Monday, May 28, 2012

Joe's Letter to the DOJ

United States v. Apple, Inc. et al., No. 12-CV-2826(DLC) (S.D.N.Y.) – Comments on Proposed Final Judgment as to Defendants Hachette, HarperCollins, and Simon & Schuster

John R. Read
Chief, Litigation III Section
Antitrust Division
United States Department of Justice
450 5th St NW
Suite 4000
Washington DC 20530


May 28, 2012

Dear Mr. Read,

I’m writing to you as the author of forty-six books--eight legacy published, two Amazon published (with three more on the way), and thirty-six self-published, all of which inform the views I express in this letter.

As you doubtless recognize from the mail you’re receiving, there is currently underway a letter-writing campaign coordinated by the Association of Authors’ Representatives, the Authors Guild, and other parts of the publishing establishment attempting to persuade you that the DOJ’s suit against five of the Big Six and Apple is without merit, and that the Agency model is, at best, good for everyone, at worst, harmless. 

I’m writing to tell you that these organizations did not solicit the views of their members, that they in no way speak on behalf of all or even most of their members, and that (as I imagine is obvious) they are motivated not by what’s best for consumers, but by what they see as best for themselves.

I recognize that the heart of the DOJ’s suit is collusion, not high prices. But it’s clear that the legacy publishing industry’s strategy is to keep the prices of ebooks high so as not to cannibalize high-margin hardback sales. If the prices of legacy published books are kept artificially high it could be argued that my lower-priced self-published books are made more attractive by comparison, but I believe that a regime of higher-priced books is bad for the industry overall because it slows the growth of the global book market, which indeed hurts all sales. I also believe it’s obviously bad for consumers, especially lower-income consumers, who could buy more of the books they loved if those books weren’t priced so high.


When prices of media are high, they’re a barrier to entry. Many are avoiding buying an ereader because the ebooks they most want are $9.99 - $14.99. If prices came down, more Kindles (and Kobo readers and Nooks and Sony readers) would be sold. That widens the market, which leads to more ebook sales. This is good for authors, and for readers who can get more for their money. 

I write a popular blog, notable in the industry for its contrary opinions, called A Newbie's Guide to Publishing http://jakonrath.blogspot.com and I'm including four recent blog posts to underscore some of the points I make above, and the structural problems in the publishing industry as they relate to the DOJ suit.

The first, written by Barry Eisler (a former attorney and author of eight legacy-published books, two with Amazon's Thomas & Mercer imprint, and four self-published titles), succinctly explains how big publishers function as a cartel (or, as it was recently revealed they refer to themselves, a “club”).

The second explains how the agency publishing model harms authors and consumers. http://jakonrath.blogspot.com/2012/04/agency-model-sucks.html

The third and fourth are direct refutations of two letters sent to you--one by the Association of Authors’ Representatives http://jakonrath.blogspot.com/2012/05/aar-fail.html, and one by agent Simon Lipskar http://jakonrath.blogspot.com/2012/05/simon-says.html, president of a literary agency called Writers House. I have done my best to show how poorly thought-out, disingenuous, misleading, and sometimes outright deceitful these letters are.

The language I've used to rebuke these agents is the language I use on my blog, which is casual, coarse, and accusatory. I mention this just so you’ll know that despite what I think is justifiable anger at the industry practices which I believe betray authors and harm readers, I recognize there’s a difference in the kind of tone one can use in a blog and the kind one ought to use in a letter like this one.

Thank you in advance for taking the time to read these posts. Though it is my understanding that the goal of the DOJ's suit is to protect consumers, it is my belief that the group most harmed by the actions of the publishing cartel is writers, who have been forced to accept onerous, often unconscionable contract terms without recourse. The Association of Authors' Representatives, and the Authors Guild, which purportedly defend the rights of writers, in fact work for the publishers. For decades, thousands of writers have been exploited by a powerful industry that universally offers nonnegotiable, one-sided terms, which have gone unchallenged. To that end I offer three more links to posts I have written,  http://jakonrath.blogspot.com/2012/05/pricing-books-and-ebooks.htmlhttp://jakonrath.blogspot.com/2012/05/exploited-writers-in-unfair-industry.html, and
http://jakonrath.blogspot.com/2012/05/unconscionability.html.

Also, I should mention a point that was brought up in the comments to one of these posts (the comments are a great place to read what writers and readers really feel about this issue). I'll paraphrase: "Why is it the Big 6 had no problems with Amazon when they were drastically discounting hardcover book prices, but when Amazon does the same thing with ebooks it is suddenly the end of competition?"

These blog posts show that Amazon has not destroyed competition. In fact, it is the only company encouraging it. 

Sincerely yours,

Joe Konrath



(the mailed and emailed letters contain the referenced blog posts in their entirety)

45 comments:

jwmanus said...

Good letter, Joe.

Jaye W Manus, 18 legacy books, 3 self-published books, owner of 200+ ebooks.

Joe Hart said...

Very well said sir! Thank you for speaking up for what is truly right.

D. Nathan Hilliard said...

Actually, this is important. The voices we keep hearing from in regards to this matter so far are the Big 6 publishers, or Scott Turow who seems to have decided his whole point of existence is to provide cover for them while claiming to represent the authors of the industry.

It really would be constructive to get other voices into the argument on a higher level, so this stuff doesn't go unchallenged. Perhaps in the media as well.

Todd Trumpet said...

An appropriate post on a day when flags are waving across the land.

Let (economic) freedom ring.

Todd
www.ToddTrumpet.com

T. F. Monteleone said...

Incisive and intelligent as usual . . . the amount of NO-Bullshit is staggering. keep doin it, Bro!

Kel Brown said...

The only company? Well maybe the only company lately.

When iBooks first debuted Amazon was still only giving a 30% royalty. Competition from Apple pushed the royalty to 70% across the board.

JD Rhoades said...

casual, coarse, and accusatory

And we love you for it, bro. Good letter.

Eric said...

Excellent letter.

(Not a writer, nor an agent, nor a publisher, only an inveterate reader.)

Ty Johnston said...

Three words: Keep it up.

Mark said...

I agree with much of what you write on this blog, but when you describe Amazon as a friend of competition, you're being either naive or disingenuous. Amazon is a friend of Amazon -- that is all.

Anonymous said...

Fuck yes!

Joe Konrath said...

when you describe Amazon as a friend of competition

I said Amazon encourages competition. Which it does, by offering low prices and terrific service. That forces other retailers to improve or die. That's the essence of what competition is. It fosters technological advances and evolution. If it puts other businesses out of business--tough shit.

Wal-Mart gets ragged on constantly for being unfair. Once they began to dominate the USA, did they raise prices? Or are they still low priced? In fact, they are allowing millions of people access to necessities at prices they can afford.

Amazon isn't creaming bookstores and publishers by being unfair. They aren't doing anything illegal. They're beating everyone because they are doing it better.

Jon Olson said...

Nice letter, and I like the restrained tone.

Jill James said...

Great letter. Thanks for being our voice.

RD Meyer said...

Joe - great letter. I agree with your response to Mark that while Amazon may be out to make money for Amazon, its presence alone is what encourages competition. The market will have to adapt, and that's a good thing for consumers.

Karen Woodward said...

Very well said Joe, but it was strange to see you write in a more subdued tone.

Anyway, I agree. One thing that has always irked me when folks complain about Walmart artificially lowering prices is that ... well, sometimes I think it's easy to lose sight of how cash poor some folks are, especially families. Getting something for 50 cents cheaper can make a difference.

Of course one doesn't need books in the same way one needs food, but -- and I hope this doesn't sound cliche -- books do feed the soul and, as I said, 50 cents (or less!) can make a dig difference.

Even though I think the Big-6 inflating the prices of books makes lower priced indie books more attractive, you're right. It hurts the book business and that hurts everyone. Writers, booksellers and especially readers.

In any case, wonderful letter Joe, thanks for sharing. :)

Mira said...

Excellent letter!!

And thank you for adding the e-mail addresses. I think I will send a letter of my own.

This is terrific, Joe. Great letter!

Anonymous said...

Moving off topic slightly, there is something that concerns me rather more. I don't understand the discount thing that well, but when Amazon discounts trad published books the publisher/author is not affected. When Amazon discounts self-published books the author gets less money; given that this is usually because the book has been on sale at a lower price somewhere else the author, in theory, has control of the pricing of their book. But sometimes it doesn't feel like that, going forward how are self-published authors to be sure of maintaining pricing control on their books?

JPK said...

See, Joe. I know it hurts, but you can get your point across rather vehemently without painting a blue streak across your blog. Not sexy, but effective. And, dare I say, a tad more persuasive.

Anonymous said...

Eighth paragraph. Do you mean "legacy" publishing model? Or "agency" publishing model?

Laura Resnick said...

My letter to the DoJ, snail-mailed 2 weeks ago:

I am writing to you concerning the Department of Justice's investigation of Apple and five major publishers with regard to alleged collusion and price-fixing.

I'm a full-time, self-supporting writer who's been licensing my books to publishers for over twenty years. I hope to continue doing so for many years to come. Like many writers, I also now self-publish some of my work in ebook format, bypassing the traditional publishing system entirely; I hope to continue doing this, too, for many years to come.

My interest, therefore, is in seeing =all= aspects of the rapidly-changing publishing industry thrive. As a writer, I benefit most when all potential venues for my work grow fruitfully, further develop their markets, and innovate to attract still more readers.

It is up to the legal system to prove whether or not antitrust violations have occurred. But after I read the letter sent to the DoJ by the Association of Authors' Representatives (AAR), I felt compelled to write this letter to clarify an important point: **My position as a professional writer is actually that breaking the law is not a reasonable reaction to being faced with aggressive business competition.** And only an organization with a very poor grasp of business =and= of ethics would think otherwise.

TK Kenyon said...

Fantastic letter, Joe.

I just hope they'll find it in the huge "slush pile" of letters that the publishers instructed their pet writers to write.

All the best,
TK Kenyon

jtplayer said...

Am I the only one who finds it ironic that Joe's letter is addressed to a guy named "Read"?

Good letter btw. I too like the toned down approach. That hammerhead stuff gets old real fast, and in my mind does nothing to advance the argument.

Anonymous said...

To anon at 2:19



Amazon will still pay you the original cut of 70% Retailer discounting is not the same as price-matching.

Here is a helpful quote from Passive Guys blog (via Anthea Lawson):

------
"I’ve seen a bit of misunderstanding about Amazon dropping prices. Here’s the thing — if Amazon is choosing to discount your book, you will STILL GET the royalty amount on the price you set. They take the loss. Yes, they do this with indies.

*However* if they are ‘price-matching’ your title to a lower price that they find on another site, then you only get paid royalties on the lower price.

...If you don’t have your title listed more cheaply elsewhere (and check all the retail sites, some can be notoriously slow to post changes if you’ve changed, esp. Kobo and Diesel) THEN Amazon is actually doing you a favor, by putting your book on sale (ie. more attractive to readers) yet still giving you the amount you’ve chosen based on the retail price you’ve set.

Retailer discounting. Different than price-matching. Make sense?"

And PG said:

"What Anthea said.

Many of the misunderstandings about Amazon’s price-matching price changes end up being traced to some little webstore someplace that updates its database and prices every six months."

(unquote)

------------

So the author gets paid 70% of the original list price he set (as long as its 2.99 and over) even if amazon discounts the price for its customers. Plus as long as the writer does not set a lower STARTING LIST PRICE (ie 'the retail price you set') on other sites (ie barnes and noble) but makes sure his list price on nonamazon sites is at least 20% higher than his original list price on amazon (which he sets also) he protects his 70% cut.

Its all in the kindle rules and info amazon has on its site.


hope its okay to quote them here just wanted to reassure you. you can read more at
http://www.thepassivevoice.com/


Jacques
(reposted again from pricing ebooks reposting of mine)

Anonymous said...

So you see the author has complete control because amazon does not judge you over the current sale price at amazon OR ANYWHERE else --no they look only at what original lest price (ie your original retail price) YOU set up at amazon or Barnes and noble etc.


amazon can lower your books price on their site BUT WILL STILL PAY YOU 70% OF THAT **ORIGINAL LIST PRICE**!! NOT 70% of the new amazon lowered sale price but of your original list price over which you have total control.

And as long as you also set your original list price of your book at BN etc higher than amazons --you profits will not be affected at all.


Jacques.

PS Joe you rock.

Anonymous said...

Good letter, and worthwhile to do.

I've sent letters to lawmakers, a college dean, and to the editorial dept. of a major newspaper, (but on issues other than publishing) and I have received a personal response.

The point being, letters like Joe's get READ, and maybe have influence.

fannyfae said...

An excellent letter, Joe! I think that Mr Read is going to end up reading a whole lot more of your blog entries and commentaries as a result.

Thank you for all that you do!

bettye griffin said...

Good to know I'm not the only one working this holiday.

Anonymous said...

This is nice.

What would be even better is if all the writers who agree with Joe, wrote a letter themselves.

You don't have to say anything new, just make the same points and add the weight of your voice, so the DOJ can see that not all writers are on the side of the legacy publishers.

Apart from the DOJ, Joe is mostly "preaching to the choir", he speaks to those already converted. There are only a handful of dissenters who posted here and they seem to have drifted away.

The message needs to be taken farther afield.

More bloggers and tweeters, spreading the truth about publishing.

Keep on going, woohoo!

Barry Eisler said...

Way to go, amigo. As always.

Donna White Glaser said...

Thank you for, once again, leading the charge, Joe. We appreciate it more than you'll ever know.

Werner said...

Joe,

For the sake of the writing - and reading - community, let's hope you can be an influencer as much as you already are an ambassador.

C. Amethyst Frost said...

Beautiful. I just noticed today that you are mentioned on Amazon Author Central under "success stories." Too cool. You've definitely got voice, Joe. I hope the industry finally listens.

Anonymous said...

Ah. You did mean "agency" publishing and not "legacy" publishing model. You're welcome ;)

Jose said...

You've been referenced at techdirt!

http://www.techdirt.com/articles/20120529/01265619092/do-authors-guild-association-authors-representatives-really-represent-authors-publishing-cartel.shtml

Ed Teja said...

A question from reading your blog for a short time now. Where does this term "Legacy publisher" come from. When I google it, the only references, other than to your blogs and a few other blogs, are to heritage books. What constitutes a legacy publisher? Do you mean traditional print only publisher? I have been writing and publishing books since the seventies and this seems to come out of left field.

Deb said...

Legacy is a term some folks use in lieu of trade publishing.

Cheri Schmidt said...

Well said, Joe!!! As usual. :D You get a star from me. A nice shiny gold one. You can were it on your forehead if you like.

Cheri Schmidt said...

oops, of course I meant “wear”

Bob Blick said...

A publishing company looks at a manuscript and decides whether they think it will sell or if they like it. The key word being "they" and referring to a single person in many cases.

It might be true that publishing on Amazon opens things up for some crappy, hastily put together books but, at the same time, it turns it over to the reader and they decide what they like and the they in this case is more than one person.

Not to mention they can read a lot more literature when the price of a book is reasonable.

Chrissy said...

Paul Aiken, since he is a narcissist who continually tells the world what others think/need/want without, for example, consulting them? I have decreed him to un-be. He doth not exist in 3... 2... *poof*

Bryan Chapel said...

This is off topic, but I just received a newsletter from my local library and on the front page is a call to action to write to publishers and tell them to stop forcing print books down the library's throat.

They essentially say that the publishers are trying retard ebooks books further by not allowing libraries to purchase and lend ebooks as they do print. They specifically point at: Macmillan, Hachette, Simon & Schuster, Penguin, and Brilliance Audio.

It seems funny to me that publishers would decry the demise of brick and mortar stores, but then find it OK to threaten libraries by blocking their ability to adapt to the technological wants and needs of the communities they serve.

Any chance on articles skewering publishers for their blatant attacks on our libraries?

AstroNerdBoy said...

Ah, but you see Joe, it isn't FAIR that a big, greedy company like Amazon succeeds while others don't. It isn't FAIR that they are so powerful and can squash poor, innocent people, stealing the food out of their children's mouths and not wanting to pay high taxes. Therefore, Amazon, like Walmart, MUST be taken down in the name of fairness and equality. In the name of that lofty end goal, whatever means we choose to achieve this glorious objective are justified.

*****

Obviously, I'm being facetious, but this is part of what I see is a war on prosperity. When Amazon started, I remember thinking, "I'm not so sure this is a good idea. After all, when I buy something, I like to see it first." However, the folks who started Amazon ran a tight ship, provided customer service, and Amazon became what it is today -- a successful business that embraced the future, and so must be punished for this success, even if it means harming affiliates, or in your case, authors. Its no wonder that as I get older, I become more libertarian in my beliefs.

*sigh*

Anyway, keep up the good work.

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Sandy Thatcher said...

Amazon not being unfair? That's a joke, right? Consider how Amazon threatened to de-list all titles of publishers that did not agree to use its own POD subsidiary, BookSurge. That is a strong-arm tactic if i ever saw one. Amazon is out for its own good, not the public good, no matter what you may think. ---Sandy Thatcher, past president, Association of American University Presses