embrace self-pub. You can’t overstate how psychologically important it is to many authors, particularly if they are not especially young right now, to see their books go through the “reality filter” of publishers. That’s what we were raised on. And it can be really tough for many of us to change our thinking and accept no-publisher as a superior alternative.

        But today is my first day as a full-time writer; I ditched the day job yesterday. That would almost certainly not have been possible in the old era. I’m glad we’re in the new era now. :)

        • Judith says:

          Congratulations on your mind shift and on successfully making that your new life!

        • Mark Anderson says:

          While I applaud your willingness to embrace self-publishing, what I would say about publishers and agents is two things: the first is that they act as guardians of good taste in a way, helping get important (and not-so-important) books out there, and secondly, they are crucial as editors. We writers are rarely able to self-edit our work successfully for a commercial audience; some can but the majority can’t. This is where agents and publishers are worth their weight in editing gold; helping us separate the wheat from the chaff of our individual stories. Of course, one of the reasons why the publishers have never taken on your book, as well as countless others, is not a matter of quality but rather quota: they have a limited number of places on their list and I’m afraid it can be a little bit of a mad scrabble to get one’s book on that list against other well-known writers.

          • A.Rosaria says:

            Mark, self publishers can pay editors themselves, there is no need to have agents or publisher to do the editing for you. I prefer getting 70% of gross and pay for my own editing/book-cover than getting 25% of net.

            I also rather have the readers themselves decide which books are worthwhile instead of a select group of people working for corporations.

          • Vikki says:

            Totally disagree. Self-pubbed authors can do all that and more by hiring out on their own. And the agents, editors and PR reps hired by these big publishers are only looking out for themselves. Let’s face it, what they like and what books they choose are based on their opinion. How many stories have we all read of the scrupulous editor who rejected a manuscript that became a million dollar seller down the line when someone else gave it a go?
            Publishing in the Big 5 is a crap shoot. Why not take charge of your own work and your own money and do it yourself? Seems ludicrous not to.

          • F. E. Mazur says:

            “…what I would say about publishers and agents is two things: the first is that they act as guardians of good taste in a way, helping get important (and not-so-important) books out there…”

            Not so fast with that accolade! Zombies, vampires, screwball sexploits, dystopian stuff, and endless fantasy is much of what has been coming through the gates guarded by those you mention. Your statement once had some merit to it. Not anymore.

          • quilty says:

            To be fair, FE Mazur, the big publishers rejected the Twilight series 14 times before someone published it. That’s only two times fewer rejections than The Diary of Anne Frank received.

            “The girl doesn’t, it seems to me, have a special perception or feeling which would lift that book above the ‘curiosity’ level.” unnamed publisher re Anne Frank.

          • John muccillo says:

            Mark, Mark, Mark… Your view assumes that authors are too stupid to hire their own editors, and/or really are lazy, and don’t much care about the quality (whatever that means in comparison to one’s own measurement) of their work.

            As regards your comment on the “guardians of good taste”; to whose good taste are you referring? Certainly you’re familiar with the old saying “one man’s ceiling,” etc., etc., etc. After all, aren’t we all in favor of a free market economy here?

            Besides, the worlds of the Big 5, and Amazon are not mutually exclusive. The last time I checked I could buy any printed book I want on Amazon, and for a competitively low price. However, from past court decisions and the resultant fines traditional publishers paid, we know the opinions of those publishers regarding e-book prices – now don’t we?

        • Renee Regent says:

          Good for you! Congrats!

          Mr. Howey really put it all into perspective. I am hard pressed to find much good with the “old system”. Much like wining the lottery, a few did really well, but for the rest…Self-publishing may not be perfect, but at least now we have a chance.

        • Sarah says:

          Good for you! I went through a similar mind shift myself and am so happy to not feel stagnant any more. Best of luck!

      • Cathryn Cade says:

        Nigel,

        Well said! I’ve never heard it put quite that way–makes so much sense.

        Hugh,

        Fabulous article. Thank you for taking the time and thought to poke a sharp stick into the ‘groupthink’ bubble.

  3. Meg Collett says:

    Thank you so much for this post, Hugh. Your points about the Big 5 cartel were great. It really opened my eyes, and debunks this Amazon monopoly ridiculousness. I appreciate you taking such a strong, vocal opinion on this matter. As a small-time author and total underdog, it’s great to have you in our corner giving those like me a voice when we aren’t “big” enough or “important” enough to have a voice that can be heard. Yet.

  4. RJ Crayton says:

    Great thoughts on the subject, Hugh. I’m still surprised at the seemingly universal hatred toward Amazon among traditionally published authors. There was a great Salon piece that faulted publishers refusing to pay authors a decent ebook royalty as the cause of this problem. The article, basically said that Amazon decided that if publishers were going to make all this money on ebooks and not give authors a cut, then Amazon would prefer to get a larger piece of the pie. Yet, traditionally pubbed authors seem to be mad solely at Amazon, rather than publishers.

    Amazon has done a lot to equalize the chances of indie published authors (and even traditional authors, if they chose to do it themselves). Yet, like you pointed out, publishing seems to be entrenched in it’s ways. While Amazon stepped up provided an easy epublishing, edistribution outlet, no one has stepped up to offer indies, and those who want to leave traditional publishing, a way to get distribution in stores, either indie or the traditional stores. Yes, traditional publishers are all competing for the important in-store shelf space, but there are enough self published authors who are selling gangbusters in ebooks, who would do well on shelves. Yet, no one has stepped forward to broker bargains to help get them into stores. It’s baffling, on some level.

  5. Ann Christy says:

    Like many, I’m also baffled at the way this war is being fought. It’s bad tactically, bad strategically and bad for a post-war peace. It’s almost like they picked the worst operational planners they could find and then sat them down with lollipops and sugar water and told them to finger paint their solution.

    All this finger pointing and revenge-minded pettiness isn’t going to solve the problem inherent to an old and exclusive minded industry in a post-industrial world where communication is the default, not the exception. Old school publishing needs to sit down, fire their operational planners and just deal with the future without flinching.

    And ebooks, print on demand and rapid-fire realization of a potentially awesome indie book are the keys to that future. It isn’t the authors they must cater to and try to find, it’s the book. They should get their underpaid (or unpaid) interns in rooms doing nothing but reading new books at the bottom of the Amazon lists. When they find a gem, run with it straight to a decision maker, seal a worthwhile deal for that book…and only that book…and they can rake in their millions while lifting a book that languishes into the bright light of stardom.

    If that author can pull it off again, then another book of their get’s the lift. But no one should be waiting over long lunches discussing how much they’ll make off that person. Instead, they should run right back to those six digit books and look for more.

    That’s just my tactical and strategic view of the situation. And it seems so obvious it’s probably flawed, but the way they are moving now is doomed to failure. Absolutely and without question. They can only win by trying something new.

    Thanks for your wonderful and very true post. When you got your print only deals, a whole lot of people had a whole lot of hope. Those aren’t going to happen though, so the next thing is waiting to be found.

  6. Elizabeth says:

    Thank you, thank you, thank you!

  7. Books used to be owned and read by only the richest elite. They were hand illuminated and penned by monks or similar. With the Gutenberg press, books could be in the hands of at least the middle class. By democratizing publishing, there came an explosion of writing, publishing and reading.
    The Big 5 set up a gatekeeping process that was nearly unassailable for new talent. 20 years ago, I tried to get published. At that time, in science fiction or fantasy, you could not even be considered by an agent until you were a member of the scifi and fantasy guilds. The entrance requirement was to be published three times, usually in a trade magazine, like Asimov’s. The problem was, there used to be at least a handful of mags that considered new writers, and they all dried up or flat out stopped accepting submissions except from established authors, or (get this) submissions from agents.
    I saw the iron gates confronting me and frankly saw no logical way through it. I needed an agent to get an agent. I needed an agent to published so I could join a guild to get an agent to submit my work to the Big 7 (at that time). It was a hopeless cause. This is the status quo the traditional publishers want to keep in place.
    Frankly, since I knew I could self publish, I’ve published 4 books, working on more, have a small but generous audience.
    I LOST 20 years of good writing because of the gatekeeping gulag. The world lost 20 years of good writing, from a myriad of authors, including established authors whose releases were calendar-throttled to a slow trickle.

    The gatekeeping system served only its own ends, at the expense of authors AND readers. There is absolutely no reason, with current technology, that we are required to go through agents, slush piles, or publishers. Sure, some things published will be substandard, but that’s always been the case, because gatekeeping is a subjective activity, and opinions are going to let Snooki biographies out during the current system.

    Consumers have nothing to fear from a more open market. Only those who hold the monopolies have to fear.

    The emperor has no clothes. It’s time we pointed and laughed.

    • David Keener says:

      Yes. I felt the same way about publishing. That’s TWENTY YEARS of writing that I could have had under my belt, but I could never see any reasonable way to support myself. I was willing to work hard, but it always felt like a rigged game. I’m angry at myself for not starting to write seriously sooner, but I also possess a burning rage toward the Big Five. I can’t see myself ever signing a contract with any of them, no matter what kind of success I might achieve in the future.

      Now, ask yourself this. How many writers coming up today through indie publishing feel the way I do?

      • KimBoo York says:

        Same, David, same – I completely abandoned my writing in the 90s when I realized I was not writing “mainstream” sf and that, as a nobody, I’d never get taken seriously. Could I have tried harder? Sure. And we hear today the horror stories of those who did, so is that really better? Anyway I’m furious at the system that convinced me I never had a chance.

        I’m still a nobody but I’m writing again, and moving towards publication one way or another. The field is still challenging and competitive but it’s all different now.

  8. I was just saying on another thread that I’m far more concerned about the day Jeff Bezos leaves Amazon than anything he may do during his tenure as CEO. Bezos is innovating and disrupting and breathing new life into an industry that was moribound and on its way toward a long, slow decline… not just of their business, but of reading.

    A friend was telling another friend (in my presence) how getting an ereader has completely changed the way she reads – that she buys far more books than she ever had before. It’s simple, easy, and if she doesn’t care for the book, she just gets another one. Each of those books is money in the pocket of an author – more if the author is indie. Bezos created this market – and it benefits readers and writers both. Which is what freeing people to create and commerce usually does.

    • James McCormick says:

      I will 100% second that getting an eReader changed the way I read.

      Prior, I wouldn’t have considered myself a reader — at all. Books were cumbersome (Sorry book fans. But for people constantly on the go, it’s true). I’d forget to bring a book with me. Or it wasn’t appropriate to hang on to one going into meetings. Or maybe what I was reading said a little too much about me (Fans of erotica will know what I’m talking about here — although, I’m not explicitly talking about Erotica).

      The fact that I can carry an entire library on my cellphone and purchase practically any book in existence wirelessly from vritually anywhere on the planet is fundamentally Earth shattering to the way we read.

      • Cathryn Cade says:

        James,

        Woot! Sounds like you are the future of reading.

        Thanks for giving your perspective.

      • I agree that e-readers have helped authors so much…and so has Amazon. I’m grateful to Amazon as a reader, because it’s brought me so many fresh new indie authors and lowered the price of ebooks so readers can read MORE books. And I’m thankful for Amazon as an author, because it helps me reach my readers easily, via multiple outlets such as audiobooks.

  9. J. R. Tomlin says:

    Great article, Hugh. Needless to say, I agree 100%. I am so tired of hearing how Amazon is picking on Hachette and that is David vs Goliath as though Hachetter were some mom-and-pop corner store instead of a large multinational corporation owned by Lagardère Group which is one of the world’s largest trade publishers. Much of what I see and read is just plain silly.

    • James McCormick says:

      Yeah. The irony of calling a 7 BILLION dollar company a “David” is mind boggling.

      This is two titans clashing.

  10. Cherry Adair says:

    Yes! This. Thank you!

  11. Even before the merger of Random House and Penguin, there were the imprint mergers at RH. I was a victim of this (Ballentine swallowing Bantam), as the people who were my supporters were shucked out and the new folks had zero vested interest in my career. As depressed as this made me, I also understood that this was business and these things happen. Thankfully this happened in 2010/2011, because not long before this, I would have most likely ended up one of those “whatever happened to author ____?” Amazon has given me and many, many other authors like me a second life, in fact a life where I now make more each year than I ever did when I was traditionally published. And best of all, I’m the boss! When I hear other author railing against Amazon, my head nearly explodes. Sure, there may be conflict between Amazon and the Big 5, but that’s JUST BUSINESS. Do they not understand what Amazon has done and continues to do for authors the work with directly either through KDP or T&M?? They treat us like humans, LIKE PARTNERS. And then, as I read all these defenses of the Big 5, I think I can actually feel my skull cracking.

    Thanks, Hugh. I don’t think I don’t think I’ve read anything that sums this ridiculousness up better.

    • I was the victim of one of those early mergers back in the late 80s when it was all starting and our agents were telling us what a good thing it would be for us. They lied. One of my early novels was bought by an old but good UK publisher but published – badly – by the bigger fish that had just swallowed it, mid publication. It sank without trace. Many years later, my editor at the time wrote to me to tell me how ‘very sorry’ she was that things had turned out the way they had. She had ‘loved’ the book but her new boss hadn’t. Not half as sorry as I was, even though I’d made a very good career as a playwright. But I never stopped writing fiction as well. To a large extent, Amazon has been my saviour. I’d call myself ‘hybrid’ these days – I’m working with an excellent independent publisher (who also genuinely does treat me as a business partner) as well self publishing. As a mid-lister, I grew very tired of being told that the mid-list was dead. Turns out it was only sleeping. For the first time in a long working life, I feel in control. Able to make decisions that suit me, and my work. Happier than I’ve ever been. And I’m earning regular money. But the current media briefing against Amazon – however illogical most of the arguments – is scaring one or two people I know who were considering self publishing. Maybe that’s the intention.

      • Catherine, that is absolutely the intention of the current media briefing against Amazon: to scare authors away from Kindle Direct Publishing, CreateSpace, Lulu, Kobo Writing Life, Nook Press, Apple iProducer, Google Play, and anywhere else that allows us to sell our writing directly to readers rather than to a middleman.

      • Vikki says:

        And these Big 5 companies that swallow up other publishers and bury your work so it never sees the light of day should have to pay. None of them realize what it takes to write novels, to spends nights lying awake as our characters demand screen time. They don’t know how each of these books are like our children and for them to murder them without thought is unconscionable to us. And you know what, they don’t care. Why would they when they have a thousand other children sitting on their desks, in slush piles, ripe for abuse and death.

  12. I think we’re seeing with Amazon what we saw with Apple and the music industry. After iTunes, there were these stories about how independent music stores would all disappear and how music companies would be hurt. None of that happened. The record stores that were in my town when I grew up are still there – not the chain stores, they’re history, but the locally owned stores. Some will always like to be able to hold their music. The record industry is still there too, perhaps on a different scale, and in a different business model.

    Same with books. Traditional publishing will continue to exist. Their business model will change, their profit margins will change, they might be a scaled back versions of what they once were, but they will still be there.

    So the bashing of Amazon seems similar to the doom and gloom record execs were crying in response to iTunes and digital music in general. Apple looked at digital music and saw opportunity. Amazon looked at indie writers and did the same. So I’m really not going to cry a lot of tears that publishing houses have to change their business models and they might not be as in control as they might like. Even if Amazon is bullying them a little, maybe that’s not such a bad thing.

    • I make that comparison all the time. I remember the warnings about how digital music would destroy the music industry and how horrible Napster and iTunes were. Same thing is happening with the book industry, they just didn’t learn the lesson

  13. Let’s not forget that the media reporting on this supposed “David vs. Goliath battle” is, in large part, owned or otherwise controlled by the Big 5. That will always ensure the “reporting” remains in their favor.

  14. Believe it our not this reminds me of the Bluefin Tuna Fishing Industry. Five families owned these huge factory trawlers called purse seiners. They had everything completely wrapped up pushing out the small fishing operations. The five families pushed to increase their quotas and lobbied in congress to have their own sets of rules.

    What happened was they fished the schools so hard that evolution took over. The schools of fish broke up and the genetic material that makes the tuna migrate to the same areas every year was lost. The fish became so spread out that the huge netters couldn’t justify scooping up whole schools anymore because they couldn’t find them.

    The small boats started coming back, because they no longer had to target schools. The hook and line fisherman could target single fish. The product was also better because the fish weren’t being beat up tossed through nets. They could be caught bled and shipped to Japan all in the same day because the small boats were faster.

    Now its been a couple years since the Purse Seiners have been able to sail. Those Five Families are crying foul and begging for government subsidies.

    It just goes to show that big corporations colluding together trying to hog all of one resource (in this case the readers) end up driving them away and into someone else’s hands. The worry is what will they take down with them when they fall?

    Micah Ackerman

  15. Paris Marx says:

    I’m not a defender of the Big 5 publishers, so I won’t even argue with you on those points, but it disgusts me to see how some in the indie community think Amazon can do no wrong. They’re the white knight, come to save us all from the evils of the Big 5.

    I won’t deny Amazon has pushed the industry to become much more open to indies, and has empowered us by giving power to independent authors and publishers where there was little before, but that doesn’t mean we should let Amazon off the hook with nearly anything.

    You point out in your post that we’re demonizing Amazon, a company that could lower royalties in the future, when they’re already low in traditional publishing, but should we really shrug our shoulders at the idea that Amazon could lower royalties in the future if they gain greater market share? I don’t think so. If we ignore Amazon’s possible future actions we’re being just as ignorant as Big 5 publishers who ignored possible changes in the publishing industry. It’s definitely possible Amazon will lower royalties in the future if they gain market share, and the example of ACX is proof. I was disgusted to see some indie authors shrug their shoulders at the royalty change, arguing it was too high for us to expect it to stay there and Amazon was being too generous. Should we really let our royalties be taken away so easily, because they’re still higher than what traditional publishing would offer?

    I see no reason to defend the Big 5. They’ve put themselves in their current predicament, and business as usual won’t get them out of it. But I’d ask indie authors to be a little more critical toward Amazon, and not let them get away with next to anything.

    • @Paris — Amazon doesn’t give us “royalties”.

      I sell my products through Amazon’s marketplace and, in return, Amazon takes a 30% cut. That’s it. They don’t own my rights, and they aren’t paying me “royalties”, despite the fact that they use that incorrect terminology on the KDP dashboard. I’m choosing to pay them 30% of my retail price in order to connect with their huge customer base and in order to avoid the hassle of delivering ebooks and dealing with customer service.

      It works the *same way* with the physical products smaller stores sell through Amazon. Amazon just takes a cut.

      —-
      In reading all these articles about Amazon vs the Big 5, I swear, it’s like most people don’t understand how business actually *works*. Publishing isn’t some magical industry where manuscripts are chosen based solely on literary merit. And being poor, but published, isn’t glamorous or enviable. I haven’t drunk the kool-aid.

      Publishing is just a business, like any other. If you have a product, you negotiate terms with retailers or distributors to get your product to consumers. You’re free to sell directly to your customer through your own website or stores, but you usually want the help of larger stores with a larger customer base. And those retailers (and distributors) obviously want a cut of the profit for helping you sell your product. It’s fair.

      More authors need to approach publishers as business partners. Publishers might be able to help authors reach a wider audience, and they deserve a cut for that. We need to make sure they’ll do the job well, though.

      Amazon is ripe for disruption. Other companies will come along and offer authors something new and great. Someone will find a way to connect even better with readers or will force Amazon to compete if they try taking a bigger cut than 30%.

      • RD Meyer says:

        “In reading all these articles about Amazon vs the Big 5, I swear, it’s like most people don’t understand how business actually *works*. Publishing isn’t some magical industry where manuscripts are chosen based solely on literary merit. And being poor, but published, isn’t glamorous or enviable. I haven’t drunk the kool-aid.”

        To me, this summed up perfectly the biggest problem with most traditionally published authors. Too many just want to be arteests and let someone else handle that nasty, boring business stuff. Their publisher gave them a chance, so of course the publisher is an angel. The publisher is in it for literary magnificence, not money. Only eeeeeevvvvvviiiiilll corporations like Amazon, who wants to crush art under the heel of its boot, look to the bottom line when making business decisions.

        Autumn, I thought your point was spot on. Unfortunately, too many don’t want to think past the surface to see it.

      • Paris Marx says:

        Are we really just squabbling over terminology?

        I don’t disagree with almost anything you’ve said, except your last paragraph.

        Sure, people can try new models to challenge Amazon, but with Amazon the size it is and controlling the customer base it controls, it’s hard to make an impact. Not to mention Amazon can easily buy up its competition.

        Amazon won’t change their royalty structure (and excuse me for using that word, but it is the one they use, and most indies use to describe the transaction taking place) until they control a significant portion of the market, which means it’s possible they may never reach that size. But with Google’s ebook platform floundering, Kobo all but pulling of the US, Barnes & Noble’s ability to stay afloat a recurring concern, the only real player we can depend on is iBooks, which is doing increasingly well despite its obvious drawbacks, or the growth of new direct sales platforms by publishers.

        If Amazon does raise the cut they take from our sales when they reach a dominant position, what can indies feasibly do? We don’t have the individual power to negotiate like a large publisher, and the majority of customers won’t follow us to another platform.

        Yes, other companies will come along, they already are, and indies will try them, but it doesn’t matter where indies go, it matters where customers go, and Amazon will only make the change once they control a significant number of the customers. They did it already with ACX, and I see no reason why they wouldn’t do it with Kindle. They may bullshit about customer experience and all those things, but in the end they’re a corporation, and they’ll do whatever’s best for their bottom line. If we’re making good money with our 70% cut, they’ll target that just as they’re doing with Hachette’s margins right now.

        And again let me repeat, I don’t care about the Big 5, whatever position they’re in they’ve brought it on themselves, but we shouldn’t be ignorant about what could be coming or we’ll find ourselves just as blindsided.

        • The 70% or even 35% I make off my books at Amazon is better than the 0% I make off them sitting in my drawer. That’s why I don’t mind.

          And you imagine Amazon as this unstoppable monolith that will swallow up any competitors. Five years ago, people said the same thing about the Big 5 and the idea that Amazon would be their biggest threat was laughable. That’s why some people aren’t worried about Amazon. We’ve seen it before and will see it again. And if Kobo and some of the other digital publishers would even attempt to match the promotional system Amazon has, there would be no perceived monopoly. Authors would be on all platforms equally. But it’s easier for Kobo and the others to complain about Amazon than try to beat them at their own game.

        • Paris, Autumn’s point isn’t squabbling over terminology. It’s a sound understanding of how wholesale and retail works in business.

          The standard retail split is 60/40, which means it’s typical for the retailer (Amazon) to keep 40% of the cost charged to the consumer, and for the supplier (you) to keep 60%. At 70/30, Amazon is being a little more generous than is usual in retail.

          It’s possible that they may one day decide to switch to the standard retail split of 60/40. That would definitely spell a big change in income for many, especially those who move tons of ebooks every month, but it wouldn’t be devastating. If they were to drop below the 60/40 split, that would be highly unusual, and would make them even more vulnerable to disruption than they are already.

          ROYALTIES are a different bag. There isn’t an accepted standard in royalties, except in the case of collusion. They can be anything the two contracted parties agree to. That’s why you see tradpub authors making a paltry 17.5% of net. A retail split (as opposed to a royalty) is very unlikely to deviate much from the 60/40 standard. That would be so unusual that disruption would almost certainly come along, almost immediately.

          • To clarify a bit further: the retail split is standard across ALL types of retail, for all products, not just books. So if Amazon wanted to monkey around with retail split, they’d likely already be doing it with other products for which they DO have an even larger market share than they do for books.

            It’s easy to think of Amazon solely in terms of books, since that’s what’s most important to us. But Amazon sells tons of other products, in tons of other industries. It’s telling that we’re not seeing them change retail split for other types of products.

            In short, while it’s possible that changes could occur, and we should be on the lookout for it, I think you’re probably worrying too much about it. It’s very unlikely to ever be as catastrophic as you’re imagining, because retail simply doesn’t work that way, and this is a retail business.

          • Paris Marx says:

            I respect where you’re coming from, Libbie. I probably do think about the future a bit more than I should, but I think most people don’t think about it enough. Again, I’m not saying don’t use Amazon, I’m moreso saying don’t make Amazon your only marketplace and don’t push all your customers to it so it becomes a quasi-monopoly in book distribution, both physical and digital.

            I understand what you’re saying about retail split, but let me point out one thing to you. It may be pulling at straws in a way, but it is an example of how Amazon could be changing how they operate moving forward.

            The royalties (or whatever you want to call it, but again I’m using royalty because that’s the generally accepted term) on ebooks sold in Japan, India, Brazil, and Mexico is 35%, unless you’re in KDP Select, at which point you get 70% as long as it meets the price requirements. These are all markets poised for significant growth, and if future countries are added on the same basis, with 70% royalties reserved for those in Select, it’s almost a stealth way to reduce royalties without having to admit they’re being lowered. They’re demanding exclusivity for royalties, which works famously for them because it increases their monopoly status.

            Again, that may be reaching a little, but it’s another example of how Amazon could screw us over quite easily, and doesn’t adhere to the traditional retail split.

        • DPB says:

          The challengers already exist but they can’t seem to pull their heads out of their you-know-what’s long enough to do anything about it. Each of the “Big-5″ could easily setup an ebook distribution website of their own and just make an e-reader app for android, iOS, and windows OS.

          What they should be suing about is Amazon’s closed device architecture. Force Amazon to allow other other companies to deliver ebooks to their Kindle Basic and Paperwhite e-readers and this discussion is done. In the meantime they could just deliver the books via email. Amazon provides you with an email address you can send documents or books to for your e-reader to download. Put that email address in the publisher’s ebook website and have all your future ebooks delivered with the click of a button.

          The problem isn’t Amazon. It’s how stupid the publishers are.

          • This is what some big distributors (aka book store chains) and publishers are doing in Germany. They teamed up to build an e-reader that takes epub files. I don’t know how large their market share is, but they adopted the loss-leader idea for the reader itself and sell ebooks through four sites, at least.

            And they may have become a serious competitor for Amazon here if they had opened up for indies. However, they get all their ebooks from established publishers and thus have missed the biggest opportunity to get really big. I have no doubt that this ereader will go under with the chains (one of them is going through bankruptcy as I write this).

      • Sheila says:

        [b]More authors need to approach publishers as business partners. Publishers might be able to help authors reach a wider audience, and they deserve a cut for that. We need to make sure they’ll do the job well, though.[/b]

        That’s the thing, though. You can’t approach them as a business partner (nor Amazon, really), because they refuse to negotiate contracts. If you’ve read anything about publishing contracts, you’ll understand that the majority of authors don’t get a say in how the book is edited, printed, marketed, or distributed. There’s no say in the cover selection, how many copies are printed, if there’s a reprint, or anything else.

        I’m no starry-eyed Zon-ite, not by a long shot (because it’s entirely possible for them to change the terms of their contract, and in the case of ACX it’s been done) but I prefer their terms when it comes to selling my books. And I diversify, so while Amazon may be the biggest piece of the pie, they aren’t the only piece.

      • Well said. This stuff isn’t hard. Just pretend it is a widget market. Books are treated the same way in the market.

    • Paris, I get what you’re saying. Power corrupts. Absolute power corrupts absolutely. Orwell illustrated it quite well in both Animal Farm and 1984. However, the antidote to absolute power is strong competition. Creating strong competition in the publishing world means competition on the things Amazon is doing well (innovative excellence in customer service at the print and ebook level). Privileging the antiquated way of the Big 5, besides being ill-advised on the customer level, does not create stronger competition for Amazon. Encouraging B&N and Apple and Kobo to compete and innovate does. Even encouraging publishers to innovate in getting books to customers does — but that is not what publishers (or Patterson, or Turow) are asking for.

      As for letting Amazon get away with things — first the conversation has to be a sane one about what Amazon is getting away with. And in the Hachette dust up, that’s not more than acting like any good business, ever, and not letting their hands get tied in such a way that they can’t continue to do what they do best — innovate excellent customer service. I don’t want Amazon to quit being the best business it can be. I want to see other businesses learn from Amazon and do the same.

      When ACX royalties were cut, I was reminded of the time when I first acquired an agent — right as the agents were saying they needed to make a living so they need to take 15% instead of 10%. This was a reducibly foolish argument: publishers are paying less for books, therefore the agent deserves a bigger piece of the smaller pie than the author of the book. And yet very few authors were able to hold out against this change. Some agents did allow 10% clients to remain…for a while. Because agents held the power (and the purse strings, as well, which was another business tradition that made no sense from the author’s perspective — it boiled down to: “authors aren’t good with money, so it is better to let the business-headed agent deal with it all.”

      At least ACX is demonstrably better at selling than quite a few agents earning 15% turned out to be.

      • Paris Marx says:

        I agree with almost everything you said, Kelly. Encouraging innovation is key, and I’m definitely not advising we keep the model of the Big 5. I could care less if they disappeared tomorrow, though we would suffer for it, as much as we like to complain about them. They provide an important piece of the publishing puzzle at the moment, and while I believe they influence will diminish over time, we still need it for the time being.

        What most excites me is small presses. That’s where we’ll find the innovation, the new business models, the people who aren’t afraid to find new things. They have some of the organization of the Big 5, but a degree of agility that a self-publisher would have.

        It’s important to have multiple distributors, but I’d like to see more authors and publishers pushing direct sales, and providing new experiences that way.

        There are so many opportunities in publishing right now, and it’s the indies and small presses that will seize them as long as we don’t let ourselves get bogged down in groupthink and trying to hold onto the now. Just as we do in writing, we need to always come up with new ideas and try new things in our publishing.

  16. Amy Eyrie says:

    Right on, Hugh. The way the entrenched status quo of publishing has closed ranks and refused to adapt to change has been astounding. Most horrifying is how the artist is thrown under the bus. Bookstores refusing to sell indie authors in order to punish Amazon reveals the truth. As Marcus Aurelius said, “What is this, fundamentally? What is its nature and substance, its reason for being?” The answer when it comes to the big 5 is simply “money.”

  17. Amazon is as big as they are because they’re the best at what they do. I sell there because it’s the best for my bottom line. I shop there because it’s the most painless shopping experience. If other places want my business as an author and reader, I’m all ears, but you’re going to have to give me a reason that boils down to more than “Amazon is evil.”

    I don’t understand all these authors wanting to boycott Amazon or encourage people to buy elsewhere. As a reader, why am I going to reward other sites with my hard earned money for not being as good Amazon? I shop there because they make is easy, and I have the best customer experience. I’m happy to support other companies, but it really doesn’t seem like other companies are putting much effort into competing with Amazon. It apparently takes a lot less effort to try to scare people (readers and authors) away from Amazon than entice people with a superior alternative.

  18. Lisa Grace says:

    The funny thing is, many self publishers with good fan bases built in, would love to publish through a trade company, if they offered the opportunity Amazon has. Half (I really do believe) would go through them first, and gladly take less than the 70% commision they get now.

    This is where the trades are really dropping the ball.
    Restricting the field of what/who they publish is strangling them. They could grab market share by tying up the producers, (mid-list self published authors) left and right, and getting basically free money (as most SPs would be more than happy to keep control of their covers, formatting, and editing.) Their publisher *name* (not some weird just self publish vanity press) has value to these authors, not to readers.

  19. Raine Miller says:

    My first traditional deal published smack dab in the middle of the Simon & Schuster vs. Barnes & Noble war. Needless to say, I didn’t feel the love with the Big 6 or 5 or whatever it is now. Amazon enables me to make my living at writing books, and it is as simple as that.

    • Yeah, the moral outrage at the time was deafening. I remember the New York Times and Publishers Weekly screaming about the poor authors who . . . wait. Sorry. Dreamt that. It was reported as normal business negotiations between two large corporations.

      Sorry you were caught up in that as well. :(

  20. The scenario is like the movie Elysium. From the ground everything looks better up in the clouds with the big five, the ultimate goal and prize for all. For some, it stays that way, and the model works. But for most, the only way to really improve conditions is to change the conditions in the place you already are. This is what Amazon is doing, and the place in the clouds that used to enjoy controlling everything no longer seems so promising.

    • Paul Draker says:

      “…the big five, the ultimate goal and prize for all.”

      Uh… wrong. This meme gets repeated a lot. But it simply isn’t true.

      Especially for us newer writers. Going indie was our first choice. When we hear all this old-school stuff about submissions and queries and whatever, we laugh. It just sounds dumb to us.

      And more and more often, when we get unsolicited offers from the big publishers for our indie-published books…

      We turn them down.

      • “unsolicited offers from the big publishers” !!!

        LOL!!

      • I’ll second the LOL on “unsolicited offers from the big publishers.”

      • D.L. Shutter says:

        Send them form rejection letters, the kind that have been photocopied dozens of times with an underlined space to handwrite the publishing company’s name in:

        I regret to inform you that you company’s one sided, unconscionable contract, empty promises of peerless collaborative and tireless promotion and a pitiful advance against royalties I’m likely to never see, does not meet my needs at this time. I will, however, encourage you to continue your efforts in these endeavors…”

      • Andy says:

        I saw one of those happen too.

        It kinda ruled.

      • Paul Draker says:

        H. M. Ward was very transparent about the Big-5 publishers she turned down, and why:
        http://blog.demonkissed.com/?p=1387
        http://www.kboards.com/index.php?topic=178537.0

        But even indie mid-listers, when approached by big publishers, are starting to say no.

        I don’t think it’s the norm yet — the publisher who made an offer on my book seemed surprised when I politely declined. But I think that’s going to start happening more and more.

        Especially in the wake of the Hachette situation, which is a *huge* wakeup call for us writers about the value of owning our intellectual property. When you sign control of your IP over to a multinational media conglomerate whose financial and strategic interests aren’t aligned with yours… well… that’s what happens. Sorry.

        This is the part that folks demonizing Amazon just don’t get.

        Anytime we indies don’t like Amazon’s terms, we can walk away. Because we *own* our books. Amazon isn’t holding our books hostage, the way Hachette is holding their authors’ books hostage. Amazon is just a store. It’s charges for retailing are reasonable. And whenever they become unreasonable… some other store will come along to fill that gap.

        And then we indies will sell our books there.

        Too.

      • Chris says:

        “Uh… wrong. This meme gets repeated a lot. But it simply isn’t true.

        Especially for us newer writers. Going indie was our first choice. When we hear all this old-school stuff about submissions and queries and whatever, we laugh. It just sounds dumb to us.”

        It’s simply not true for *you.*

        I could not disagree with this attitude more, and (unfortunately IMO) I see this sentiment expressed more and more.

        Not all writers want to self-publish; queries and submissions don’t sound dumb to them. Some newer writers still want a traditional deal, and I personally find it as insulting to tell them that it sounds dumb to want that as it would be if they told me it sounds dumb to self-publish.

        • I’ll say it: Signing away lifetime rights to a work of fiction today to a Big 5 publisher is dumb. It would be the height of folly. Put that work in a drawer for five years. Because limited terms of copyright are coming. 50% net e-book royalty rates are coming. We don’t know what B&N’s status is going to be in the next few years, or whether the Big 5 will have books on Amazon.

          Signing a book over to a publisher today, with all of this set to shake out, would be idiotic. Even if you hoped to end up with a Big 5 publisher. Those who wait a few years are going to find much more favorable terms waiting on them.

          • Rich Leder says:

            I’m old, Hugh. Can’t wait five years for the traditional publishing empire to shake it out. The awesome joy of self-publishing is the personal empowerment of the writer, the inner strength and fulfillment we get just from the doing of it. Not to worry, tell the empire I’ll be here with my books when they get it together five years from now.

            God, I love this conversation.

    • Cathryn Cade says:

      Michelle,

      You’re right. But you know what the hardest trad perc was to give up? My (successful self-pub) books will probably not appear in my local grocery store.

      LOL. We all have our dreams …

  21. JL Oakley says:

    I spent 20 years too out in the middle of nowhere, pitching and querying. Then I decided to test the water 3 years ago and published one of my novels. Now I have readers, won awards and published another. It’s been a big learning curve, but I tell other writers I’m glad I jumped. I have a team of editors, book cover designer and whatever I need to market from him and people reading the books and asking for more. Amazon/Createspace/Kindle made that possible. I support my local indie bookstore. It’s a important part of my community and I’m happy to say they support me.

  22. Michael McCloskey says:

    I despise the old publishers and I am grateful to Amazon for enabling me to do what I love. (I wish I could pay my taxes in one click).

    That said, the day will come when Amazon, too, will wield its power and increase its take. That’s why I’m with Smashwords and refuse KDP Select. It’s a classic cycle: you please the customer, grow into your success, then you use that success to stifle competition. Companies are collections of people and their strategies change with their stage of life. Innovation gives way to greed and parasitism. It’s a shame to see great companies like Amazon and Google go the way of Microsoft but I see no way to stop it.

    I’m enjoying the Amazon we have while we have it. I hope it takes decades to rot.

  23. James McCormick says:

    One small quibble: “Eastman Kodak is of the other sort.”

    Eastman Kodak is responsible for the invention of the first digital camera. Meaning, it’s more similar to Amazon than it is Traditional Publishers.They were pushing new ground in a similar way that Amazon was — but they also didn’t capitalize on it in a way that’s similar to traditional publishers.

    Eastman Kodak was truly of both worlds. They invented their own obsolescence without capitalizing on it. That’s pretty unique (although not entirely uncommon).

    The analogy would be similar if Amazon invented the Kindle and then never pushed the eBook market. Ironically, it’s this pushing the eBook market that has publishers crying foul.

    http://petapixel.com/2010/08/05/the-worlds-first-digital-camera-by-kodak-and-steve-sasson/

    Other than that small quibble, I totally agree.

    It’s not that Amazon is too big. Or too monopolistic. It’s that it is revolutionizing the publishing industry to the detriment of publishers — and publishers are crying foul instead of catching up or changing.

    Amazon wants competition. It helps their business. It also prevents the government from having to step in because of a defacto monopoly. But, it also is better business. Barnes and Nobles is just as much an advertisement for Amazon as the books both businesses carry are. Physical book retailers are a constant reminder of the products they sell. How those are purchased is totally at the discretion of the consumer — meaning — competitive businesses advertise each other just by their existence.

    • Their invention of the first ccd sensor was precisely why I mentioned them. They had the choice of where to go: Chemistry or Electrons. There were two VPs there advocating for both. They went with Chemistry. They didn’t pivot.

      • James McCormick says:

        I had a hunch your intentions were something like that :p Was too coincidental not to be.

        And I agree. I just thought it was important to illustrate that Eastman Kodak wasn’t a stubborn dinosaur. They were being innovative too. They just decided they were a film company and not a “capturing moments with cool gadgets” company.

  24. Scott Ralph says:

    Thanks for writing this, Hugh! Sharing your post to the four corners of the world as you read this.

    I’m not at the living wage of my writing life yet, but I’m getting there, thanks to this open, near instantaneous publishing platform Amazon has developed. When I was at the little one’s second grade party last week, some parents who read my books asked me when the next one was coming out. “Tuesday,” I said. “Already?” They asked. “Yeah, sorry for the delay, had to do a small rewrite on a chapter.”

    Then I convinced one mom to turn her amazing and funny Facebook posts into a book and publish it. She asked if I would do it for her through my tiny one man publishing company. “You don’t need me, I said, “I’ll just show you how to do it like this guy Hugh showed me on the internet.” So thanks, Hugh! Guess I’m part of the Hugh Howey coaching tree now :)

  25. Someday Hugh will write something I disagree with. Today is not that day. When I’m not writing, I work in the comms dept. of Walmart, and suffer similar slings and arrows on their behalf. Innovation is not equal to tyranny. It is the tide that lifts all boats. Well, most boats. If it isn’t yours, get a better boat or retrofit. Let see.. can I wedge in another overworked metaphor? How about, adapt or die?

  26. What hasn’t been covered much are the new threats to Amazon by small market entrants. Look at the impact that a few sites already have on Indie Authors, some authors pray for luck in getting placement in the latest “Bookbub/ENT/POI/Freebooksy/etc/etc” because those platforms have figured out how to market since “Select didn’t work for me” or “Countdown didn’t work for me” or “Facebook only goes to 16% of my fans list”. How long before such a new company with a better email/social network/etc system worry even mighty Amazon?

    • J. Gordon Smith. A better analytics system is what is needed. That’s why Amazon doesn’t share numbers. It isn’t just that you can get what you want at Amazon. You can get it how you want it, when you want it, and where you want it. And they don’t just wait for you to tell them, they figure out what you want by analyzing what you do. A system like that, just for books, that networked in indie bookstores as well as online retailers would give Amazon competition. I keep talking about it, hoping that someone will get it done soon. If not, I’ll peck at it slowly and get to it when I can :-)

  27. Chad Brink says:

    I’m just a customer. I do not have a love affair with the printed book as those tend to age along with me including the falling apart at the seams along with some amount of internal decay. This means I am firmly behind the logic and convenience of the Ebook. Ebook preference has pushed me into Amazon’s camp due to the amazingly cheap and functional kindle combined with the simple search and purchasing ability.

    With those caveats behind me I have found I read at least three times the books now as a decade ago. I attribute this to two things. One is the aforementioned convenience. I can read my Ebook reader while exercising or during any short wait. The second is the price of the works. I used to be a hard back book reader of my favorite authors. This meant shelling out $25-30 to have the current release of a particular work. If the work was average or subpar then I was burned and disgruntled. I had hoped E book works would drop in price from the Big five but they resisted. Amazon and Self Publishers filled the niche that I was looking for. I can risk my $3-5 on a new work at a rate of 10:1 over my previous purchases. This has opened up dozens and dozens of new authors to me for my enjoyment. Some of my favorite works were found because of this pricing policy and I will be forever grateful.

    On the opposite I have stopped buying and reading works by some authors. These authors works pale when held against the prolific and eager self publisher. One perfect example is a prolific SF author who’s works are popular and embrace order. Though popular, his writing is so repetitive that after a few series you realize that a good portion of the new self published lower price point works are superior. You give up. Sadly, this author is older and disparages the self publisher though his prolific nature would lend itself to faster and more profits if he chose to adapt and go that way.

    To conclude. What everyone on both sides of the argument needs to realize is that the djin is out of the bottle. If Amazon is castrated… there will be another. Self publishing will only become easier and digital works will continue to involve. maybe with the inclusion of video and animation options. I can see in the near future hardware and software that is able to produce narrated audio of anything written either using AI or other tools built into the work by the author. Down the road after that will be software that can generate an animated video of any written work. It will be possible especially if it is opened up to tweaking and perfecting by thousands of fans in an open source way similar to how modding a game is done.

    The future is bright and the media will adapt.

    • “What everyone on both sides of the argument needs to realize is that the djin is out of the bottle. If Amazon is castrated… there will be another.”

      You are spot-on. But that won’t stop the attempts to castrate Amazon. The hatred has reached levels normally reserved for religion and politics. The publishers won’t care who takes their place, and they will suffer the same terms or worse than what Amazon offers today, but they will still want to destroy Amazon because they cluelessly blame the company for the march of progress.

      It’s delusional. It will persist. The best we can do is counter delusion with reason as often as we can.

      • James McCormick says:

        Our radio broadcasting networks weren’t obliterated by the advent of television. The majority of them BECAME television networks.

        The ultimate irony is that some of these publishers screaming about Amazon and the gloom and doom it brings will survive. They’ll just change. And probably become more like Amazon.

        Smart businesses change with the times. They raise a stink because its cutting into their profit margins, but that’s all it is. They want to maximize a working system for as long as possible and make as much money from it as possible before being forced to either shutter or change. And most will change. There will be a few RKOs though.

  28. As always, you make some fantastic points, Hugh. In my opinion, when it comes down to it, I really do think a lot of the Big 5’s anger toward Amazon is it’s made them almost unnecessary and irrelevant.

    Let me explain.

    Before Amazon, it was almost impossible to be a published author without the Big 5’s permission. They were the Gatekeepers and had sole decision making power as to who would be a Writer and who wouldn’t be. Hat in hand, writers would stand at their door (metaphorically, I’m guessing) begging to be let in. And, if they got the nod, they were more than happy to sign any piece of paper put in front of them, no matter how egregious the terms.

    After Amazon, the world changed. And I mean that. Now, you simply (and I do say that tongue in cheek) have to write a very good book that’s properly formatted, professionally marketed, and competitively priced. Obviously it’s more than just that, but the torturous, time-consuming Please Allow Me to Be a Writer dance one had to do just to be a writer with the Big 5 (Big 6 back then) is no longer a necessity. And that terrifies them.

    I mean, what’s going to happen when Legacy Publishing’s Meal Ticket writers realize they can do much more and have a lot more freedom and control if they opt out of renewing their contracts and become their own companies that publish through Amazon? Do you not think agents, lawyers, and advisors left, right and center haven’t floated the idea of self-pubbing to Marquee Names? That with their established brand and a small army of help (editor, cover art, publicist, etc), they could continue their careers much as they are now while enjoying a much higher, more straightforward paycheck?

    This is the nightmare that keeps Legacy Publishing awake at night.

  29. Robert Kent says:

    Awesome post!!!!!!!!!!!!!

  30. L.K. Rigel says:

    Amazon is a threat and must be destroyed.

    What if the wealth creators in other sectors start believing they should be able to keep a good portion of the income they generate?

  31. Judith Roseta says:

    Well said, Hugh. This battleground couldn’t ask for a more eloquent standard-bearer.

  32. Kate Danley says:

    I want you to send this to the New York Times as an Op-Ed piece. Yes! To all of this. Yes!

  33. D.L. Shutter says:

    Simple epic post. I would FWD to PG for discussion there but I know ten people already beat me to it.

    Thanks for the insight from deep inside the “mating garter snake ball” as Gaughran would put it. I can only imagine what you’ve been listening to all weekend.

  34. Mike Burton says:

    When I was growing up, I read… a lot. My parents headed off to this amazing place that would buy all of your books (at a reduced amount of course) and you could use that credit to buy MORE books. They saved me money, and I didn’t give a lick as to how any of that affected the author.Fast forward to young adult trying to make it in the “real” world. There’s no time for reading, and when I can get a book in, it’s gotta be cheap on a ramen noodle income. Again, no thought for the person who wrote the thing. I am now a middle-aged man who owns an e-reader. I have all the time in the world for reading, even if it happens to be a few minutes while waiting for the doctor to call me back. I can carry what amounts to a library in my pocket. Did I forget my ereader at home? Oh, well, it’s on my phone too… synced to the exact place I left off before. Does the amount of money that goes into the author’s pocket enter my mind? Nope. One day, I hit upon this amazing, life-changing, piece of work entitled WOOL. Finishing it, I asked, “Who is this author? And why haven’t I ever heard of him?” We now all know Hugh as this amazing “indie” author that has bucked the system and turned the publishing field on its head. THAT’S the moment when I felt that maybe, just maybe, there might be a chance for me to get the stories that have been rolling around in MY head a chance to breathe life, see some sunshine for a little bit, make friends with someone. THAT’S when I realized that I could support an author for entertaining me and giving me the ability to leave my troubles behind, even for a little while. This war that is raging… being fought by many people and companies, has only ONE question that must be answered by me. Which one allows me to give the most money to the people that are pleasing me? Which choice gives me the ability to put MORE of the very little money that I do earn in the pocket of the one that deserves it? WHY? Because I want to be one of those authors. I want to be able to share the stories that NEED to be told. I want to be able to carry a pocket that might actually have a chance at making dollars instead of cents. Do I believe that I’ll be able to do that? Before Hugh, no. After, maybe. I’ll take maybe, and at the same time, choose to support the other people that chose maybe too.

  35. I had no idea how much collusion existed in the publishing industry. It makes me even more disgusted with them.

    That said, I wish there was less of an Us vs. Them mentality. Self published authors would be happy to co-exist with publishers, and that is the inevitable end to all this.

    • I will be happy to continue working with them. When they change their contracts.

      They aren’t going to change their contracts unless we demand they do.

      • D.L. Shutter says:

        With record, booming profits coming from the ranks of loyal mega-sellers and a mountain range of backlist titles locked under contract for life plus forever, I wouldn’t hold my breath on change from the Big5 anytime soon. But that’s just fine because we can move on without them.

        And thank for all the great commentary from BEA!

  36. “When Simon & Schuster innovated with print-only deals—thereby landing bestselling authors who were otherwise never going to sign with any major publisher—the resulting press on these deals (and likely pressure from other publishers) caused an immediate retreat. The poor publisher who stepped out of line dutifully pulled back into rank. Print-only deals were no longer on the table. Contracts snapped back to their immutable and noncompetitive form.”

    Then my books are off the table.

    It’s absurdly short-sighted of the Big 5 to reject the one path which is actually mutually-beneficial to publishers and independent authors – but that is the point of this post, after all.

  37. Rysa Walker says:

    This is the first time I’ve seen anyone in the industry acknowledge the point you make concerning Amazon imprints. As an APub author (Skyscape, the YA imprint) I had to bite my tongue several times at conversations I overheard at BEA. I’m delighted with Skyscape and wouldn’t even consider a Big 5 option if it were offered–I’m quite sure my terms are better, especially for a new author. It is, however, very annoying to hear everyone lamenting the treatment of Hatchette authors, when B&N, Target, and most indie bookstores refuse “on principle” to stock print copies of books published by any Amazon Publishing imprint.

    • Paul Draker says:

      The double standard is even more egregious than that.

      It isn’t just books by Amazon publishing imprints that Barnes & Noble and most indie bookstores won’t stock… they don’t even want CreateSpace-printed indie books on their shelves, because CreateSpace is owned by Amazon.

      As an indie author, I’m forced to create and sell two identical (same-ISBN) versions of each print book:
      1) A CreateSpace-printed version to sell online at Amazon (but no extended distribution)
      2) A LightningSource-printed, Ingram-distributed version for Barnes & Noble retail stores, indie bookstores, and the like.

      This anti-Amazon whining by a cosseted and inbred industry that has no clue how to compete for realz is getting ridiculous.

      • Alan Spade says:

        Paul, I’m curious, there. Have you checked if your Lightning Source books are shelved on Barnes&Noble stores?

        Like you, I work with both Lightning Source and Createspace. I use Lightning Source for books I handsell myself. We are talking about POD books, so I figured B&N would only stock my book if I a reader was to order it. And I’ve checked, with Createspace extended distribution, my books (like this one: http://www.barnesandnoble.com/w/the-breath-of-aoles-m-alan-spade/1119630989?ean=9781496136558) are on the virtual shelves of B&N. The one on the link is even discounted!

        • Alan Spade says:

          I should have said: “B&N would only print my book”

        • Paul Draker says:

          Hi Alan,

          Yep, I’ve got my books on Barnes & Noble store shelves at a few locations:

          http://www.pauldraker.com/images/hardcover-BN-SM.jpg
          http://www.pauldraker.com/images/paperback-BN-RC.jpg
          http://www.pauldraker.com/images/signing-BN-1.png
          http://www.pauldraker.com/images/coop-BN-RC.jpg

          The key is to call or visit each store and chat with the store manager and CRM. As long as you set the industry-standard wholesale discount (45%) and made your book returnable through Ingram, Barnes & Noble stores are happy to go into their order-entry system and order a few copies of your book to stock on their shelves. Or sometimes 50+ copies, if they want to hold a signing event for you.

          In my case, I put my broader Barnes & Noble roll-out on pause after getting my books on the shelves at a few of their stores. I want to wait a few months to get a good sense of sell-through and return rates before “going wider.” The returnability that bookstores require is a two-edged sword — if Barnes & Noble folds (or closes a bunch of stores), then any unsold books will get returned to Ingram for a refund, which means the publisher (in this case me) will end up getting billed for the printing costs. It could get ugly.
          Just imagine: 600 stores x 10 unsold books each x $10/book. Ouch.

          So, yeah… I’m taking my time with the print roll-out.

          Besides, the money just doesn’t seem to be there to make a broad print roll-out worthwhile, either. I sell one print book for every 100 e-books, and earn a whole lot less money per print copy than I do on an e-book.

          But online sales through http://www.barnesandnoble.com are painless.
          As you said, as soon as your book goes live through Ingram, it just appears on barnesandnoble.com by magic — often discounted, too :)

  38. Mgon says:

    Thank goodness for level-headed thinkers like you that not only see the truth but are also taking the time to use their platform to share the truth with others and give us a rallying point and place to stand against these injustices and wrongs. It’s so easy to become irate and livid over this. Authors like you give me hope :o)

  39. Thanks for the post and leading the charge. Every day I’m more and more thankful for publishing with Bob Mayer’s forward-thinking Cool Gus. I’ve also had nonfiction books cancelled or orphaned after my publishers were sold, and figured my writing career was over. Thank God my then-agent got rights back to my 2-dozen or so titles, and Bob convinced me to bring my back list back, and even took a chance on a first time thriller writer.

    Lead, follow, or get out of the way!

  40. Phyllis Humphrey says:

    Hugh; Great post! I agree that you should do an Op-Ed piece. As you’ve said so well, we need to counter the lies and hatred being spewed by the Big-5, not one of which, BTW, is an American company. Time will reveal the truth, though, even if we don’t.

  41. Chris says:

    “When Simon & Schuster innovated with print-only deals—thereby landing bestselling authors who were otherwise never going to sign with any major publisher—the resulting press on these deals (and likely pressure from other publishers) caused an immediate retreat. The poor publisher who stepped out of line dutifully pulled back into rank. Print-only deals were no longer on the table. Contracts snapped back to their immutable and noncompetitive form.”

    I’m curious, Hugh. Do you have a source for the reason behind the retreat?

  42. Bezos is often quoted saying the other guy’s margin is his opportunity.

    Amazon is often predicted to become a monopoly that will increase prices to consumers and cut royalties to authors.

    If so, that sounds like Bezos’ increased margin might become someone else’s opportunity.

  43. Orlon Wigge says:

    Cheering on the sufferings of the big houses is trying to pull a wall down on your own head. They are still the best mass market launchpads for books. They have scale and reach. They can make careers. They cannot, however, break them any more. So why the ire?

    There is a certain vibration in those places. A humming invisible network of editorial traditions, house styles, different schools and approaches to books. Joining one of these places as an author is like entering a school.

    I’m at two major publishers. From my perspective, one has treated me poorly and the other has treated me like a king. But they have both paid satisfactorily, the terms in the contracts have been standard practice, and there have been no violations of the terms. Lucky? No. Insofar as luck goes, I’ve had positive and negative experiences. The rest isn’t luck, it’s lawyers and agents.

    It’s frustrating to be shut out of what looks like an old boy’s club. But these publishers aren’t monoliths. They have dozens of imprints, each its own little microcosm. The big company name on the credits page is little more than a distributorship. So when you curse the fortunes of those hide-bound majors, understand you’re aslo denouncing the small publishers who together compose the big ones. Those publishers retain a great deal of autonomy, for the most part. This is how they persist in an age of juggernauts.

    If you get a book placed at Tor, for example, you will be dealing with Tor and its people and ways. There will be contracts and documents from the bigger company Macmillan, but Macmillan has nothing to do with crafting your book. Tor does that, from first to last steps.

    Don’t knock the majors. They created enough critical mass to keep books from becoming factory product the way magazines are.

  44. Travis Hill says:

    I woke up the other day as this Hachette vs Amazon thing started to blow up and realized:

    Self-pub/indie authors like us… we shouldn’t waste our time trying to convince publishers to change. It’s a waste of time. Think about it… as long as they have record profits from hundreds, maybe thousands of authors tied down by these contracts that sane writers like us would never touch, they can hold out against almost any siege for years. Maybe even a decade or two more.

    But authors… how many of them are under contract for long terms? Two, three, maybe five books? Think of this like free agent season in sports. Our energy should be spent poaching traditionally published authors to ‘our team.’ The writers, who should (might) have built some sort of fan base… they’ll make more signing with our team.

    They’ll build new fan bases, possibly larger fan bases as humans slowly but inevitably transition to almost purely digital lifestyles (imagine your kids, and then their kids… 2d entertainment and physical books will be odd things that existed for their parents and grandparents, to be boxed up when Dad or Grandma passes on).

    They’ll get to keep the rights to their creative works. They’ll get into Amazon’s algorithms and also-boughts and also-vieweds. They’ll get paid monthly. They’ll get almost real-time sales numbers and rankings. They’ll only have to pay for editing and cover art once (unless they choose to revisit it), instead of paying 80% of the book’s sales forever for it (and not getting the final say-so in either of those subjects unless you’re selling like hotcakes, as my dear Gram used to say).

    Here’s my answer to the inevitable discussion of how Trad Pub is “the one true path” and if you aren’t Trad Pub’d, you aren’t a real writer:

    How does someone selling $100,000 worth of books as a self-published author differ from someone selling $100,000 worth of books as a traditionally published author? How is one more ‘true’ or ‘real’ than the other?

    I’ve yet to encounter anyone who has been able to tell me how one is better than the other.

    So… since big publishing is going to entrench for the long war (and they’ll lose this Hachette battle, pretend publicly they didn’t, then sit back and watch the next publisher take their best shot at Amazon, rinse & repeat), here’s how you quickly end that war:

    Take away all of their soldiers. Take away all of their laborers. Without authors signing contracts, who will write their books? When authors stop signing contracts and then announce they are making as much, if not more, by selling direct to their customers (via Amazon / iTunes / etc), will those remaining trad pub authors still toe the line and defend their masters at all costs? It’s hard to watch your squad mates defect to the other side and then listen to them shout across the trenches that the fried chicken is crispy and hot and the beer is cold.

    Anyway… that’s my goal. Convince authors that not only will they do better on their own, they’ll be the very reason publishers have to begin sitting down at the negotiating table to offer better terms. Hugh is right: better terms are coming. But not until there aren’t enough authors left willing to sign to such horrendous terms. Or until they go broke. A company worth billions tends to take a long time to bleed dry as long as they have something to sell that customers still want.

  45. […] Freethy, Hugh Howey (who wrote an interesting an accurate blog about the Amazon-Hachette thing here), Tina Folsom (who sells as much in Germany as in the US), Lilliana Hart, HM Ward, Jacinda Wilder, […]

  46. […] And then I found this: “So the question is this: Is Amazon a disruptor because of its size? Or is its size a result of previously stifled innovation? The culture of the Big 5, which was built by gobbling up successful small presses and rolling them into imprints, left the door wide open for Amazon, a company that dared to sell direct to consumers, innovate the way we read, and pay authors a living wage. You know, the first company to actually compete. […]

  47. […] course there is another perspective on Amazon entirely, compared with what I normally advance here. I don’t subscribe as much to […]

  48. One of your best posts ever…and that’s saying something.

  49. […] A quite contrarian take on the upheavals in the publishing world by Hugh Howey: […]

  50. I suspect everybody knows this but me: are the print-only contracts from publishers now non-existent? Has that possibility gone away?

  51. Ron Walker says:

    How amazing that we’ve reached this turning point. Aspiring authors can now say (with a straight face) “Why would I ever chain my book to one of the Big 5?” The cartel is coming apart, and the risk of becoming collateral damage in a distribution war is just too high.

    James Patterson Himself is pissed off because he can’t sell books on Amazon right now. His anger is misdirected in my opinion, but whatever. The point is that James Patterson’s publishing deal isn’t working for James Patterson, so why on earth would someone starting out today sign up for that kind of risk?

    Who woulda thunk it?

  52. John Weaver says:

    Competition is a bitch. These guys have been bullies for too long. Just like Microsoft has own the PC business forever in a monopoly like none since Standard Oil they are now waning. They did not see the tablet business in the way that Apple did and they are losing big time. People will hopefully see these companies for the bullies they are and seek change.

    What most people do not recognize in this industry is the hidden power of potential players in publishing. Look at Google. They have more than half the market in smartphone and tablet operating systems. If they were to change there systems to be more user friendly, up their royalties, and focus on selling books, they could easily become a major player in the eBook market. Smashwords could easily start up their own POD and/or sign with existing POD distributors worldwide and they truly become a 1 stop shop for the self published.

    The biggest danger in a free market is an uneducated consumer. People hate Walmart but they always shop there. If people decided that I am no longer shopping there but will shop at the local markets, Walmart will have no choice but to change. Monopolies (or oligopolies) can be controlled if consumers exercise their freedom of choice. Many writers offer their books directly through their own sites where no one profits but the writer.

    We just need to let the readers know of all their choices and why they are important.

  53. […] up with the Amazon/Hachette issue? Hugh Howey posted his take on the situation on his […]

  54. […] did on trying to go it alone the traditional route or in self-publishing. As Hugh Howey put it in his write-up of this whole situation, BB as a publishing venture is what a publishing company should be, a […]

  55. Don Bay says:

    You, Joe Konrath and Barry Eisler among others (and a number of Commenters) have the facts and experience that are needed in the Amazon-Hachette controversy that rages these days.

    Being an avid reader, blogger and lawyer, not to mention years in the TV industry reading thousands of scripts, I have observed in the press that the traditional publishers I refer to as The Buggy Whip Brigade have merged, colluded, downsized and shed personnel in their quixotic quest to remain true to their vision of being all things to all writers. They have failed, so their ploy now is to cast Amazon as the bully and bloated villain in its negotiations with Hachette.

    A scan of the New York Times reveals that their bias for The Buggy Whip Brigade is showing. Consequently, I have felt compelled (the devil made me do it) to submit comments pointing out that misinformed readers interested in getting the facts instead of the propaganda make their way to The Passive Voice, a blog devoted to writers, to discover a measure of truth before they form an opinion on the issues.

    Sorry to have added to your already overflowing plate, but you guys have the facts that I lack. That said and being a long-term skeptic, I doubt that many misinformed individuals will beat a path to your doors. I tried, though.

  56. Victoria Noe says:

    Well said. I heard all the same arguments at BEA, Hugh. But the one that stands out for me is James Patterson’s.

    I applaud that he puts his money where his mouth is when it comes to indie bookstores. Awarding $10,000 grants! Great! Winners everywhere!

    But he – and many Amazon bashers – would earn much more respect from me if they weren’t selling their books on Amazon. Amazon is Satan? Okay, then don’t do business with them. But I have yet to hear of an author removing their books from Amazon in protest. Have you?

  57. snow man says:

    Regarding other bookstores not carrying their titles, Amazon shouldn’t have been surprised. Bookstores haven’t and won’t carry books by B&N’s Sterling imprint for the same reason: why help a competitor who wants to put you out of business? For similar reasons, in part, the Doubleday and Scribner bookstore businesses were sold to B&N in the early 1980s.

    And this attitude isn’t particular to publishers. Remember when MTV played videos? They don’t anymore because Viacom decided to stop promoting their competitors’ products. Remember when the Food Network had shows with great chefs? They all got dumped in favor of Food Network chefs whose brands they owned.

  58. I think there is one thing wrong in this debate. As it rages, there are three sides to it; the BIG 5, Amazon, and lastly, the authors. This is where things are missed because clumping all authors together is not a fair viewpoint. Clearly, I as an indie author with very limited sales of a book or two a week should not be grouped with top authors selling a book or two a minute. Nor should I be grouped with authors signed to BIG 5 contracts as I am an independent.

    When you’re at the bottom and looking up, everything is a challenge and a block that needs to be overcome on the way to success. I see little benefit in championing either the BIG 5 or Amazon, as both, in their ways, stymie my chances through their actions.

    This is all about one thing, money. The publishers are crying foul because their bottom line is going to be hurt should the legacy format fail. The authors who are with the publishers are whining because their sales are hurt due to the fight. Amazon is trying hard to get a bigger slice of the pie.

    I would be willing to bet my bottom dollar that 99.9999% (I might be missing a few nines) of all indie authors would love to have the problem of decreased sales due to this legal battle because that would mean they have a BIG 5 contract and are selling a lot of books.

    When this all shakes out and the legacy format is either upheld or defeated, neither decision will affect my situation. Because I am without an agent, because I am without a BIG 5 publishing contract, because my sales are slow and my sales rankings are quite low, I will still be at the same place I am now and will have to continue to operate in a marketplace designed to favour the top authors.

    Were this a battle to put all authors on the same playing field, regardless of published by the BIG 5, Amazon, or self-published, then it might hold my interest.

    • What on earth makes you believe that if you had “a BIG 5 contract” that you would be “selling a lot of books”?

      A Big 5 contract means that you have NO SAY AT ALL about the sale of your books. If your publisher decides that you are no longer worth any marketing effort, you will no longer have any book sales. Period. And you cannot then take those books and sell them yourself because that wonderful Big 5 publisher won’t let you because it owns the rights to those books virtually forever.

      As for that “marketplace designed to favour the top authors”… there are thousands of authors around the world who are quietly making a living and paying their bills from the income that they make as independents. (That’s not conjecture; do a little Googling and you’ll find out about them.) If your sales are slow, maybe you need to write books that more people want to buy and stop blaming outside forces for your lack of success.

  59. […] I was pointed at this post on the matter, in which the author is quite well and firmly on Amazon’s side. I was asked for […]

  60. James McCormick says:

    An interesting wrinkle: Buy 2 Hachette books from B&N, get a third free.

    http://www.barnesandnoble.com/s/?dref=51&pro=2897&sort=SA&store=BOOK&view=grid

  61. ML Banner says:

    Hugh, great post as always!

    I for one would not be writing this if it were not for Amazon. Their brilliantly simple publishing platform and marketing methodology enabled this nobody author to self-publish his first book and make it to #1 Best Seller in both its genres. I know I would not have had a chance in hell of getting published traditionally (two months ago anyway). Ironically, I know several traditionally published authors and I’m betting that I made more money with my first book in the last two months than they have made in that same period from their traditional publishing deals.

    So, this whole anti-Amazon sentiment seems laughable to me for all the reasons described by you and others. Countless Indie authors each have thousands of readers who would not be finding their books, were it not for Amazon. Yes, Amazon may someday get too big for its britches and stumble, as all big companies have done. Regardless, if we as authors smartly use all the tools available to us (which currently includes Amazon), and if we build our own reader base, we will succeed whether we use Amazon or some other publishing platform in the future.

    Until then, I’m a major fan of Amazon!

    • bluerabbit says:

      I am glad you are doing well with self-publishing. It is great for certain kinds of books. I like Amazon too, for different reasons.
      I always told my daughter that in any situation, you always have an advantage. This applies to business competition. If Barnes and Noble is smart, they will see this as an opportunity. They can offer something Amazon is not willing to–new books from Hachette. The problem? They have not stocked a wide variety of new books in ages. Before the Internet, I heard authors speak about new titles. They were never in stock at B and N or Borders. (We have no independent here–just a used book store, and I already own everything they have that I would want, but I digress.) By the time the new books came into the store, I had forgotten about them and was looking for the next new thing that hadn’t come in. That should be better online. Barnes and Noble should be playing it up. It is their advantage moment. Who is running these companies, anyway?

  62. Peter Taylor says:

    I have not self-published so far, but it is not inconceivable that I may do so in the future – possibly for niche craft-skill topics that are unlikely to be profitable for the Big 5 or the smaller and independent but equally excellent presses.

    There are many wondrous self-pub’d books in every genre, but there are also internet marketing gurus who promote the ability to create a dozen books a week (particularly with outsourcing) which are all not well edited or designed. Novels can apparently be written to plans with ease by their methods. I believe that this rapidly flooding market will increasingly confuse shoppers, who may more frequently prefer to trust books created through gatekeepers. Reviews and word of mouth obviously help the globules of self-published cream to float, but unfortunately the surrounding water and whey is increasing.

    Staff of traditional publishers lose their jobs if books are not profitable. There’s a lot at stake. Some duds slip through, but great care is taken to perfect every book as much as it’s possible to do so, more often than not to a level above that envisaged by the author. My last publisher used two designers and an art director who commissioned extra artwork from me so that each page now has a screened-back background and decorative features – it’s a far better book than I would have created.

    Some books that are read only once may continue to have an increasing digital share of the market – but I don’t believe this will occur for books with a significant number of illustrations. One cannot fully appreciate watercolour and traditional painting media on a small screen.

    When a self-publisher writes a children’s picture book, they usually instruct the illustrator according to their own vision for the pictures. This almost invariably limits the book’s potential. If the words say, ‘James splashed in the waves. Watch out – here comes a shark!’ then the author is likely to tell the illustrator to draw a girl in the sea and a shark’s fin protruding on the horizon. The Big 5 or any traditional publisher will give the author no say and choose an illustrator who can imagine what no one else could possibly imagine from the words, and they might draw a child bouncing on a bed with crumpled sheets as waves, and the pet dog, representing the shark, jumping in the bed as well – creating a far more rewarding reading and visual literacy experience for the reader.

    All serious writers recognise the need for editing – but to what level does each self-publisher engage an editor in comparison to the people hours that a traditional publisher pays for in the development of a text? My inbox had over 600 emails from my editor from a traditional publisher to answer. If I were self-publishing, would I have felt financially strained after the first 200 and told them it was now good enough?

    While excellent self-publishers will develop their tribe of followers and will prosper, I do believe traditional publishers will continue to flourish for worthy reasons. But to in order to take risks in subject matter and risks with new authors and harness exemplary production values, they need to be highly profitable. A cut in profits potentially means the wider community of writers, illustrators and readers suffers, and any fight for a greater share has my support.

    • bluerabbit says:

      Well said! Children’s books are a special field. I selected books for a school library. We could only order books that had received starred reviews in one of the major publications. The only books considered for such reviews were from established traditional publishers. This was several layers of gate-keeping/filtration. Is it fair? Maybe not. Are good books overlooked? Maybe, but nobody in the world has time to read all the new books that are published, even by big houses, much less small traditional publishers. Self-publishers? Have you looked at the numbers? How many hours are there in a day? Chances are, a self-published book by someone famous or notorious will sell, while a much better book published the same way will fade into oblivion. And this is different from traditional publishing how? Well, with legitimate reviews, a well-crafted story has a chance to be seen.

  63. […] court held last summer that the Big 5 colluded with Apple to drive eBook prices higher. Just who is it that has the power of a monopoly? Clearly, corporate publishing has been restricting writer’s access to the system, limiting […]

  64. bluerabbit says:

    I review books. I also recommend them in nonfiction materials I author. I do not know what will happen in the future, and I understand how authors are being cheated under current e-book contracts, however, I do not read, nor do I plan to publish the type of fiction that does well self-published (romance,science fiction, horror, dystopian,paranormal). For now, I appreciate editors. I appreciate the time they spend sorting through stacks of manuscripts and picking out the ones that are well-crafted, original, and exciting. I appreciate professional reviewers, such as the ones in School Library Journal, Hornbook, and Publishers Weekly. There is no way I can read everything that comes out and I find a system in which friends are supposed to buy other friends’ books unsustainable. It’s like sites that thrived briefly on the Internet with mutual backscratching to promote sales/traffic. It’s short-sighted and adds nothing to the culture. When I choose books to review, I’m sorry, they are always from houses I know, and, yes, I do pay attention to the publisher. Why? My time is limited. I am not a slush pile. Now if someone says that Stephen King self-published, I will answer that he needs editors too.

    • Terri says:

      Okay, you do not like genre fiction. More power to you. The successful indie books now are professionally edited and formatted with professional covers. Do you not think if King decided to strike out on his own that he wouldn’t have an editor?

      But, bottom line, how does keeping ebook prices at $13.99 have a thing to do with what you just said?

      When someone tells me that Hatchette is fighting to save me from Amazon, I feel the same way that I did when my congresswoman told me she was saving me from the Affordable Care Act. Hatchette wants to save me from books I can afford the same way she wants to save me from insurance I can afford.

      Hatchette isn’t battling for literature. In fact, they just canned two of their editors with the most experience in literary works. They are battling to keep the proportion of what they (not writers) earn from ebooks funneled to the mothership. Not to pay higher royalties or advances, but to go into the maw of the multi-national corporation that owns it.

      You don’t like indie. Cool. Where do you think a lot of the very fine freelance editors came from? They were fired by trad pub. Me personally, I much prefer genre. Cool, too. But this issue has zero to do with that. It’s business.

  65. […] Passive Guy be less passive and had Joe Konrath fisking James Patterson again, or you could check Hugh Howey’s view on the so-called monopoly  and see Amazon’s reply on Joe Konrath’s […]

  66. quilty says:

    The NY Times is pounding on Amazon so hard it’s like their beating the bushes to find lost little girls…what? those lost little girls are black? and African?

    Well, then, let’s have 4 more op-eds about wicked Amazon. Because haggling over the price of e-books is more important than demanding that more effort be put into saving kidnapped girls from ruthless armed men who would use them as slaves.

    • Terri says:

      Okay, the international kidnapping outrage thread is two doors down. You can’t compare the two, but this discussion is about Amazon and Hatchette.

  67. […] while the responses are mostly anti-Amazon, writers like Hugh Howey, not surprisingly, will turn the blame back on Hachette. “We have suffered under the thumbs of a cartel that controls print distribution and refuses […]

  68. Nan McCarthy says:

    Thanks for another great article Hugh. I love your open approach and willingness to share your knowledge, data, experiences, and insights. I’ve also enjoyed reading the many and varied comments here. What a fantastic platform you’ve provided (here and on Facebook and with your Author Earnings report) for authors to share their experiences!

    I have one very small quibble with some commenters who state or imply that self-publishing didn’t exist before Amazon, or that Amazon invented self-publishing. There are those of us who self-published before the days of Amazon and ebooks. It was a lot riskier financially of course, because we had to shell out thousands of dollars for printed copies of our books in addition to paying an editor and professional designer. But it could be done and some of us did do it. Some of us were even successful in getting our self-published books reviewed in the print publications usually reserved for traditionally published books.

    I was one of those authors who plowed ahead with self-publishing in the 1990s after receiving rejections from all the major publishers. And when my novel gathered traction and started getting some good press, I eventually accepted a traditional publishing offer from one of the very same big publishers who’d rejected the novel just a couple years previously. And although I more than earned out my advance from the traditional publisher (as well as selling numerous foreign rights), would I characterize my experience with the traditional publisher as good overall? I’m sad to say the answer is no.

    (It’s worth mentioning that before I signed with the Big Publisher, I was offered and accepted a “co-publishing” agreement with a medium-size publisher, an agreement that could be likened to Hugh’s print-only deal w/ S&S, in that the medium-size publisher’s role was to get my books into bookstores while I retained all other rights and was also still allowed to sell copies of the books via the Web (including my own website) and anywhere else I could make a sale. This was before ebook technology was widely in use so the books being sold were all printed copies, but the concept was similar and the terms were ideal for me as a self-publisher. One might then ask why I jumped ship from the co-publishing agreement to go with the Big Publisher, and my answer is that I thought it would lead to better things. And in some ways it did—more foreign rights sales, better distribution, more exposure, etc.)

    So fast-forward 20 years later from when I first self-published. I’ve now got the rights to my novels back from that particular Big 5 publisher (a process which took ten years I might add, even though I had a reversion of rights clause in my contract). And I am DELIGHTED with the opportunities now available to indie authors today. Amazon has revolutionized publishing with ebooks, Kindle, KDP, and the access to worldwide distribution it offers indie authors. I am completely energized and invigorated watching Hugh and all the other independent authors make use of the many new platforms available for writers to get their work in front of readers. (And by the way, I’m rooting for *any* platform or company that gives authors a fair shake, whether it’s Amazon, iTunes, B&N, Kobo, small- to medium-size presses, some new distribution system being dreamed up right now in someone’s back bedroom, or even any of the Big 5 publishers willing to significantly change their contract terms and treat authors more equitably.) Having now run the gamut from being self-published to co-published to traditionally published and now back again to self-published, I can’t say enough what a joyful and rewarding experience it’s been to once again have full control of my work. In addition to having just released new editions of my previous novels, there’s no question I’ll go the indie route when I finish the new novel I’m working on.

    Thanks for letting me ramble here Hugh, and for doing what you do—writing great stuff, and looking out for your fellow authors. The only other thing I’d like to add to the Amazon vs. Hachette discussion is that, as authors, let’s try to stick together. Let’s not find fault with the traditionally published authors crying foul right now. My heart goes out to them. Let’s not make some arbitrary us vs. them distinction between traditionally published and indie authors. We are all creators. We all deserve to be treated fairly.

    I’ll end with a Neil Young quote I read the other day in which he was being interviewed about his new album and his plans for the future: “You know, the future’s a huge, gigantic place. I have no idea what’s going on out there, I’m just going to walk into it and see what happens.”

    I feel the same. Write on.

  69. Very insightful. I agree wholeheartedly. The danger represented by Amazon becoming a monopoly is far less than the danger they’re fighting. I do have a few concerns about Amazon, but so far their leadership in the e-book publishing industry has been benevolent to say the least. I make six figures thanks to them, whereas with a traditional publisher I’d probably still have several other jobs.

    So long as Amazon remains the innovative, benevolent leader that they are, everyone will benefit. I’m not scared for the Big 5. The writing’s on the wall and they’re done. I didn’t realize they blacklisted Amazon authors like me, or that they’ve stopped offering print only deals (which is really the only thing they have left to offer a successful indie author). I’ll be happy to see them shrivel up.

    The good news is that small imprints will never go out of business, because they do the leg work that most authors can’t. Small book stores won’t go out of business either, but they need to be smart and think ahead, to start searching places like Createspace for the next best-seller to stock their shelves.

    Literary agents? Now there’s a troubled profession. I do think they can adapt if they want to–morph into publicists and social media correspondents, and/or contact people for TV and Movies, which are still something of an enigma to most novelists.

    Let the winds of change keep blowing. Now it’s the readers who open and shut the doors for new manuscripts, and the slush pile is a part of Amazon’s catalog. You can find it by browsing the newborn titles listed for free and at $0.99, yet to receive their first few reviews.

  70. […] Lately I’ve been listening to more podcast. I’ve hit a few episodes the past couple days where pricing has come up for debate. Then the Amazon v Hachette debate began blowing up social media. If you’re new to the debate check out Hugh Howey’s article on his blog. […]

  71. […] As Hugh Howey says in wading into this issue, “Publishers could have realized years ago that they are in the story development and delivery service, but they thought it was all about books. Which pretty much underscores all that has happened since.” […]

  72. […] 2: Author Hugh Howey (http://www.hughhowey.com/winning-at-monopoly/) has some fascinating thoughts on the whole matter — I just spent 30 minutes reading through […]

  73. […] Hugh Howey steps in, calmly dismantles every possible argument in the defense of traditional publishing’s position, and leads us to a brighter […]

  74. […] blame but themselves; they’re the ones who signed up with the big publisher in the first place. Hugh Howey thinks it’s the publishers who have gotten too big — and too out of touch — not Amazon. Slate […]

  75. […] one excellent writer. Have you read it yet? The first in the series is perma-free! He wrote a smart post about Amazon and Hachette […]

  76. John muccillo says:

    Hugh, absolutely and fabulously on point. My only regret is I didn’t see your post sooner so that I could jump into the fray.

    It is indeed astounding, the indignation of the publishers like Hachette (shocking, shocking that gambling is going on here!).

    Innovation has always driven humans forward – the innate desire to create things where they don’t yet exist, and then to make those things even better.

    Amazon will continue to innovate for writers and readers alike, and that innovation itself will stimulate a new cadre of Amazon competitors. If we don’t demand this forward movement in everything we do, we all die on the vine.

    Let’s don’t fear Amazon, we should stand on their shoulders.

    By the way — “contretemps?” Come on, really (see Toby Neal, May 31 comment)???

  77. […] Winning at MonopolyHugh Howey | May 31, 2014 […]

  78. […] But in terms of blame for the situation they’re in, as others have said (See exhibits A was, B and C ) I’d point to the mirror as much as […]

  79. […] But in terms of blame for the situation they’re in, as others have said (See exhibits A was, B and C ) I’d point to the mirror as much as […]

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  82. […] court held last summer that the Big 5 colluded with Apple to drive eBook prices higher. Just who is it that has the power of a monopoly? Clearly, corporate publishing has been restricting writer’s access to the system, limiting […]

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  84. […] authors, unless you consider getting paid 70% of the sale price for your book instead of the 17.5% that authors used to get from publishers like Hatchett is hurting […]

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